Dáil Éireann debate -
Wednesday, 11 Jan 2012

Vol. 751 No. 1

Protection of Employees (Temporary Agency Work) Bill 2011: Second Stage

Minister for Jobs, Enterprise and Innovation (Deputy Richard Bruton)

I move: "That the Bill be now read a Second Time."

I am pleased to present the Protection of Employees (Temporary Agency Work) Bill 2011 for the consideration of the House. The Bill marks an important milestone as it represents the last piece of the three part matrix of employment rights protection geared towards workers engaged in atypical work patterns. It has been preceded by the Protection of Employees (Part-Time Work) Act 2001 and the Protection of Employees (Fixed-Term Work) Act 2003 that deal, respectively, with part-time and fixed-term work. Members will have a full opportunity to explore the provisions of the Bill in greater detail on Committee Stage and I look forward to active engagement with them on the Bill.

The Bill has been designed to give effect to an EU directive on temporary agency work that was finally adopted in 2008 after a number of years of discussion. The directive has a transposition date of 5 December 2011 and as its implementation is mandated by our EU commitments, it is intended that the legislation will on enactment have retrospective effect to that date, with the exception of the offence creation provisions in sections 12 and 14 and Part 4 of the Bill. These latter provisions will, on the basis of legal advice, only come into effect on enactment of the legislation.

At its core, the directive aims to establish in all member states of the European Union a legal framework in which agency workers are afforded equal treatment in respect of their basic working and employment conditions as if they were directly recruited by a hirer to the same job. This key objective is reflected in the non-discrimination principle set out at Article 5.1 of the directive. Other entitlements concern the right of access by agency workers to the collective facilities and amenities at the hirer undertaking, to include canteen, crèche and transport facilities, in the same manner as these may be available to direct employees of the undertaking. Additionally, agency workers are also to be provided access to vacancy notifications to avail of the same opportunities to gain access to permanent employment positions in hirer undertakings. Agency workers must also be included in the headcount towards employee representation in either the employment agency, as in the case of the Bill or with the hirer undertaking.

In short, the directive established a set of minimum rules to be applied by EU member states having regard to the national law, custom and practices in force in each jurisdiction. This is geared towards improving the operation of the temporary agency work sector by promoting job creation and making agency work more attractive and amenable to employer needs for flexibility in the labour market. The underlying rationale for the directive, as explained by the European Commission at the time the proposal was first tabled in 2002, was that by extending the equal treatment provision to agency workers at EU level and creating a common framework for agency work, this would promote agency work. In the context of its analysis at the time, the Commission pointed to the main difference in terms of intrinsic quality of agency working compared with the terms and conditions enjoyed by employees on open-ended contracts as being related to pay.

The directive provides for certain derogations that may be availed of by member states under Article 5. The first of these is under Article 5.2 and allows member states to exclude from its scope but limited only to the aspect of equal pay agency workers engaged on a permanent basis and paid between assignments. Section 6 of the Bill invokes this derogation and includes necessary protections against potential abuse of the provision in that it requires that such workers are paid at a level of not less than 50% between assignments based on the most recent assignment.

The derogation available under Article 5.3 of the directive entrusts the social partners with the ability to conclude collective agreements that deviate from the basic working and employment conditions. While the system of collective bargaining envisaged under the Article 5.3 derogation is more suited to the well established system of collective bargaining associated with mainland Europe, in the Irish context, it would cover registered employment agreements. This derogation recognises the national traditions, custom and practice in place in member states and allows a necessary level of flexibility in the workplace to operate to the mutual benefit of employees and agency workers alike. Use of this derogation is not without limit but must have overall regard to the need to ensure overall protection for agency workers. Collective agreements cannot, for instance, set levels of pay at a rate lower than equal treatment would demand without being balanced by countervailing measures favourable to temporary agency workers such as, for instance, in respect of the provision of better training opportunities between job assignments.

Section 7 of the Bill provides for this derogation and enables existing collective agreements to be upheld and facilitates the negotiation and conclusion of future such agreements. It would also facilitate the future negotiation and conclusion by the social partners of collective agreements at the level of the user undertaking or at enterprise level. The provisions for oversight and approval by the Labour Court of such collective agreements as set out in the section mirrors that already in place in the context of agreements reached under the terms of section 24 of the Organisation of Working Time Act 1997.

Recognising the voluntarist nature of industrial relations in the United Kingdom and Ireland, the derogation available under Article 5.4 of the directive was designed to meet the needs and flexibilities required in the labour market to accommodate the system in place in both countries. This derogation includes the possibility to have a qualifying period before the principle of equal treatment would apply to temporary agency workers. However, the derogation is subject to agreement being reached between the national social partners and, in the absence of such agreement, cannot be invoked by the Oireachtas. Members will be aware that the present and previous Governments engaged in discussions with the national social partners, namely, IBEC and ICTU, with a view to facilitating agreement between the parties on this important issue. This was against the background that agreement on a qualifying 12 week period already had been achieved in Great Britain and Northern Ireland that applies to temporary agency workers assigned to hirer undertakings in the North and elsewhere in the United Kingdom. Regrettably, agreement on this issue has not proved possible between the national social partners. In that case, it is not possible to avail of the derogation and the Bill provides for the application of equal treatment for temporary agency workers on a day one basis.

I advise Members that the qualifying period was considered important not in any sense to disadvantage temporary agency workers as they would, on expiry of the qualifying period, benefit from equal treatment. Rather, the measure raises issues of a competitiveness nature in that the absence of agreement on a qualifying period, unfortunately, puts Ireland in a less favourable position in terms of labour market flexibility than that of our closest neighbour, the United Kingdom. Employer representative groups and the recruitment sector were also anxious to have a sensible qualifying period in place in Ireland, given that in the absence of such, it gives rise to greater administrative overheads in providing day one equal treatment, even in respect of very short-term assignments. This will result in higher labour and administration costs for the sector. There is also concern that this is likely to have a chilling effect on employment in the agency sector in that undertakings are likely to opt to use existing staff in preference to taking on agency workers to meet spikes in demand or short-term absences of permanent staff. It would have been optimal, at the least, to have an all-Ireland approach on a qualifying period, given that certain larger recruitment agencies operate both in the State and Northern Ireland. In the context of the serious labour market challenges that beset the economy, each job, including those of a short-term or even seasonal nature, must be nurtured and every effort made to maintain and grow employment and reduce unemployment.

In deciding how to establish equal treatment and in line with section 6 of the Bill, read in tandem with the definition in section 2, the requirement is to treat the agency worker as if he or she had been recruited directly by the hirer to occupy the same job. This means that equal treatment can be established by giving those relevant terms and conditions, for example, pay and holidays, as if the agency worker had been directly recruited by the hirer to occupy the same job having regard to the particular role and the required skills or qualifications needed. The relevant terms and conditions are those which are included in enactments, collective agreements or other arrangements generally applicable to employees of the hirer. This would include, for instance, terms and conditions ordinarily found in contracts of employment of directly recruited employees of the hirer which are binding and generally in force in the hirer undertaking. Section 2 defines "pay" as basic pay, shift premium, piece rates, overtime premium, unsocial hours premium and Sunday premium. Pay does not extend to other aspects provided for in recognition of the longer term relationship between an employer and a permanent employee such as pension schemes, financial participation or sick pay schemes.

As to the profile of agency work, although established statistical sources in Ireland do not capture data for this type of atypical work, in general, estimates based on surveys conducted by private employment agencies suggest temporary agency workers represent approximately 2% of the active working population. Currently, this would amount to approximately 35,000 agency workers operating in both the private and the public sectors. The majority of agency workers are engaged in the private sector across a diversity of sectors ranging from security, manufacturing and services to information and communications technology, etc. In the public sector, in particular in the health sector, agency workers represent a significant and important part of the workforce and allow the service to use them in a flexible manner to respond as necessary to short and medium-term staff absences.

