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Dáil Éireann debate -
Wednesday, 20 Jan 2016

Vol. 903 No. 2

Other Questions

Job Losses

Paul Murphy


6. Deputy Paul Murphy asked the Minister for Jobs, Enterprise and Innovation his views that Mondelez is seeking further outsourcing of jobs at the Cadbury plant in Coolock in Dublin 17. [2084/16]

This relates to the latest worrying news from Cadbury in Coolock to the effect that Mondelez is seeking to outsource a further 17 jobs on top of the 165 jobs that were lost last year. Does it not speak to the nature of the recovery as being for big business and the rich when workers continue to face job losses and major exploitation?

There will always be companies that lose employment. It is a source of disappointment whenever that happens, but the rate of job losses in Enterprise Ireland and IDA companies is at an historical low. This is encouraging. There is strong employment growth, including in manufacturing.

It is a source of great disappointment that Cadbury has needed to indicate that it will reduce the numbers it employs and restructure its business. In February 2015, the company announced job losses and stated that its Dublin facility would focus on four of its key brands. However, it committed to an investment of €11.7 million to improve the technology at the plant and copper-fasten its quality and capacity to compete in the long term.

I met the company as recently as last November and Enterprise Ireland continues to work with it to ensure that the best outcome is secured. We have a cross-agency group that is designed to help the workers in every way that we can. My understanding is that the company has not made changes to the plans announced in February. However, it continues to engage with the unions on the restructuring and has been negotiating on future work practices. It has availed of the State's industrial relations machinery, namely, the Workplace Relations Commission, WRC, and the Labour Court. I understand that the recommendations of the Labour Court are to be considered by union members this month.

That the jobs are disappearing and the workers are disappointed are not just natural events. It is cold comfort to the 17 workers who may lose their jobs that the rate of job losses elsewhere has decreased. Does the Minister acknowledge that the reason these jobs will go is not that Mondelez or the Cadbury plant in Coolock is unprofitable, but because Mondelez wants to maximise its profits? Mondelez's income in 2014 was $34.2 billion and now it is chasing further profits on the back of a race to the bottom in working conditions, pay and the yellow-packing of jobs.

Does the Minister agree that the workers should be supported in taking action against the company and demanding that no further outsourcing should occur, given in particular the investment announced and promises made last year?

In any company based in Ireland that has an international footprint, its Irish operation must be competitive with its other operations. This means that companies continually go through processes of restructuring. Enterprise Ireland seeks to support companies in doing that in order to anticipate threats that might be posed. Protecting companies and employment forms a large part of Enterprise Ireland's work. We have reduced the job loss rate to its lowest ever at just 4%. Sadly, however, there are still cases in which employment is lost.

We seek to ensure that companies remain competitive in the long term. That is the common aim in this instance. The company has committed to an investment programme, but it must negotiate with its unions those work practices that it believes will prove important in ensuring its long-term future. We seek to assist that process through the WRC and the Labour Court with a view to a fair and equitable outcome for everyone concerned. This is the approach that has been taken by every Government. We support the best possible outcome for workers in this situation.

At least that answer has the benefit of being honest: "That is capitalism". Companies will try to maximise profits, globalisation means that there will be an international race to the bottom in terms of wages and conditions and we must go along with it. The workers would not be happy to hear the news that this is the Government's approach.

To become the most competitive, the company will want the most flexible workforce possible, to outsource as much as possible and to pay as little in wages as it can. Should the workers and the Government accept this? The public good in having these jobs in Coolock is immense. The Government has a responsibility to defend them on the basis of decent terms and conditions and to support workers in resisting attacks on wages, conditions and jobs, not to accept the logic of a race to the bottom.

The Deputy is seeking to distort what I stated. Through Enterprise Ireland, the Government seeks to work with companies to secure quality jobs that will survive in the long term and provide increased living standards for people. Consider the evidence of recent years since the recovery took hold. The number in employment has increased, wages have increased, the Government has been in a position to cut the tax burden and other burdens on workers, the legislation on temporary agency workers has improved, registered employment agreements, REAs, and employment regulation orders, EROs, have been restored and the Low Pay Commission delivered an increase in the national minimum wage. This work is continuing, but we must see a strong and viable enterprise sector that can grow employment and living standards.

