Thursday, 24 November 2005
Seanad Eireann Debate
Minister of State at the Department of Enterprise, Trade and Employment (Mr. Killeen): I welcome this opportunity to advise the House of certain recent and impending developments in the area of employment rights, to give Senators some idea of the types of issue being encountered and to suggest how the changing working environment gives rise to new challenges in the area of employment rights enforcement. I also want to set out how my Department is addressing these issues and what are our priorities as the new year approaches.
First, I suggest to Members that, as in so many other areas of public life, the availability of objective and comprehensive information is vital to an informed exchange of views. In the area of employment rights enforcement, objective assessments of what is at issue and of what is happening are set aside too frequently in favour of expressions of high profile indignation, based on partial information or second or third hand reports.
Members will agree that Departments should base their responses to complaints on solid evidence and factual information. In tackling abuses of employment rights of employees, be they Irish or from overseas, I suggest that a calm, rational approach, coupled with a determination to get to the heart of the matter is likely to be more effective than the well-meaning, but ill-informed statements which are sometimes made in the absence of hard information. Indeed, some claims made in the media turn out to have no substance when pursued by the relevant authorities and can cause resources to be diverted from real and pressing problems. I will now deal with a number of issues that were mentioned in recent exchanges in this House on the subject of employment rights.
Virtually everyone will be aware of the recent controversy regarding the group of Latvian periwinkle pickers who were taken from Colt Island, off the coast of north County Dublin by the Skerries lifeboat. This incident was well publicised and was the occasion of much public comment, both from the media and from groups who concern themselves with employment rights, with particular reference to the working conditions of workers who have come to this State from overseas.
I understand the facts are as follows. On Saturday, 5 November, the Skerries lifeboat was launched to investigate a report from a member of the public and found 13 people on Colt Island off the Skerries coast. After assessing the situation, the Skerries lifeboat brought the 13 individuals back to Skerries. The marine co-ordination centre, MRCC, in Dublin advised Skerries gardaí of the situation and requested that they meet the lifeboat on its return to Skerries, which was done. The lifeboat reported to the MRCC at 10.15 p.m. that they were back in Skerries and that all the people were now safely ashore.
The marine survey office of the Department of Communications, Marine and Natural Resources has been investigating the private craft used earlier in the day to transport the workers to and from the island in question. Any vessel carrying more than 13 passengers requires a passenger ship safety certificate, according to the Merchant Shipping Act 1992. If the vessel is used to make several trips carrying less than 12 people on each occasion to or from their place of work, it is then required to hold a passenger boat licence. If such a vessel does not hold a certificate or licence, its owner and master are deemed to be guilty of an offence.
The Department of Communications, Marine and Natural Resources has also initiated an investigation from the perspective of seafood production. A person who places live periwinkles on the market for human consumption must ensure that the periwinkles comply with specific standards laid down in EU Directive 91/492/EEC, which relate to the microbiological standards of the product and its general fitness for human consumption.
A Garda investigation into the incident has also been undertaken. The labour inspectorate of my Department has been in contact with relevant colleagues in the Garda Síochána, the Department of Communications, Marine and Natural Resources and the Health and Safety Authority. An inspector has interviewed the boat owner and two of the Latvian people who were gathering the shellfish. It has not been possible to establish any detail of an employment relationship and the Latvian interviewees made no complaint.
The Latvian Embassy has been contacted in the matter to ascertain whether it had received any complaints in connection with the incident. It appears that no complaints have been received. The embassy was assured that any complaints will be investigated and advised that in the event an employment relationship is established, the inspectorate will undertake a full inspection of relevant employment records and will pursue any non-compliance with legislation within its remit.
The Health and Safety Authority, which is responsible for the enforcement of the Safety, Health and Welfare at Work Act 2005 and other relevant worker protection legislation, has also liaised with the Garda on this matter and has investigated every possible avenue. However, concrete information has proved hard to obtain and it is difficult to make progress, especially when the main parties concerned are not contactable and have not submitted complaints.
I am aware there have been subsequent newspaper reports of an interview reportedly given to a Latvian newspaper by one of the group picked up by the lifeboat, who is said to have stated that the group in question were never in danger and never requested help. While investigations in this matter are not yet complete and further information may yet come to light, I invite Members to consider how the information now available compares with the serious and sweeping allegations made by various parties at the time. We should all be wary of being dogmatic in the absence of relevant information.
As for employment agencies, I understand that Members expressed concerns about the alleged activities of some employment agencies or recruitment companies. I can advise that section 20 of the Protection of Employees (Part-Time Work) Act 2001 provides that all employee protection legislation, including the National Minimum Wage Act 2000, applies to workers from overseas just as it applies to Irish workers. If Members have any specific information that workers from overseas are being paid less than the statutory minimum wage, or are being charged by employers for seeking employment for them, a practice which is unlawful under the Employment Agency Act 1971, they should pass this information to my Department, which will investigate the matter. This is also the most effective course of action if Members believe that specific employees have had moneys illegally withheld or otherwise deducted from their pay.