Agency workers already enjoy extensive rights and entitlements in the current suite of Irish employment rights legislation. Thus, for example, they are entitled, in the same way as full-time workers, to the annual leave entitlements under the provisions of the Organisation of Working Time Act 1997. Additionally, they have recourse to redress under unfair dismissals legislation and are also subject to rules that apply under health and safety legislation. They can vindicate their rights and pursue grievances under employment law by accessing the same avenues of civil redress - rights commissioners and under the National Employment Rights Authority - as are generally available to directly recruited workers.

Under the Bill, it is important to note that there will be no change to the employment status of agency workers, nor will their entitlements to avail of existing employment rights such as statutory leave and rest periods, a safe working environment and the right to claim redress for unfair dismissal be affected. As is the case, the triangular employment relationship between the agency worker, the employment agency and the end user undertaking will continue under the Bill such that the employment agency which pays the agency worker's wage is the employer. In the case of unfair dismissal, however, it will continue as in the past that where an agency worker is dismissed by a user undertaking, the agency worker may bring a claim under the Unfair Dismissals Acts against the user undertaking which, in that instance, is deemed to be the employer.

In general, the fair treatment the enactment of the Bill will bring about for agency workers will confer a greater level of employment protection. Understandably, employer representative groups, user undertakings and employment agencies are concerned about the additional costs the legislation will impose in bringing the entitlements for agency workers to an equal level with direct employees. This is challenging at a time when businesses are otherwise facing serious challenges in endeavouring to maintain and sustain a competitive cost base.

Agency work has a legitimate and valuable role to play in the economy and is the option of choice of some who benefit from the flexibility, personal freedom and income it provides. It also serves the business needs of employers in that this type of atypical working arrangement can be used to assist in managing the peaks and troughs encountered in the normal business cycle.

In the light of the divergent considerations of the various stakeholders and based on the outcome of the consultation process undertaken in informing the provisions of the Bill, the Bill represents a balanced approach to transposition of the directive. It aims to respect in full the objective of providing fair and equal treatment for agency workers, while at the same time striking a necessary balance with the need to ensure labour market flexibility and contribute to ensuring agency work can continue as an option of choice for agency workers and employers and user undertakings alike.

The Bill is divided into four Parts and has two Schedules. Part 1 contains standard preliminary provisions. The main part of the Bill contains the protections available to temporary agency workers under employment law which are set out in Part 2. Part 3 contains a number of amendments to earlier enactments and certain statutory instruments. Part 4 sets out the means of achieving redress in the event that a claim by an agency worker for breach of equal treatment in terms of basic working and employment conditions or other entitlements is made. As I mentioned, the intention is that on enactment the Bill will, with the exception of sections 12 and 14 and Part 4, have retrospective effect to 5 December 2011.

Section 1 contains the Short Title of the Bill and enables the Bill to come into effect from 5 December 2011. The retrospective provisions will not apply to the provisions of the Bill that create offences.

Section 2 contains definitions of a number of terms used throughout the Bill. Section 3 sets out the scope of the Bill and to whom it applies. Section 4 gives effect to the exemption from the scope, permitted byArticle 1.3,of agency workers on public or publicly funded programmes where these are designed to facilitate the integration or reintegration of certain categories who may encounter difficulties in entering or re-entering the labour market. Section 5 is a standard feature to enable the funding of administration costs by the Minister.

Section 6(1) gives effect to the basic principle laid down in Article 5.1 ofthe directive in which a temporary agency worker assigned to a hirer is entitled to equal treatment in relation to his or her "basic working and employment conditions" as if he or she were directly recruited by the hirer to the same job. Section 6(2) invokes the use of the derogation available to member states under the terms of Article5.2 of the directive which applies to pay and may be applied only to agency workers who have a permanent contract of employment and are paid between assignments.

Section 7 gives effect to the derogation provided by Article 5.3of the directive which facilitates the social partners to develop collective agreements at the sectoral or enterprise level to establish arrangements which deviate from the working and employment conditions of agency workers, provided such are appropriately balanced to ensure the overall protection of agency workers. This section provides the framework in which the Labour Court will decide whether to register such agreements that have been agreed.

Section 8 is a consequential amendment linked with sections 7 and 8 of the Employment Equality Act 1998. Section 9 brings agency workers as defined in the Bill within the scope of the Terms of Employment (Information) Act 1994.

Section 10 provides that an agency worker is entitled to be provided with information on job vacancies within the hirer available to a comparable employee. Section 11 sets out overarching principles to help improve the situation of agency workers, mainly with a view to enabling them to gain access to permanent employment.

Section 12 prohibits the charging of work-seeking fees by employment agencies. It strengthens the current provision under the Employment Agency Act 1971.

Section 13 provides that an agency worker is entitled to be treated no less favourably than a comparable employee in relation to access to collective facilities and amenities provided by the hirer for employees. These include canteen, workplace crèche or transport services and provide that less favourable treatment in terms of access by agency workers to these facilities can only be justified if it is based on objective grounds.

Section 14 outlines the relative responsibilities of the employment agency and the hirer and in relation to the obligations of both parties and the necessary flow of information to comply with the terms of the Bill. Subsection (2) is designed to allow the employment agency to be compensated in the event that the hirer fails to comply with the terms of subsection (1).

Section 15 brings within scope of the Employment Agency Act 1971 an employment agency within the meaning of the proposed transposition legislation. Section 16 ensures the Employment Agency Act 1971 regulating employment agencies generally, through licensing, applies to temporary work agencies as defined under the current legislative initiative.

Sections 17 to 19, inclusive, meet the terms of Article 7 of the directive by providing that agency workers should be included in the context of calculating the thresholds above which bodies representing workers are to be formed and provide that agency workers should be included in the thresholds for the establishment of representative bodies of the temporary work agency in respect of the information and consultation requirements of various enactments on this issue.

Section 20 to 22, inclusive, include standard whistleblowing provisions. Section 23 provides for the manner in which complaints in respect of the contravention of provisions contained in the legislation will be dealt with and must be read alongside Schedule 2 to the Bill.

Schedule 1 appends a copy of EU Directive 20087104/EC on temporary agency work. Schedule 2 contains standard complaints and redress provisions applicable and procedures to be followed by the various parties in respect of any breach of a right to equal treatment. The employment agency will be responsible for dealing with any rights for which it is responsible. Liability in relation to access to employment notices - section 10 - and collective facilities - section 13 - falls solely on the hirer as the agency has no role in the delivery of such rights. The redress provisions in Schedule 2 are modelled on the provisions in other employee protection legislation such as that relating to fixed-term work.

It is my intention on Committee Stage to bring before the House a number of amendments in order to clarify or strengthen the intent of certain provisions of the Bill or align them more closely with similar provisions in other enactments. I commend the Bill to the House.

Deputy Willie O’Dea

I am extremely relieved with regard to the final statement by the Minister, namely, that he intends to bring forward amendments on Committee Stage. Unfortunately, the Bill bears all the hallmarks of being hastily drafted. Essentially, what we are doing here - albeit we are being compelled to take action on foot of an EU directive - is adding to the difficulties faced by employers in the context of taking on employees. The last thing required in respect of such a move, particularly in light of our current position, is uncertainty.

Temporary agency work is essential to the smooth functioning of a modern economy. As the Minister pointed out, this type of work is not a private sector phenomenon because it also obtains in the public sector, particularly in the context of the HSE. Agency workers sometimes manage to obtain full-time positions out of placements they obtain. However, many of those to whom I refer are involved in this type of work on foot of a lifestyle choice. It suits them to work in a temporary capacity. It is difficult to identify the number of agency workers here at present but the best estimate is that there are between 35,000 and 45,000 of them.

