New rights for employees with variable working hours

Following a lengthy discussion to improve the rights of employees with zero-hour contracts or variable working hours, new rules for employment contracts with variable working hours will enter into force on 1 June 2018.

New rules on using variable working hours

Variable working hours refer to arrangements where the employee's working hours vary between the minimum and maximum working hours defined in the employment contract or where the employee has committed to work on an on-call basis (often referred to as zero hours or on-call employees).

Under the amendments to be introduced to the Employment Contracts Act, the use of variable working hours will be limited to situations where the employer's need of workforce is not fixed. Therefore, the employer can only propose to use variable working hours when there is a varying need for workforce. Variable working hours can also be used at the employee's initiative, in which case these new restrictions do not apply.

When the employer and the employee agree on the use of variable working hours, the employer must provide the employee with a written statement detailing the circumstances under which the employer needs workforce and the amount of workforce needed. Unless the information is already included in the employee's employment contract, the information must be given to the employee no later than within the first pay period.

The agreed minimum hours cannot be less than the employer's actual need. If the employee's actual working hours during the preceding six months indicate that the employer's need for workforce is greater than the agreed minimum hours, the employer is, upon the employee's request, obliged to negotiate an updated working hours provision.

Negotiations must be arranged within a reasonable time (normally within one to two weeks) from the employee's request, and the employee is entitled to use an external advisor in these negotiations (e.g. an employee representative or a union lawyer).

In case the employer and employee are unable to reach an agreement, the employer must provide the employee with written objective reasons on why the employer considers that the working hours correspond with the employer's need of workforce. If the employee still disagrees with the employer upon having received the employer's written statement, the employee can initiate legal proceedings against the employer to determine the employee's actual working hours.

Work exceeding the agreed minimum hours

The employee is bound only by the agreed minimum working hours. If the employer plans to offer working hours exceeding the agreed minimum hours, the employee must be given an opportunity to inform the employer on the extent and conditions on which the employee can accept the offer. This means that, as of 1 June 2018, working hours exceeding the agreed minimum working hours cannot be assigned to the employee without the employee's consent.

The employee's consent must be obtained separately each time, or for a short period at a time if necessary for the work arrangements (e.g. for a period of a production peak).

Improvements to employee's right to sick leave and notice period salary

The amendments will clarify the sick pay entitlement and notice period salary of employees who have a variable hours contract. As of 1 June, employees will have a right to sick pay if they are incapable for work due to sickness or injury on the scheduled work day.

In connection with the termination of employment, the employee is entitled to compensation for loss of earnings during the notice period if the employee is offered less work than during a 12 weeks' reference period preceding the employee's last work shift. If the employment relationship has lasted less than a month when the notice of termination is given, no obligation to compensate for loss of earnings will arise.

Recommendations

Once the amendments have entered into force, employers have a six-month transition period to ensure employment contracts entered into before 1 June 2018 comply with the new legislation.

Employer's should assess the need for workforce carefully and take necessary measures on the basis of such assessment. Also existing employment contracts with variable working hours should be reviewed.