When dealing with the issue of employment agencies, it should be noted that the Employment Agency Act 1971 is under review. This is not surprising, given the length of time since its enactment and the significant changes in the economy over that period. In June 2005, my Department issued a policy paper as part of this review and invited submissions to be made by 15 July. A total of nine submissions was received. At present, my Department is examining the various matters raised by the respondents. It is my intention that, following further consultations with various interests and completion of the deliberative process, the heads of a Bill will be prepared and Government approval will be sought to have a Bill drafted by the Office of the Parliamentary Counsel to the Government. It is my intention that a Bill should be published in the first half of 2006.
As for employment rights compliance, the Government is acutely aware that the evolving labour market has brought new demands and challenges for those engaged in delivering employment rights information and the administration and enforcement of employment rights generally. The Government is also aware of certain abuses encountered in recent years and appreciates that there is public concern that some employers have been engaging in behaviour which, while not in itself illegal, would be considered exploitative by reasonable people. Therefore, it is opportune to outline to the Seanad a number of initiatives which are being undertaken at present and which focus specifically on the improvement of our employment rights framework, both in the short and medium term.
The employment rights compliance group consists of representatives of the social partners and several Departments. It is engaged in the consideration of some 40 proposals contained in the report on the mandate and resourcing of the labour inspectorate and seeks to establish the degree of consensus which exists in respect of those proposals as well as a couple of others made by the social partners. This group is working towards the formulation of a thoroughly revised model of employment rights enforcement that will see redress mechanisms streamlined and a level competitive environment for those employers who are fully compliant with employment rights legislation.
An independent review of the joint labour committees was completed recently. Arising from this review and following bilateral consultations with social partners and stakeholders, my Department is now preparing a paper that will be used as the basis for implementation of the review in further consultation with the social partners and stakeholders. Moreover, the expert group on bullying reported during the summer and its principal proposal was that legislation should be enacted. Consequently, I have sought the views of the social partners in that regard.
The employment rights review group comprises representatives of several Departments, the employment rights bodies and the social partners. It pursues the Government mandate to guide and drive the implementation of Government decisions on the role and functions of the employment rights bodies and to ensure the complexity of employment rights legislation does not impede understanding and compliance. The objectives of the exercise are to ensure streamlining of the roles of the employment rights bodies and simplification and consolidation of the corpus of employment rights legislation. It is to be expected that the work under way will feature in any forthcoming social partnership negotiations.
A major investment in education, particularly of migrant workers, and in the general dissemination of employment rights information is planned. This will consist of the strategic targeting of information at those who need it most. The delivery mechanisms and content will be formulated in consultation with social partners and others.
Employment rights compliance will be a feature in what may be the next round of social partnership and discussions with the social partners are well advanced, both in respect of the development of the legislative framework and the approach to adopt with regard to ensuring compliance. I am confident that an effective and more user-friendly structure will be achieved.
As Senators will note, the State is active in the area of employment rights protection and compliance. Much of what is being done is effectively the review and modernisation of the already large corpus of legislation which has been in place for some years. Irish legislation in this area mirrors the broader EU social protection framework. Critics sometimes speak as if there were no protection in place and as if employees in Ireland had no statutory rights and were at the mercy of a winner takes all economic system. This is not the case and the work of the Employment Appeals Tribunal, the rights commissioners, the Equality Tribunal and the civil courts will testify to this. I pay tribute to the people who work in these bodies for the constructive contribution they have made in their roles. The information and consultation legislation, which adds a new dimension to the rights of workers, recently came before the Seanad. I should mention the high-profile Gama case, in which a large amount of work was undertaken by the Department. Matters have been subsequently challenged in the courts and are awaiting determination at Supreme Court level.
The number of labour inspectors has recently been increased from 17 to 31. This will add significantly to the capacity of the Labour Inspectorate to ensure compliance with the law and to investigate complaints. We cannot expect to have an inspector at every street corner any more than we can expect to have a Garda presence on every rural road at 3 a.m. If the inspectorate is to deliver the kind of service demanded by society it needs the active support of that society. This means those in possession of information on breaches and denial of employment rights must share it with the inspectorate to enable an investigation and, where appropriate, a prosecution. A civil society alert to its responsibilities can make a significant contribution to the work of bodies, such as the Labour Inspectorate, and can help to improve the already high level of compliance with employer obligations.
I trust the developments I have outlined will help to inform Senators of the Government’s approach in this area and will indicate improvements expected over the coming year. I will listen with interest to their contributions to this discussion.
Mr. Coghlan: I welcome the Minister of State and thank him for his outline of the developments. While I am glad to have the opportunity to make a statement on this matter I would prefer to see us debate Bills that would pass into law and make a real difference to workers rather than talk generally in the manner in which we are today. I wish to address two relevant Bills, one of which we have recently dealt with in this House, namely, the Employment Permits Bill and the Employees (Provision of Information and Consultation) Bill. It has always made good business sense, as the Minister of State has said, to keep employees informed about what is going on. Any manager knows that to keep morale and productivity high he or she must make everyone feel like a stakeholder, a fully paid up member of the team.