Unfortunately, there are times when companies must undertake restructuring. We aim to support this restructuring to get the best possible outcome in the long term, that is, a good plant that will offer good and secure employment. The company must negotiate with its unions, however, and that is happening.

National Minimum Wage

Paul Murphy


7. Deputy Paul Murphy asked the Minister for Jobs, Enterprise and Innovation when he will receive a report from the Low Pay Commission following his request that it review the impact of the minimum wage on young persons and women; and if he will make a statement on the matter. [2083/16]

The Low Pay Commission was established last year through the National Minimum Wage (Low Pay Commission) Act 2015. Its remit is to make recommendations to me regarding the national minimum hourly rate of pay, ensuring that all decisions are evidence-based, fair and sustainable and do not create significant adverse consequences for employment or competitiveness. The Low Pay Commission also has other functions. For example, the Act allows me to request the commission to examine and report its views and recommendations on matters related generally to its functions under the Act.

In this context and in order to obtain a better understanding of the impact of the national minimum wage on younger people, I requested the commission to examine the appropriateness of the sub minima rates as provided for in the National Minimum Wage Acts, with particular regard to their impact on youth unemployment rates and participation in education. This report is due by 29 February.

Given the preponderance of women on the national minimum wage, as highlighted in the commission’s report in July last year, in order to obtain a better understanding of the composition and profile of this group and the underlying causality, I also requested the commission to examine this issue in more detail and report its views on the underlying reason for this position and make recommendations it considered appropriate. These recommendations are due to be presented by 31 October this year.

I look forward to that happening. Does the Minister of State agree that the prevalence of low pay among women and young people speaks against it being in any way an equal recovery or a recovery for ordinary people? Does the Government and the Labour Party, in particular, consider it to be a source of embarrassment that two thirds of low-paid workers are women, that 50% of women earn less than €20,000 per year and that the highest levels of growth in precarious work are in areas dominated by female workers such as the retail sector? The incidence of low pay among the under-30s is around 40%, on average, while teenagers receive 70% of the adult minimum wage rate. Does the Government consider this to be a source of embarrassment and is it concerned about it? Is it going to introduce a minimum wage that is a living wage on which people will be able to survive?

The reason I asked the Low Pay Commission to examine these areas in the first place was that we wanted to make sure there was full, active participation in the workforce and that people were treated appropriately. The commission's figures revealed that about two thirds of those on the national minimum wage were women. We want to look under the bonnet to see why that is the case. For example, as a Government, we want to ensure full participation in the workforce by all sections of society. There are underlying reasons for the preponderance of women in certain sectors of the economy. There are issues to do with access to child care, caring duties and responsibilities, the bulk of which, whether we like it, are still taken on by women. We want to address these issues. That is why we, as a Government, are addressing issues to do with child care and want to introduce better child care facilities for families to encourage more people to participate in the workforce. I am looking forward to receiving the reports. I asked the Low Pay Commission specifically to examine these two areas because they are of interest to me in terms of the widest possible participation in the workforce.

Does the Minister of State agree that we live in a low-wage economy? Was it the Government's intention to create a low-wage economy, where 20% of workers would be classified as living in deprivation, where one third of one-income households would be deprived, where many people affected by the housing crisis and suffering from homelessness would be employed and yet could not afford appropriate accommodation or shelter? The low-wage economy hits young people and women the hardest. Further investigation will reveal that child care responsibilities are an important aspect of the reason women are pushed into lower paid and less secure, more precarious sectors of employment. What is the Government actually going to do about this, as opposed to Labour Party election promises? The party has been in government for five years. Is there not a need for publicly funded child care provision that is free at the point of use? Does the Government agree that what we need is a minimum wage that is at least a living wage, as that would make a significant difference to the lives of about one in four workers?

The difference between the Deputy and the Labour Party is that he talks about all of these issues and we take action to address them. That is the fundamental difference. We provide the solutions.

