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Employment contracts and policies in Ireland

Contract terms in Ireland

Contract extension in Ireland

Fixed-term contracts in Ireland

Remote work in Ireland

Stay compliant when hiring internationally with CXC

Contract of employment in Ireland

When hiring in Ireland, understanding the nuances around employment contracts is essential in order to remain compliant.  

Whether you are considering offering fixed-term contracts, part-time contracts, or other employment arrangements, this guide will provide the information you need to create a locally compliant contract, including the key components of employment contracts, types of employment contracts, and the employment laws you need to keep in mind to compliantly hire talent in Ireland

Employment contracts and policies in Ireland

Creating a standard employment contract in Ireland serves as a legally binding agreement between employers and employees.

It is a legal requirement for companies in Ireland to provide employees with a written statement detailing essential terms within 5 days of starting employment. Additional minimum terms must be provided within 2 months of employment commencement.

Probationary period in Ireland

Employers in Ireland have the flexibility to establish probationary periods, typically ranging from 3 to 6 months. In exceptional cases, this period may be extended to a maximum of 12 months, provided it benefits the employee. When it comes to fixed-term employees, the probationary period should align with the duration of the term.

Employment contract policies in Ireland

As you work on the employment contract of your potential hire, you must bear in mind that companies in Ireland are required to implement written health and safety, disciplinary, bullying, and harassment policies, and procedures. In addition, it is also advisable to have grievance and IT-related policies in place to address common workplace matters effectively.

Types of employment contracts in Ireland

Permanent contract: This is the most common type of employment contract in Ireland, providing individuals with long-term employment. Permanent employees are entitled to various benefits and protections under Ireland’s employment law, such as redundancy pay and sick pay. A permanent contract is usually ongoing without a fixed end date.   
Fixed-term contract: Employers in Ireland often use fixed-term contracts to address temporary staff shortages or fulfil short-term projects. These employment contracts have a specific end date or end based on the completion of a particular assignment or project.
Part-time contract: Part-time contracts are suitable for roles that require fewer working hours than full-time positions. These type of employment contracts usually specify conditions and adjusted terms on a proportionate basis.  
Agency worker contract: If you hire workers in Ireland through an agency, they will have contracts with the agency rather than your business. However, under Ireland’s employment law, these workers still have certain rights and protections, including breaks and limits on working time.
Temporary contract: Similar to fixed-term contracts, temporary contracts are used for employment that is not permanent but may be more short-term in nature, such as covering for another employee on leave.  
Casual contract: Casual contracts are for employees who work on an as-needed basis without a regular working pattern. These contracts are often used for jobs where the work demand is unpredictable. This contract is not that common in Ireland.  
Zero-hours contract: Under zero-hours contracts, employers are not obliged to provide a minimum number of working hours, and employees work only when needed. However, certain conditions and protections apply to zero-hours workers under Irish law. 
Freelance/contract for services: Freelancers or independent contractors work on specific projects or tasks and are not considered employees. They are self-employed and responsible for their own taxes and benefits.
Apprenticeship contracts: These contracts combine work with training and are used for apprenticeships, where the employee learns a trade or profession over a fixed period while earning a wage.

Are Ireland’s employment law policies different from UK law?

While there are some similarities between the UK and Ireland’s employment law, as both systems are rooted in a common law system, there are also significant differences.

In Ireland, unfair dismissal cases can be brought forward after only one year of employment, while in the UK, employees must work for two years before filing an unfair dismissal claim. Another distinction is that in Ireland, redundancy pay is calculated solely based on service, whereas in the UK, the calculation also accounts for employee age.

Additionally, Ireland’s and the UK’s minimum wage laws have differences. In Ireland, as of January 2024, the national minimum wage is 12.70 EUR per hour. Meanwhile, in the UK, the minimum wage varies based on age, ranging from 6.40 GBP (7.51 EUR) per hour for under 18s to 11.44 GBP (13.43 EUR) per hour for those aged 21 and over.

Another significant difference between Ireland and the UK is related to maternity leave. In Ireland, maternity leave can last up to 42 weeks (26 weeks paid and 16 weeks unpaid), whereas in the UK, it lasts up to 52 weeks.