I believe in the worker shareholding agenda. In a civilised society we cannot view a firm’s labour force as anything other than an integral part of the decision making process. Workers are not just a resource to be turned on and off but a vital component in any management team and the provision of information to them is a vital component in any management strategy. Under the Bill, employers will have to provide information and consultation on issues such as the probable development of a firm’s activities, the structure and future of employment in the business and any decisions likely to lead to major changes in work organisation or contracts.
The Bill also obliges employers to provide enough information to enable worker representatives to make adequate preparations for consultation. Employers must begin negotiations to set up information and consultation procedures once 10% of employees make such a request. The Labour Court will be able to investigate disputes about the operation of agreements. Employers could face fines of up to €30,000 for breaches of the proposed legislation. This Bill is part of a suite of workers rights’ legislation that has been brought to us from Europe. It is because of legislation like this that Fine Gael is passionately pro-European. It is worth reminding the country that those on the far left who oppose the European project are being deceitful when they say the EU is anything but a social project. It has been a leading force in better working conditions for Irish employees.
Deputy Perry, among others, raised the following issue in the Dáil recently. The Bill excludes companies employing fewer than 50 employees. The Minister of State outlined sound reasons for this when I dealt with the Bill here and we concurred. Small firms in particular must be protected from over-regulation. Due to their competitive disadvantage, and because they tend to be indigenous, the Government must protect them at all costs but we must ensure that those who work in small firms are not treated as inferior to those who work in large companies. I know the Minister of State does not intend to permit that.
The fact that an employer has only 45 workers on his or her books does not mean that he or she should be treated with anything less than the respect and dignity of those who work for the Microsofts and Coca-Colas of this world. I have heard the Minister of State’s views on how we can ensure that the provision of information can be extended to everyone and he struck the right balance on that.
On publication of the Employment Permits Bill the Minister stated: “In relation to work permits the legislation will enable the Minister, every two years, to set the maximum number of employment permits to be issued both in total and by sector, to identify the skills and qualifications required for the grant of a permit, and to identify the categories of employment that may or may not be the subject of granting employment permits.” That provision is correct and Fine Gael welcomes it. However, the Minister added that while the Bill allows for the creation of a green card type system, “the practice of the employer applying for the permit will continue”.
The Minister may or may not be familiar with one of the world’s biggest websites, the online encyclopedia Wikipedia. It defines “green card” as “an identity document issued by a country’s authorities affording non-citizens of that country some of the rights its citizens enjoy, sometimes with the prospect of naturalisation”. An example is the United States permanent resident card. Since the publication of the Bill, the Minister has referred to green cards in an effort to suggest his Department has come up with a comprehensive and compassionate answer to the problems faced by the migrant workers who are keeping this economy going. While Irish citizens have the right to quit a job and look for another, this Bill does not give immigrants the same freedom because it does not give the employee rights over his or her employment status. The new Bill makes it easier for migrant labour to move job but I do not know why the Minister did not go all the way and grant the green card to the employee and not the employer.
This year we have already witnessed flagrant breaches of existing laws designed to protect Irish and non-Irish workers. At Gama’s luxury offices in Santry, north Dublin, ingenious schemes were cooked up to pay those unfortunate workers half nothing while they helped build the country. Some action may have been taken against the company but we await the outcome. Nobody has been punished for the disgraceful treatment of one lady who had to go to the Labour Court to get her thoroughly deserved €25,000 compensation from Irish Ferries, whose status as the pariah of Irish industrial relations solidifies every day.
The Minister of State comes to us with more legislation but tells us little of how it will be enforced. What extra resources will be made available to the labour inspectorate and other bodies that will enforce the legislation? How does the Department intend to communicate those new rights to migrant workers? How does the Minister intend to co-operate with foreign embassies to ensure that those rights are translated into meaningful improvements for migrant workers upon entry to this country?
Unfortunately, the Government does not have a good track record when it comes to cross-cutting initiatives. If it did, the Employment Permits Bill would have been announced as part of a package of measures promoted jointly by the Department of Enterprise, Trade and Employment, the Department of Justice, Equality and Law Reform, the Department of Education and Science and the Department of Foreign Affairs. Needless to say, one arm of Government very often still does not know what the other is doing. It would be good if the Minister of State could at least answer the questions that I have put to him to assure us that the Bill is worth the paper on which it is written.
This debate comes against the backdrop of the Irish Ferries dispute and the latest sinister twist in the story, with management flatly refusing to recognise the legitimacy of the Labour Court or implement its decisions. Regarding the largely very good industrial relations machinery that we have, the court itself, the Labour Relations Commission, and the Employment Appeals Tribunal, I often wonder whether there might be some way of making their decisions legally enforceable. We would like to have a voluntary court, and it is supposedly there, but as we know, on occasion one or other party rejects its findings. Perhaps the Minister might examine that to see if some positive improvement might be made in that regard. Now that it seems clear that Irish Ferries are operating within the law in reflagging the MV Normandy as Bahamian, I urge the Minister to lead the way in convincing our European partners to change EU law in the area to protect all workers, whether Irish or eastern European, from exploitation.
