The main requirements are outlined below for each individual clause in the online contract, clarifying if it is legally required or one that is recommended by Ibec.
The statement (contract) of employment must include the following details:
- full names of the employer and the employee;
- full address of the employer;
- place of work, or where there is no fixed place, a statement that the employee is required to work at various locations;
- nature of work;
- commencement date of the employment;
- duration of the contract, either fixed or permanent;
- rate or method of calculation of remuneration and pay reference period;
- where an employee is in receipt of less than 150% of the national minimum wage, that the employee may, under the National Minimum Wage Act 2000, request a written statement of the employee's average hourly rate of pay for any pay reference period in the last 12 months;
- payment intervals, e.g. weekly, monthly, etc;
- annual leave and other paid leave entitlements;
- hours of work (including overtime);
- details of rest periods and breaks;
- sick leave and pension arrangements, where applicable;
- notice requirements;
- reference to any collective agreements.
This written statement should be signed and dated by both parties. The employer is also obliged to keep a copy of this for at least one year after the employee leaves the organisation.
It is recommended that the following terms are also incorporated into a contract of employment:
- a probationary period;
- provision for lay-off and short time;
- a flexibility clause;
- confidentiality clause;
- health and safety;
- disciplinary and grievance clauses;
- changes to conditions of employment.
Ibec’s online contract of employment is designed to ensure that employers are fully compliant with the provisions of the Terms of Employment Information Acts 1994 to 2014.
Explanation of each clause
This section goes through each individual clause in the online contract, gives a brief note on each clause and explains why it is important to include the Ibec recommended clauses in a contract of employment.
Name and address of employer and employee – legally required
It is a legal requirement that the name and address of the employer is clearly identified on the contract of employment.
Position – legally required
It is a legal requirement that an employer briefly outline the nature of the work and duties that the employee will have to undertake.
Under position, the online contract also includes a statement which requires employees to be flexible and undertake other work as required. This is recommended by Ibec.
Contract and date of commencement – legally required
It is necessary to outline the nature of the employment contract. If the contract is for a fixed term duration or purpose, this needs to be outlined in the contract and the contract needs to specifically state the end point of the contract.
Not only is it a legal requirement to state the date of commencement, it is necessary to ensure you have a record of the commencement date. Employers regularly use this date to establish the employee’s service for statutory and other entitlements.
Place of work – legally required
The place of work must be stated and if there is no fixed place of work, and if the employee is required to work at various different locations, this must also be stated. It is also recommended that where the employee is required to travel as part of their role, this should be stated in the contract.
Probationary period – Ibec recommended
There are no specified rules or legal requirements on the use of probationary periods. Therefore it is important that the contract of employment specifically provides for a probationary period, the right to extend that period, a process for dismissal and notice requirements. This will allow an employer to evaluate a new employee’s performance and manage any issues which arise. An employee's suitability should be assessed in sufficient time to address concerns before the expiry of the probationary period.
The contract should include a provision on the length of the probationary period. It would be normal to have a probationary term of six months duration. The employer should also reserve the right to extend the probationary period, provided that no such extension brings the aggregate probationary period beyond about 10 months. In any event a probationary period should not be extended to an aggregate period of longer than 11 months.
Hours of work and rest breaks – legally required
Employees are entitled to a written statement of their terms and conditions of employment detailing hours of work including overtime. Employees are also entitled to be given a statement showing the terms and conditions relating to rest intervals including the times and duration of such breaks. This includes details of the daily rest period, rest breaks at work and weekly rest periods.
The legislation limits the maximum average working week to 48 hours. Weekly working time can be averaged out over a four, six or up to 12 month reference period (please seek Ibec advice as to on what reference period would apply to your company). Working time is defined as net working time, i.e. exclusive of breaks, on call or standby time.
Below are the minimum rest periods provided for in legislation and there is nothing to prevent employers providing longer or more frequent breaks.