Contract terms in Ireland

The standard employment contracts in Ireland must outline certain terms and conditions in written form. These contract terms should always meet or exceed the minimum legal standards set by Ireland’s employment laws or any relevant collective agreements without exception.

Can employers in Ireland change the terms of contracts?

In Ireland, employees have certain rights and protections when an employer changes an employment contract. There are two main ways in which an employment contract can change in Ireland:

Changes in the law: If there is a change in the law that affects the terms and conditions of employment, employers in Ireland are legally required to update their employment contracts accordingly.
Agreement between the employer and employee: Changes to an employment contract are also permissible through a mutual agreement between the employer and the employee. Nonetheless, changes in the employment contract should not result in providing lesser conditions than the minimum legal entitlements.

If the employee in Ireland is not in agreement with the proposed changes to their employment contract, they have the right to seek advice or assistance, including legal representation, to protect their rights and interests. They may also have the option to challenge the changes through the appropriate legal channels if needed.

What are the implied terms of employment contracts in Ireland?

Implied terms in employment contracts contain obligations that are not explicitly mentioned but are understood to be part of the employment relationship. Common law and statutory requirements define these implied terms to ensure fairness and clarity in the employment contract.

In Ireland, some implied terms include:

Duty of faithful service. One key implied term in Ireland is the duty of faithful service on the part of the employee. It requires them to act in the best interests of their employer and to carry out their work diligently and honestly. On the other hand, there is also an implied duty on the employer’s side, which is not to undermine the trust and confidence of employees.
Dismissal of an employee. Another important implied term in Ireland refers to the dismissal of an employee on the grounds of sickness or incapacity in a way that does not compromise their entitlement to sick pay or other benefits, where applicable.

Understanding these obligations can help prevent disputes between employees and employers and ensure that both parties adhere to the implicit expectations set by law in Ireland in the absence of explicit contractual clauses.

Contract extension in Ireland

Before considering a contract extension, employers in Ireland should review the terms of the existing contract to determine if an extension clause already exists. An extension clause permits a specified period of contract prolongation under mutually agreed-upon terms and conditions. If such a clause exists, both parties must adhere to the procedures outlined within it. 

For independent contractors, there are no specific restrictions or tenures on contract extensions in Ireland. If an extension is needed, the terms of the contract extension must be agreed upon by both the contractor and the employer.

Although a written contract extension is not legally required, it is still highly recommended to avoid any potential misunderstandings and provide a clear record of the extension’s terms and conditions. Both parties should sign this written agreement to confirm their acceptance and understanding of the new contract terms. 

Fixed-term contract extension in Ireland

The Protection of Employees (Fixed-Term Work) Act 2003 governs fixed-term contract extensions in Ireland. This Act sets out the legal framework for fixed-term and specified-purpose employment contracts in Ireland. It places limitations on the duration of successive fixed-term contracts with the same employer or associated employer, with a general limit of four years for continuous employment under fixed-term contracts. 

After four successive years on fixed-term contracts, employees in Ireland can request a statement confirming their permanent status. Employers must provide this statement or justify the continued fixed-term status within 21 days. Extending fixed-term contracts in Ireland beyond four years requires a valid business reason or agreement.

Fixed-term contracts in Ireland

In Ireland, a fixed-term contract has a specific duration or is associated with the completion of a specific project or task. Employers commonly use this type of contract when they need an employee temporarily or when hiring for a specific project or season. 

The Protection of Employees (Fixed-Term Work) Act 2003 is Ireland’s primary legislation governing fixed-term contracts. The purpose of this act is to protect the rights of fixed-term employees and ensure that they are not treated less favourably than permanent employees. 

Under this Act, fixed-term employees have similar rights to permanent employees, including the right to equal treatment in terms of working conditions, pay, training, and promotion opportunities. In addition, they are also entitled to benefits such as annual leave, maternity leave, and payslips. 

Ending a fixed-term contract in Ireland

Under the Protection of Employees (Fixed-Term Work) Act 2003, employers in Ireland should be aware that the specific end date of the contract, as agreed upon at the outset, is legally binding. However, fixed-term contracts can be terminated before its end date if there are justifiable grounds for doing so, such as prolonged illness or gross misconduct. Employers in Ireland must ensure that the reasons for terminations are objective and reasonable to avoid potential litigation.

