JOINT COMMITTEE ON ENTERPRISE, TRADE AND EMPLOYMENT debate -
Wednesday, 30 Apr 2008

Agency Workers: Discussion.

Chairman

I welcome Mr. Seán Murphy, director of the public affairs division of Chambers Ireland; Mr. Eddie Keenan, director of industrial relations, and Mr. Martin Whelan, director of communications, from the Construction Industry Federation; and Mr. Jim Curran, head of research, and Mr. Mark Fielding, who is returning to this committee after a short absence and who is chief executive officer of the Irish Small and Medium Enterprise Association. Mr. Brendan McGinty, director of industrial relations and human resources, and Ms Rhona Murphy, solicitor, from the Irish Business and Employers Confederation are on their way. I thank everybody for their attendance today.

I have to issue the usual warning to witnesses appearing before the committee. I draw witnesses' attention to the fact that committee members have absolute privilege, but the same privilege does not apply to witnesses appearing before the committee. It is generally accepted that a witness would have qualified privilege, but the committee cannot guarantee any level of privilege to witnesses appearing before it. Members are reminded of the long-standing parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

With that on the record and the witnesses understanding the position, I think Mr. Seán Murphy is first into the fray.

Mr. Seán Murphy

Thank you, Chairman. I appreciate the invitation to come to the committee to discuss this important topic--

Chairman

We are looking for a five-minute presentation, and then there will be cross-examination on it.

Mr. Seán Murphy

I have a presentation of about five minutes.

Agency workers are an issue not just for employers but employees, and not for the reasons that committee members may think. A continuous stream of stories on the theme have been published recently and in our view they have been one-sided and not necessarily based on fact. The changes regarding agency workers being called for by trade unions are unnecessary and unfounded. Furthermore, such additional bureaucratic requirements will almost certainly result in job losses and reduced availability for those seeking temporary employment and will ultimately damage the Irish economy. It is work noting that, in the United Kingdom, 40% of people who start off working in agencies are in full-time employment within one year of that commencement date. It is often seen as a way of labour market testing an individual's skills set as he or she enters the workforce.

Contrary to what the unions are saying, agency workers have the same employment rights as permanent workers. It is important to reiterate that fact. Everything from the Organisation of Working Time Act 1997, which provides equality of treatment for both full-time and agency workers, through to equality legislation pertains to agency workers in the same way as it does to full-time workers. Any claims to the contrary are not true.

Another context in which the subject should be examined is that of the foreign multinational sector. In this sector, business units typically compete with sister companies across the world for investments and projects. I can give one example. If a multinational, or, indeed, any company, has ten months of work for their employees over a 12-month calendar period, it may bid for an additional task or project that takes four months of work to deliver by the end of the calendar year. The additional two months would have to be done by agency workers to support the output within the calendar year. Without that output, all of the jobs are at risk - not just those of agency workers.

The same issue applies to professional services, a field in which I have personal experience. A software development project may take five person years - five staff working on the project for a year. Typically, the technical writer - who produces the end-user documentation, which is a vital output from the project - will do it in three to six months flat. Most, although not all, software houses do not have enough time allocations to hire a full-time technical writer, but they can hire somebody on an agency basis for three or six months. I was that soldier in a previous life - I worked in eight different locations over more than an 18 month period and it worked well for me.

That is the important point about agency workers - it is not just about exploitation of people at the lower end. Huge numbers are professional, white-collar workers in different sectors in the economy. The majority are Irish. Some of the sotto voce uisce faoi thalamh on the issue is quoting our national workers who are in the sector. While some foreign nationals may work in this sector, there are also huge numbers of professional, white-collar workers in our hospitals, software houses, foreign direct investment companies and corporates. Our entrepreneur of the year, Anne Heraty, runs an agency that puts skilled individuals into skilled sectors across the country. It is worth repeating that fact.

Other issues need to be addressed. It follows that the union case, in the context of meeting the needs of flexibility in the Irish workforce, will be undermined if we start cutting off this vital ability for manufacturers, employers and companies to hire staff as and when they need them to sustain and guarantee the full-time employees who are working in the same position.