I noted with interest the Minister of State’s comments on the Employment Agency Act 1971, which is currently being reviewed, and the National Recruitment Federation. In some instances, they have been unfairly treated in comments. I am assured and accept that temporary workers are automatically covered for the following wherever they operate or are placed by them: unfair dismissals; redundancy pay; holiday pay; rest breaks; health and safety; discrimination; the minimum wage; and force majeure leave. I accept their bona fides in that regard. Bar one or two cowboys, perhaps, who were not affiliated to them, they are doing a good job. I totally accept the Minister of State’s comments in that regard.
Mr. Hanafin: I welcome the Minister of State to the House and commend him and the Department on their work. It is unusual that we should speak about employment rights at a time when labour shortages are evident, we have full employment and all the hallmarks of an advanced economy working within social partnership. Nevertheless, there are those who would flout the rules and try to retreat from their spirit or circumvent them entirely. I am thinking here of Gama, which will be before the courts. I also believe that the management of An Post has left behind the spirit of social partnership. Irish Ferries wishes to de-register and make many employees redundant, and that would of course be unacceptable.
I commend the Minister on his work in the Department and on the Employment Permits Bill 2005, which has been brought before the House. The Bill had two objectives. First, it puts in place a statutory framework that will implement an active, managed economic migration policy. The three pillars of this employment permit policy were to be green cards, an intracompany transfer scheme, and a revised work permits scheme. Second, it provides several new important protections for migrant workers in Ireland. The Minister has also brought before the House the Employees (Provision of Information and Consultation) Bill 2005, which transposed the EC directive on informing and consulting employees, which resulted from extensive negotiations at the European Council and Parliament. The directive sets out clear principles, while leaving much of the detail of implementation to national governments. Its aim is to establish minimum requirements regarding informing and consulting employees across the Union. For the first time, employers are obliged to establish arrangements for the provision of information and consultation to their employees.
The directive is an important EU intervention in national industrial relations systems. Much of the existing EU-inspired employment legislation relates to individual rights such as equal pay, health or safety. When it has had an impact on collective rights, EU law has done so in limited circumstances. The rationale behind the directive was based on the need to address perceived gaps in the existing legal framework for information and consultation.
We have also recently received clarification from the Department regarding the legal employment rights of construction workers. In that regard, it pointed out to those inquiring about the employment rights situation pertaining in the construction industry that only statutory minimum rates were enforceable in law. The officers of the labour inspectorate can only seek to ensure that relevant employees receive at least those specified rates and conditions. Accordingly, the highest rates of pay that could be enforced in respect of construction operatives under the terms of the register employment agreement were €7.36 per hour.
I am conscious of the fact that we have a minimum wage and excellent terms of employment for many workers. However, we must continue in that vein and ensure that employment rights are upheld. I commend the Minister and Department on their work.
I welcome the Minister of State and thank both him and the Leader for arranging this debate, which comes at a time when recruitment agency legislation is under review. I intend to speak specifically to that today and leave my colleagues to deal with some of the other issues, such as employment rights.
The Employment Agency Act came into force in 1971, when such agencies were just beginning to operate in the State. The Government at that time identified the need to bring some regulation to the area, and that regulation has remained unchanged since. It probably indicates the success of the recruitment agency area that there has been no need to introduce additional legislation, most recruitment agencies being operated very well and tending to regulate themselves.
The recruitment agency field is self-regulated through membership of the National Recruitment Federation, which was formerly the Irish Federation of Personnel Services. That federation has over 100 licensed recruitment agency members. They have their own code of conduct to which anyone joining the federation signs up and agrees to keep. That is self-regulating and ensures that we have a very good industry.
Speaking in general about the industry, a recent survey, the 2005 National Recruitment Federation annual survey, estimated the size of the Irish industry at €1.3 billion. The Minister of State and his Department will know that there are over 450 licensed employment agencies in Ireland. Not all will be operating as such, since many licences are held by small organisations such as accountants, who would recruit on behalf of some of their clients. If they do so, they must have a licence to operate. There are just under 10,000 people employed in permanent jobs in the industry, making it significant by any standards. Many are in small, owner-managed organisations with one or two people, but there are also several international groups working in Ireland. A significant number of people, amounting to approximately 10,000, are employed in the industry on a full-time basis. It is estimated in the National Recruitment Federation survey that 85,000 people obtained permanent jobs using employment agencies in 2004.
Employers approach recruitment agencies and tell them they have vacancies, after which the vacancies are advertised by the agencies. Alternatively, suitable candidates are found on the agencies’ databases. The agencies create a match between the qualifications of the applicants and those desired by the employer. This service is useful to the candidate because it gives him an opportunity to find out exactly what he is getting involved in. He can find out information on the company through an intermediary working on his behalf. The agencies are also working on behalf of the employer and therefore they always have two clients. This ensures that a fair and honest service is provided.
We are having this debate because reference was made in the House to people who have been exploited by recruitment agencies. It is fair to say, and the Minister of State will accept, that any exploitation that has occurred is unacceptable and that it has not been engaged in by Irish recruitment agencies. The very well-publicised case of the female employee on Irish Ferries had nothing to do with an Irish recruitment agency — a foreign agency was involved.
