I am delighted to speak on the Bill. The Fine Gael Party supports this overdue legislation which provides that a fixed-term employee shall not be treated less favourably than a comparable permanent employee in respect of his or her conditions of employment. Deputy Mulcahy discussed the rights of employees to have a contract of employment. It is equally important that contracts be two-way, providing a clear definition of the work of the employee and employer to be honoured by both parties. This is often difficult.
Employees are frequently regarded as victims. It is important to note that the people who take the risks, hits and pressure in business are the employers. Even with the best intentions, matters do not always work out. I recommend that all employees receive a contract precisely defining their responsibilities. Unfortunately, too many employers do not clearly define the work they expect of their employees and contracts are only examined when litigation or unfair dismissals arise. IBEC and the Small Firms Association should recommend that their members issue contracts which comply with legislation and specify the obligations of the employer and employee in terms of the work they are contracted to do.
The Bill transposes a European Union directive four years late. The area of employment law illustrates that membership of the EU has been positive for the country and employees. During the Nice treaty referendum campaign we debated the difficulties of Europe. This important legislation is one of the benefits of membership. Its main provisions prevent employers from continually renewing an employee's contract. Only one renewal will be allowed after a three year period, after which the employee will be considered permanent.
As a businessman, Deputy Cassidy will be aware that jobs are no longer for life. In recent years, difficulties have arisen in the services sector. This is apparent from the number of visas and work permits issued and the number of people who have entered the country to work. Service and meeting the customer are of critical importance in tourism and at the coalface of business. Regrettably, the education system frowns on the céad míle fáilte, friendliness, commitment and customer care associated with the service sector. Jobs in the sector are perceived by parents as part-time and somewhat demeaning for their sons and daughters and, as a result, are seen as useful only for filling gaps.
I am a firm believer in the enterprise culture. The backbone of this economy was built by small companies, the people who from a small acorn grew a large oak. It is important we continue to encourage enterprise and consider employers as vital partners. We should never castigate them as a group, although there are obviously rogue elements whose activities I do not condone. It is paramount that employers adhere to the law and comply with the tax regime. Equally, it is vital that partnership is encouraged to promote development and growth.
Small companies employing fewer than ten people provide the backbone of the economy, yet few incentives are offered to enterprises of this size. This role has been left to enterprise boards. Enterprise Ireland deals with manufacturing and development companies, while IDA Ireland deals with external companies. Our small towns and villages have been developed by people who started out small, but had a burning ambition to succeed. Unfortunately, they receive little or no encouragement under the current system.
This issue closely ties into the objective of the Bill, which is to address the level of security offered to permanent employees. The success and sustainability of any job rests on the profitability of the company in question. In many cases, business owners are often the last and lowest paid. This is not a common perception and may not be believed by many. I know many business people who work 40-hour weekends, as opposed to 40 hour weeks. They take great pride in their work and many risks, which cost them sweat. Their families must also endure a great deal. While I do not wish to diminish the role of employees, it is critical that we take a balanced view.
A contract worker cannot be discriminated against purely because of his or her status. If he or she is doing the same work as a permanent employee, no preferential treatment can be given to the permanent worker.
People going into business can spend a fortune on equipment and machines, which are significant cost factors. The largest and most important investment a company operating in an open economy will make is in staff capable of doing the work required. Contract periods are, therefore, important as they allow employers to assess new employees. There should be a clear understanding when one signs a contract that one is entering a trial period in which one's capabilities as an employee are assessed. I have seen curricula vitae which are so good and well presented that one expects the person to be able to go straight to the moon. People do not always live up to expectations and their CVs are not always fully truthful. They may contain dubious references and this is why recruitment companies have been so successful. The selection process in which these companies engage is critically important because if an employer mistakenly takes on an unsuitable employee, it can have undesirable consequences. Deputy Cassidy would agree with me in this regard because the recruitment process involves a significant investment on the part of employers and, therefore, it is very important that they choose the correct candidate. The principle of selecting a suitable candidate applies not only to private companies but also to the public service. People should be able to do the job they are paid to do, just as employers are obliged to fulfil their contracts, because a successful company is about having a successful team. The Bill will help in this regard.
An employer who contravenes the law can be taken to the rights commissioner who will adjudicate on the matter in question. If an employer fails to mend his ways, his employees may take him to the Labour Court and vice versa. This Bill is as good for the employer as the employee and we should not castigate employers or use them as fall guys. A culture exists whereby begrudgery is directed at those who are enterprising and creating wealth in the economy but we should acknowledge and encourage their risk taking and foster an enterprise culture. State organisations such as FÁS and the enterprise boards have a role to play in this respect.
Deputy Cassidy is Chairman of the Select Committee on Enterprise and Small Business, which is doing a very good job addressing the issues of small companies. It is critically important that a man of his expertise hold that position in order to recognise sufficiently the difficulties companies encounter. These difficulties are mentioned daily and include high insurance and electricity costs. People often make comparisons with other countries in Europe but they do not take into account the huge stacked-up costs and operational charges that companies must pay in Ireland.