There are other people whom we should be cognisant of, as they are affected by agency work. They include college students and women who have been out of the workforce and want to return, perhaps on a three, five or ten-day basis over five, six or eight months, thereby building up the skills and experiences that give them the confidence to return to full-time employment. There is no specific data in the Irish context, but I am aware of UK figures on agency workers and the context in which they work that, if extrapolated to Ireland, show that shutting off that valve would not create more work but would, in fact, cut off work. Employers would say that they could not deal with the paper compliance issues and could not get the people they needed at short notice to do the necessary tasks. The work would stop, which would affect everybody from young people entering the workforce, people returning to the workforce after a period out of it, college students and others.

It is our understanding that the Department of Enterprise, Trade and Employment has approached the unions for hard examples of exploitation pertaining to agency workers in the past and has not received, apart from anecdotal information, any documented evidence of the issue. I know that the unions, when they appeared before this committee, quoted a number of situations regarding, for example, underpaid workers coming into a company. That issue pertains in most employment situations. Typically, a person who has been employment for ten years in any operation will be paid more, because of increments and recognition of loyalty, than someone entering the operation at entry level. It is worth considering that fact in the context of agency workers. There may be a differential between €13.50 and €18.50 - the issue that the unions quoted in their presentation - but the fundamental point is that, with the working time directive, equality of treatment, maternity leave and other such considerations, agency workers come under the same statutory requirements, laws and treatments as permanent workers.

My final comment is that we would obviously not condone or support the exploitation of workers. Employers look out for their staff. We are in a virtually full employment economy, and we should be aware of that fact. Employers who do not look out for their staff should be regulated accordingly, but that is different from the situation that has been posited in the agency worker debate.

Mr. Eddie Keenan

I do not intend to reiterate what Mr. Murphy said, but I point out that agency workers have made an invaluable contribution to the transformation of the economy, notwithstanding the fact that they make up less than 2% of the total workforce. We certainly would not have been able to sustain the level of expansion and growth, particularly in construction but in all areas, across the economy were it not for the important role and flexibility provided by agency employment. It is vital that, as a modern, flexible, responsive and outward-oriented economy, Ireland maintains flexibility in its labour market in order to maintain competitiveness. We must avoid becoming overburdened by regulation that will serve to blunt our competitive edge and allow other economies take a competitive advantage over us. We are in danger in Ireland of heading in that direction, particularly with regulation and legislation. The pay talks are coming up again and the unions are looking for more legislation.

The construction industry has come in for much ill-informed and vested criticism. We agreed under Towards 2016 that agency workers would receive the terms of the registered employment agreement. The registered employment agreement means that the rates of pay and conditions of employment and pensions have the force of law, and agency workers are entitled to that. We agreed that with the unions as part of the social partnership and the legislation is currently being drafted. That is more than other sectors in the economy have done. Agency workers in the construction industry will actually have a pension scheme. We have come in for a lot of criticism, including in this forum, based on anecdotal information. We have confronted the unions on a number of occasions about that, but the information is all anecdotal and there is little to support what they are saying. We agreed in 2000 with the unions - SIPTU in particular - that agency workers would have the terms of the registered employment agreement and we have agreed also under Towards 2016 that they would receive the entitlements under the REA.

We would want to be careful with the directive coming from Europe. The registered employment agreement covers craft workers and general workers on site. That is an important point. It does not cover people in the general construction industry. As Mr. Murphy stated, agency employment suits many people at the higher end of the market. We would want to be careful with the directive because, although there is derogation for countries that have collective agreements, we could be at a huge disadvantage if we accept the directive as it is at the moment without derogation because we do not have collective agreements. We would certainly support the Government's position on the issue. We need to see how the situation will pan out before we accept the European directive as it is currently drafted.

Mr. Mark Fielding

I thank the Chairman and committee members for the invitation.