Weekly rest period
An employee is entitled to a period of 24 hours consecutive rest in each seven day period. This period can be averaged over 14 days. If the weekly rest day is preceded by a working day then the employee concerned must first receive his/her daily rest entitlement of 11 hours consecutive rest (Please seek Ibec advice in relation to any exemptions which might apply to your company).
Daily rest period
Under the legislation an employee is entitled to 11 hours consecutive rest in each 24 hour period. This effectively means that having completed a day’s work an employee cannot report back to work until 11 consecutive hours have elapsed. Time spent by an employee on ‘standby’ or ‘on call’ is not considered working time. However, an employee who is ‘called out’ would be considered as working. Such ‘call outs’ will therefore break a consecutive rest period if the employee has not had 11 consecutive hours rest before the call out, or if he or she cannot avail of the 11 consecutive hours after the call out. However an exemption or a collective agreement may provide for alternative arrangements (please see the IBEC guideline on working time).
Rest breaks during the working day
An employer must ensure that your employees do not work for any more than 4.5 hours without a break of 15 minutes. If the hours of work are greater than six hours an employee’s total rest break entitlement is 30 minutes, which can include the 15 minute break already referred to. Rest breaks must not be given at the end of the working day. The breaks outlined here are the absolute minimum and most companies would provide for longer breaks. Such breaks are unpaid.
Rest breaks for shop employees
There are special provisions governing the daily rest breaks of retail workers. They cover any retail trade or business, not including hotels, the preparation of food including catering operations or licensed premises. For any shop employee whose hours of work include the hours from 11.30 a.m. to 2.30 p.m. and who works more than six hours, the minimum duration of the break shall be one hour. The one hour break should take place between the hours mentioned and cannot be granted at the end of the working day.
Unless otherwise provided in a contract of employment an employee will be entitled to have Sunday off as his/her weekly rest period. If weekly rest is averaged over 14 days at least one rest day must be a Sunday. If you require employees to work on Sundays, this must be stated in their contract of employment.
Remuneration – legally required
The rate or method of calculation of remuneration and pay intervals must be stated the contract. Where an employee is in receipt of less than 150% of the national minimum wage you must advise the employee that they can request a written statement of their average hourly rate of pay. Such a statement should outline the employee’s average hourly rate of pay, the reckonable components which are used to calculate the employee’s average hourly rate and the minimum rate of pay to which the employee is entitled to under the minimum wage legislation.
If you require employees to work overtime, it is necessary to state this in the contract.
The online contract is a basic contract, and you may choose to add details of any additional benefits or bonuses which you provide to employees. (You will be able to edit the final saved document). Should you propose to make any deductions from an employee’s pay, you will need to add in authorization to enable you to make such deductions.
Annual leave – legally required
Employees working a standard five day working week are normally entitled to twenty days annual leave in an annual leave year. Statutory annual leave is calculated based on the number of hours an employee works in any given leave year.
Statutory annual leave entitlements can be calculated by one of the following methods:
- four working weeks in a leave year in which the employee works at least 1,365 hours, unless it is a leave year in which he/she changes employment; or
- one-third of a working week per calendar month in which the employee works at least 117 hours; or
- 8% of the hours worked by an employee in a leave year, subject to a maximum of four working weeks (this is the method normally used for calculating part-time employee's entitlements).
Employees covered by two or more of the above calculations will be entitled to use whichever reference period results in the greater amount of annual leave. The ‘working week’ is defined as the number of days that the employee concerned usually works in a week. For example, if an employee works three days a week then an entitlement to four weeks annual leave will amount in his/her case to 12 days’ leave in total.
Public holidays – legally required
There are nine official public holidays as follows:
- 1 January
- St. Patrick's Day
- Easter Monday
- First Monday in May
- First Monday in June
- First Monday in August
- Last Monday in October
- Christmas Day
- St. Stephen's Day
All full-time employees are automatically entitled to public holiday benefit. Part-time/casual employees who have worked at least 40 hours in the five weeks ending on the working day before the public holiday are also entitled to public holiday benefit. In respect of each public holiday, an employee's entitlement is as follows:
- a paid day off on the public holiday, or
- a paid day off within a month, or
- an extra day's annual leave, or
- an extra day's pay.