The availability of the facility of agency work is especially important to the multinationals which invest in this country and on which a great deal of our economic well-being currently depends. If, for example, a multinational decides to establish operations here, while it is carrying out a proper recruitment process, and so on, and building up its workforce it can take on agency workers and commence production immediately. There are various other reasons the facility of agency work is particularly attractive to multinationals. In that context, the Minister referred to peaks and valleys in production. If such companies wish to commence operations in a new area of production, they sometimes take on agency workers to carry out the work.

Ireland is noted worldwide for its highly-skilled and flexible workforce. We must, therefore, avoid at all costs any measures which impact not just negatively on the engagement of temporary agency workers but which would jeopardise investment, whether local or foreign. Such an outcome would have catastrophic consequences in light of the current position regarding unemployment in Ireland. I do not know the motivation of those who put forward the relevant EU directive. I am sure it did not revolve around making agency work not viable.

Approximately 3,000 temporary agency workers are employed in the recruitment industry here. Globally, the use of agency workers has increased significantly in recent times. In that context, it is estimated that the number of agency workers, or their full-time equivalents, increased from 5.2 million to 8.9 million between 1999 and 2009. The numbers in this regard remain strong in recent years despite the recession. There is a notion abroad that agency workers are concentrated exclusively at the lower end of the labour market but that perception is changing. The opposite appears to be the case. Studies carried out by the CBI in the United Kingdom show that in sectors such as energy and water, 7% of employees are agency workers, that in the manufacturing sector the figure is 5% and that the figure for lower-paid and lower-skilled areas such as retail is approximately 1%. This would tend to dispel the idea that agency workers fall into the same category as those whose terms of employment are governed by JLCs. The difference between these two categories is vast.

As the Minister indicated, in the past, agency workers were treated, to use Kipling's phrase, as "lesser breeds without the law". In 1970, the English High Court found that a temporary agency contract is not a contract for services but a contract sui generis - in other words, a contract exclusive to itself - a different kind of contract from either of the familiar two, namely, an employment contract or a contract for services. This decision was cited with approval in several decisions subsequently handed down in the Irish superior courts. Under successive Governments during the past two decades, almost every item of labour protection legislation passed by the Irish Legislature has conferred on agency and temporary agency workers protection equal to that conferred on their full-time counterparts. As the Minister pointed out, agency workers now enjoy legislative protection in the context of equality, health and safety, working time, payment of wages, redundancy, maternity, minimum notice and unfair dismissal.

I will make a couple of general points in respect of this legislation. In the first instance, it is retrospective. This must be one of the few occasions - it may be the only such occasion - in the history of the State where detailed benefits are being conferred on employees and detailed obligations are being imposed on employers in the absence of the legislation which makes provision for such benefits and obligations. The edict from the Department of Jobs, Enterprise and Innovation states that the directive effectively came into law on 5 December. For the purposes of legislation, in most cases the agency is the employer. If the agency is to confer on a worker his or her rights under the directive to which I refer, then it will be obliged to consult the hirer company to ascertain how it deals with workers who hold comparable positions. The obligation to convey this information from the hirer company to the agency will, under section 14, only kick in when the Bill is signed into law by the President. The obligation in this regard will have existed from 5 December last but it will only be enshrined in law at some future date. That is curious, to say the least, and it will give rise to a further element of uncertainty in an area where certainty is required.

The Bill bears all the hallmarks of being hastily drafted. I suspect that the Government tried to negotiate in respect of a derogation clause but was unsuccessful and waited until the very last moment before it drew up the legislation. It could easily have drafted the legislation at any time during the past ten months and then waited to see if a derogation clause were forthcoming. The inclusion of a clause would only have added one line to the text of the Bill in any event.

The courts have, naturally and traditionally, been suspicious of retrospective legislation. In the Supreme Court decision relating to the Health (Amendment) (No. 2) Bill 2004, the test applied is outlined in the context of a decision handed down by the late Chief Justice O'Higgins in the case of Hamilton v. Hamilton in 1982 when he stated, “Retrospective legislation, since it necessarily affects vested rights, has always been regarded as being prima facie unjust.” The Bill before the House is the first item of labour legislation - transposed from EU law or otherwise - that is being made retrospective. I do not know why that is the case.

The practical difficulty that arises appears to be that employers have issued serious threats to the effect that they will challenge the legislation in the courts. If they do so, not only will the country suffer but employees and temporary agency workers will also suffer in several ways. First, they will not obtain that to which they may be entitled under the legislation until the legal process has been exhausted and that might take years. Second, there will be a marked reluctance on the part of employers to take on agency workers as a result of the uncertainty surrounding this entire area. Third, the uncertainty to which I refer will have an impact on possible investment by multinationals.

Under Article 5 of the EU directive, the Government could have obtained a derogation if it had been able to agree such with the social partners. The Minister referred to negotiations conducted by the previous Government. As I understand it, those negotiations were only in the very early stages when the general election was called. The 5 December deadline had been approaching for ten months while the Government was in office and before it was compelled to bring in the legislation it was incumbent on the Government to agree a derogation period with the social partners but it failed to do so. In the United Kingdom the Government has managed to negotiate a derogation period of 12 weeks but the Confederation of British Industry, CBI, has calculated that, even with a derogation of 12 weeks, some 25% of temporary agency jobs could be lost as a result of the application of the directive. That would equate to approximately 10,000 jobs here with a 12 week derogation but here we have no derogation; the extra obligations on employers kick in from day one.

I am all in favour of equal rights for all workers whether temporary agency workers, casual workers or whatever but we should remember that we are implementing this directive and transposing it into law in a particular context. Everything has a context. The context here is that 450,000 people are unemployed officially and, depending on who one believes, perhaps up to 2,000 people per week are emigrating. Another part of the context is that the country is heavily dependent on multinational investment, especially from the United States, at a time when American investment in Europe is dropping proportionally; they are moving more towards the Far East.

I deplore the failure of the Government to get a derogation. As the Minister rightly recognised in his speech, we are at a competitive disadvantage vis-à-vis our nearest neighbours, those in the United Kingdom. The same applies with even greater force with regard to other European countries. Article 5.3 of the directive states that if a country already has a collective agreement which provides for not so much a derogation but lesser treatment of temporary agency workers, it stands despite the directive. Germany, the Netherlands and several other countries are in the happy position of having such a collective agreement as we speak but we do not. Even with these lesser rights, the Dutch enjoy a six month derogation and the Germans a six week derogation. It is no exaggeration to suggest that we are probably in the worst position of all in Europe and we will be in the worst position when this legislation goes through without derogation. Nevertheless, we support it because it transposes an EU directive and I do not propose to oppose that. I am simply pointing out the obvious. The Minister would agree because in September 2011 in a letter to the leadership of the Irish Congress of Trade Unions, ICTU, the Minister indicated that the provision of a day one equal treatment for agency workers could have implications for jobs. He stated that “without the benefit of some leeway in transposing the directive in the shape of a framework agreement, Ireland will be in a position of significant competitive disadvantage vis-a-vis our European trading partners”. He went on to state:

This would be particularly keenly felt given that our immediate and major trading partner, the UK, has already secured agreement for a waiting period of 12 weeks, an arrangement I understand extends also to Northern Ireland. In the current climate and with the significant challenges that face us on the road to economic recovery, we must avail of the flexibilities afforded by the directive.

This is the major flexibility afforded by the directive and apparently we are not in a position to avail of it.

Temporary agency workers in Ireland are already subject to a good deal of the legislation protecting employees rights. However, the directive and the legislation which will transpose it takes the matter further. Thus, the task of the Oireachtas is to make up the difference or shortfall. However, we must do so in a way that minimises the effect of the directive on flexibility and on potential investment, especially multinational investment.