The Deputy is quite good at identifying some of the problems, but he does not take a solutions-based approach to the economic and social challenges. That is unfortunate, but we do and we have had some success in doing so. I do not agree with his depiction of the economy as a low-wage economy in general. The evidence does not suggest it is. Living standards are improving; the level of disposable income is improving, as are wage levels across the economy. We are playing our role in improving wage levels across the economy, through an increase in the national minimum wage from 1 January this year which will apply to about 124,000 workers. That is a very significant contribution, with, as I mentioned, the signing of employment regulation orders which apply to 55,000 workers in contract cleaning and security services. We are legislating and regulating to make sure the least well-off in society, those who work hard, will see an uplift in their living standards. We are doing what we can from a legislative point of view to make sure that will be the case and the economic recovery will hit not just every region in the country but every household. That is our job.

Deputy Paul Murphy, who is doing very well today, also submitted Question No. 8.

I am going to play the lotto later.

National Internship Scheme Placements

Paul Murphy


8. Deputy Paul Murphy asked the Minister for Jobs, Enterprise and Innovation the number of interns for whom he has provided placements under the JobBridge scheme since the scheme began; and how many of these were subsequently offered full-time employment in his Department. [2087/16]

I am glad that the Minister of State mentioned a solutions-based approach because with this question we come to one of the Labour Party's favourite solutions which works so well for employers and those who want people to work for free. For how many interns has the Minister provided placements under the JobBridge scheme and how many of them were subsequently offered full-time employment in his Department?

As Minister in the Department with primary responsibility for the promotion of a competitive environment that supports and promotes job creation, my Department and I are acutely aware of the enormous value of work experience in assisting jobseekers in finding employment. Since the inception of the JobBridge national internship scheme, my Department has been a willing participant and sought to maximise the opportunities available to jobseekers. Since 2011, when the scheme began, 25 placements have been offered by my Department, of which 13 have been taken up. Of these, six left within the proposed internship period - five to take up employment elsewhere and one for unspecified reasons - while five successfully completed their internship before moving on to other endeavours. There are two JobBridge interns assigned to my Department.

I emphasise for the Deputy that internships do not displace existing staff and are not used to fill vacant posts. My Department’s HR unit has been very careful to structure internships in such a way as to ensure interns receive quality training and experience that maximises their opportunity to find employment subsequently. The intern placements offered to date by my Department have been in areas such as company law and legal research, intellectual property and copyright report research, records management and entrepreneurship strategy projects.

On the question of JobBridge participants subsequently being offered employment in my Department, recruitment to all Departments is conducted openly and transparently via the Public Appointments Service and open to all suitably qualified applicants, as determined by the recruitment process. Directly retaining interns in my Department was, therefore, not an option. I am, however, confident that the experience they gained while in my Department was of significant benefit to them as they sought to progress their careers.

As the Minister did not really provide the figure in the very clear way I would like, I will spell out what I think the answer was. I asked how many placements had been provided and the answer was 13. A total of 25 placements were offered, of which 13 were taken up. I asked how many of them were subsequently offered full-time employment. If I did not take up the Minister wrong, the answer is zero. He obtained interns to work for the Department for nine months - I am sure they received valuable experience, etc. - and then did not employ them. This is the Department that is meant to be dealing with job creation. It highlights what is happening with the JobBridge scheme in that interns are being used to do work to make up for the recruitment embargo. They are also being used to legitimise the idea of people working for free and thus counteract the idea that there is actual job creation. That is the Government leading the way and the solutions-focused approach which sends a message to the private sector that if a company wants somebody to work for free, there is a great scheme called JobBridge in place, whereby the State will subsidise the company to have somebody come to work for free and the company will not have to employ them. I do not see how this helps in dealing with the unemployment crisis.

It has long been established that a catch-22 for people seeking to enter the labour force is that they do not have experience. The purpose of the JobBridge programme is to bridge that gap. The Department of Social Protection, to which the Deputy should, perhaps, direct his questions, has very clear requirements in respect of the training provided and the value of the experience gained. That is what we have done. As made clear in the answer, nearly 50% of interns went directly from a JobBridge scheme placement into employment; therefore, the experience gained did help them to find employment. Obviously, the others have moved on and no doubt many of them have found work. The public service recruitment process remains open and transparent, as I outlined. I thought the Deputy would see it as valid, to allow all qualified persons to compete for posts in the public service.