We all know the costs small and medium enterprises suffer from at the moment. The reality is that SMEs are not in a position to countenance any increase in their labour costs. The Bill, by its implementation, will increase costs to SMEs. As has been mentioned by both previous speakers, we are talking about people willing to work under agencies for the flexibility and lifestyle that gives them. There is certainly a trade-off between flexibility and security for employees. The danger is that the Bill will take that away. I will talk more about that at the moment.

In the small and medium enterprise sector, we use agency workers to cover for staff on leave of absence, including maternity, paternity or sick leave. We use them to cover seasonal work or short-term contracts. The possibility of getting access to agency staff as an additional source of labour is important to the sector. We are a labour-intensive sector. Up to 48% of added value in small and medium businesses is accounted for by labour, while in the multinational sector it is 8%, so there is a sixfold difference between the labour content in added value. The flexibility of agency workers is important for us.

The key point from an SME perspective is the business relationship based on flexibility from both parties' point of view. In reality, we are utilising a service. We are not hiring an employee, which is what the Bill will introduce. We blink and suddenly businesses will have another employee after six weeks. That is crazy, and it will introduce massive burdens on small business.

Deputy Deirdre Clune

Sorry to interrupt, but which Bill is Mr. Fielding referring to? Is it the proposed directive?

Mr. Mark Fielding

Sorry, it is the proposed directive.

The provision will effectively mean that companies will have to have a detailed job analysis for any agency worker they propose to take on for more than six weeks, despite the fact that the agency worker is not an employee of the company - we must continue to state that. That burden will deter many companies from using agency workers for any length of time because of the additional costs involved. It will increase the cost of hiring agency staff and create a knock-on effect. If agency staff are being paid the equivalent rate to the existing staff, the existing staff will ask what they are getting for the experience they are bringing to the job, the training they have done on the job and their loyalty to the business. A worker brought in for six, seven or eight weeks will receive exactly the same pay as existing staff, including the other rights they have earned as permanent full-time workers due to seniority, such as additional holidays, increments and other monetary awards. That knock-on effect has already been experienced with the introduction and subsequent increase in the national minimum wage legislation, and we see the directive as another problem for small and medium size businesses.

It is ironic that, while the Government is anxious to promote the re-entry of women into the workforce and the availability of family-friendly policies to facilitate the balance of work and family commitments, it is allowing the directive to be proposed. It has the potential to wipe out temporary agency work. As Seán Murphy stated, agency workers gain invaluable experience, particularly when they have recently left educational establishments or are returning to work. The proposed directive will seriously endanger the survival of a well-developed recruitment sector, which includes more than 600 recruitment businesses employing more than 4,000 permanent staff. They are significant employers, and a heavily regulated temporary agency market will simply result in fewer jobs being created and fewer vacancies being filled due to the bureaucratic burden.

ISME is concerned that the introduction of the equal treatment clause in Ireland will reduce the use of agency work, because of the burden and the risk of being sued. The agency runs the risk of being sued, as does the company, especially if it cannot show that it is paying exactly the same amount. We also express concern about potential foreign direct investors looking at another inflexibility being imposed on them if the directive becomes law.

An agency will have to receive details of a comparable rate of pay in writing from the client. Clients sometimes will not wish to tell a third party the pay, but without that information the agency will run into difficulties. An agency will need proof in writing before allowing one of its staff to join as an agency worker. Many businesses will simply take on agency workers for five weeks and then replace them. That will increase costs and create instability for the agency workers. We must also remember that a direct employer can currently hire a new permanent member of staff on a lower rate of pay as long as it does not discriminate on one of the nine grounds of unlawful discrimination. However, if I take on somebody, I can take him or her on at a lower rate of pay. If a direct employer can take on somebody at a lower rate of pay, why can an agency not do the same?

Agency workers will have less certainty about their pay and working conditions than they currently have. With each change of assignment, they will change their pay rates, which will negatively affect motivation and mobility across the sectors. How can businesses value items such as pension entitlements, stock options and Christmas bonuses when they are taking on a temporary worker for a few weeks? Even the unions argue over the value of public sector pensions, so how would a small business come up with a figure so that it was paying people equally? There is no right of equal pay for permanent workers, so why do we give agency workers greater rights than our own employees? That is what will happen if we introduce the directive. It would be incongruous for that to happen.