An unduly burdensome transposition could have devastating consequences for employment. This applies not only to agency workers, to which the Minister referred, but to current and potential employees of multinationals. Competitiveness is not only about wages and prices. Flexibility in the labour market is a key element of competitiveness in this country and one we cannot afford to undermine. I refer not only to potential investment but to current investment. We are unusually reliant on foreign direct investment as anyone who read the recent IDA report would readily conclude. The respected economist Mr. Jim Power carried out a study for IBEC on the potential effects of this directive and it is worthwhile to consider the conclusions he reached. For example, from talking to several multinationals he established that the three major attractions for investment in this country were the skill of the Irish workforce, the 12.5% corporation tax and the fact that we have a flexible workforce. It is worthwhile to quote what Mr. Power stated in his report. He stated, "Based on interviews with a number of employers who utilize agency workers and on a considerable body of research, it is very clear that employers in Ireland, be they foreign-owned or domestic employers, regard the proposed introduction of the Directive on Temporary Agency Work as a development that will damage the flexibility of the labour market and ultimately undermine employment in the economy." These are strong words. I understand he researched the matter intensively and spoke to many people. He goes on to state that, "For the multi-national sector, where there is a significant reliance on agency workers due to the flexibility that they give rise to, the Directive as it stands with no qualifying period, is viewed as a development that would undermine flexibility and competitiveness." His conclusion from speaking to those who employ people is that, "The clear view is that a statutory regime that is overly restrictive will act as a major disincentive to employers to engage the services of agency workers."

The Government has stated that everything it is doing centres around job creation. The Taoiseach said as much again today and stated that the Government would pursue job creation relentlessly. In an interview yesterday, the Minister, Deputy Bruton, said that we should be obsessed with job creation. If this is true, then the Government is obliged to interpret this directive in a way that does not hamper job creation or that does so to the smallest extent possible. To do this, the Government should produce legislation that is clear, certain and readily understood and it must retain flexibility to the greatest possible extent.

An unduly burdensome transposition of the legislation would undermine the principle contained at recital 11 of the directive which states, "Temporary agency work meets not only undertakings' needs for flexibility but also the need of employees to reconcile their working and private lives. It thus contributes to job creation and to participation and integration in the labour market." Apart from the disincentive, especially for multinationals, to invest generally, a more immediate consequence would be that employers would simply stop using agency workers. Given that in the majority of cases agency workers are taken on only because the employer has decided for one reason or another not to recruit directly for the jobs, the immediate consequences of a burdensome or legally uncertain transposition would include job losses. This would mean the State had failed in its obligation, set out in Article 2 of the directive, for member states to take into account "the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working."

I have no wish to be personally offensive to the officials but the Bill is rather poorly drafted and I am glad the Minister has proposed to introduce amendments. The last thing we need is uncertainty. If we are to add to employers' burdens and make it more difficult, especially because of the interests of multinationals and large native investors in this area, the least we can do is to make it as simple as possible with the least possible burden.

There are different categories of agency workers listed in the Bill, subject to different limitations and exceptions. I presume it is necessary to do it that way, but it certainly makes the Bill pretty complex. Section 2 defines "agency worker" and "employment agency". The definition of "agency" in section 2(1) may cover certain workers who are contracted by companies that are not registered employment agencies, but are simply in a position of acting in a way that is defined as doing what an employment agency does under the appropriate definition. Is that the intention? Is this to be confined to registered employment agencies that are in the business of providing employees on a temporary agency basis, or is it intended that it be extended to other types of agencies?

The direction and supervision is new. Existing employment statutes use different terminology. I presume the reasons for the new test is the reference to it in the directive, but I am not sure if it was necessary to transpose it into national law. I am sure the matter could have been covered by the well used phrases of the past which have been interpreted and which we all clearly understand by now.

Section 6 deals with the principle of equal treatment. This is unclear to me because it does not seem to distinguish between agency workers and direct recruits where there is a genuine distinction between them. I am not talking here about a notional distinction. For example, a company could take on agency workers to do work which is already being done by experienced recruits who have been working for ten years in the business. This could be the first time the agency workers did this sort of work. I notice there is an attempt in section 2(5) which defines the term "comparable worker" in order to overcome that situation. I would ask the draftsman to have a look at this before the Bill comes to Committee Stage. It does not deal with the problem.

Section 6(1)(b) envisages a situation where there is no flesh and blood comparable employee. In this case, the agency worker is entitled to what a hypothetical employee could be entitled to if one was employed. What about the situation where there is not a comparable employee? What about the situation where the company in question has never had an employee doing that sort of work? What about the situation where a company had comparable employees three or four years ago? We could hardly go back. We are now living in a different country. What is an employer to do in a situation like that in the real world? Is he supposed to look at the pay scales in the industry generally and try to make a comparison from those? It is quite unclear.

Section 6(1) seems to rule out a situation where agency workers could have terms that are different, but in the aggregate, no less favourable than comparable direct recruits. The not less favourable formula is used in the Protection of Employees (Fixed-Term Work) Act 2003 to provide flexibility for employees while still protecting the rights of the workers. The wording of the directive seems sufficiently flexible to allow that concept to be imported into this legislation, yet it is not being done. Why?

Section 2(5) proposes to define "comparable employee". Are paragraphs (c), (d) and (e) of section 2(5) cumulative or are they simply alternatives? If they are cumulative, it would be best to say that. I hope that will be the subject of one of the Minister’s amendments. What categories of temporary employees are excluded from the Bill? For example, a situation might arise where a person is to all intents and purposes self-employed, but has incorporated as a company. If that company is contracted by an agency, it may just have the one employee who will work under the direction and supervision of a third party. Is that person a temporary agency worker within the definition set out in the Bill? In other words, is the one man corporate entity a temporary employment agency for the purposes of the Bill? There are many arrangements like that where it is difficult to define a category.

Section 7 allows people to opt out by way of collective agreement. It states that they can opt out provided that the Labour Court is satisfied about a number of things, one of which is that their rights are protected under article 5(3) of the directive. I have examined article 5(3) and I do not think there is any great guidance as to what the Labour Court has to look at when it is deciding, so we should to clarify that.

The definition of "pay" is a bit curious. It sets out what is included, but it specifically excludes payments under financial participation schemes, sick pay and pensions. It does not rule out things like bonus payments and maternity top-up payments, which are presumably excluded. If they are to be excluded, let us make that clear. If we are expressly excluding certain things, then we might as well expressly exclude anything we want to exclude.

I have difficulty with the redress provisions. I can understand that in an unfair dismissals case, it is the hirer who does the dismissing and he is the defendant. However, it seems that in most cases, the employment agency will be the party that is liable, so if a temporary agency worker is not getting what he or she is entitled to under the legislation, then he or she has to take action in the various fora against the temporary agency. The temporary agency has to defend the case and lose it. In the vast majority of cases, the reason the agency worker is not getting what he or she is entitled to is because the temporary agency got incorrect information from the hiring company. However, the agency has to serve as the defendant in the case, lose the case and then go against the hiring company. That seems extraordinarily complex. Surely there should be some provision whereby the Labour Court should have discretion as to who should be the proper defendant if a case is brought.

Where an agency worker has successive assignments in different hiring companies and when different annual leave arrangements apply to each company, to which is the agency worker entitled? He or she could have accrued leave by working for a succession of hiring companies.

There are many more issues that can be dealt with on Committee Stage, but I am making these points to illustrate that the legislation is pretty unclear. I am extremely disappointed that we are bringing this in without a derogation, thereby putting ourselves competitively at a huge disadvantage vis-à-vis not only our nearest neighbour, which is assiduously competing with us at the moment for mobile investment, but also with other European countries, which have been pushing very hard for this directive when they themselves were protected by internal collective agreements.

It will be quite difficult for somebody to interpret this legislation properly, so we need to bring simplicity and certainty to the legislation. We need to transpose it in such a way that it will have a minimum disruptive effect on employment. We will put forward amendments on Committee Stage to secure those objectives. I look forward to seeing the Minister's amendments. He appears to agree largely with what I have said about the derogation. I hope his amendments will reflect that and I hope he will be sympathetic to our amendments.

