Dáil Éireann debate -
Wednesday, 22 Feb 2012

Vol. 756 No. 3

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

Deputy Willie O’Dea

I move amendment No. 1:

In page 5, to delete lines 18 and 19.

The net effect of the amendment is to remove section 1(2) from the Bill. The Bill would therefore come into effect when it was passed by both Houses of the Oireachtas and signed by the President. I am trying to eliminate the element of retrospection back to 5 December. We have the rather peculiar situation that the employment agency is the body that is obliged to pay the agency worker. It is obliged to fulfil the terms of the new legislation. However, the employment agency will not be in a position to know precisely what those terms are until this Bill has been passed into law.

The Minister said on Committee Stage that the hirer has an obligation, but it is the employment agency that has the obligation. In fact, the hirer has no legal obligation to inform the employment agency of the appropriate rate of pay for comparable workers currently employed by the hirer. That is a serious gap in the Bill.

It is not just a question of trying to assist employers in this case. Admittedly, I have received representations from one or two employers who told me they are employing a number of agency workers and that there could be a very big bill in this case. At least one of them told me they are contemplating a legal challenge. If there is such a challenge to the legislation, the agency workers whom the directive and the legislation are designed to help might not get their benefits for a long time, perhaps years. It depends on how far the legal process goes.

The other point I made on Committee Stage is that the courts lean against retrospective legislation. I quoted the authority on Committee Stage. The test the courts usually apply to retrospective legislation is the one laid down by Chief Justice O'Higgins in the case of Hamilton v. Hamilton 1982. He was quoted in the last case dealing with retrospective legislation before the Supreme Court, which was the nursing homes issue. Chief Justice O’Higgins said: “Retrospective legislation, since it necessarily affects vested rights, has always been regarded as prima facie unjust.” If it is prima facie unjust or if there is a presumption, as it were, against retrospective legislation, there must be very good reason for making legislation retrospective.

To the best of my knowledge, although I am open to correction, this is the first time an EU directive in the labour law area has been made retrospective. There have been a number of directives but this is the first that is retrospective. I have learned from my inquiries that, despite the Government's great anxiety to have its operation in place as and from 5 December last, a number of EU countries have not yet, surprisingly, implemented this directive. They include Denmark, Sweden, Luxembourg, Italy and Greece. A number of countries have only partly transposed it, namely, the Netherlands and Belgium.

I ask the Minister to re-examine the proposal I have put forward, which is to remove the element of retrospection from the legislation. That retrospection will leave the legislation open to challenge and if it is challenged, it will delay the entitlements that should flow to workers as a result of the legislation.

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

The Deputy raised this on Committee Stage. I have received advice from the Attorney General that this is the correct way to proceed, arising from our EU obligations which include that this be effective from 5 December.

As the Deputy knows, there was considerable negotiation and hope that there would be a provision for a qualifying period before equal treatment would apply. That did not prove possible. To ensure that agencies and hirers were informed of their obligations we undertook very considerable communication with employer organisations and agencies. The obligation comes under our EU obligations. Already the Constitution recognises that obligations caused by our membership of the European Union have precedence, and the Constitution cannot invalidate Acts that are in accordance with our obligations under the Constitution. On the basis of the legal advice I have received, this is the proper way to proceed.

It is true that the agency has the obligation in the first instance. If an agency worker complains of its failure, the matter will go to the rights commissioner and the rights commissioner will adjudicate. There would be a separate issue of the agency recovering from the hirer if there was a failure of the hirer to co-operate properly with the agency. That would be a matter for the civil law, with the agency taking an action to ensure recovery if there was inadequate co-operation. This issue was well flagged and agencies were engaged in the consultative process. Therefore, it did not come as a surprise. There was a clear understanding on all sides that this obligation would take effect from 5 December. There was, of course, hope its could be deferred under an element of the directive that allowed the social partners, acting exclusively on their own, without a specific role for the Government in making the decision, to seek a qualifying period. In the event, that negotiation was not successful.

Deputy Willie O’Dea

As this issue was well ventilated on Committee Stage, I do not want to labour the point.

The Minister cites an instance in which a hirer did not co-operate with an agency, leaving it with a liability. The Bill makes it clear that the agency does not have a case against the hirer in such an instance. Until the Bill becomes law the hirer is under no legal obligation to co-operate with the agency. That is a non-argument.

I take the Minister's point about a derogation. Instead of trying to negotiate a derogation which he ultimately failed to do and waiting until the last minute to draft the Bill which has left us in the situation in which we find ourselves, the Department could have drafted the Bill several months ago, as the effect of the directive was well flagged. A one line section could have been added to the Bill if a derogation had been granted. That the Department was waiting for a derogation to be granted is no excuse for not drafting the Bill in time.

The Minister harps on about our EU obligations. Denmark, Sweden, Luxembourg, Netherlands and Belgium, countries that have a better record of social legislation than Ireland, have not yet implemented the directive. What about their obligations? Do we have more obligations than these EU member states?

Deputy Richard Bruton

Many other member states operate under a different system, with substantial collective agreements which de facto implement the directive.

Deputy Willie O’Dea

Not Sweden.

Deputy Richard Bruton

The arrangements in other countries are different. These extensive collective agreements are specifically provided for in the directive. I suspect that is why other member states are in a different position from us. Ireland is implementing the directive. We have an obligation under its terms to ensure agency workers are entitled to protection as and from 5 December last. We have taken steps to make sure hirers and agencies are informed and aware of the obligation to co-operate in the implementation of the directive. We are providing the legal vehicle for this to happen. I am advised legally that this is the correct way for us to proceed. Therefore, I cannot accept the amendment.

Deputy Peadar Tóibín

When introducing the Bill, the Minister said it represented an important step forward for agency workers by guaranteeing equal treatment in pay and basic working conditions with directly recruited workers. I welcome the Government amendment which ensures the costs of training, safety equipment and so on will not be passed on to workers.

I oppose amendment No. 1. Sinn Féin's view is that equal rights and conditions should be afforded to workers as soon as possible. If 5 December was the earliest date possible, we are in favour of it happening from that date.

The Bill includes a provision to exclude permanent agency workers from its protection. This undermines the spirit of the legislation and the words of the Minister. This issue was discussed on Committee Stage and it was the hope of the select committee that the Government would act on that discussion. This provision creates a loophole for employers to undermine the legislation. It will lead to agency workers continuing to receive unequal pay and conditions and drive down the recruitment of permanent workers.

The Government knows this is a loophole and refuses to act because it itself will benefit from it. I, among others, tabled a number of amendments to this provision which were ruled out of order because they would have placed a potential charge on the Exchequer. Will the Minister tell us how many permanent agency workers are employed in the public service and what is the cost to the public purse? Maintaining this loophole is a cynical act by the Government as it seeks to undermine workers' rights and drive down the wages of the low paid. The same driving down of wages approach is not found in the Civil Service or among Ministers.

I am shocked that Labour Party Deputies acquiesced on this important point. Where were they when this loophole was found?

An Ceann Comhairle

We are dealing with amendment No. 1.

Deputy Peadar Tóibín

I understand that. I want to make a number of points because I tabled a number of amendments which were disallowed. I want to cover them, if possible.

An Ceann Comhairle

The Deputy cannot make points that do not relate to the amendment under discussion. On Report Stage the Deputy may only speak to the amendment. Does the Minister want to reply?

Deputy Richard Bruton

Not on the amendment. I have dealt with it.

An Ceann Comhairle

We can only deal with the amendment. Deputy Tóibín got excited and ran away from me for a while. I had to pull him back a little.

Question, "That the words proposed to be deleted stand," put and declared carried.

Amendment declared lost.

Deputy Willie O’Dea

I move amendment No. 2:

In page 5, line 26, after "agency" to insert the following:

", but the following shall not be deemed to be agency workers—

(a) employees of contractor companies; and

(b) limited liability companies where the worker is also the beneficial owner of the company”.