I understand very few complaints about recruitment agencies have been made to the Department. The complaints are generally not about an agency employee doing something wrong, rather it is a matter of understanding exactly what is involved, particularly given that an increasing number of people from other European countries are obtaining jobs in Ireland through recruitment agencies in their countries of origin. Issues arise regarding these agencies’ understanding of how people work in this country.
The issue of temporary workers and how they are charged was discussed. An example was given of a person being paid less than the minimum wage while the charge to the company was perhaps €12 or €13. It is important to clarify for everybody, including agency employees, that the rate a client pays to the recruitment agency for the provision of a temporary worker consists of a number of elements, including the gross pay paid to the worker. On top of this, a charge of 8% is levied for holiday pay, and 4.5% is levied in respect of public holidays. There is also a need to provide employers liability insurance, which can amount to 1% or 2%. Redundancies also need to be provided for, and this involves a provision of 4%. Employer’s PRSI amounting to 10.75%, needs to be provided for, and a VAT charge is also imposed. These costs arise before an agency’s margin is determined. From this margin, the agency must pay its own staff and pay for its premises. This explains the considerable difference in charges. The rate is all-inclusive and automatically covers all the rights mentioned by Senator Coghlan in respect of temporary workers. These concern unfair dismissal, redundancy, holiday pay, health and safety, discrimination, the minimum wage and force majeure leave.
An issue arises regarding the services directive. It is important to place on the record that Ireland is continually trying to export its services. We very much support Commissioner Charlie McCreevy in respect of his trying to extend the provisions of the services directive to allow recruitment agencies operate throughout the European Union. We would like to see the barriers removed. I am not sure of the view of the Minister of State and the Department in this regard. The recruitment industry has adopted a very positive view on Mr. McCreevy’s position.
Mr. Quinn: I welcome the Minister of State, of whom we have seen a lot lately. He is a good listener, as we have learned during the passage of recent legislation. I am also a good listener but was unaware of the story the Minister of State told regarding the Latvian workers on Colt Island, off Skerries. I grew up in that part of the world. In light of the Latvian workers’ experience, I understand why there are calls for legislation. However, I am a great believer that the less legislation we introduce, the better. The Minister of State is probably of the same opinion.
If it is possible to find a solution to a problem that does not involve enforcement legislation, it is all the better. People, particularly employers, do things because they are good for business. About ten years ago, a man called John approached me and said he had been employed in my company for nine years and was approaching his 65th birthday, which was to fall on 31 December in the year in question. He said he enjoyed his work and that he would be retiring on 31 December, but he died six days before this, on Christmas Day. His wife died a few days later and the two funerals were held within a few days of each other.
While attending the funerals in the church, I remembered his having told me that he looked forward to going to work when he woke up in the mornings and that he had looked at his watch on many occasions while at work in the belief that it was 4 p.m. only to discover it was 6 p.m. I said to myself that it would be marvellous if my company and employers in general could set a standard such that all employees would hold such views. The man’s words have stayed in my mind ever since.
I am reluctantly saying there is a need for legislation to secure employment rights, but it is a pity this is so. It would be desirable to find a way to make employers recognise the enthusiasm, commitment and goodwill of employees such that they could reap the benefits. There will always be those who break the rules but, ideally, those who do not should be the ones who succeed in business and reap the benefits to be gained from their employees.
When I considered the various employment Acts — I wish I had done a better job in this regard — I realised that even where legislators have the best will in the world, legislation that affects employment can have the opposite effect to that which is desired. Consider an example from France. The French decided to solve their unemployment problem by introducing a maximum working week of 35 hours. It was believed that many more jobs would be created if those who were working 40 or 50 hours were only allowed work for 35 but the very opposite happened. In spite of the goodwill and good intentions of the then French Government, far fewer jobs were created because employers could not afford to employ people for 35 hours at the same rate.
I make this point because we are now very much in a global economy. If we are to attract investment into Ireland, we must ensure all our standards make the country attractive. I am not only talking about employment legislation but also about other types. In spite of legislators having the best intentions in the world, they often create circumstances in which Ireland becomes more regulated and restricted.
Foreign direct investors are wondering whether the best place to invest is Europe or elsewhere. If they decide on Europe, they wonder whether to invest in Ireland or some other European country. Each legislative measure or regulation might have the best intentions but might result in the same situation that was seen in France, where the end result was the opposite to what was intended.
The legislation referred to by the Minister of State has good intentions which are difficult to criticise. However, it is another little step along the road to making Ireland a little less attractive. It is not enough to claim that there is a EU directive pushing us in this direction because that might well make Europe less attractive. Europe is in the global economy and will also have to attract attention and investment from elsewhere. My thoughts on this area are from the perspective of ensuring we are competitive.
Another point worth making relates to the complexity of the legislation. One of the growth areas in Ireland is foreign direct investment by large companies such as Hewlett Packard, Microsoft and Intel. However, the growth we really need is in indigenous industry and among indigenous traders. These are the people who start businesses. They do not have the big support structure. If they wish to take on one new employee, the complexity of what they must do and be aware of makes it difficult to do so.