An employer may decide which option to provide. If employees are required to work on public holidays this should be stated in the contract of employment.
Pension – legally required
An employer is legally obliged to inform employees of any pension arrangements or personal retirement savings account (PRSA) schemes provided by the company. Employees are legally entitled to access to a PRSA where there is no pension scheme in place. Where an employee will have a pension contribution deducted from their pay, this should be spelt out so that the contract provides the employer with the authorization to make these deductions.
Retirement – Ibec recommended
It is advisable for companies to state the normal retirement age of the company. There is no statutory retirement age in Ireland and employees over the age of 65 are now covered by redundancy legislation, unfair dismissal legislation and equality legislation.
Absence from work – legally required
An employer is legally required to inform employees of any terms or conditions relating to incapacity for work due to sickness or injury and any sick leave payments. Where a payment is being made during sick leave, the conditions attached to it need to be clear (e.g. notification procedures, service threshold, discretionary nature, duration of paid sick leave, provision of medical certificates).
An employer should also ensure that employees are aware that the company places great importance on attendance and punctuality, and should an employee be late or absent, who they should contact and in what timeframe. It is also necessary to ensure that employees are aware that persistent lateness or absenteeism may lead to disciplinary action up to and including dismissal.
Lay off and short-time working – Ibec recommended
In the event that an organisation may need to reduce employees’ working hours by putting them on short-time working or lay off it is necessary to have a contractual clause which allows an employer to do so.
Confidentiality and standards – Ibec recommended
It is recommended that each employer have a confidentiality clause particularly where employees may be dealing with sensitive information or information relating to clients or customers. It is also necessary to protect the company’s property both during and at the end of the employment relationship. It is advisable to inform employees that they may not be involved with an outside business or enterprise without prior written consent.
Health and safety – Ibec recommended
Both employers and employees need to have the highest regard for safety, health and welfare at work. Therefore a contract should refer to the safety policy which is set out in the Safety Statement, and draw an employee’s attention to the fact that employees have specific responsibilities under the Safety Health and Welfare at Work Act 2005 and related legislative provisions.
Policies, rules – legally required
Employees must be notified of any collective agreements which apply to their employment.
Grievance procedure – Ibec recommended
A contract of employment should either outline the procedures which are in place relating to the handling of grievances or should refer to the company policy on grievance procedures and how the employee can access it.
Discipline– Ibec recommended
Section 14 of the Unfair Dismissal Act 1977 requires that within 28 days of commencement of employment an employee must be advised of the procedures that will be used for dismissal. Therefore it is recommended that this should either be contained in the contract on employment or reference is made in the contact to the company disciplinary procedures. Where reference is made to a separate document, it is necessary to ensure that employees receive this within 28 days of commencement of employment.
Notice of termination – legally required
Under the legislation dealing with notice of termination of employment the amount of notice due to an employee depends on the employee’s length of service:
Length of service Notice entitlement
13 weeks to 2 years 1 week
2 years to 5 years 2 weeks
5 years to 10 years 4 weeks
10 years to 15 years 6 weeks
15 years+ 8 weeks
Under this legislation an employee only has to give their employer one week’s notice, regardless of the employee’s length of services. Most companies provide for a longer contractual notice clause, this may vary depending on the specific role. Companies may require a longer period of notice (e.g. three months) for a more senior role and require a shorter notice period (e.g. one month) for a more junior role. A company should also ensure that the have the option in the contract to pay in lieu of notice.
Changes to conditions of employment – Ibec recommended
As changes to terms and conditions of employment occur over time, it is advisable to inform employees in advance of the process with regard to how these will happen.