As I said on Committee Stage, I do not have strong feelings about this amendment. I will not lie awake tonight tossing and turning about whether employees of contractor companies are designated agency workers. During the debate on Committee Stage I asked the Minister if it was intended to include these categories of employees as agency workers. He told me he had been advised that they were not agency workers under the terms of the Bill. I have made some inquiries in the meantime with legal people who say there is a doubt about the matter. They have explained ways and means - I will not go into them now - by which the Bill could be interpreted as including these categories. If it is the Minister's intention that they will not be covered by the Bill, as he indicated on Committee Stage, it might be safer to explicitly say this.

Deputy Richard Bruton

That is the intention. I have consulted the Parliamentary Counsel. The phraseology used refers to persons employed under a contract of employment with an employment agency. That does not include the instances to which the Deputy refers. The Parliamentary Counsel has assured me that the wording is robust and that there is an implicit exclusion. In addition, my Department will issue guidelines; therefore, there will be absolute clarity for everyone concerned. I am assured that the legislative basis on which we will issue the guidelines is sound.

Deputy Willie O’Dea

I note what the Minister has said. The poet and parliamentarian, T. M. Kettle, said he would trust the Irish parliamentary draftsman to draft the ten commandments. Nevertheless, the Parliamentary Counsel has, on occasion, got it wrong. The legal advice I have received is that a court could interpret the Bill in a different way. However, I will not press the amendment. With due respect to the Minister, what he says in this House will be irrelevant in any court proceedings. I understand the guidelines will also be irrelevant in court proceedings. However, if that is the advice the Minister has received, I accept it.

Amendment, by leave, withdrawn.

An Ceann Comhairle

Amendments Nos. 3, 8 and 10 are related, while amendments Nos. 4 and 6 are alternatives to amendment No. 3. Therefore, amendments Nos. 3, 4, 6, 8, and 10 may be discussed together.

Deputy Richard Bruton

I move amendment No. 3:

In page 5, to delete lines 27 to 30 and in page 6, to delete lines 1 to 11 and substitute the following:

" "basic working and employment conditions" means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer, and that relate to—

(a) pay,

(b) working time,

(c) rest periods,

(d) rest breaks during the working day,

(e) night work,

(f) annual leave, or

(g) public holidays;”.

Amendment No. 3, to the definition of what constitutes basic working and employment conditions, expands the definition by including a reference to the fact that these terms arise under contracts of employment deriving under any enactment, collective agreement or other arrangement that applies generally to employees, or any class of employees, of a hirer. An amendment I proposed, and that was accepted, on Committee Stage inadvertently dropped the important words that it applies generally to employees, or any class of employees, of a hirer. This qualification needs to be reinserted into the definition to ensure there is clarity around the fact that the terms that apply generally in respect of employees under any enactment or collective agreement, or that are generally applicable, apply also to temporary agency workers. That principle in these areas, if it is provided for in an agreement, must also be applied to the agency workers.

Amendment No. 8 does not propose any substantive amendment to the definition of the constituent elements of pay that are already included in the Bill. Rather, it is linked to amendment No. 3 in that it proposes to move, from the definition section of basic working and employment conditions to a more logical position under the definition of pay, the items that are specifically referenced in the second paragraph of Article 5.4 of the directive which includes sick pay and pension arrangements.

Deputy Clare Daly

Amendments Nos. 4, 6 and 10 are in some ways a repeat of the discussion that we had at Committee Stage and relate to the issue of equality on enhanced conditions of work and payment beyond the basics. I appreciate that the Minister has added on a few areas above the basics, but the United Left Alliance believes that is not enough and if we are talking about equality, then we should be talking about equality in all employment issues.

At Committee Stage, some of our amendments were ruled out of order on the basis that they would involve a potential charge on the Exchequer. At the time, we asked the Minister to take cognisance of that fact and then not have a situation where we were forced to put down amendments that solely dealt with the private sector because of his unwillingness to deal with equality for agency workers who may potentially be employed by the State at a later date. Given that the Minister has not accommodated this, our amendments, in order to be valid and to go on the floor of the House, had to relate to non-Exchequer funded posts. It makes a mockery of the notion of equality if we are saying we, as Opposition Deputies, only have the right to put forward this provision in the case of the private sector because of the Minister's unwillingness to do so for any potential public sector employee.

The amendments speak for themselves. We are talking about holiday entitlements beyond the basic statutory minimum, holiday rostering, adoptive and parental leave, and other payments relating to access to pensions etc. Obviously, we are aware that some of these issues are not straightforward, but they are perfectly capable of being dealt with. When industries where staff have multi-employers have the ability to provide a pension scheme etc., agency workers should similarly have the right to access such schemes. Our amendments involve such payments, such pension provisions, work-related travel and expenses, and other allowances that would be available to comparator employees.

It gets to the heart of the issue. We are talking about protection of temporary agency workers and equality across the board and equality should mean equality in other social protection and payments above the norm.

Deputy Patrick Nulty

My amendment No. 9 was ruled out for the same reason and I defer to the wisdom of the Ceann Comhairle on that issue. To make the point, the Bill is deficient in that it does not take account of allowances to which agencies workers should be entitled on the same basis as permanent employees. In the public health sector, for example, allowances are paid to nurses who achieve additional qualifications in areas such as intensive care, theatre, accident and emergency etc. It seems quite rational, if the purpose of the Bill is to secure equity right across the board between workers who are employed via an agency and workers who are permanent employees, that allowances of this type should be taken on board.

If it is the case that amendments of this nature may not pass today, I wonder would the Minister consider an amendment to the Bill and take on board the comments that are being made by, for example, many in the trade union movement who want equity in this area.

Deputy Richard Boyd Barrett

It seems as if we are paying lip-service to the idea of equal treatment for agency workers but trying to exclude certain allowances and certain payments.

I accept fully the Ceann Comhairle's decision to rule amendment No. 18 out of order, but it is for the same reason that we, as Deputy Clare Daly indicated, had to refer specifically to the private sector because if we sought equality for all temporary agency employees, that would also be considered to be a charge on the Exchequer and would have been similarly ruled out of order because of the Minister's failure to deal with that issue of equality.

It seems to amount to the Government wanting the right to have a second tier of workers which it can exploit and not give the same rights and allowances to as ones that would be directly employed. There can be no other explanation for the Minister's refusal to deal with the issue of extending full equality to temporary agency workers in terms of all the rights, allowances and provisions that would be made for comparators who are directly employed.

I suppose that merely indicates that the point of agency workers is to undermine the pay and conditions of directly employed workers. It seems, in refusing to give equality in these area, the Minister is going along with that even while paying lip-service to the idea of giving equal rights to agency workers. It is disappointing that the Minister is doing that.

I strongly ask him to reconsider, although I doubt at this stage he will do so. It is simply not right or fair that agency workers should be given lesser rights when it comes to matters such as sick pay, pension entitlements and other arrangements that directly employed people have.

Similarly, although it is ruled out of order, the issue of persons who are permanently employed by the agencies being allowed to be paid as much as 50% less than those employed directly is outrageous and is a recipe to undermine the purpose of this legislation which is to give equality to agency workers. It is very disappointing.

Deputy Richard Bruton

I thank the Members for those various contributions.

To start with the last comment first, the purpose of this legislation is to deal with temporary agency workers who have been clearly exploited where they have been brought in and paid at an entirely different rate. Basic pay and conditions is the issue. This is not seeking to state that short-term assignments are identical to the employment status achieved by persons who are full-time workers. On full-time workers who become part of a pension scheme, that is not a basic pay and terms of employment condition that is required to be applied equally under the directive.

It was designed to deal with people who are being exploited. We have made sure we are protecting people's basic terms and conditions.

Some of the issues that have been raised in the amendment in the name of Deputy Clare Daly and others are included. Holiday entitlements that are within collective agreements and arrangements that apply generally to employees or a class of employees would need to be equally applied. Therefore, the holiday entitlements that prevail would transpose to the temporary agency workers, and bank holidays and employment registration orders would be included in the terms of amendment No. 4.