While early termination of fixed-term contracts is allowed in Ireland, employers should handle termination with care and adhere to employment laws and regulations to minimise risk and prevent costly compensation claims.

Working hours in Ireland

How many hours is considered full-time work in Ireland?  

The average working hours per week in Ireland is 39 hours. The standard full-time work hours in Ireland are regulated by the Organisation of Working Time Act 1997. This Act sets out the maximum limit of 48 hours that employees in Ireland can work in an average working week, calculated over a specific period. It also outlines provisions for rest periods, work breaks, and regulations regarding the health and safety.

A work week should not exceed an average of 48 hours over a four-month period. In addition, employees in Ireland are entitled to 24 consecutive hours of rest within any 7-day period, ideally following one of the already mentioned 11-hour rest periods. Alternatively, if there has been a week without any 24-hour rest periods, an employer in Ireland can provide two 24-hour rest periods in the following week. Unless specified otherwise in your contract, the 24-hour rest period should include a Sunday.

How many hours is considered part-time work in Ireland?

Regarding part-time employment in Ireland, the number of hours can vary depending on the job and industry. There is no specific number of hours that constitutes part-time employment in Ireland. Still, it generally means working less than the standard full-time hours for that job or industry. For example, part-time retail employees may work as little as 12-16 hours per week, while part-time hospital nurses may work more days per week but still fall short of full-time hours.

Overtime in Ireland

When it comes to overtime pay, employers in Ireland are not legally required to provide it under statutory obligations. Instead, the payment for overtime is determined by the terms outlined in the employment contract or collective agreements. Nonetheless, many employers in Ireland choose to compensate their employees at higher rates for overtime hours in accordance with the agreed terms of their employment contract. In certain sectors, overtime pay rates are even higher than regular hours, and these rates are governed by specific employment regulation orders and registered employment agreements.

Working week in Ireland

Monday – Friday 

Can companies change the working hours of employees in Ireland?

In Ireland, employers can change the working hours of employees, but they must adhere to specific legal requirements and consider the impact of such changes on employees.

According to the Organisation of Working Time Act 1997, employers can make changes to the working hours of employees, but these changes must be implemented in compliance with the legislation and individual employment contracts. Any changes to working hours should be communicated clearly and agreed upon with the employees, considering notice periods and any collective agreements that may apply.

Remote work in Ireland

Ireland has recognised the importance of remote work and created a framework to facilitate its implementation, balancing the needs of both employers and employees. 

Remote work legislation in Ireland

The Work Life Balance and Miscellaneous Provisions Act 2023 was signed into law on April 4, 2023. This legislation gives employees in Ireland the right to request remote work and requires employers to provide reasonable grounds for refusing such requests. The law aims to regulate and support remote working arrangements by outlining the process for employees to request remote work and requiring employers to consider these requests in a fair and transparent manner.

Under this legislation, employees in Ireland have the right to request remote work if the following conditions are met:

Employees have 6 months of continuous service with the employer.
Employees must submit the request at least 8 weeks before the date they intend to start the new arrangement.

Upon receiving the request, employers in Ireland are required to:

Provide a decision within 4 weeks (extendable to 8 weeks if evaluation challenges arise).
Prioritise both the employees’ needs and business requirements in reaching a decision.
Provide reasonable grounds if a remote work request is refused.

Employers in Ireland have the right to terminate remote work arrangements if they significantly impact business operations negatively.  

Remote working allowance in Ireland

In Ireland, the remote work allowance allows individuals to claim tax relief for certain expenses related to remote work. The tax relief is calculated based on a percentage of allowable utility bills such as electricity, heating, and broadband costs. As of 2022, individuals can claim a tax relief of 30% for electricity, heating, and internet costs.  

Remote work visa in Ireland

Digital nomad visa or remote work visa in Ireland is currently not available. While Ireland does not provide a visa explicitly labelled for digital nomads or remote workers, there are alternative visa categories that individuals looking to work remotely in Ireland can consider. 

One option is the short-stay visa, also known as the ‘C’ Tourist Visa, which allows visitors to stay in Ireland for up to 90 days. While the primary purpose of this visa is for tourism or visiting family/friends, digital nomads may utilise this visa to live, travel, and work remotely within Ireland, as long as they are not employed by an Irish entity. We recommend referring to relevant government websites for the most up-to-date information, as these guidelines are subject to change.

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