One important point that has been missed is that, by allowing agency workers to be included as a member of staff for numbers purposes, the company will then have to consult them on issues that directly affect the company, under the information and consultation directive, which was transposed into Irish law in 1996. Technically, therefore, temporary workers could be privy to information about a company, even though they work there only for seven, eight or nine weeks. Those temporary workers could partake in staff meetings and be privy to confidential information. That would become a serious issue, particularly in sectors where a temporary worker could end up working for a competitor within eight or nine weeks. If agency workers have full rights, they will leave with all the information a company gives them.

There would also be problems with seasonal workers. Companies will have the option not to employ seasonal workers, which could cause shutdown. That would affect existing full-time employees if companies chose to do so. In recent surveys in the UK, when clients were asked how they would respond to the new situation, they said that, rather than taking on temporary staff, they would either use existing staff partially to cover the role or opt not to execute the function, thereby reducing jobs.

However, the biggest issue, apart from cost increases and bureaucracy, is flexibility. It is so important for small and medium size businesses that we have a flexible workforce. What ISME is saying is that this Bill is not needed and should be dropped. Agency workers should be regarded as being employed by the agency they work for and not the final client for permanency and other entitlements. As has already been said, agency workers already have all the entitlements of full-time employees.

Should the Oireachtas decide to proceed with this legislation ISME would request that a derogation for all businesses in the small and medium sector - those employing less than 250 employees - be put in place. The proposed six-week qualifying period is far too short and inflexible and we suggest that it be extended to at least one year. The only comparable job analysis that can be done for an agency worker is with another agency worker in a similar position and not within the client company. As for all legislation, we hope that a regulatory impact assessment will be undertaken, especially from the perspective of SMEs, before we start adding more onerous bureaucracy to that which is already in existence. We also mentioned that agency workers should not be counted as being among the staff of the client company as this will have adverse consequences with regard to information and consultation and similar criteria which are based on the number of staff employed by the company.

According to the Government, agency workers account for less than 2% of workers. The background to the introduction of this Bill seems to be the Gamma and Irish Ferries situation, which is certainly not relevant to SMEs. We cannot put up a flag of convenience outside our stores or factories. Yet, as with the employment compliance Bill, it is the small and medium sector that will be most adversely affected by this. It is therefore akin to using a sledge-hammer to crack a nut. The 99% of compliant SMEs will be hampered by this legislation, which is unwarranted, unworkable and unwelcome.

Ms Rhona Murphy

In the domestic context, IBEC has opposed any additional regulation of temporary agency work or of employment agencies other than by reason of what has emerged by agreement between the social partners under section 21 of Towards 2016. This will bring significantly improved protection to temporary agency workers through a new licensing system of employment agencies and a proposed statutory code of practice that will set out the practices and standards that employment agencies will be expected to follow. Employers are extremely concerned about the implications of the proposed EU directive, which is part of the highly regulated European labour market model. As has been observed in member states where stringent regulation of agency work was introduced, this is damaging to the business agility for which we have a strong national reputation and which is important for business development and investment.

At the heart of social partnership, consistent with the need to maintain a competitive economy, is the need for a more balanced approach to social measures, particularly in line with stated commitments on labour market flexibility in the context of the Lisbon process. Temporary agency work has proved to be a critical feature of the labour market and provides flexibility for both companies and agency workers. The relationship between the user undertaking and the agency is purely commercial in nature. One of the features of temporary agency work is that it involves a tripartite relationship between the temporary worker, an employment agency and the user undertaking. Typically, there is no contractual relationship between the end user and the individual agency worker. Generally, there is a contract of employment between the agency worker and the agency, and a further commercial agreement between the employment agency and the end user.