The question of adoptive and parental leave is a separate issue as these are matters that arise under equality legislation. We are not seeking to replicate in this legislation what is dealt with in equality legislation, hence we are not introducing a new legal basis for rights in regard to adoptive and parental leave, which are already dealt with in other legislation.

Amendment No. 6 seeks to require the inclusion of sick pay and pension schemes. I cannot accept this because it goes well beyond the scope of the directive's requirements. The directive is about guaranteeing a floor of basic working and employment conditions that would apply to temporary agency workers. Nonetheless, it still recognises that people on short-term assignments are not in the same position as those who are full-time employees. Entitlements to pension rights or to various bonus schemes, share options and so on do not automatically transfer an entitlement under the directive, nor do we seek to go beyond the spirit and intent of the directive to introduce such obligations, which would have very considerable financial implications at a time when there is serious pressure on employers and employment. We are seeking to ensure people are not exploited. We are not seeking to define short-term assignments as equivalent to different types of arrangements.

With regard to amendment No. 10, some of the areas referred to are included, such as overtime premia and bank holiday premia, as well as work-related allowances such as shift work, piece work and unsocial hours allowances, and some others are also included if they come within the scope of collective agreements or arrangements that apply generally to employees or to any class of employees. However, some areas are not included. For example, where there is a dispute, a worker can contest and the issue will go to a rights commissioner for determination. We are seeking to protect agency workers in areas where we know there has been huge abuse of basic pay and conditions and we want to make sure this does not happen.

A number of Deputies, including Deputy Nulty, raised concerns about the derogation provided for in the directive, the so-called Swedish derogation. For example, arrangements are suggested which would mean workers on assignment are paid at least 50% of pay during periods when they are not on assignment, as is provided for in the legislation. Where such arrangements are in place, this would give rise to a situation where the full force of the directive would not apply. Such systems are not in any widespread use in Ireland and we have sought to ensure that there would be protection in respect of cases where such a derogation may be taken up. That protection includes the requirement for written notices, including the example I gave of 50% pay to be paid when the person is not in employment.

Following the discussion on Committee Stage, we examined whether there was additional protection or provisions that could ensure this system would not be abused. Items discussed included requiring that people could not arbitrarily terminate employment and that there would be an obligation to pay for a certain period if there was arbitrary termination. When we looked into that, we were advised that it would actually make the provision more frail in regard to protecting people. If there was an arbitrary lump sum, we would almost invite employers to decide to use this as a short-term arrangement, with workers getting temporary assignments and a retention payment for the off-time. This would almost build into what we initially thought would be a protection an incentive to regard this as something to be used in a system that would be very advantageous to the employer, not to the employee. Therefore, we have not made any additional changes. There is a written requirement so people enter into such a contract knowing they are giving up certain rights they would otherwise have as temporary agency workers, if they agree to such arrangements.

This is included for the reason that it provides flexibility and is a derogation that is provided for in the directive. If we do not make provision for it now, it can never be considered in the future. However, it is not an area where we have any evidence of abuse. We have transposed it into the legislation but we believe we have done this in such a way that the interests of workers will be protected by it. Obviously, this is an area where there is not a great deal of experience in Ireland of applying the rules. We feel we have done the best we can. We went back after the Committee Stage discussion to ascertain whether there were other changes we could make to make it more robust. The advice we received from the draftsman was that what we were doing was the best way to handle it. Let it then be challenged before a rights commissioner if there are abuses. The legal provision is fairly clear-cut and would give better protection to people to challenge any use of this provision that was not seen to be fair and reasonable by the workers concerned.

Deputy Mick Wallace

It would appear that improvements are being made in this area. However, I am not sure just how good the rights a worker working for an agency will have. As building contractors, we used to sometimes employ agency workers, for a number of reasons. We generally kept our own direct employees but, if we were under pressure and needed them, we hired agency workers. They were paid at a rate which was perhaps a couple of euro above the official rate but there was still a saving because we were not involved in their pensions, holiday pay and so on. The big advantage for the building contractor employing the agency worker is that the contractor can specify, for example, that he wants the worker from 8 a.m. until 6 p.m. on Monday, does not want him on Tuesday or Wednesday, but would like him back again on Thursday at 8 a.m. to work for ten hours and would also like him to work eight hours on Friday. This was very attractive to a contractor because, as one can imagine, there might not be full-time work for a person on a site.

The sad part was that, more often than not, these workers who came on-site were generally getting less per hour than our own workers. Friction and dissatisfaction would sometimes develop because the agency worker was not being treated as well as the person who was directly employed. Agencies were able to charge a premium for their services because they could state to an employer that a worker could be taken on on a Monday but there was no requirement to keep him or her on the Tuesday. Will agencies still be able to tell workers that there is no work for them on a Tuesday but they can come back in on the Thursday, or will they be obliged to take care of employees for a full working week? Many are engaged by agencies for six to 12 months but are not always guaranteed a full working week. They might get one day's work or they might get five, there is no guarantee. That is not a very good framework within which to work. I have noticed that very few agency workers are married. Family life would not be sustainable within the structure being offered to them by the agencies. I am curious to know whether agencies will be allowed to lay people off as they please or whether they will be obliged to look after them for a full working week.

On the construction sector in general, it serves everybody better, including the client who is seeking to have a job done, if a company has its own direct employees. I argue that there has been a serious drop in the quality of workmanship in the past 20 years in the construction industry and that the overuse of agency workers and agency companies by contractors has contributed to this. In the past contractors were much more likely to have their own employees - workers they trained themselves - and they were much more au fait with what needed to be done. That was a far better arrangement. However, we should get an agency worker of higher quality if we give such workers the same rights as regular employees. The closer we can get to this, the better for everybody.

Deputy Joan Collins

I accept that the Minister has taken on board some of the points we have made. However, the issue in regard to pension schemes, as set out in section 6, must be dealt with. Otherwise there will remain a serious inequality, whereby agency workers will not have the same arrangements as full-time employees. Will the Minister review this matter? A person's entitlements on retirement is an important aspect of his or her long-term role in the workplace. If this matter is not dealt with as it affects agency workers, they will remain very vulnerable.

I reiterate our disappointment at the provisions relating to the so-called Swedish derogation. The Minister has said he has not taken the line we propose because it has not been an issue. Surely we should be taking legislative action to prevent employers from abusing the requirement in regard to the figure of 50% of pay. This should be included in the Bill rather than being left open to challenge in the future.

Deputy Seamus Healy

The entire rationale behind the use of agency workers has been to casualise employment, with such workers subject to various employment abuses. We have been slow enough in bringing the Bill forward and it comes on foot of an EU directive. Rather than being minimalist in its provisions, we have an opportunity to ensure agency workers will be treated properly and equally with the employees they work beside on a daily basis. Amendments Nos. 4, 6 and 10 seek to meet this objective. The legislation should ensure agency workers will be employed on the same basis as full-time employees. Sick pay, pensions, holiday entitlements, top-up maternity payments, work-related allowances and so on should be encompassed within it. What has been happening in the State and throughout the Europeand Union is that because agency workers effectively have few or no rights, their own positions have become vulnerable and they, in turn, have been used to undermine the position of full-time employees and move towards a model of employment that is casual and part-time. The opportunity should be taken in the Bill to act as comprehensively as possible in affording the same level of protection to agency workers as to full-time employees.

Deputy Richard Bruton

Deputy Mick Wallace who has practical experience in this area has made the point that the nature of temporary agency work is often intermittent and serves to meet the need to fulfil additional work obligations as they arise. That flexibility is needed in many workplaces and the reason temporary agency work arrangements have developed. Such arrangements suit certain workers who are not seeking a full week's work.