As the Deputy knows, there have not been many opportunities for recruitment in the public service but now, as a result of the progress we are making elsewhere in the economy, we are in a position to recruit, particularly in areas on the front line, such as health and education, which is welcome. I strongly defend the value of work experience and training for any worker seeking to progress their career.

I strongly attack these activation schemes as a mechanism for the Government to manipulate unemployment figures, further casualise the labour market, normalise the idea of working for free, drive down working conditions and undermine working wages and conditions for all. How many of the 13 who took up positions in the Minister's Department did so under threat or perceived threat of sanction? The number of penalties applied to people not taking up activation schemes such as Gateway and JobBridge has shot up. More than 5,000 people received a reduction in their social welfare payment in 2015. These people are forced to work; they are not doing it voluntarily. In the National Youth Council of Ireland study, 11% said they took part in order to retain their social welfare, 100% were dissatisfied with it and 44% felt the companies - I presume this includes the public sector - use the scheme solely for free labour.

The Deputy should acknowledge that every country with an unemployment problem develops work experience programmes as part of its response. The OECD has been very strong in advocating that Ireland needs to have a wider range of these sort of programmes that give people a bridge from whatever they did in school or college to the employment environment. Those schemes are continually evaluated by the Department of Social Protection, which has weeded out cases of abuse. These work experience programmes prevail in all countries with strong activation policies that provide quality opportunities for people to progress in their careers. JobBridge is no different; more than 60% have progressed to unemployment from the programme. A wide variety of employers is engaged and many companies have put substantial amounts of money into developing the training programmes that give people genuinely good work experience on these programmes. They are an important and valuable part of the response to unemployment.

Employment Rights

Peadar Tóibín


9. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the actions he will take before the end of this Dáil Éireann to prevent workers from being forced into bogus self-employment and forced self-employed contracts. [2067/16]

As this Government's term in office draws to a close, the cancer of bogus self-employment still exists within the State - in the construction industry and many other sectors. It has hollowed out the working conditions of ordinary workers around the country. In some sectors, direct labour is becoming rarer and this is also affecting the Government's tax income. Recently, the Labour Party stated in its manifesto that it will deal with this issue - not today, though, but in the next Government. What can the Minister of State do in the next ten, 15 or 20 days of this Government to fix this problem?

I thank Deputy Tóibín for raising this issue. Ireland has a well-resourced and proactive labour inspectorate in the form of the Workplace Relations Commission. Inspections are undertaken on the basis of risk analysis which identifies certain sectors as a result of complaints received and on a routine basis. Where the inspection service receives complaints of bogus self-employment or bogus subcontracting, they are forwarded to the Revenue Commissioners or the Department of Social Protection's Scope section for investigation either solely by the recipient or jointly with the WRC.

In most cases, it will be clear whether an individual is employed or self-employed. Where there is doubt about the employment status of the individual, the relevant Departments and agencies will have regard to the code of practice for determining employment or self-employment status of individuals. This code was drawn up and agreed in 2007 by the Office of the Revenue Commissioners, the Department of Social and Family Affairs, the Department of Enterprise, Trade and Employment, the Irish Congress of Trade Unions and the Irish Business and Employers Federation.

The Workplace Relations Commission has statutory authority to share information with both Revenue and the Department of Social Protection. Such information-sharing takes place regularly between the Workplace Relations Commission inspectors and their counterparts in these bodies. In cases of mutual interest, joint operations may also be carried out. This exchange and sharing of information is a valuable element of the inspection process and contributes to uncovering non-compliance in the areas covered by the relevant bodies.

Having looked at this issue very closely over the last period of time, I believe this area needs further examination and closer attention. I am concerned that the law has not kept pace with the phenomenon of what might be termed bogus self-employment, a phrase with which I have become familiar in recent times. I would like to have the time to respond to this issue in the short period of time we have left available in the parliamentary term but the parliamentary clock is ticking. I have said publicly in the past week or so that if a mandate is renewed by the Irish people in the coming weeks, the approach I would like to take is to root out bogus self-employment in certain areas of the economy where it has become an issue. I will do so primarily by reforming the legal definitions of employment status to include a test determining the status of employment in keeping with Revenue guidelines and in line with recent European Court of Justice judgments.