I remember travelling on an aeroplane some years ago with the chief executive of a large company in Ireland. He was also on the board of the company in the United States. He told me that one of the managers had come to the board meeting in the United States the previous week with an idea. The manager urged the board to start a new enterprise. When the board asked what would be involved, the manager said he would take on 37 people. He believed there was a good chance he would make a success of the venture. The board gave him the go ahead. However, the Irish man asked what would happen if it did not work. The reply was that the 37 people would be let go. The Irish man told me: “We could not do that in Ireland.” We make it so difficult and so restrictive that if somebody took a chance to take on 37 or even two people and had to let them go again, the difficulties that would be created are such that it is quite likely the company would not take that first step.
This is the difference between what was happening in the United States and what was happening in Ireland at that time and even now. Each legislative measure we pass makes it a little less attractive to take on an employee. Can we make it more attractive to take on people, even if five or nine out of ten of those enterprises fail? Where one blossoms and grows, we have succeeded. It worries me that each step we take lessens the opportunity to do that. I have a concern about the complexity of the legislation, particularly for smaller employers. In this regard it is acknowledged that the legislation has become increasingly complex over the years.
Some of the EROs and the REAs should be either updated or even abolished. Taken in conjunction with the introduction of the national minimum wage and the transposition of protective legislation from the EU, it could be argued that the requirement for these industry specific measures is redundant. The Minister might consider that. The case has been made that the growth in the body of employment legislation since 1990, only 15 years ago, when 18 separate labour laws or regulations have been enacted, has overtaken the need for much of the focus on those industry regulatory instruments.
Another big point that is hard to make relates to the minimum wage. There are some jobs that do not exist at a certain price. It is very hard to argue against increasing the minimum wage because nobody wants to see people working for a rate that is less than one can live on. However, some jobs cannot exist for that wage. The example I offered some days ago when discussing this is that ten years ago when one bought petrol, the garage employed somebody to put the petrol into the tank. There were many jobs that were extremely menial and which did not yield a great deal of money. Some of them were probably part-time jobs. However, they were jobs people were willing to do. The introduction of the minimum wage made it impossible to make those jobs pay for themselves. The jobs, therefore, ceased to exist.
There are many other such jobs. It is when I go to other countries that I see people willing to work for rates of pay that are lower than the minimum wage. The job might be a second or surplus job. I am not arguing against a minimum wage but we should remember that its existence means that certain jobs can no longer exist.
There is an unemployment problem in Ireland. The problem is that the same people are being left at the bottom of the pile all the time. When jobs become available these people do not get onto the first rung of the ladder by getting that first job. I do not know the answer to this. It is not to reduce the minimum wage to half its rate to employ these people. In Ballymun recently there was a large amount of construction but when the people in the area who would, perhaps, not be the first choice of an employer went looking for the jobs, they found they were already filled because the construction companies brought their own people with them.
The same people are being left at the bottom of the pile. I am not sure what the solution is but perhaps it might be possible to subsidise employers in some way so the minimum wage can be paid. I can see the difficulties this would cause but it might be a way to achieve something in this area.
The proposal for a standardised record keeping format is a practical and beneficial measure for employers and employees. It removes the ambiguity that might exist. However, we should be careful that any standardisation of records does not impose an undue administrative burden on employers, particularly the small and medium sized enterprises. We should be creating opportunities for them.
I wish to refer to the increase in the penalties. The fines prescribed in various statutes might not have the deterrent effect they once had but it is important to ensure that due process is maintained for all parties. That does not always happen. The same applies to the imposition of on-the-spot fines. All these act in some way or other as a deterrent to taking on a new employee. With regard to the annual declaration of compliance, the complexity and ongoing evolution of employment rights legislation make a system of self policing problematic. I am not sure how the declarations should work.
Mr. Leyden: I welcome the opportunity to discuss proposed legislation relating to employment rights. It is good to have these debates in a calm way rather than in the middle of a crisis or when an issue arises. I listened carefully to the contributions of Members. I am aware from my experience of being in Senator Quinn’s Superquinn stores that they are excellent places for workers. I was delighted to hear the Senator’s views on the treatment of workers and how he had treated his workers over the years. It is a win-win situation where both the employees and the employer have succeeded. That is a credit to Senator Quinn.
I first encountered Senator Quinn when he was the first chairman of An Post. He contributed a great deal to the early development of that company. I am sure he is relieved that the pending strike has been settled. A good settlement has been reached on the payment of Sustaining Progress increases. The other issues will be resolved in the new year. It is vital that there is no danger of disruption of postal services prior to Christmas and into the new year because, as Senator Quinn is aware, it is the most profitable time for An Post. To put that in danger would be detrimental to the future of An Post, the workers and the entire structure.
The liberalisation of the market in 2008-09 will put enormous pressure on An Post. The largest and most profitable areas are the major cities and towns. It is extremely difficult to maintain the five days a week service in rural areas. I live in a rural area and I get post at 9 o’clock every morning, delivered by a top-class member of An Post, Micheál Meeley, who arrives bright and early and is co-operative and efficient. One could not pay for that excellent service provided every day but An Post will be under major pressure when the market is liberalised. I am delighted the Communications Workers Union members have recognised that the system must be rationalised to ensure a viable system when the market is liberalised in 2008-09.