In regard to the Swedish derogation, we are providing that agency workers must be paid the same basic rate. The Deputy has mentioned that there has been friction on some sites as a consequence of different rates being paid to different workers. That will no longer apply under these provisions. The only situation in which a company could seek not to apply the same basic rate is where it makes a commitment that during the down time, when workers are not employed, they will be paid at least 50% of the basic rate. That will only be allowable where the agency has informed the workers concerned that they are entering into an arrangement where some elements of the package will not apply to them but that on the days they are not working they will be paid a retainer.

That is the exemption the directive allows in order to facilitate people who want to enter into that type of contract. They undertake to be available at short notice but will have the confidence that on the days they are not asked to work they will be paid something. The directive anticipated that this would be a possible arrangement into which people would willingly and knowingly enter and a flexibility that would be required. We are transposing it into Irish law, with the proviso that people be formally notified, by way of a written notice, that they are giving up something to which they would otherwise be entitled by entering such an arrangement. They will only agree to this where it suits their own circumstances and requirements.

Deputies Joan Collins and Seamus Healy have raised the broader question of why we are not insisting on pension rights being afforded to agency workers. I have responded to this point. The purpose of the legislation is not to introduce new provisions generally to Irish employment law. There is no obligation on an employer to provide a pension. The only obligation now on an employer is to ensure that a worker has access to a PRSA into which the employer has no obligation to contribute. We cannot under this provision introduce new far-reaching provisions in Irish labour law. Pension and sick pay are not included because this was designed to protect people from abuse in respect of basic pay and employment conditions. It does not seek to assert that arrangements in place in respect of an employee who has been working with an employer for years, such as sick pay, share options, pension provisions and so on would apply to a person on a short term assignment. That is not the intention of the directive and is not what we are seeking to transpose into Irish law.

We are not seeking to include new entitlements in this area, rather we are seeking to protect against abuses that are known to occur. The purpose of the directive is to protect people from abuses. While I can understand the Deputies' desire to see better working conditions, what we are doing is setting minimum protection that will apply. Issues such as longer term pension provisions and whether we should have compulsory pensions and so on are for another day. We are not seeking to introduce them in this legislation.

Amendment put and declared carried.

Amendments Nos. 4 to 7, inclusive, not moved.

Deputy Richard Bruton

I move amendment No. 8:

In page 7, to delete lines 4 to 11 and substitute the following:

" "pay" means—

(a) basic pay, and

(b) any pay in excess of basic pay in respect of—

(i) shift work,

(ii) piece work,

(iii) overtime,

(iv) unsocial hours worked, or

(v) hours worked on a Sunday,

but does not include sick pay, payments under any pension scheme or arrangement or payments under any scheme to which the second sentence of the second subparagraph of paragraph 4 of Article 5 of the Directive applies;".

Amendment put and declared carried.

Amendment No. 9 not moved.

Deputy Clare Daly

I move amendment No. 10:

In page 7, between lines 11 and 12, to insert the following:

"(vi) any allowances that are automatically paid as an industry norm in the case of non-exchequer funded posts,

(vii) occupational pensions in the case of non-exchequer funded posts,

(viii) work related allowances in the case of non-exchequer funded posts,

(ix) work related travel and expenses in the case of non-exchequer funded posts,

(x) "top up" maternity payments in the case of non-exchequer funded posts,

(xi) bank holiday premia in the case of non-exchequer funded posts,

(xii) sick pay in the case of non-exchequer funded posts,

(xiii) overtime premia in the case of non-exchequer funded posts;".

Amendment put and declared lost.

Acting Chairman (Deputy Joe O’Reilly)

Amendments Nos. 11, 12 and 22 are related and will be taken together by agreement.

Deputy Richard Bruton

I move amendment No. 11:

In page 7, line 26, to delete "employed" and substitute "employed under a contract of employment".

These are technical amendments which aim to clarify beyond doubt that as the Bill refers to persons who are employed under a contract of employment this extends also to persons employed by the State or in the wider public service such as local authorities or the HSE, namely, in areas not normally governed by contracts of employment.

Amendment put and declared carried.

Deputy Richard Bruton

I move amendment No. 12:

In page 7, line 31, to delete "employee of" and substitute the following:

"employee employed under a contract of employment by".

Amendment put and declared carried.

Deputy Willie O’Dea

I move amendment No. 13:

In page 8, between lines 20 and 21, to insert the following:

"(3) If any agency worker believes that an incorrect comparator has been used that worker must inform the employer and the employer will be obliged to

investigate the claim and if necessary correct the situation within a period of fourteen days. If the employer corrects the situation within fourteen days, then no claim will lie against the employer.".

The purpose of this amendment is improve procedure and make the Bill more workable from the view of the employer and employee. Where an agency worker takes up a position and is paid in comparison with a comparator that turns out to be incorrect he or she can take a case to the rights commissioner and, if necessary, go further up the line. I propose a type of fast-track system to save the time of the rights commissioner, who is already pretty well over-burdened, and of the worker and potential defendant, namely, the employment agency. The amendment provides that if a worker believes the hirer has for one reason or another used an incorrect comparator he or she can inform the agency of that, following which the agency will investigate the matter with the hirer and try to have it rectified. I anticipate that if the Minister is prepared to accept this amendment this will result in many cases being resolved without the necessity to go to the rights commissioner and so on, which only puts further pressure on already strained resources and puts the agency worker and potential defendant to unnecessary trouble.

Deputy Clare Daly

This matter was discussed on Committee Stage. This is a positive suggestion which would improve the legislation. It must be seen against the backdrop of a 76 week waiting lists for a rights commissioner hearing and a system that is grinding to a standstill. Anything that assists in avoiding a further burden on that situation should be welcomed. It would be unworkable to suggest that a casual employee would have to wait 76 weeks to have his or her case heard, by which time the case would be only a long distance memory. This measure would not cost anything and would reduce the burden on the State's industrial relations machinery. I do not see any reason the Minister could not accept this amendment.

Deputy Peadar Tóibín

I support the amendment. The current infrastructure is too inflexible to facilitate individuals who will not be working or who will not have earned a large amount of money.

Deputy Richard Bruton

I understand the desire of Deputies in supporting this amendment. However, putting into a Bill of this nature such a provision implies there is in place a sanction for an employer who fails to address a matter but no such sanction is implied or provided for. What the Deputies seek to introduce is a regulatory obligation which would have no oversight mechanism. I will ensure that the guidelines issued to employers includes this as good practice. We should not provide in primary legislation that this would be a statutory obligation when we are not providing for an enforcement mechanism for such a provision. I do not believe there should be an enforcement mechanism for such a provision.

We have made good progress reorganising employment rights and industrial relations agencies. A pilot conciliation scheme, which provides that queries received from temporary agency workers be forwarded immediately to a conciliation arrangement, will be introduced during the first half of this year. Under this scheme the employer will be made aware of the situation and his or her obligations in that regard. Obviously, if the employer refuses to address the matter it will then proceed to a hearing. However, the Government is moving to introduce arrangements whereby such queries that clearly ought to be resolved through simple conciliation and clarification of the position would not on their arrival enter a lengthy queue to wait for a hearing. The Government is attempting to stream away all such cases and to reduce the number of cases that sometimes go to highly legalistic tribunals that serve the interests of neither the workers nor the employers. Consequently, rather than including this proposal as an item of primary legislation that is set out in the law in the manner suggested by Deputy O'Dea, I instead seek to enshrine it within the implementation guidelines that will be issued. In addition, the entire thrust of the reform I am attempting to introduce is to streamline the employment rights bodies. It will be piloted, hopefully will be successful and then will be mainstreamed quickly, thereby streaming away challenges of this nature in which the facts of the case are pretty clear, thus avoiding the type of clogging to which Deputy Clare Daly rightly refers.