Lord, give the workers rights, but just not yet. There are 365,000 RTCs in the State and it is estimated that approximately 80% of them are bogus - in other words, they are workers who should be directly employed but are subcontracting. This means that employers get to shirk their responsibility with regard to the minimum wage, employer PRSI, illness benefit and jobseekers' benefit. The clock is ticking. This is not a new issue being raised today; I raised it in this Chamber when the Kishogue dispute was going on. I had to filibuster a committee for hours to get the Government to focus on it. These RTCs are being abused so frequently that job agencies are advertising roles in the construction industry for which people do not have to pay holiday or sick pay, give proper notice or deal with direct employment. The Kishogue workers were getting €5 per hour. They had to get up every morning at 6 o'clock, stand for months on end at the place of work and try to draw attention to their situation. They had to climb cranes to draw the attention of the Minister to this issue. The worst thing about it is that it was a State contract. The Department of Education and Skills was the ultimate employer in this. All the tools and elements of the State that the Minister of State said are there to police this problem did not police it in the case of Kishogue. The school was built before the Department of Social Protection made a ruling on it.

We all know that responsibility for determining employment or self-employment status rests with the Revenue Commissioners and the Scope section of the Department of Social Protection. In cases I have dealt with in my constituency over the years, it has taken a considerable amount of time for the Scope section to deal with cases referred to it. Deputy Tóibín is quite right that in cases where bogus self-employment emerges, it is a case that the Exchequer can potentially lose considerable revenues owed to it in terms of the status of that individual, whether they are employed or self-employed. There are a range of different employment protections that would be forgone by somebody in a bogus self-employment situation. It is an area that I intend to address in a comprehensive way over the next period of time. As I said, the parliamentary clock is ticking. We have introduced a range of different industrial relations reforms over the last while, particularly over the last year and a half. It is an area that requires more attention and I intend to attend to it.

ICTU has estimated that €600 million has been lost in taxation revenue since 2007, which is a multiple of the water charge income for the State. There are 27,000 sole traders paying approximately €2,886 in PRSI payments in an Exchequer year. Not only does this really hurt families in those sectors but it also hurts the income of the State. The Minister of State said that he intends to work on this. The major problem I have with the Labour Party's approach to many of these workers' rights areas is the inaction it has shown. When it came to zero-hour contracts, the Minister of State did not act but he commissioned a report. When it came to the Clerys tactical insolvency, the Minister of State did not act but is now commissioning the second report on that issue. The Minister of State is good with tea and sympathy, writing reports and being appalled but he is not good with action. Whatever promises he makes on workers' rights in the next month will be devalued by five years of inaction.

I do not trust one word that comes out of the mouth of Sinn Féin about employment rights, zero-hour contracts, low-hour contracts or anything else, when one considers the low-pay economy over which trade unionists say Sinn Féin presides in Northern Ireland. Consequently, I will not take lectures from it on its views on employment rights or the performance of the Labour Party in government on such rights. That is for others to decide. One will find that many others who are more expert in this area than Deputy Peadar Tóibín and who work on a daily basis with people to protect their employment rights and advance their agenda through trade unions are quite satisfied with the performance of the Labour Party in government, as well as with what it intends to do if returned to government. Based on the track record of Sinn Féin in Northern Ireland, I do not have much hope it would implement anything particularly strong for workers in the Republic were it to be successful in getting into government after the next general election. While I do not believe Sinn Féin wishes to be in government, that is another day's work.

It is also important to point out that during the recent Committee Stage debate on the Finance Bill the Minister for Finance, Deputy Michael Noonan, announced that there would shortly be public consultation on a range of issues related to employment practices and trends.

Consultation; a report.

This was announced by the Minister.

Perhaps we should set up a committee to discuss it and somehow kick it down the road.

From the point of view of the Exchequer, revenues forgone because of bogus self-employment arrangements will be reviewed and changes made in that regard.