Deputy Peadar Tóibín

Ar an gcéad dul síos, ba mhaith liom fáilte a chur roimh an Bille seo. Is céim sa treo ceart é seo agus is iarracht é ceartanna fostaíochta a chosaint. Táimid ag maireachtáil in am atá an-deacair do fostóirí agus do fostaithe agus tá an-brú ar tuarastail agus coinníollacha fostaíochta. Ba cheart dúinn gach rud is féidir a dhéanamh chun comhionnanas a chur i bhfeidhm.

I welcome the Bill which is a step in the right direction with regard to safeguarding workers' rights. I support equal pay and conditions for workers who do equal work and have the same skills set, but I do not agree with my flexible friend that there should be a derogation with regard to time. If people do the same job as others, never mind whether they are of a particular race, creed or orientation or whether they are agency workers, they are entitled to the same pay and conditions.

There are many types of employers. Most employers in the State understand that treating their workers and employees well and with respect ensures cohesiveness, productivity and a successful workforce. However, some unscrupulous employers will seek to exploit workers for short-term gains. Some of these employers will seek to do so for profit and to undermine hard-fought rights and entitlements for workers which have been achieved. This happens particularly at a time of recession when some unscrupulous local and international businesses will, if they get a chance, ride roughshod over employee rights. These unscrupulous employers seek an unfair competition to gain advantage over decent employers. In effect, they force a race to the bottom in the market in general. In the long term this is counter-productive but in the short term and mid term it can cause hardship to employees. The Yanks have a phrase, "never waste a crisis". It is evident that some in our society are using this crisis to cut wages and drive down conditions. Those who can get away with it seek to pay different wages to workers for exactly the same job.

I am glad the Minister, who long sought a derogation from the EU directive that necessitates this legislative process, has experienced a volte-face and now sides with equality and the workers. He stated when publishing the Bill that it represents an important step for agency workers by guaranteeing equal treatment in terms of pay and basic conditions with directly-recruited workers. We now have detailed legislation and the Minister assures us there will be equal treatment. However, it is of concern that the Minister added that in these very challenging economic times the legislation is also designed to minimise the impact on competitiveness in the economy and keep employment costs to a minimum. I always find it very difficult when particular political parties look exclusively to wages and conditions, often of those at low and middle employment levels, to find competitiveness in the economy. On most occasions, they do not criticise senior executives on excessive salaries as this is considered to be the normal market.

The Government states that it is committed to enhancing competitiveness. However, as we have stated ad nauseam in the Chamber there are many other areas in which to seek this competitiveness. It can be sought through VAT or increasing the level of investment in education, telecommunications and transport infrastructure. Broadband, transport and energy are all issues central to competitiveness. We also have the issue of upward-only rents. Unfortunately, we will see a plethora of international and local retail firms leave the Irish market in the coming months and one of the reasons for this will be upward only rents. However, this is competitiveness the Government does not seek. The Government places landlords as a priority over tenants and bankers over small businesses. To read between the lines, commitment to equality can be pursued only if there is minimal costs.

I congratulate the trade unions who worked hard on this issue. It was only through the trade unions staying resolute that workers' rights were defended in this issue. The Minister was on record as seeking a derogation, extending the qualifying period and other diminutions of rights. I congratulate the trade unions for showing leadership on this issue.

My welcome for this legislation is tempered by some of the issues raised by my Opposition colleague. Clarity is missing on many sections of the Bill. Amendments will be required to close down potential loopholes which could allow unscrupulous employers to treat workers unequally. I hope the Minister will have a positive approach and will include entitlements such as sick pay, occupational pension schemes, benefits in kind, financial participation payments and bonus payments. How can workers with equal length of service doing the same job with approximately the same skills have different entitlements with regard to sick pay? The Minister and the Department should clarify that workers will be entitled to the same benefits. If this is not the case, the Minister should identify why one human being should be treated differently to another.

We are also concerned about the issue of vagueness with regard to comparators. We need to ensure workers receive the correct entitlements and the system is not abused by unscrupulous employers. In identifying a relevant position to compare with that of an agency worker the legislation draws on similar definitions used in equality law. Equality law identifies three definitions for a comparator on basis of which to seek equality. Under that legislation only one of these definitions is required to make a claim of equality in terms of conditions. However, for some unknown reason, in this legislation the Minister seeks the comparator to meet all three conditions. Why is this? It is not consistent with equality law and appears to make the legislative safeguards in this area very difficult to achieve. This could provide an employer with a case in which an exact comparator does not exist and that employer could seek to undermine the entitlements of the agency worker. In this case, the agency workers would require a considerable amount of detail from the employer to build his or her case for a hypothetical comparator. IBEC has already highlighted that this would be a possible mechanism to ensure no comparator existed and therefore no obligation for the employer. This approach would undermine the spirit of the law. The Minister must clarify why he has chosen this path and why he has moved away from the accepted methods of identifying a comparative job.

The legislation also provides for what is known as the Swedish delegation, which excludes from equal pay entitlements those agency staff retained on half-pay by the agency between assignments. This affects a class of workers known as permanent agency workers. This provision is open to abuse in that employers would seek out permanent agency workers as a way of circumventing equal pay obligations. Will the Minister re-examine this to ensure this class of worker, although very small in number, is not presented with discrimination or used to undermine the legislation?

The legislation includes a list of collective facilities agency workers are entitled to have as part of equality of treatment. I hope the Minister will clarify the list as the list provided is not exhaustive and is used only for illustrative purposes. I hope the Bill and its protections will be enhanced as it moves through the legislative process and that the Minister acts on the points made. Agency workers have a vital part to play in our economy and in meeting the needs of employers. They can provide short-term support and technical skills expertise. Enactment of the Bill should not safeguard the rights of agency workers only but also those of all workers. There should not be an advantage to an employer in the employment of an agency worker over a directly employed worker, and I include the State as an employer in this regard. There is a trend whereby some unscrupulous employers will see agency staff as cheap labour and a method of keeping wage rates low and eliminating entitlements. Agency workers should be used to fill short term gaps in the labour market not to provide a form of cheap labour. There will be a cost for equality but the cost of equality should be met within a civilised society. This will have an impact on public services. We are aware of the huge number of agency staff contracted across the public sector. In my constituency, many of the roles in Navan hospital, County Meath, are filled with agency staff. The State is trying to eliminate such staff, but it is not filling the roles where agency staff once worked. Therefore, there is a danger of reducing health care services to people in County Meath.

While some have been used to fill short term and technical positions we remain concerned at the number of agency workers who have been used to fill full-time permanent staff vacancies circumventing the employment embargo and in some cases they are used to drive down costs. It makes nonsense of the employment embargo and shows how ridiculous it is. It is unwieldy and cannot properly deal with the necessity for front-line service and front-line employees.

The HSE spent €48.6 million on agency staff in the first quarter off 2011, higher than the amount spent the previous year. In excess of €14.5 million was spent on agency doctors, €21 million on agency nurses and a further €13 million on agency care, assistants and porters. If the Minister is true to his word to ensure equality between workers, the economic case for long term use of agency workers should no longer hold. There is a need to lift the employment embargo and begin to recruit full time permanent front-line staff to deliver services. I hope the Minister will respond to these points and provide the necessary clarifications for strengthening of the legislation.

Deputy John Halligan

I wish to share time with Deputy Clare Daly.

Acting Chairman (Deputy Michael McGrath)

Is that agreed? Agreed.

Deputy John Halligan

Like the previous speaker I welcome the Bill's aim to provide the country's 35,000 agency workers with entitlement to equal treatment, pay and conditions of permanent staff in order that they cannot be used to drive down pay and conditions generally or to undermine the hard fought equality rights as has been happening in recent years. Many of us have encountered an increasing number of workers, notably in the construction sector, hotel services, contract clearing and red meat industries, who were displaced and left with little option but to work as agency workers with wages driven down and existing conditions undermined as a result of a failure to legislate for the principle of equal treatment.