Deputy Willie O’Dea

While I appreciate what the Minister intends to include in the guidelines about conciliation, I do not understand his reasoning in rejecting this amendment. It appears to me to be typical Civil Service-speak, in that he cannot accept this because there is no sanction and no oversight. However, no one is worried about sanction or oversight. Were an incorrect comparator to be used, the sanction would kick in down the line when someone took a case after a lengthy wait for the rights commissioner. I am trying to avoid a scenario in which someone would be obliged to approach that overburdened and understaffed authority and in which the sanction can be avoided. I refer to a scenario in which the employee will not be obliged to go to the trouble of approaching that body and the sanction for the employer would be avoided because the mistake would be pointed out to the latter, who will be given 14 days in which to correct it. As this will work in many cases, I cannot discern the logic of the Minister's response when he states there is neither sanction nor oversight. The entire idea is to avoid a sanction down the road and the consequential overuse of the already heavily burdened rights commissioner or the State's industrial relations machinery.

Deputy Richard Bruton

This is what I believe any proper employer would do. However, there is no sense in stating that were an employer to correct the situation and deal with the issue on the 15th or 16th day, such an employer still would be in some sort of breach. The Government does not intend to introduce a form of sanction regime for a new provision that really comprises the substance of a guideline to good practice on the manner in which an employer should deal with a worker in this situation. However, if one introduces a provision in primary legislation, one is inferring that a failure to comply with it is a matter that can in some way be litigated or pursued with the rights commissioner.

Deputy Willie O’Dea

Not necessarily.

Deputy Richard Bruton

That is not the point. The Government seeks to achieve good practice and to get in place a compliance culture among employers, not to introduce an obligation that sets out in primary legislation time limits and time lines in a highly precise way that could lead to unexpected and unnecessary outcomes, while still ensuring that there is a robust system in which a worker who has not got a fair deal has the absolute right to go to the rights commissioner. There will be in place a service that will stream away such a case if it clearly is a matter of clarifying the facts. There will be a quick move to contact the employer to outline the facts as presented, to note that the matter appears to be straightforward and to query the reason the employer is not dealing with it. Consequently, putting this proposal into primary legislation effectively is a form of coat-trailing and will not really have any effect unless Members introduce or anticipate that employers can be challenged for failing to do this and that on the 15th day, such employers have in some way failed and a provision can then be triggered to pursue them.

This is not the way in which to proceed in such a case. The Government's intention is to avoid contention of this nature, whereby someone who took action on the 15th day should have done so on the 14th day and the matter then goes before the rights commissioner as another case to be investigated. This is not the approach, as I am trying to get reasonableness and to build up a compliance culture among employers. That is the purpose of the reform the Government seeks to introduce in the employment rights area. It is not to set highly rigid rules and regulations but to get a general compliance culture and a system that supports such a culture for employers and workers, as well as a flexible employment rights and industrial relations approach in which there is compliance first, conciliation next and hearings of disputes only in extremely difficult and intractable cases. This is the approach and while I accept the spirit in which this amendment is being offered, I cannot accept it as an item of primary legislation. However, I will ensure the guidelines my Department sets out and the practices it seeks to promote will be sympathetic to what the Deputies are trying to achieve.

Amendment put and declared lost.

Acting Chairman (Deputy Joe O’Reilly)

Amendment No. 14 cannot be moved as it involves a charge on the Exchequer.

Amendment No. 14 not moved.

Acting Chairman (Deputy Joe O’Reilly)

Amendments Nos. 15, 16 and 17 are related and may be discussed together.

Deputy Willie O’Dea

I move amendment No. 15:

In page 9, line 6, after "same" to insert the following:

"or where different, in the aggregate not less favourable than,".

As for amendment No. 15, the basic point is that under the European Union directive, an agency worker must be put on the same level, in so far as possible, as a permanent employee. I simply am using a formula that has been used in other labour legislation to the effect that rather than stating that they will receive exactly the same rights, it states they will get benefits, rights or whatever that are "in the aggregate not less favourable than". While I understand the Minister may have some technical difficulty with this proposal, as he pointed out on Committee Stage, I seek clarification on it.

In respect of amendment No.16, the Minister has provided in the legislation that if an agency worker is taken on to do the same job as a permanent worker already employed, the employer is entitled not to pay the agency worker the same rate if knowledge, skill, length of service and so on are relevant factors. For example, someone who has been doing the same job for ten years may have built up a level of expertise that someone coming in naturally would not have on his or her first day and the legislation provides for this case. However, I refer to another scenario, whereby an employer can have some employees who were employed on a particular pay scale from a time when conditions in the country were much better. The same employer may, over the last 12 months or so when matters were very different, have taken on further employees to perform precisely the same work. However, the employer may have considered it necessary to employ them on a different pay scale. In such a scenario, it is not a case of experience, length of service and so on, but is a question of when the people were taken on. There are a number of instances in which people who were taken on since the recession kicked in are on a lesser pay scale, even though they are doing the same work as others who were taken on during better times.

I refer to a scenario in which such an employer decides to take on an agency worker to do the same type of work. The firm already has employees doing the work the agency worker will do but who are on two different wage scales. I asked the Minister on Committee Stage at which wage scale must such an agency worker be taken on and he replied it would be the newer, lower wage scale. I then asked who would choose and whether it would be the employer, the hirer or the agency worker. I believe the Minister told me the hirer had the choice as to which category of employee with which to compare the agency worker. However, there is some doubt about who can choose in this case. If the legislation means what the Minister told me on Committee Stage it means, it is as well to write it in specifically. That is the purpose of amendment No.16, the amendment in which I am most interested.

Deputy Richard Bruton

The Deputy raised these issues on Committee Stage. We had a discussion about and reflected on them. The first amendment concerns cases in which the overall package is good but some individual terms are not as good. The directive is clear in this regard. It does not allow us latitude to take an aggregate package. Essentially, the view is that if such arrangements were permissible, they would be manipulated. There could be a lower basic rate in the expectation that a person would be offered overtime which might then not materialise and the person concerned would be left on the lower basic rate. The fear is that this arrangement would be manipulated and the directive does not give us latitude to weigh one against the other. The basic rights are spelled out. This is about basic minimum rights which have to be observed.

On the second issue the Deputy seeks to go beyond what is permitted by the directive, the wording of which requires that equal treatment be afforded as if the agency worker was directly employed. Therefore, the words "be entitled" which the Deputy is seeking to have deleted are appropriate. The amendment would introduce additional conditionality that the directive does not allow; therefore, it is not legally possible to agree to it, as it would potentially bring us into conflict with the European Commission for incorrect transposition.

The Deputy cites the example of an employer who employed workers two or three years ago at higher rates but now the going rate is lower and he or she is seeking to employ agency workers at the lower rate. The crucial issue is whether a worker was directly employed on the day he or she was taken on, or on 5 December, from which the measure has effect. The hirer will decide, but it will be open to challenge by the worker on the grounds that the employer is arbitrarily choosing a rate that is much lower than the rate for all other employees. The employer will then have to make the case that as and from 5 December the rate to be applied to the job was the one offered, even though there might be workers on the higher rate applied two years before. The onus is on the hirer to show that he or she can back up the choice made. If he or she is directly employing employees on that day, he or she has a clear comparator. He or she might be able to claim that he or she has taken on one full-time employee and three agency workers on the same basic rate; in that instance he or she will have a cast iron case. If is only where he or she takes on agency workers and the only comparable employees are on much higher rates, that he or she will have to produce evidence to back up the choice made. It is important that this onus rest on the hirer and that we do not allow an arbitrary situation where he or she could claim that the rate has been manufactured out of the air. The hirer makes the decision; he or she decides the going rate for a direct employee. That is the rate for the agency worker. If this is challenged by the agency worker, the employer will have to back up the choice made. I can see what the Deputy is saying because undoubtedly rates have come down in many instances, but this is designed to protect the employee and make sure there is a proper basis for the rate.

Deputy Richard Boyd Barrett

I accept that the Ceann Comhairle has ruled amendment No.18 out of order. While we cannot move it, it is important that we record our deep concerns, shared by trade unions, about this section of the Bill. We referred briefly to it earlier, but the provision which allows agencies to employ people on a permanent contract and only pay them 50% of what they were paid on their last assignment means that they can permanently have a group of employees for whom the central thrust of the Bill simply does not apply. In that context, it completely undermines the Bill. If I represented an employment agency, I would see this as a way around almost all the provisions of the Bill.