I am also concerned about the future of the post office structure. There are approximately 1,350 sub-post offices and some of them are not viable. There will be a rationalisation even though these sub-post offices are at the heart of communities but they have been under major pressure over the past few years.
I commend Senator Cox on her contribution during which she declared her interest. The Senator runs a very successful agency in Galway providing an excellent service in the west. I had discussions with the National Recruitment Federation on this issue. In the Gama controversy there was no reference to the fact that no Irish recruitment agency was involved in recruiting the Gama workers. A similar situation applies in the case of Irish Ferries. It should be clearly stated that neither of those issues was dealt with by Irish recruitment agencies. Some agencies were involved but they were not Irish, not that that would exonerate them in any way. I am aware the Minister of State’s Department is dealing with this issue very effectively, and also the periwinkle issue on which his Department is very proactive. That is the advantage of having a dedicated Minister for labour who is proactive on the implementation of legislation and bringing forward new legislation, which he so ably outlined to the House.
It is interesting that the recruitment industry here is worth €1.3 billion. There are approximately 450 licensed employment agencies in Ireland and 85,000 people obtained permanent jobs in 2004 through employment agencies. There are under 10,000 employed in the industry, which is an impressive number many people would not appreciate, as I did not until I was briefed on it earlier. A total of 250,000 temporary assignments were filled through employment agencies.
Employment agencies are regulated under the Employment Agency Act 1971. That Act is under review and I am aware will require amending legislation next year. The Act is 34 years in place and it is proper to review legislation on a regular basis, bearing in mind the new era in which we now live.
The activities of employment agencies can be broken down into two main areas, first, permanent placements, involving finding somebody a permanent job, and, second, temporary placements, involving finding someone a temporary job. The end employers pay a fee to the agency. It is important to note that the job-seekers do not pay the agency; some people have a different opinion on that. The end users pay the agency, the agency pays the workers and all employment rights are protected in that regard. The industry is well regulated. Its code of conduct is well laid out and the organisations affiliated to the National Recruitment Federation comply with the regulations and carry out an excellent job on behalf of their clients.
I agree with Senator Quinn that we do not want our employment legislation to be too complex. It must be pro-employee but not anti-employer. It should be easily adhered to. In reviewing legislation the Minister of State has an ideal opportunity, with his senior officials, to review all legislation to ensure it contains pro-employment provisions. I support that.
Minister of State at the Department of Enterprise, Trade and Employment (Mr. Killeen): I thank the Members who contributed to the debate and will try to respond to the principal points made. Senator Coghlan referred to the danger of over-regulation and the negative impact it can have on small firms, something we must all bear in mind. It is something we try to do. The Senator made the counter-point that employees in small companies must have their rights vindicated but that sometimes we exclude them, as happened regarding the information and consultation Bill. It is a difficult balance to strike but we did as well as we could have done in that regard.
The Senator raised the question of extra resources for the labour inspectorate. That is one part of the whole aspect that needs to be dealt with but in the review I mentioned briefly there are many areas we must examine. For example, for the inspectorate to succeed on an issue it is examining it must establish proof at criminal law level. That is unhelpful. It places a burden on both parties and I would prefer if we could devise a method that enabled us to refer many of these cases to the Labour Court, the Labour Relations Commission or the Employment Appeals Tribunal. That is the appropriate level at which they should be dealt with and the system would be far more successful if we could do that. We are committed to providing extra resources, close to doubling the current number of labour inspectors, and I am sure there will be another increase following the social partnership talks if they get under way and succeed.
We are also examining the means for communicating information. The biggest difficulty, as the Senator and other Members will be aware, is the language barrier. We are addressing that by providing virtually every piece of legislation in a number of languages. I was looking at one yesterday which is now available in 18 languages. Most legislation is available in seven or eight languages, and others in 12. We are doing that on a gradual basis.
In the area of health and safety we have joint initiatives with, for example, the Construction Industry Federation on the provision of pictograms, which is understandable. I never worked on a building site but I am very impressed by the quality of them.
The Senator asked about the involvement of embassies. I have been in contact with many of them. Interestingly, in very few cases do they make the initial approach. Sometimes we have made the approaches because we read speculation or stories in the media about embassy concerns in regard to their nationals. We have told them clearly the actions we believe ought to be undertaken by people from their countries who come to Ireland. People tend not to recognise that this country is not cheap to live in or get accommodation. A great many of them come here assuming they can get a job immediately but that is not always the case. We have been encouraging the embassies to transmit useful information to their own people who may be thinking about coming here.
The Employment Permits Bill will be introduced in the House by the Minister, Deputy Martin. The Senator will be pleased to hear that the Department of Justice, Equality and Law Reform is on board in regard to these proposals. We have had fruitful meetings with the Department and in regard to the education element. The practice heretofore regarding employment law has been that FÁS undertakes that work and it is doing it successfully. It is an area that is relatively new to it.
Senator Hanafin mentioned the large number of employment rights in place and the peculiarity that we should have such difficulties in an era when we are close to full employment. In that regard we should remember that we created 93,000 jobs in the first year post-accession, many of which have gone to people outside the country. We ought not be surprised that we have teething problems which we are trying to address as effectively as possible. What we need from people who experience difficulties is, first, the information and, second, that they be supportive in terms of helping the Labour Inspectorate to meet the burden of proof. Sometimes that is not the case.