Some concerns exist regarding bureaucracy and red tape. The Government should assure business people that these problems will not arise and stress the importance of compliance. It is important to note that the smallest businesses now have to employ a secretary just to comply with all the legislative requirements imposed on them. The legislation that applies to businesses should be kept simple and the red tape involved in the creation of employment should be kept to a minimum. Simple contracts would ensure that employees and employers knew exactly what they had to do, and there should be no hidden agenda.
Deputy Mulcahy referred to the State and local authorities. It is quite disappointing that people taking up employment in the health boards have very short-term contracts. Their parents think they have long-term jobs only to find out that they lose these jobs soon afterwards because of their short-term contracts. The employers have to operate totally within the law and cannot retain employees for one day in addition to the period specified in their contracts. I hope the Minister will take heed of this in the Bill and ensure that local authorities, health boards and State bodies are not in breach of any regulation. If we are to establish standards for the private sector, it is equally important that the public sector is fully in compliance with the law.
Our present workforce is very different to that of ten or 20 years ago. There are now 294,000 part-time workers in the economy, representing 17% of the workforce. The idea of one's having a job for life is gone. Nowadays, people may carve out a career but they feel it is neither practical nor desirable to spend 20, 30 or 40 years working for the same employer or institution. To change is to live and most people like the idea of change. It is very much an American concept that people feel they can improve themselves in a job, but it is important.
Let us consider pension entitlements. Insurance companies are promoting the concept of pension policies. Employers must promote the concept of pensions but it is unfortunate that they are not obliged by law to have pension schemes for their employees. Pensions are very badly catered for in both the public and private sectors – it is very much at the discretion of the employer whether to have a scheme. There should be a mechanism in the PAYE system to ensure that people who have served in employment all their lives do not end up without any allowance other than the old age pension. This is very important.
Contract work is an attractive prospect for young people entering the labour market who are unsure whether they wish to pledge their entire working lives to a chosen profession. This no longer happens. Young people are so well educated that they want to go abroad to work and want to change careers. It is only right that they get the opportunity to do so. As they get older, they settle down, have families, buy houses – generally between the ages of 27 and 40 – and develop a greater sense of what they are doing in their lives. They look for security and pension entitlements. They have to consider the high costs of rearing families and of mortgages, etc., and it is important that the tenure of their employment be sufficient to provide job security.
Some years ago, there was usually only one wage earner per household but now two or three members of certain families have jobs to maintain a high standard of living. Some families go on two holidays per year, own two cars and have high expectations. It is very common to compare one's lifestyle with that of one's neighbours and friends. In the past people were happy to go to a local beach on holidays once a year – they now want to go to Portugal and other places. The mass exodus of holiday makers from the country demonstrates that expectations have changed. There is considerable pressure on people, particularly young people who are interested in fashion and want to buy designer brands. Never was there greater pressure on families than there is now and simple lifestyles are no longer evident. These factors have a bearing on people's desire for secure jobs.
During the debate on the Intoxicating Liquor Bill this week, the Minister, Deputy McDowell, spoke about the difficulties associated with alcohol and the huge impact they are having on families. However, the problem is also having a huge impact on employers. The difficulties it causes bring themselves to bear on the employment contract. One must remember that Monday morning blues are a significant difficulty and contribute to the tension that exists between employers and employees. A massive commitment must be made by the licensed traders to police this problem. It is equally important that the overall contract should deal with those employees who are not doing their job, do not attend work on Monday mornings and have a sick head on Tuesday afternoons. This is making an impact, as the recent debate on the liquor licensing legislation testifies.
This legislation is concerned with what Fine Gael believes to be the need for rights and responsibilities. For employers this means the right, enshrined in our democratic system, to run a thriving, successful business. Nobody suggests it would be possible to do this without the flexibility afforded by a system of contract work. In this context, partnership is important. It also means that a duty is owed to employees who have been in employment for a given period of time. I am sure that will be recognised by the majority of employers. Only the unscrupulous need be worried about the legislation. It is a good Bill.
The rights and responsibilities of employees are also recognised. By allowing for an easier passage to the status of permanent worker, they will share in the duties and responsibilities of every permanent employee. In this way, both employers and employees win. Although the legislation might be four years overdue, its importance is undiminished because it places the contract of employment on a permanent footing.
It would be difficult to argue against the broad thrust of the Bill. Section 7 provides that a fixed-term employee shall not be treated less favourably than a comparable permanent employee in respect of his or her conditions of employment. It is astounding that this should even be debated in 2003. Section 10 provides that the contract for a fixed-term employee may be renewed only once after he or she has been employed for a period of three years. I support this. It is unfair that somebody could work for a company for, say, 20 years and not know from one year to the next whether he or she will keep his or her job. It is an insult to treat in such a manner somebody who may work for a company for all of his or her life.
We live in a dynamic economy, but we are also civilised human beings. We must treat each other accordingly. I welcome the establishment of a rights commissioner who will adjudicate on alleged cases of contravention of the legislative provisions. I am also pleased that in cases where the rights commissioner cannot solve an impasse, provision is made for referral to the Labour Court.
I congratulate the Minister of State for introducing what is a good Bill, albeit that it is late. The employment contract is a two-way process. It is equally important that recognition is given to employers and small businesses, who are the backbone of the economy.