The Minister has said agencies employing workers on a permanent basis is not a widespread phenomenon in Ireland. However, what is to stop them from doing so now? The Bill improves things for agency workers to a degree, although not as far we would like. I accept that the Minister has taken on board some of the points made on Committee Stage, but this opt-out of the central provision of the Bill essentially allows agencies a way around equality and all the provisions of the Bill. They can establish a permanent group of employees who will be paid less, no matter for whom they are working and to whom the provisions of the Bill simply will not apply. It is not, as the Minister seems to be suggesting, just when they are not working. The point is that the central equality provision of the Bill does not apply to them if they are employed permanently by the agency. The only requirement is that they must, during the periods they are not working, receive 50% of what they received on their last assignment. What they received on their last assignment might have been substantially lower than what a directly employed worker was paid for doing the same job.

This is a recipe for a coterie of workers to work alongside others paid twice what they are paid, or God knows what. It is a complete opt-out clause in respect of the equality provision included in the Bill. If we do not grasp this, the agencies will. We will have a new mechanism that will allow them to circumvent the Bill and create a second-tier workforce.

Deputy Patrick Nulty

I am also disappointed that amendment No.19 has been ruled out of order. There is much in the Bill that I support but section 7 is deplorably inadequate. The Bill fails to provide for effective anti-avoidance measures. Article 5.5 of the directive places a clear duty on the Government to introduce appropriate measures to prevent abuse of the derogation. However, under the Bill, as it stands, it will be all too easy for employers or agencies to use the Swedish derogation to circumvent equal pay rights.

Legislation needs to be amended to provide for safeguards against abuse, including a guaranteed rate of pay, a guaranteed minimum number of hours, a guaranteed period in the last assignment or an averaging of the hours worked during a particular period.

While I am not in a position to move amendment No. 19, which was ruled out of order, the Minister could amend the legislation either today or at some future date. Amendment No. 19 did not emerge out of thin air. It is influenced by the regulations that have been put in place in Britain to prevent the type of exploitation to which Deputy Boyd Barrett referred. Britain has a flexible labour market which is similar to ours. However, it has put in place protections which are similar to those contained in amendment No. 19. There is no reason we could not introduce such protections. Disingenuous comparisons are often made between pay rates here and in Britain. These comparisons are usually out of context and incorrect. In the context of agency workers, the British authorities are a step ahead. Will the Minister reflect on amendment No. 19, which I cannot move, and consider amending the legislation? The amendment contains quite a detailed proposal which would strengthen regulation in this area and protect agency workers.

Deputy Peadar Tóibín

These amendments relate to one of the issues to which I referred at the outset. Some of the amendments we tabled in respect of this matter have been ruled out of order. There is no doubt that the Bill creates a loophole and that this will grow in the future. If the Government is seeking a growth area, then it has found one because the loophole will give a competitive advantage to businesses which use the workers to which it relates. The existence of this advantage will incentivise the use of the loophole to which I refer in the future. The loophole has the effect of undermining all the other works for which the legislation makes provision. How many people are employed by the State under conditions such as those outlined in the section? What is the cost to the State of paying their wages? I am just trying to obtain an understanding of why this loophole is so attractive to the Government.

Deputy Mick Wallace

The Minister would be surprised by the number of people who remain on a full-time basis with agencies. I assure him that during a building boom a few years ago, most of the large building firms in this city had many more agency workers than direct employees on their books. This was because it had become somewhat more attractive to employ the former. I have not seen the figures - I would love to do so - but I am of the view that large numbers of people are employed by agencies on a full-time basis.

Deputy Clare Daly

We are getting to the nub of the issue. There is a gaping chasm in the Minister's argument to the effect that the relevant issues are being addressed in the legislation. This is a substantial loophole. It is the case that agencies have quite large numbers of staff. A great many questions are asked with regard to how - in comparison with Aer Lingus and its large workforce - Ryanair can do so much with so few workers. The reason is that companies such as Ryanair maintain hardly any staff as direct employees and that they instead rely on agencies and agency workers. The agencies to which I refer charge massive sums in respect of training, etc. As a result of the fact that the derogation will remain in place, there is nothing in the legislation which will prevent the current position from continuing to obtain. We are paying lip service to both the directive and the concept of equality. In addition, we are giving a nod and a wink to rogue employers in respect of the gaping hole into which they can jump to avoid ensuring equality and addressing the very issues which the legislation was designed to deal with in the first instance. The large numbers of people who are carried, so to speak, by agencies would vindicate my words in this regard.

Deputy Willie O’Dea

Will the Minister indicate the percentage of agency workers who are classed as permanent agency employees?

Acting Chairman (Deputy Joe O’Reilly)

Does the Deputy wish to leave that matter until the Minister makes his final contribution on these amendments?

Deputy Willie O’Dea

I want to know the position before I comment.

Deputy Richard Bruton

A number of issues were raised in respect of the Swedish model. That model is not prevalent in Ireland. It is not the case that people in the public service are paid retainers for periods during which they are not working. It is obviously an arrangement which can be suitable for both sides. Deputy Wallace described the way in which people were employed in the construction sector in recent times, namely, where they could be working for a couple of days, then be off and then be back in employment again. In such circumstances, being paid a retainer in respect of the periods during which one is not working can be attractive. We are seeking to have in place an arrangement which can be used if it suits both sides. Flexibility exists in this regard. It is not the intention that this arrangement would allow people to bypass the provisions of the legislation. If it were abused in that way, we would certainly revisit the issue. Essentially, this is not a system which is in place. However, we recognise that it could be used but not abused. It is provided for under the directive and there are cases where it is used in other countries, but not in a way whereby it is capable of being abused. We are including the derogation now because we would not be able to do so later.

The protections in respect of this matter are stronger than the Deputies have indicated. The commitment must be to permanent employment. In other words, a person must be taken on by an agency as a permanent employee. If this is done in a bogus fashion, if it is used as a way to try to bypass paying agency workers who are taken on for short-term assignments by pretending that they are long-term employees and if a challenge arises, then agency workers will have the right to make retrospective claims in respect of the entire periods during which employers failed to apply the terms of the agency work directive. If employers seek to abuse this aspect of the legislation and, as Deputies fear, use it for short-term gain, there is a strong case in respect of their being challenged. As already stated, agency workers would also be in a position to seek equal treatment on a retrospective basis right back to the day on which they were first employed.

There is a balance on both sides. For example, a balance will apply when the arrangement is put in place and we will be seeking that clear, written statements will be provided to agency workers which will indicate the conditions which will apply to them, that these will be different from those outlined in the law, as it applies, and that they will they will be paid the rate which applies under the REA or the 50% rate which applies in respect of downtime periods. There is another protection in place in respect of cases where agencies might use this mechanism as a short-term way of abusing the terms of the arrangement. In such circumstances, a claim can be made and the whole construct created by an employer in respect of pretending that some form of long-term commitment exists would fall. We are of the view that a balance has been struck. This is not an area of which we have experience because there is not a wide range of contracts of this nature of which we are aware.

Information is not available with regard to the percentage of people who are classed as permanent agency workers. It is certainly the case that some individuals are taken on as temporary agency workers and that they later enter permanent arrangements with those who hired them. However, we do not have data of the type sought by Deputy O'Dea.

We are trying to strike a balance in respect of providing what could be a reasonable and flexible working arrangement for some people. We are also seeking to ensure there will be adequate protection available and that in downtime periods, people will be paid at least 50% of their normal remuneration. Furthermore, the Bill stipulates that a permanent contract of employment must be provided in order that these workers will know they are being offered permanent positions.

If the agency does not deliver, there is a right of redress.

