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Written by Michelle McDonagh

Contracts of Employment – What Needs to be Included?

Under the Employment (Miscellaneous Provisions) Act 2018, all employees are entitled to receive a statement of five key terms of their employment within one week of starting work. The core terms that must be provided are:

  1. The full names of the employer and employee
  2. The address of the employer
  3. The expected duration of the contract (where the contract is temporary or fixed-term)
  4. The rate or method of calculating pay and the pay reference period for the purposes of the National Minimum Wage Act 2000 (for example, a week, a fortnight or a month)
  5. What the employer reasonably expects the normal length of your working day and week to be, in a normal working day and in a normal working week

A full statement of the remaining terms of employment i.e. contract of employment must be provided within two months of starting work, as required by the Terms of Employment (Information) Acts 1994–2014. This must include:

  1. The place of work
  2. The title of the job or the nature of the work
  3. The date the employment started
  4. Pay intervals (for example, weekly or monthly)
  5. Any terms or conditions relating to hours of work (including overtime)
  6. Paid leave (other than sick leave), including annual leave and public holiday entitlement
  7. Sick pay
  8. Pension and pension schemes
  9. Period of notice to be given by employer or employee
  10. Details of any collective agreements that may affect your terms of employment

Recent Labour Court Hearing on Contract of Employment

What many employers forget is that as these terms and conditions change over time, they are obliged to maintain an accurate and up to date contract of employment for each employee. In the Labour Court case of July 2019 [Maano Foods (Dungarvan) Limited. Trading as Domino’s Pizza – And – Mr Marcin Zygala], an employee took a claim against their employer for failing to provide them with updated terms after they had been promoted, resulting in a change to their job title and rate of pay. The employer was found to be in breach of the act and €1,528.80 was awarded in compensation to the employee, equivalent to four weeks gross pay. The company appealed this decision on the basis that the employee had suffered no loss as a result of the error. They lost their appeal as the law states it is not necessary for a Complainant under the Act to show that he or she suffered a loss, in order to secure compensation. However, as the breach was very minor, the adjudicator reduced the compensation to €764.40, equivalent to two weeks’ pay.

In our experience of conducting HR audits, circa 60-70% of employment contracts are out of date in employments with relatively stable workforces as terms change annually or more often. Two – four weeks’ pay per employee could quickly become costly, in addition to the cost and inconvenience of preparing a defence, organising representation and witnesses attending hearings/appeals.

Avoid the risk by contacting Aspire HR today to arrange a HR audit on your business or for guidance on drafting contract templates and update letters.

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©Aspire HR. This document is intended to be a general guide only.