Irish Employment Contracts

Irish Contracts

Foreign companies hiring employees for their international expansion into Ireland must comply with extensive tax and social insurance regulations. The framework of legislation is based on laws, statutes, trade union and collective agreements. This means employers must take account of employee benefits and entitlements when they draw up contracts.

In Ireland the employer-employee relationship is governed by employment laws setting basic minimums, such as the National Minimum Wage Act, the Organization of Working Time Act, the Maternity Protection Act, the Protection of Employment and Unfair Dismissals Act. Taxation and social security are overseen by the Revenue Commissioners and the Department of Social Protection.

Ireland has no legal requirement for a formal written contract, though this offers protection for both employers and employees. Employers, though, must offer at least a written statement covering ‘core items’ of the agreement within five days of the employee starting work and the full terms within two months.

Employment Contracts in Ireland

There are a variety of contracts in Ireland. The main types are:

• Open-ended, indefinite employment contract: Most employees work under these full-time contracts, which are in force until either the employer or employee ends the agreement. The contract need not be in writing, but the employer must provide a written statement of ‘core items’ within five days of the employee starting work. These are:
  – Names and addresses of employer and employee
  – Start and end date of a fixed-term contract
  – Method of calculating pay and payment schedule
  – Normal working hours and working week

The employer must supply written statement / contract of full terms within two months.

• Fixed-term employment contract: These cover employment that ends on a specific date or is tied to a particular project, in which case an end date does not have to be set. A fixed-term contract can be for a number of months or more than a year. Generally, fixed-term contracts provide the same benefits as indefinite contracts under the Terms of Employment Act and the Protection of Employees (Fixed Term) Act. However, certain restrictions apply to fixed-term contracts:
  – They cannot be renewed more than twice or exceed a total of four years, after which employees must be offered an indefinite contract
  – If an employee’s fixed-term contract ends but the individual is re-employed within three months, that is considered continuous employment
• Trial period or probationary employment contract: Contracted trial periods typically last between three and 12 months and can be extended. If terminated during the trial period, the Unfair Dismissal Act applies if termination is due to:
  – Trade union membership
  – Pregnancy related issues
  – Entitlements relating to maternity, parental, adoptive or caregiver’s leave
  – The Act may also apply if the probation exceeds 12 months

Employers are expected to clearly state what is expected during the trial period, give feedback on progress via probation review meetings. If the employee fails, the probation period only one week’s notice applies.

Other contract types include:

• Temporary / agency employment contract: The European Union Directive on Temporary Agency Work stipulates all temporary or agency workers are treated the same as full-time workers as applies to working time, breaks, annual leave, and public holidays, pay, pregnancy and nursing mothers and discrimination. The EU Directive was absorbed into Irish law by the Protection of Employees (Temporary Agency Work) Act of 2012. Whoever pays the agency worker is considered to be their employee.
  
• Part-time employment contract: Part-time workers are defined in law as those whose normal hours are less than those of a worker in comparable employment and their rights are protected under the Protection of Employees (Temporary Agency Work) Act. The Act generally applies to any part-time worker in Ireland who:
  
  – Has a contract of employment or apprenticeship
  – Job shares
  – Is employed through an agency
  – Are state employees
  
  There is no legal right to change from full-time work to part-time.
  
• Youth Employment Contract: The Protection of Young Persons (Employment) Act stipulates the maximum working week for under-18s is eight hours a day, 40 hours a week in total including if they have more than one job.