I can see people may be concerned about how a process could be abused but we have provided protections and we will certainly monitor it. If there is a sense that abuses are creeping in which undermine the value of the provision, we will revisit it. We have designed a scheme which is reasonable and robust in defending against abuse but which leaves open a system which may suit both sides.

Deputy Willie O’Dea

I must confess Deputy Wallace has far more practical experience of the construction industry than I do. If one looks at the situation in the country at present, the percentage of agency workers who fall into the category of permanent agency workers is minuscule. The Minister should have dropped the Swedish derogation from the Bill. Every action he has taken since the issue was first raised demonstrates that he should have dropped it. He stated he thought it would create a particular loophole so he moved to close it. The real problem is that after we pass the Bill today and it goes through the Seanad next week, what will happen when the next loophole emerges or is found? Will we suspend proceedings in both Houses of the Oireachtas to deal with yet another loophole found in the legislation by the clever legal representatives of employment agencies?

The Minister states the directive provides for it. However, the directive allows any individual country to exclude it. The directive does not compel the Government to introduce the Swedish derogation.

Acting Chairman (Deputy Joe O’Reilly)

As per procedure, the Deputy has two minutes to speak and he will be allowed to speak again at the end.

Deputy Willie O’Dea

I require 30 seconds more. The measure is being introduced to accommodate a minuscule subsection of those employed as agency workers. We are not asking the Minister to get rid of the concept of permanent agency workers. All we are asking him to do is stop permanent agency workers being excluded from the protections of the Bill. There is no point in introducing something that can be used as a loophole when there is no obligation to do so and it will benefit only a category comprising a tiny minority which we are not asking to be abolished. All we want is that these workers are not excluded from the protections in the Bill.

Deputy Richard Boyd Barrett

I am not quite sure the Minister grasps the point we are making and the concern we are expressing about a fundamental loophole in the entire thrust of the Bill. I will spell it out to him. Section 7(1) enunciates what I understand to be the absolute central kernel of the Bill, which is that the basic working and employment conditions to which an agency worker is entitled shall be the same as the basic working and employment conditions to which a comparable employee is entitled. However, this shall not apply in so far as it relates to pay applied to an agency worker employed by an employment agency under a permanent contract of employment. It is simple. One has equality as an agency worker but not if one is employed permanently by the agency. It is as simple as that.

This is a way around the legislation. It is a gaping hole in it. If I were an agency I would see a very simple way to get around the legislation. I would employ many people permanently, I would decide their pay and conditions and the equality demands of the legislation would not apply. There will be nothing to stop an agency permanently employing nurses and paying them two thirds or half of what nurses normally earn because as permanent employees, the provisions of the legislation will not apply. When these nurses work in a public or private hospital, they can be paid half of what nurses employed in the hospital are paid.

The only requirement is that when the employees are not on assignment, they are paid at least 50% of what they were paid on their previous assignment. What they got paid in the previous assignment could be virtually nothing or considerably less than what a comparable employee directly employed would receive. The point is that this is a gaping hole in the legislation which fundamentally subverts the point of it. It is an incentive to agencies to circumvent the demand for equality.

Deputy Richard Bruton

I cannot accept what the Deputies are saying. This is an exemption for a situation where an employer offers temporary work but for the period the person is not working a retainer payment will be made. This is a reasonable employment arrangement into which people can enter. The Deputies want to outlaw such an arrangement. I accept such an arrangement could be flexible and would justify paying less than the basic pay rate which would be applied to someone who commits to working a full working week. This is the flexibility being allowed in the directive. It is not a pattern that is much established here but it is not one that is abusive in its concept. It could be a reasonable arrangement to enter into.

Deputy Boyd Barrett seeks to portray a case where this would be entirely exploitative. The truth is we are putting in place provisions whereby the agency must notify the agency worker in writing that if the agency worker enters into such a contract of employment, the provisions of section 7(1) will not apply. The agency is also under obligation to make this a permanent contract of employment. If it is abused, there will be a right of redress for the employee. If it is used by an agency as a way of filling a short-term gap in a way that does not meet its obligations, it can be challenged before a rights commissioner in the normal way.

The provision will allow certain flexibility for this arrangement. It is fair that we leave it in the legislation. It is a reasonable arrangement for people on both sides to enter into knowingly if it suits them, but it is not the case that people will be compelled to enter into such an arrangement. An agency must notify people in writing and an agency worker must knowingly enter into it. It provides a balance of protection on the two sides that we seek to have in the arrangement.

Deputy Willie O’Dea

The Minister is fundamentally inaccurate. He accuses speakers on this side of the House of trying to outlaw the arrangement of permanent agency workers. They are not. Nobody is objecting to the arrangement whereby a person can be a permanent agency worker. What people on this side of the House who tabled amendments are objecting to is the notion that if somebody falls into this category, they are automatically excluded from the protection in the legislation. This is unreasonable.

I do not accept the so-called protections written in by the Minister will have any effect or impact whatsoever in practice. It will be possible to employ somebody on low pay because all the agency has to pay them is a minimum of 50% of what the person received on the previous assignment. People will be in the system to get employment because they need a job. If they receive a letter from an employment agency, they will tacitly accept the conditions by not stating they object to them. It will not do people any good to object because they will be told this is how it is.

The Minister spoke about a permanent contract of employment. I am very unclear about what that means. It certainly does not mean somebody is obliged to be employed in 20 or 30 years time. An employer can take on somebody today and state it is intended to make the position permanent but circumstances can change. For a category of people who form only a tiny subsection of the totality of agency workers, and without any obligation being put on us by the EU directive, we are introducing a provision into this Bill which can create a loophole through which employment agencies can drive a coach and four. That is unnecessary and wrong. The Minister should reflect between now and the Seanad debate with a view to withdrawing this unnecessary provision.

Deputy Mick Wallace

Will the Minister clarify one point? Am I right to think that if a person registers with an agency and is in full-time employment, he or she is guaranteed? I refer again to the construction sector. If the labour rate in that area is €14.80 per hour, as it was, will the agency worker working full-time for the agency who goes on to the site full-time be guaranteed the same rate or can the agency pay him less? I am a little confused.

Deputy Richard Bruton

The amendment allows that during the assignment a rate will be set which need not meet the rate that would apply to permanent workers. However, there must be a commitment that when the person is not assigned, he or she is paid. People will get a permanent contract. These agency workers are not on temporary assignments but on permanent contract under which there are periods of assignment and non-assignment. They are paid during both but the rate at which they are paid during the active work period need not necessarily be the comparable rate for a full-time employee of that employer.

Deputy Richard Boyd Barrett

They could be paid the minimum wage.

Deputy Richard Bruton

It is an arrangement whereby a person can enter into an agreement with an agency that gives him or her periods of work but also provides for periods during which he or she will be paid, even when not working. It is a different type of contract but it must be permanent in that the person is taken on with a long-term contract that provides periods of assignment and non-assigment. The agency commits to payment, even during the non-assigned periods, thereby making a commitment to guarantee the worker work or, during the periods when it cannot provide work, to pay a retainer fee. It is an arrangement that may suit some people but not others. We seek to allow this to be contemplated by the legislation provided the agency notifies the worker in writing, that the person knows what he or she is entering into, that there is a permanent contract that provides for it, and that it is not something which can be turned into a temporary assignment that can be terminated at will without the rate that would have applied being paid. That is the model being allowed for here.

Flexibility is provided for in the directive because this can be a fair way of working that can suit both sides where there is intermittent work and neither side knows the exact commitment involved. It provides some protection to both sides. There is certainty for the agency of being able to provide a service when it is needed and there is certainty for the worker that he or she will get a certain level of pay regardless of being assigned. The arrangement allows both sides to meet needs they may have. We seek to allow this flexibility.

Amendment put and declared lost.

Amendments Nos. 16 and 17 not moved.

Acting Chairman (Deputy Joe O’Reilly)

Amendments Nos. 18 to 20, inclusive, are out of order.