Most EU countries have already counteracted the obvious risk of exploitation in agency working by enacting and enforcing dedicated legislation which recognises the equal rights of an agency worker from day one. It is imperative to follow their lead in regulating the agency worker business with commercial legislation and the assignment of workers to user companies with employment legislation which covers both.

It is crucial to recognise the potential of agency working for displacing direct employment by legislating for a limited duration, for temporary employment, after which a worker must be made permanent. While I have not read the legislation in detail, that issue may be provided for. While providing protection for agency workers there is also the question of protecting the directly employed worker from losing his or her job to a cheaper agency worker, a case well illustrated by the Irish Ferries dispute some years ago. It is possible to run a sustainable economy without the necessity to maintain a tier of workers who are poorly paid and badly treated. I welcome the elements of the Bill which address this issue.

There remains a great deal of uncertainty on particular elements of the Bill. For example, where breaches occur, the legislation is notably vague as to how liability will be apportioned between the agencies and the end user companies. There is a need for clarity on the obligation of the hirer to provide the agency with correct information on pay and relevant conditions which would have applied had a worker been recruited directly. Perhaps, in his summing up, the Minister would clarify that issue. It is important for workers to know where they stand and the conditions of employment when making application to the agencies. Many do not know the terms and conditions until they are employed by the main company.

I am concerned as to how the equal treatment of an agency worker will be determined under the provisions of the Bill. For example, to whom will that worker be compared to ensure he or she is being fairly treated? Creating a comparator could prove particularly difficult for SMEs who may not employ an equivalent permanent staff member. I acknowledge that not every agency worker will be comparable with a permanent worker, because of variations in qualifications and experience. The Bill is vague on that issue and needs to be tightly drafted in order that an agency worker is, nonetheless, treated fairly.

While I will support the Bill, clarification is needed on some issues. The Minister means well in dealing with agency workers who have been treated badly during the past ten years. In general, I welcome the Bill.

Deputy Clare Daly

It is timely that we are discussing this matter. Clearly the protection of workers is an extremely important issue. The Topical Issue debate brought to centre stage the issue of workers rights in general and highlighted the necessity for legislative protection. Statutory and legal protection, if not enforced, is not sufficient. That workers in Vita Cortex and La Senza who are not being given basic statutory rights were forced to take action to secure those rights, shows the breaches of existing legislation that are being engaged in by employers. That begs the question as to what support and protection will be provided to ensure those breaches do not take place.

Agency work is a form of casualisation of labour and has been traditionally used to undermine the rights and entitlements of full time workers and is generally for the benefit of employers and not workers. That the practice is rampant within the public sector is an indictment of the Government, particularly the Labour Party which prides itself on being friends of workers. As previous speakers have said this is a consequence of the public sector recruitment embargo. Not only does it threaten the job security of workers and undermine the level of service provided to the taxpayer but it is a more expensive option in many instances. Unless the issue is properly addressed society will continue to suffer, not least the workers involved. Historically, there have been major campaigns and struggles against casualisation, not just in this country but in other countries as well, from the days on the docks when employers liked to hand pick the fellows they wanted for the day and sent everyone else home with no rights or security whatsoever. What we have is an EU directive which does not propose the abolition of agency workers or to curb the ability of employers to engage temporary agency workers instead of directly employing them. The purpose of the directive is to propose that we legislate for the equal treatment of agency workers in terms of some but not all conditions. It is shocking that the notion of equality is objectionable to some, but in fact that is the case. What happened is that the introduction of the provision has been delayed. The legislation should have been passed before Christmas. I note that the Government is respecting the provisions of the directive from 5 December but we all know what happened when the word got out that this provision was to be given legislative status - many employers started banging the drum. One would think they were going to be pauperised as a result of the measures being put in place. As a result, the Government is somewhat begrudgingly introducing the measure late in the day. It is poor form on the part of employers' groups that led the charge in that regard. There is no doubt what they were seeking was a similar provision to that negotiated by some employers in Britain and Northern Ireland where the directive was transposed into legislation but it also included a derogation that excluded workers from the protection of the legislation unless they had worked for a 12 week period. It is appalling that equality would be measured by the length of time one works and that one would not be entitled to equal treatment if one happened to work for ten weeks, two weeks or one week. It is regrettable that the derogation was introduced in those jurisdictions. Undoubtedly, in that instance it is a licence for people to employ temporary agency workers for 11.5 weeks to avoid liability under the terms of the legislation. I am pleased that such a measure is not being envisaged in this country but it is incredibly poor form that it was allowed to happen elsewhere. It is regrettable that many of the employers' organisations waged a certain campaign against the progressive element in the legislation in this country. As other Members have said, there is a progressive element to the legislation which would be welcomed by most right-thinking people.

I am pleased the Bill will provide for equal treatment of agency workers in terms of core pay and work place facilities such as canteens, transport and crèches. I imagine that many workers would have a good laugh at that on reading the legislation considering that there are hardly any employments that have crèche provision and there are few which provide transport either. However, even on the limited basis that such facilities exist they should be made available to all, even if an employee is only in the workplace for a day, three days, a week or two weeks. That is a point that should be conceded.

The biggest problem with the legislation is the list of exemptions, which we in the United Left Alliance find objectionable and on which we will table amendments on Committee Stage. There is no need for workers to be excluded from protection. In the context of equal treatment and equal protection, why should it not be extended to all areas? Pensions have been highlighted. That is an issue on which there is frequent media comment. The argument could be made that it is unrealistic to provide for agency workers in general being protected by a potential scheme but that is a false argument. The construction industry provides a poor pension scheme but nonetheless it demonstrates that there is an ability to pay pensions for those working for multiple employers and still to develop a mechanism whereby a pension provision could be made available for them. While the scheme is poor in terms of the returns to employees, the idea that one could not have a pension scheme because workers are moving around to various employments does not stand up to scrutiny given what is happening on the ground. It is logistically possible to provide for that so why would we not do so? The sad reality is that the pension provisions are so poor that many workers are opting out of the scheme for fear they will get nothing ultimately. We should not make pensions unattractive; we should facilitate the provision of pension cover where possible. That is one area that also requires to be examined.

Similarly, sick pay needs to be addressed. That someone may become ill when he or she is engaged in short-term employment must be considered because it is precisely those workers who are the most casual and the most vulnerable who need the most protection. The idea that there would not be sick pay provision could lead to catastrophic consequences for those workers and provision should be made in that regard.

There are a number of potential problems with other aspects of the Bill such as the exclusion of benefit-in-kind and bonuses. We saw that happen in the EBS dispute before Christmas whereby bonuses are not just something that apply to fat-cat bankers and the provision of big four and five figure sums to already wealthy people. In many employments the negotiation of bonuses or benefits associated with piece work have been a negotiated part of people's wages and conditions. If we were to exclude temporary agency workers from protection and access to benefit-in-kind and bonuses we would create a loophole which could give rise to employers being encouraged to set up a structure of pay involving a low basic rate with piece work and targeted bonuses being built in to that to try to exclude an entire section of the workforce from core benefits by enhancing other benefits rather than improving basic pay and thereby introducing a divide between permanent and agency workers. There is no need for such an approach because they are the type of bonus payments which are part and parcel of payroll. That is an important issue that must be addressed.

In the context of equality, many of the jobs in question are carried out by women. Maternity leave and access to top-up maternity pay are important issues. It is unacceptable that they would be excluded. Many temporary agency workers are employed in catering, cleaning and hospitality, which are predominantly occupations involving females. One could ask whether they deserve less equal treatment when pregnant than their permanently employed colleagues in a similar condition. Of course they do not. Provision must be made in that regard.

Other speakers pinpointed the derogation in section 6(2) exempting permanent agency workers who are paid between employments. The derogation should be opposed as it could work to the disadvantage of workers. The situation must be rectified.