Senator Cox spoke in the main about the Recruitment Agency Federation and related issues, and the fact that the Act is from the early 1970s and is now dealing with a very different situation. Senators Cox and Leyden made the point that, as far as we are aware, all the difficulties, including the most high-profile cases, have arisen in situations where no Irish recruitment agency was involved. Nevertheless, this does not absolve the State from responsibility. Regardless of what agency is involved or where it is from, we must try to ensure the rights of workers are vindicated.
Senator Cox made the point strongly that exploitation is not facilitated by Irish recruitment agencies. Such reassurance is welcome. She also set out a list of costs, of which many of us were unaware, associated with recruitment. I accept her point on the services directive. It is something we will examine and our position will be made clear.
I strongly agree with Senator Quinn’s point that legislation should only be in place when it is needed. There have been occasions, of which he gave an example, when the most well intentioned legislation had the opposite effect to that envisaged by its champions. Senator Quinn has frequently made the point that we are well advised to be aware of the climate in which foreign direct investment companies wish to operate and that we must try to facilitate them in this regard. We endeavour to do so to the greatest extent possible.
I was initially surprised to encounter many compliant employers who argue they are at a disadvantage unless all employers in their sector are similarly compliant. This did not seem so surprising when I had time to consider it. It is clear that in many areas there are companies that behave in a cavalier, sometimes entirely illegal fashion, and undercut their competitors, especially for Government contracts, in the construction sector in particular and across a range of areas. We must ensure that compliant companies are not placed at a disadvantage. This is a major challenge, far greater than it was five or ten years ago. It is one of the reasons the legislation we are discussing is needed.
Senator Quinn made the important point that we must ensure directives and legislation introduced at EU level do not make Europe less competitive. If I had time, I could tell the Senator some stories about a Council of Ministers meeting at which this issue should have been given more urgent attention. In the reviewed Lisbon Agenda, however, there is a welcome acknowledgement by European governments that this is a real concern. The revised agreement comes much closer to reflecting the needs of a global economy than was the case in the original text.
A major debate is ongoing about the national minimum wage. I take the view that the debate was conducted in 2000, primary legislation was enacted and it is my job to implement it. I recognise, however, that there are jobs which are not tenable at the minimum wage level, including perhaps the example to which Senator Quinn referred.
In the context of the employment rights group, I hope to achieve two aims. One of these is to streamline the bodies themselves. Equally important, I hope to introduce a corpus of consolidated legislation that will be easier to understand. It will not be possible to do this in one go, however. Some type of miscellaneous provisions Bill will be required that draws together various strands and eliminates the contradictory provisions in different legislation. It will be a major job, which will probably take some 18 months, but I have made the first step in securing Government approval for it. It can only proceed, however, in the context of a much clearer delineation between the Labour Relations Commission, Labour Court and Employment Appeals Tribunal. It is a worthwhile endeavour and will be greatly advantageous to employers and employees alike.
Senator Leyden made the important point that it is far better to conduct this type of debate in a cool climate rather than in a crisis. I mentioned earlier that in a crisis situation, much of the material that appears in public tends to be considerably at variance with the truth. This is what happened in the case of the periwinkle pickers. Senator Leyden also referred to recruitment agencies and progress in regard to the situation in An Post. In particular, he mentioned the type of situation that will pertain in regard to An Post in a liberalised market.
I have already dealt with the Employment Permits Bill 2005. We must take account of the types of resource pressures that some of the employment rights legislation places on industry and employers, as well as on Departments. This is an issue of considerable concern to me in regard to the long-term employed and the thankfully very small coterie of individuals who have difficulty accessing the workplace. Some of them may be disadvantaged to some extent in the context of the minimum wage in regard to the jobs mentioned by Senator Quinn. The best approach is to focus on training and retraining. In regard to disabled people, for example, we recently provided the wage supplement. It will be interesting to see how that plays out. We are in the business of helping people in terms of training and support and incentivising employers to recruit them. It is something to which we must direct considerably more energy than we have done heretofore.
In regard to employment agencies, we must acknowledge that there will be particular difficulties in trying to address the problems that arise with non-national employment agencies, particularly those that recruit people in countries outside the EU. In such circumstances, the agency effectively controls how those workers are employed in Ireland and has often already put them in debt prior to arrival. It is difficult to put in place a system and resources to enable us to get to the bottom of this type of situation. It is an area that will be difficult to deal with at national and even EU level.
Several Members referred to the displacement of workers that is happening in the context of globalisation. We must try to strike a balance in this regard. In the Irish Ferries case, we are grappling with a situation governed by international maritime law rather than Irish labour law. It is a case for which it will be difficult to devise a satisfactory resolution but we will continue to endeavour to do so. I very much regret that the company seems unprepared to recognise the Labour Court in any meaningful way.
That is an important issue but it is far more important that we address the issues within our own competence. We have a job of work to do in this regard. I welcome the input of Senators. They come from a variety of backgrounds and bring much common sense to debates such as this.
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