Amendments Nos. 18 to 20, inclusive, not moved.

Amendment No. 21 not moved.

Deputy Richard Bruton

I move amendment No. 22:

In page 12, line 11, to delete "contract of service" and substitute "contract of employment".

This is a technical amendment.

Amendment agreed to.

Acting Chairman (Deputy Joe O’Reilly)

Amendments Nos. 23 and 24 are related and may be discussed together.

Deputy Richard Bruton

I move amendment No. 23:

In page 12, to delete lines 16 to 28.

On Committee Stage I flagged to Deputies that I would revert in particular to section 13(2)(b) and (c)which relate to the charging of fees in respect of health and safety costs and Garda vetting. In addition, I undertook to look more closely at paragraph (a) that proposed that employment agencies would be able to charge reasonable expenses in the context of providing training to improve the employability prospects of agency workers. In essence, the amendment now proposed, which I know will be well received by Deputies, has the effect that the entirety of section 13(2) is being removed from the Bill. I listened to views argued on Committee Stage and accepted them. On that basis I propose to remove from the Bill any provision that allows for the charging of fees to agency workers in the context of the introduction of an individual for the purposes of his or her employment with a third party.

Amendment agreed to.

Amendment No. 24 not moved.

Acting Chairman (Deputy Joe O’Reilly)

Amendment No. 25 is out of order.

Amendment No. 25 not moved.

Deputy Joan Collins

I move amendment No. 26:

In page 20, after line 24, to insert the following:

"26.—The employment agency and the employment to which the agency worker is assigned shall be jointly and severally liable for all breaches of this Act with the exceptions of the matters of facilities and amenities for which the employer who is end user shall be solely responsible.".

My colleagues and I wish to place this section at the end of the legislation, after section 25. It concerns complaints in respect of certain contraventions of the Act. It is to ensure the employment agency and the employment to which the agency worker is assigned are jointly and severally liable for all breaches of the Act. It will tighten this up because employers and the agency are well aware they must comply with this Act in regard to breaches, with the exception of matters of facilities and amenities for which the employer who is end user shall be solely responsible. We ask for discussion of this provision and for the Minister to take it on board.

Deputy Patrick Nulty

I support this amendment. It is right and proper to place in primary legislation a responsibility on both the agency and the employer who avails of the agency worker and that there should be stringent legal protections in place within the primary legislation.

Arising from the previous debate, although amendment No. 23 is welcome, the Minister should look at the Swedish derogation issue before this Bill goes to the Seanad. The British Government has dealt reasonably well with this issue. I urge the Minister to consider the debate we have had today on the Swedish derogation.

Deputy Willie O’Dea

I, too, broadly support this amendment. Basically, the position is that if a hirer signifies a wrong comparable employee, or if a hirer in some other way does not pay the agency worker that to which he or she is entitled, that worker will then have an action against the employment agency which is designated the employer, even though it is the hirer who is at fault. The case will have to be taken against the employment agency, which will then have to take a case against the hirer. That would require two sets of proceedings and the Minister should do what he can to avoid that. As Deputy Nulty said, this was dealt with neatly in the UK legislation, which I examined some time ago. While I have not read it recently, my impression was that it dealt with this issue much more neatly than is proposed in the Bill.

Deputy Clare Daly

Unless this issue is clarified, agency workers could be deprived of their rights because of the complexity of the enforcement process. By specifying the end-user employer and agency as jointly and severally liable, employment tribunals would be allowed to determine where responsibility for breaches of regulation lay. The amendment is necessary to this end, whether it involves the end-user employer or the agency.

The unions have correctly pointed out that this would ensure that agency workers would always be able to establish their rights, which may not necessarily be the case unless the amendment is made, for example, where an agency or a user employer becomes insolvent or the contract for the supply of workers is outsourced through a chain of agencies, including some outside the jurisdiction. This clarity is needed for legal purposes to assist enforcement and to ensure agency worker rights are protected in this regard.

Deputy Peadar Tóibín

I support the amendment. Often the weakness in labour law relates to compliance and enforcement. Employers who are not compliant seek ways to extend the time within which an individual can achieve justice and the penalty usually is the initial fine. If an employer is of the view that he can draw the process out and dodge the case for a period knowing he will only be hit with the original penalty, there is a great incentive to do that. I support the strengthening of the enforcement and compliance involved in this.

Deputy Richard Bruton

With the exception of sections 11 and 14, as amended on Committee Stage, responsibility for breaches of the legislation is attributable to the employer of the agency worker given the direct employment relationship that exists between the two parties. However, exceptionally in sections 11 and 14, which relate, respectively, to the rights of agency workers to vacancy notices relating to job opportunities at the hirer's undertaking and the right to access amenities and collective facilities at the hirer undertaking, responsibility for these aspects rests solely with the hirer. For all other matters in respect of which a breach is claimed, the employment agency is responsible.

In parallel with the provisions in sections 11 and 14, Schedule 2 proposes that, in these specific instances, the hirer undertaking has sole control and discretion over these aspects that can be taken before the rights commissioner. For all other issues, the employer of the agency worker will potentially have a case for breach of the legislation taken before a commissioner. However, an important consideration is that set out in section 15, which provides for the subsequent indemnification of the employer in the event that the breach which occurred, if proven, was incurred as a consequence of the failure of the hirer of the agency worker to provide accurate information to the employment agency in the first instance.

I have taken advice on this approach and understand that this is a preferable route to take and is much simpler than the enjoining of two parties, only one of whom has responsibility for the breach. This would have the undesirable effect of usurping the time and resources of all parties concerned, including the rights commissioner service, when there is a simpler solution. For this reason, I am not in a position to accept the amendment.

The legislation makes clear where the responsibility lies in each case where there is a failing. If it clearly falls within the hirer's responsibility, namely, vacancies or not providing access to facilities, then the case is taken to the rights commissioner against the hirer. If the breach relates to pay and conditions, the case is taken against the employer agency. If the commissioner then rules in favour of the worker that the employment agency failed to provide the basic pay and conditions, he or she will make an award to the worker and the onus will fall on the employer, if he feels the responsibility lies with the hirer because he has given false information, to pursue him. The worker is, therefore, not delayed while that new action is tried. The onus is on the employer to go after the hirer for his failure under the contract between them. This is cleaner and provides more direct access for workers to the rights commissioner to try the case if the hirer failed to give them access to collective conditions in the workplace. They take a case and the process is clean. If they take a case on pay and conditions, they take it against the agency and they win. It is up to the agency then to pursue the employer. I am advised this is cleaner and better for the worker to pursue his case with clarity as to who is responsible in each case and leaving the agency to pursue the contract it had with the hirer if there is a dispute following the award.

Deputy Richard Boyd Barrett

I do not see why the Minister objects to the amendment. It seeks to establish a legal bottom line regarding compliance and enforcement in order that there will be no ambiguity. The agency and the hirer would be jointly and severally responsible for breaches of the legislation and it would be clear that this was the case. This would not preclude workers from going to the rights commissioner and so on. We want a legal bottom line written into the legislation whereby agencies and hiring employers will be held responsible if they breach the Bill. That is what the amendment seeks and I do not see why the Minister objects to it. He should consider it a sensible and reasonable addition to the Bill.

Deputy Richard Bruton

This approach is standard in other Bills such as the transfer of undertakings legislation and, therefore, we are not innovating. If there is a clear obligation on the hirer, he will be responsible. The case should be pursued against the hirer and it is the responsibility of the hirer to honour his obligations under the legislation as they relate to vacancy notices and workplace facilities. If the case relates to basic pay and conditions, the employer is responsible but to make them jointly and severally liable is to pretend they are jointly responsible whereas the legislation has separated their responsibilities and established the line of responsibility clearly and a redress mechanism that makes it simpler for the worker to pursue a case against one or the other. If the worker wins the case and the employer has a subsequent gripe, he must pursue it himself. That is better and cleaner.

Amendment put and declared lost.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.