CURRENT LEGAL ARTICLES

Varying the terms and conditions of employment contracts can be challenging and complicated for employers and employees. However, employers and employees can mutually agree upon temporary or permanent changes to their existing employment contracts, provided these changes adhere to specific legal requirements.

This article aims to provide a comprehensive guide to changing employment contracts in Ireland, specifically addressing how modifications to the standard application of specific provisions of the Organisations of Working Time Act 1997 can be effected through collective agreements. This guide will also walk you through the legal process involved, the significance of the role of the Labour Relations Commission and Labour court, and the need for collective agreements in modifying existing employment contracts.

Legal Framework for Changing Employment Contracts.

The Organisation of Working Time Act 1997 regulates the working time of employees in Ireland, including the maximum number of working hours and minimum rest periods. Under section 15(1) of the Act, an employer shall not permit an employee to work more than an average of 48 hours per week, calculated over a specified reference period. Unless the employer and employees have agreed otherwise, the standard reference period is 4 months or 6 months, as the case may be. But if there is a collective agreement, and where the employee’s weekly working hours vary on a seasonal basis or where it is not practical for the employer to stick to the standard reference period due to the technical nature of the work, this reference period can be extended to more than 4 or 6 months. In addition, as per section 11, an employee is entitled to a daily rest period of not less than 11 consecutive hours in each period of 24 hours during which he or she works for his or her employer. However, the standard application of the above statutory provisions can be altered through a collective agreement, as set out in sections 15(5) and 4(5) of the Act.

Can the employer change employment contract terms unilaterally? 

It is not uncommon for employment contracts to contain flexibility or variation clauses that allow the employer to modify or adjust the terms and conditions of the agreement. For example, it makes sense in some cases for the employer to propose new words to give the commercial contract efficacy. Generally, changes under such clauses are tested for their reasonableness and can only be used to effect minor non-material changes. 

An employer may also seek to change the terms of employment law contracts in more significant ways, such as switching from a 17-week to a 52-week work period and implementing a 4-day on 3-day off schedule. But is it possible for an employer to change these terms unilaterally? The short answer is no. Any proposed changes to existing terms can only be made with the consent of both employer and employees. If employees consent and a collective agreement is reached, it must be approved by the Labour Court before the proposed changes can be implemented.

Legal Process for Changing Employment Law Contracts

The legal process for changing an employment law contract begins with a written request from the employer to the employees. It is a good practice to include the proposed changes and the reasons for introducing them in the bid. If the employees agree to the changes, a new employment contract must be drafted as a collective agreement. If the parties cannot reach an agreement, either party may first refer the matter to the Labour Relations Commission for mediation under section 27(2). Suppose the parties cannot resolve their dispute through the conciliation process at the Commission. In that case, they may refer the matter to the Labour Court for a determination under section 28.

The role of the Labour Relations Commission in changing employment contracts

The Labour Relations Commission (LRC) facilitates negotiations concerning changing employment contract terms between employers and employees. As per section 27(2) of the Act, the LRC may investigate any complaint made by an employee or a trade union on behalf of an employee where it is alleged that an employer has contravened any provision of the Act, including those relating to working hours and rest periods. Whenever a dispute arises between an employer and an employee about any matter under the Act, either party may refer the dispute to the LRC for resolution. The LRC provides a forum for discussion and resolution and has the power to make recommendations on changes to employment contract terms and conditions. If the LRC makes a recommendation and it is accepted by the parties, it becomes binding on the parties. If rejected, the parties may refer the dispute to the Labour Court for determination within 6 weeks of such recommendation. Ultimately, the LRC’s goal is to promote the resolution of disputes through negotiation and mediation and to ensure that employment contract terms are fair and equitable for both parties.

Changes to Employment Contracts by Collective Agreement

Section 24 of the Organisation of Working Time Act 1997 outlines the process for modifying the standard provisions of the Act through a collective agreement between an employer and employees. This requires a written agreement signed by both parties and a copy provided to affected employees and their relevant trade unions or representatives. Once a collective agreement in principle has been reached between the employer and employees, the employer must seek approval from the Labour Court. The Labour Court, after consulting both parties, will assess the collective agreement for compliance with the Act and Council directives and their reasonableness before deciding to approve or reject it. If agreed, the modified provisions of the Act as set out in the agreement will apply to the employees involved, while if left, the standard requirements of the Act will continue to use.

Changing or varying terms in employment contracts in Ireland can be complex. It is essential to ensure that the proposed changes reflect the needs of the employer and the employees and are approved by the Labour Court. Only a qualified legal professional can advise on the legal aspects of the proposed changes, help draft a legally valid collective agreement, and guide the best way to communicate the changes to the employees. Seeking professional legal advice can help ensure this process is handled correctly, all legal requirements are met, and potential legal disputes are avoided.