One of the most significant anomalies arises in section 7 which, likewise, facilitates the social partners in agreeing to deviate from the positive provisions that exist in the Bill. That screams out to me as being like a sector-wide inability-to-pay type of facility for employers. That is something about which we must be mindful because if that is the case or if the legislation provides for an opt-out of that scale there is a certain double-speak because, on the one hand, we are talking about equality for a certain category of vulnerable workers and, on the other, we are excluding so many things that the equality is not as meaningful as it could be. That is extremely important.

The other main area that is crucial is enforcement. There is no point in us debating legislation and nit-picking over amendments if the legislation does not offer protection to the workers who need it. That is likely to happen. I do not say that lightly or with any good feeling but the reality is that our enforcement procedures are in crisis at the moment and the disputes we mentioned previously are a good example of that. One could ask what agencies are in place to enforce existing legislation to protect workers. There are two. The first is the Labour Court through the services of the Labour Relations Commission. The second is NERA through the investigations it carries out.

Even before the tranche of other workers who need to be protected are included, it is a sad tale on which the Minister's Department needs to act. In The figures for the Employment Appeals Tribunal are horrendous and the responses to questions I put to the Minister towards the end of last year show the situation is chaotic and that there is lack of enforcement. Since 2007, when the economic crisis began which resulted in many people losing their jobs and an increase in the number of unfair dismissal claims, there has been a trebling of the number of cases brought before the tribunal. The waiting time to have cases dealt with has risen as a consequence from 20 weeks to 74 in Dublin and 76 outside it. Any person who wishes to access the tribunal must wait over a year and a quarter. This is appalling and there have been consequences. Because of the backlog of cases to be dealt with by the Rights Commissioner, many people are choosing not to go before the Rights Commissioner but to skip that stage and go straight to the higher court to avoid delay - a delay which could be avoided if sufficient resources were invested at the level of the Rights Commissioner. It also means that many workers are walking away from an entitlement to perhaps up to two years' compensation in wages because they simply cannot access hearings. This is not good enough. If this is the case now, the addition of tens of thousands of other temporary workers who may potentially need to avail of the labour relations machinery of the State will mean that, without sufficient resources, the position will get even worse, if that is possible.

I anticipate that the Minister's reply will be the same as before Christmas, that the staffing level at the tribunal has been increased by 50%, from 30 personnel to 45.8 since the start of the crisis. While this increase is welcome, the facts prove that it is not sufficient. The matter must be dealt with immediately if there is to be any meaningful protection and the law is to mean anything.

I refer to the inspection services of NERA. The most recent report by its inspectors was in the summer of last year - a report was not produced at the end of the year. The statistics show that its inspectors carried out 2,359 inspections of individual employments and in that period found the total due to workers was over €1.067 million in unpaid wages which they recovered. This compares with a figure of more than 3,000 inspections in the previous year in which it was discovered that approximately €500,000 was due in unpaid wages. The figures illustrate that the number of inspections carried out by NERA - a tiny figure to begin with considering the overall number of employers in the country - was very small. It has carried out fewer inspections in the last year but its inspectors recovered more money, meaning more breaches were found. The level is increasing, even though the numbers of inspections has fallen.

We should take cognisance of these figures. The sectors in which breaches have been found are precisely the ones in which we are seeking to protect temporary agency workers. In agriculture the compliance rate is 42%; in catering, 26%; in retail, 28% and in hotels, 26%. The contract cleaning sector was one of the few that made it over the figure of 50%, with a 55% compliance rate. The security sector scored a 48% compliance rate, the construction sector, 61%, and the electrical sector, 54%. Others sectors recorded a rate of 42%. The average compliance rate is well under 50%, based on inspections in many of the employments which generally employ temporary agency workers. Unless the inspection service and the issue of backup support are addressed, all we are doing is nodding in the direction of the European Union and pretending we are writing in a provision. We are being disingenuous as regards the workers seeking our protection. On the one hand, we are bringing in a piece of paper to promise equality and, on the other, not giving them any vehicle to exercise that equality in cases in which employers choose to ignore it. Sadly, the facts speak for themselves; many employers are continuing to choose to ignore the legislation.

While I accept there are positive aspects to the Bill, its powers are too limited and there is no provision for backup. On that basis we will be tabling amendments on Committee Stage because it is essential that we support the intention to protect workers in this category.

Deputy Heather Humphreys

I wish to share my time with Deputy Jerry Buttimer.

I welcome the opportunity to speak on the Protection of Employees (Temporary Agency Work) Bill 2011 and commend the Minister for bringing it forward. It follows on from the EU directive on temporary agency work and will allow for the passage of the directive into Irish law.

The Bill will allow for the equal treatment of agency workers with direct employees as regards basic working rights and conditions. Leaving aside the matter of employment rights, that every person should be treated equally and with dignity, no matter what his or her circumstances, is one of the most basic human rights that should be available to every person. The Bill ensures agency workers will be afforded the same rights, in terms of pay, work duration, breaks and holiday time, as those who are directly employed. It will mean that temporary agency workers will also be allowed equal access to the relevant amenities and facilities within their workplaces such as crèche and canteen facilities. This is a welcome provision and I was surprised to discover it was not already the case. I find it astonishing that temporary workers are not permitted to use the same canteen facilities as their permanent counterparts. This is unequal treatment and what springs to mind is what happened in 1950s America when African Americans were not permitted to sit beside their Caucasian counterparts on buses. I did not think there is a similar practice in Ireland in 2012 where temporary agency workers are not allowed to eat alongside their colleagues. In fairness, I would be surprised to discover any such cases. It is a welcome development that this right is being set out clearly in law.

I note the provision in the Bill that equal access to amenities may not be afforded to temporary agency workers where such action can be "objectively justified by the hirer". There must be clarification of this provision to avoid confusion in the workplace. In this regard, perhaps the Minister might outline briefly the exact meaning of the term "objective justification".

With regard to pay, it is welcome that this legislation means that temporary agency workers will be entitled to the same basic pay as those who have been directly employed. They will also be entitled to any overtime, unsocial hours and Sunday premium payments available to permanent staff. It is welcome that this is being set down in law. If temporary agency staff are not entitled to the same level of premium pay, there is nothing to stop unscrupulous employers having rosters which have temporary agency staff working weekends, nights, etc., meaning they will not have to premium rates. In this regard, it is important that employees are made aware that this legislation will be applied retrospectively from 5 December 2011. Employment agencies and hirers were notified of this provision and instructed to make appropriate arrangements to ensure equal treatment from that date. This means that once the legislation is enacted, employers will be obliged to backdate payments to this date.

Another important provision is that agency workers must be informed of any vacant positions for employment which arise at their respective companies, in the same way as a comparable permanent employee would be entitled to be informed. This is only fair. In essence, it affords agency workers the same opportunities to progress in the workplace that would be available to permanent employees.

As somebody who has worked as a PA YE worker all my life, I fully appreciate and recognise the huge contribution workers have made to this country. As I mentioned previously, equal rights in the workplace are not just a matter of employment rights but represent a fundamental human right. It is hugely important that nobody feels discriminated against or is made to feel like a lesser person in the workplace, regardless of race, gender or the fact that one is an agency worker. In Dáil Éireann, equal rights are also something of a topical issue, with discussion ongoing regarding the low number of elected female representatives. In this regard, I acknowledge that as a newly elected Deputy, I have not felt discriminated against in our workplace because I am a woman. While I agree that it is a positive step to continue to encourage female participation in politics, it is important that we differentiate between equal rights and equal numbers. It is fine to introduce gender quotas and this has certainly brought the issue of women in politics to the fore. However, at the end of the day, the electorate will have the final say on the best person for the job, regardless of gender. I will not go into further detail on this, as it is a debate for a different day.

