Read Time: 7 mins

Written by Michelle McDonagh

COVID-19 has changed how we work in a myriad of ways. These changes have generated uncertainty and many questions for employers. One such question relates to Employee Contracts.

In this article, we will answer the following question: Should I Update My HR Contracts due to COVID-19?

Specifically, we will look at:

  • Employment Law Infrastructure in Ireland since COVID-19
  • 6 Areas of Employee Contracts that May Need to Be Updated/Changed

Employment Law Infrastructure in Ireland since COVID-19

The employment law infrastructure in Ireland is still the same now as it was before COVID, although this will need to be reviewed by lawmakers as time moves on. For now, our contracts have been written based on this foundation so largely speaking, the change is minimal.

Contracts of Employment and Handbooks Provide Answers in Times of Change

Those companies who had invested in creating robust contracts of employment and employee handbooks detailing their company policies will reap the rewards now of managing a changing context. Having detailed contracts of employment provide consistent and objective answers to how the company deal with various scenarios such as sick leave, annual leave, payment of wages etc. can bring a sense of calm to volatile and emotional situations. It also demonstrates that the company are in control with managers leading people through crisis.

On a more practical level, the reality is a lot of small to medium companies don’t tend to have detailed contracts in place. With this in mind the article focuses on the key clauses in contracts of employment to support the management of varying situations during the pandemic.

Below we look at Six Areas of Employee Contracts that May Need to Be Updated/Changed

1. Ensure that Contracts Clarify Employee Roles and Responsibilities

 It is critical that all employees have a contract of employment in place reflective of their current terms and conditions of employment. This is legally required But it is also important that each employee clearly understands their role title, key responsibilities, where they fit in the organisation hierarchy and general remuneration terms.

This will support clarity on immediate adjustments to be made but also any analysis required for restructuring.

2. Include Lay off and Short Time Clauses

 Lay off and short time is not legally required but should be included in contracts of employment. When this clause is present in the signed contract, the employer has the automatic right to put people on lay off or short time when necessary. If this clause is absent, employers must obtain signed consent from their staff to place them on lay off and/or short time as an alternative to redundancy.

Prior to COVID, staff could only remain on lay off / short time for four consecutive weeks or six broken weeks in the last thirteen. After that, the employer had to provide them with their normal working hours for at least thirteen consecutive weeks or make them redundant. This right was removed by the Emergency Measures in the Public Interest (COVID-19) Act and has currently been extended until the end of March 2021.

3. Include a Health and Safety Clause

 Contracts should have a general clause to require all staff to comply with the company policies on health, safety and security which exist at the time of commencement or may be introduced in the future. In this way, new introductions like a COVID-19 Response Plan can be issued to all staff and they will be contractually bound to comply with it.

Equally, incidents of work-related stress and general anxiety have increased greatly during the pandemic. We have started to see some interconnected issues spill into the workplace around drug and alcohol misuse. In all companies, but particularly in safety-critical roles, a robust policy should be in place to manage substance use and abuse in the workplace. These policies can be referenced in the contract and laid out in further detail in a policy but should explain what action steps must be taken by managers where such abuse is suspected.

4. Include Leaving Employment Clauses, where appropriate

 For some staff, the changes have given them an opportunity to reflect on their careers and may result in a decision to change jobs. The recruitment market is active, despite rolling lockdowns and companies are now more open to considering at least partial remote working arrangements on a permanent basis. This has opened up the job market for a wider range of employees who may now be suitable candidates for such roles. This has created some issues with staff moving to competitors and the danger that they will take confidential information, colleagues and/or clients with them.

  • Non-compete agreements are difficult to uphold but can still be valid if they are negotiated for staff in key roles. Tailor them as much as possible for each individual i.e. listing specific clients they cannot poach and/or limited areas they cannot work in and/or specific products or services they cannot work with. They must support the employer in protecting a legitimate interest rather than just acting as a broad-based ban precluding employees to work in ‘any capacity’ and against ‘any competitor’ for unjustifiably long periods of time. See the Ryanair DAC V Bellew 2019 case for an interesting overview of how the High Court analyses these situations.
  • Include confidentiality clauses in all contracts such that information acquired during the course of employment cannot be shared outside the company.
  • Code of conduct clauses highlight the fact that staff owe an obligation of fidelity to the company interests at all times, they cannot use their working time or company resources to support outside activities etc.

5. Include the Right to Pay for Accrued Leave During Notice

 Include the right to pay people for accrued leave during their notice period. Where people feel their income is threatened, they may decide to leave a role/company. As part of this transition, they are likely to seek to maximise their earnings. This means, even if the company is willing to waive a notice period, the employee may choose not to do this. They will therefore be entitled to work and be paid their notice and then be paid for any outstanding leave entitlements in the final pay. If the contract gives employers the right to include outstanding leave in their notice, it can save the company the added cost.

6. Examine Absence and Leave Policies in light of COVID-19

Absence and leave policies have been to the forefront in addressing instances of sick leave, annual leave, public holidays, parental leave, force majeure leave, parents leave, maternity leave etc. Employee entitlements in these areas are different in different situations and should be covered in separate company policies, rather than in the contract.

Contracts of employment do however need to stipulate basic information around absence procedures and sick pay entitlements, as they always did. They also need to refer staff to where they can access further information on disciplinary, grievance, bullying and harassment policies. Please see our article on What Must be Included in a Contract of Employment.

 It is important to reiterate that company sickness/absence policies did not change as a result of COVID-19 unless companies decided to give additional company payment entitlements to staff. The enhanced payments introduced by the Government supplemented the company policies already in place.

Related Article: How to Create an Ongoing COVID_19 Strategy

In the case of the newly introduced COVID Enhanced Sick Payment or the Temporary Wage Subsidy Scheme (TWSS), information on these changes frequently so should not be included in a contract. Instead, it can be included in the COVID-19 Response Plan with a short edit to the absence policy to refer staff to the COVID-19 Response Plan where they can access further information.

Managing Continuing Change

 We know our business landscape will continue to change into 2021 and beyond which may necessitate reductions in staff numbers and more permanent changes to terms and conditions. Steps should be taken now to ensure you have a clear and detailed contracts of employment, signed for all staff. This will enable both parties to understand the direct impact of any business changes and enable conversations to focus on how to address those to move forward rather than disputing the factual details amid a tense context

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or call Michelle on 086 878 2557

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

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