IDA Portfolio

Seán Kyne


10. Deputy Seán Kyne asked the Minister for Jobs, Enterprise and Innovation the steps he and State agencies within his Department's remit are taking to ensure a supply of office and manufacturing facilities generally but also in County Galway where a constraint on suitable accommodation has delayed the establishment of new companies or divisions of existing ones. [2073/16]

This question relates to the steps the Minister and the State agencies within his remit are taking to ensure a supply of office and manufacturing facilities both generally and in Galway city and county, in particular.

I thank the Deputy for raising this question. An adequate supply of office and manufacturing facilities is a key component of successful enterprise development. As part of the regional Action Plan for Jobs 2015, I announced that IDA Ireland would invest €150 million over five years in property solutions designed to allow it to create opportunities to win additional projects for all regions. As part of this programme of investment, IDA Ireland is building nine advance facilities around the country, in particular in locations where the private sector has been slow to build. This includes the delivery of an advance facility in Galway. In marketing Galway as part of the west region, IDA Ireland not only promotes its own property portfolio but, where appropriate, advises prospective investors of available privately-owned properties that may be suitable. Enterprise Ireland does not provide office space or manufacturing facilities directly, but it has given its support to the provision of innovation or enterprise spaces. For example, it funded the NUI Galway business innovation centre and the innovation in business centre at Galway-Mayo Institute of Technology, GMIT, which provide spaces for spin-out companies, start-ups and entrepreneurs to establish their businesses.

The record results for 2015 for both IDA Ireland and Enterprise Ireland show there are 21,575 people employed by client companies of the agencies in County Galway, an increase of 2,964 since 2011.

I thank the Minister for his reply. I certainly welcome the plans put in place by the Government which, as he noted, entail an investment of €150 million over five years. The objectives of the regional Action Plan for jobs and the Action Plan for Jobs to monitor implementation of policies on the regional plans certainly are welcome because it is not simply a case of publishing plans. One must also ensure they are implemented. Previous plans have certainly been implemented. As the Minister noted, there has been considerable success in IDA Ireland-supported job creation initiatives, with more than 60 IDA Ireland-supported companies in County Galway creating jobs. More than 3,900 jobs have been created by IDA Ireland-backed companies since 2011, not to mention the indirect jobs created in small to medium-sized enterprises. The Minister attended a recent jobs announcement in Galway at which I was present. In his contribution he asked the chief executive officer to let him know of issues he had. As the chief executive officer mentioned the delays he had experienced in sourcing an adequate building in Galway city, this is an issue that must continue to be pushed because it would be a sad day were it not possible to create jobs because of a lack of space or suitable buildings in a city such as Galway.

I agree absolutely that this is important and not only has the Government acted on it through acquisition but planning permission has now been granted for a 40,000 sq. ft. office space in Galway. As the process for delivery will be selected in the coming year, the Government is moving ahead in that regard. However, private property developers should also have confidence given the flow of new wins in Galway. This should give the private sector confidence to commit to building because there is a strong flow of investment. Galway is highly successful and its record speaks for itself. As companies within the remit of Enterprise Ireland and IDA Ireland have seen a 15% increase in employment in the space of just four years, there is a significant flow and through IDA Ireland's property section, the Government will work with the private sector to try to give it the confidence it needs to commit to invest where it can assist in meeting some of the needs of new investors.

I thank the Minister for his reply. As I stated, I welcome the initiatives that have been taken. Will IDA Ireland be pursuing other projects, even by merely advancing towards planning permission? The planning process can cause delays and there have been certain instances of this in Galway. I obviously welcome the provision of 40,000 sq. ft. of office space, but were the agency to pursue planning in other areas, it might act as an incentive to attract investment in other areas. There are adequate IDA Ireland lands in other areas, including Athenry, Parkmore, Dangan and Oranmore.

The Deputy is absolutely correct that IDA Ireland is seeking to promote actively its property portfolio. It has a significant property portfolio in eight locations across the county. The Department and its agencies are clearly seeking to promote these locations as sources that could provide property solutions for companies that are investing. However, on foot of the Deputy's contribution, I will also ask IDA Ireland to consider making available space throughout Galway city and county and to examine whether initiatives could be taken, in addition to what is already being done, to focus on a decent flow of property to meet the needs of investors.

Written Answers follow Adjournment.