The Government has made it clear that it wants to protect workers. This was evident in our restoration of the minimum wage rate to €8.65 and is evident again today in this Bill. The protection of workers is integral to any society and Ireland has a fine tradition in this respect. Figures such as James Connolly have played a vital role in ensuring that equal rights and conditions are afforded to workers. The reason I mention James Connolly is that he is an Irish patriot whom I consider to be a particularly inspirational figure. James Connolly's parents were from County Monaghan. They originated from the Killevan area, which, by coincidence, is the same area from which I come. I welcome this Bill and look forward to its enactment.

Deputy Jerry Buttimer

It is important to acknowledge that even as we speak, two groups of people, the workers of La Senza and Vita Cortex, are engaged in sit-ins in their places of employment in an attempt to gain what is rightfully theirs. This Bill is an important move in the right direction and I welcome the Minister's decision and persistence in proceeding with it. It is concerned with equal treatment in regard to pay and conditions of employment for workers. It is about people. The Minister was correct to say when publishing it that it was about directly recruited workers, but more importantly that it also was designed to minimise the impact on competitiveness in the economy and to keep costs in employment to a minimum. We must value work and must reward people who do their job, irrespective of the type of work and this Bill is important because it is about providing workers with equal pay and conditions.

The Bill is concerned with pay, duration of the working day, rest periods, breaks, night work, annual leave and public holidays. These are issues many people in employment take for granted. Deputy Humphreys alluded to the issue of access to facilities. I have been concerned with regard to the trend, particularly in the health sector, towards agency work and I will refer to this in more detail later. When I was in college, I had a part-time job as a porter in Cork Regional Hospital and there were many people working there as cleaners. We were trained on the importance of hygiene in our hospitals. We have moved away from that type of training now with the recruitment of agency workers, particularly with regard to cleaners in hospitals. These workers are women in the main. They do a very good job and they should be treated with respect. This Bill will ensure that happens. The Bill will include and recognise the right to basic pay. I am not sure but would like clarification from the Minister on whether it will also deal with the issue of a shift premium and an unsocial hours premium, which are important for people in this sector.

We must keep employment costs to a minimum, while at the same time rewarding and creating employment. I compliment the Minister on the interview published in The Irish Times this morning in which he stressed the importance of work and of getting people back to work. He spoke earlier about a milestone and referred to the Protection of Employees (Part-Time Work) Act 2001 and the Protection of Employees (Fixed Term Work) Act 2003, important legislation. To be fair, other Governments have done significant work in protecting employees. It is extraordinary that agency workers were not entitled to access to facilities or to information on job vacancies. We must avoid creating antagonism between people in full-time employment and agency workers.

Chambers Ireland and IBEC have raised concerns about the Bill. Sometimes these groups do not speak the language I speak and I am concerned at times about some of their remarks. In these economic times, many agency workers are young and unskilled and they must be protected. For that reason, I wonder about the thrust of the argument put forward by Chambers Ireland regarding the anti-competitive and unsupportive element of the legislation. Equally, IBEC complains regarding the cost to employers. Without doubt, employers here are in big trouble and the months of January and February will be a major challenge to small and medium size enterprises in our cities and counties. I have met with and spoken to some traders in Cork city in recent weeks and, thankfully, there has been good business within the retail industry and restaurants in Cork city in the past month. Part of this resulted from the Government restoring confidence. People believe someone is in charge and some want to spend and support local industry and small retailers. It is important to shop local, but it is also important to keep costs down for those who want to employ.

The derogation to which the Minister referred presents a major difficulty. Unfortunately, and despite his best efforts, agreement with the social partners was not reached. After the enactment of this legislation, negotiations to secure the derogation and keep us in line with the majority of European countries will continue. It is clear that the Government and all sides of the House encourage flexibility of employment while protecting the rights of workers.

The amount spent by the HSE on agency workers has increased by 75% from €108 million in 2009 to an expected €190 million last year. This increase directly related to the recruitment embargo, as front line staff who are on maternity leave, sick leave or annual leave can only be replaced by employing agency workers. In replying to a parliamentary question of mine last November, the Minister for Health confirmed the breakdown of the cost of using agency staff. He stated:

The cost to the HSE is the wage cost, commission, which ranges from 5.5% to 11.75%, employers PRSI at 10.75%, holiday and public holiday pay at 12%, plus VAT at 21%. This costs the HSE a premium of between 55% and 62% on top of the wages paid to the agency worker.

The cost increased from 5 December onwards because of the direct effect of the European regulation. Going by last year's figures, removing the VAT element would save the HSE €33 million.

Is it right to spend €190 million per year on agency staff when we have limited resources? It is an extraordinary amount of money by any stretch of the imagination and, even on its own, is a reason to reconsider the embargo. Just as with education, one size does not fit all in the health sector. Perhaps the Government and the HSE should revisit the question of spending so much money on agency staff when the HSE could recruit and directly employ additional front line staff.

The Vita Cortex situation in Cork is a question of employment and employees' rights. Thanks to the Minister for Jobs, Enterprise and Innovation, the Labour Relations Commission, LRC, has intervened. I compliment him on his efforts and thank him for engaging with me on the dispute during the Christmas period. Of the 32 workers, 27 have been forced to sit in every day since mid-December. As I stated during the Topical Issue debate, they are genuine, decent people, many of whom have given more than 40 years. They have been treated appallingly by a company that is sacrificing humanity because of greed.

Acting Chairman (Deputy Paudie Coffey)

Deputy Buttimer must be careful not to make anyone identifiable.

Deputy Jerry Buttimer

I will not mention anyone. People outside the Chamber need to understand that, if the Bill is meant to protect workers and their rights, it is important that Vita Cortex's workers are mentioned on the record of the House properly and devoid of party politics. They are being treated poorly. They are the innocent party in the dispute. I look forward to the engagement with the LRC.

In the current economic climate, it is important that we not sacrifice workers and their rights. We must protect workers and attach a value to working in a job. Those who choose to sacrifice employees are wrong.

Deputy Dara Calleary

I will begin where Deputy Buttimer concluded. There are three cases - possibly a fourth by tomorrow morning - of companies trampling over workers' rights, namely, Vita Cortex, La Senza and Lagan Brick. Given that many businesses are under considerable pressure and the majority are run by decent, ordinary people trying to make a living, the three cases outlined do the business sector no service. The workers should be shown respect and fairness. Forcing people to occupy their workplaces to get their entitlements is a bad sign for business.

I welcome the chance to discuss this directive and its implementation. The officials in attendance have spent many years and done a considerable amount of work on the issue. It has been a frustrating subject. In the absence of a derogation we now have something that, when combined with other Government decisions in recent weeks, will contribute to an erosion of competitiveness and may cause job losses.

We agree with the directive's central aim, that is, to give temporary workers protection, as there are many cases across the EU of temporary workers being abused for the want of this protection. However, the way in which we have come to the directive without a derogation will set back everyone's shared aim of job creation. That the Minister acknowledged this in his speech was extraordinary. He stated: "Rather, the measure raises issues of a competitiveness nature in that the absence of agreement on a qualifying period, unfortunately, puts Ireland in a less favourable position in terms of labour market flexibility than that of our closest neighbour, the United Kingdom." I praise the Minister for his admission.

It is even more extraordinary that ICTU, an all-island body, could agree to the derogation in the North but not in the South. I presume that IBEC is also partly to blame. The inability to reach an agreement has damaged our economy's competitiveness.

Temporary workers can be found in all sectors, not just the low paid sectors with which many people automatically identify them. They are used on contract bases in many leading multinationals. They perform specific tasks and deliver specific products before moving on to other contracts. This is how they work.

The 2% increase in the VAT rate will affect every aspect of business. We have also tackled the redundancy side of the issue by lowering the rebate from 60% to 30%. Adding this directive to the equation sends a wrong signal to employment creators despite the Government's rhetoric about job creation being its No. 1 priority.

I appeal to everyone involved to take the chance presented by this debate. Given the condition of the Irish and European economies, will the Minister try to knock some heads together?

Debate adjourned.