The use by companies of agency staff raises legitimate questions. First, do such employees have the proper and necessary protection under law to prevent any abuse of their position? Second, do these staff provide vital services to companies that might not otherwise be available and, in doing so, contribute to the overall strength of the economy? The answer to both questions is a clear and unequivocal "Yes". The legislature has intervened to deem the agency worker to be the employee of either the employment agency or of the user undertaking, as the case may be, for the purposes of the individual employment Acts. For the purpose of the majority of such employment legislation it is the party responsible for paying the temporary agency worker's wages who is deemed to be the employer. This is usually the employment agency. In the case of the Unfair Dismissals Acts 1977 to1993, however, the end user is always deemed to be the employer. Agency workers have the same protection as permanent workers with regard to unfair dismissals, redundancy, holiday pay, minimum wage and working time. Under the Redundancy Payments Acts, if an agency worker is employed in four different jobs for two years, as long as the agency remains the same and that agency is the employer, the person will be entitled to redundancy payments.

Before any additional regulation of temporary agency work or employment agencies is contemplated, more reflection is required on the variety of forms of agency work. Many agency workers have no obligation to make themselves available for placement and may refuse offers of placement from the employment agency. Without mutuality of obligation, IBEC submits that such forms of agency worker should not be afforded the same rights as the permanent employees of an end user while maintaining all of the flexibility of being self-employed.

Direct employment contracts of an indefinite duration are and will continue to be the most common form of employment relationship between employers and workers in Europe. However, there is no doubt that temporary agency workers have contributed to an increase in active participation in the labour market, mainly by facilitating the entry of women and young people into the employment market. They have also contributed to the improvement of business competitiveness by providing a flexible response to sudden changes in business conditions. This is particularly the case in Ireland, where there is continuous, sophisticated use of temporary agencies for both sourcing and recruiting permanent staff as well as providing temporary cover. Companies based in Ireland use the flexibility and expertise available through agencies to supplement their other staffing policies. In contrast to the situation in many other member states, this is a normal process of business which covers all levels and seniority of work and sectors. In Ireland it is common to see highly skilled and experienced individuals, who are in significant demand, working through agencies, often by choice, in order to have total flexibility and independence, and to be in a position to demand significant remuneration.

The use of agency workers as part of a supplementary workforce is most prominent in sectors such as ICT, food processing, construction, manufacturing, transport and haulage, hotels and catering, to name but a few. In IBEC's opinion, an additional measure with regard to parity of terms and conditions for temporary agency workers would reduce and in some cases remove the advantages of agency work for businesses and, as a result, seriously hinder employers' capacity to respond to fluctuating business needs.

The directive, if adopted, would also serve to reduce the incidence of flexible work in the economy. Furthermore, it would erode the perception of Ireland as an environment possessing an adaptable and responsive labour market, and fails to take into account the considerable range of circumstances - including the duration of the assignment, the nature of the work performed and experience - which can apply to situations in which agency workers are deployed. This is the last thing we need at a time of greater economic uncertainty. Such inflexibility in the use of agency workers would reduce the capacity of employers in the sectors outlined to respond to short or medium term seasonal or production requirements.

In Ireland, agency work is very attractive to individuals as a means of entry to the labour market to gain initial experience. This can include recent school-leavers or graduates who wish to gain experience to help build their careers and as a stepping stone to more permanent positions. The availability of agency work is often attractive to those returning to the labour market who may have been out of the workforce for a while or other EU nationals who want to assimilate into the Irish labour market. Temporary agency work is also attractive to the parents of young children as a useful way of combining work and family life by allowing them freedom of choice and flexibility about when they want to work.

On the specific issue of equal treatment, it is entirely reasonable that workers who have been assigned by an agency to work for the end user on a short-term basis have different terms and conditions to those working directly for the end user, given the fundamentally different nature of the relationships between the end user and an agency worker and between an undertaking and a direct employee. The package of terms and conditions an employer agrees with both its fixed-term and permanent employees reflects the ongoing commitment the employer is entitled to assume on the part of such employees. Those terms and conditions often reflect the level of knowledge that the permanent employee has of the company's product and client base which has been developed over time by reason of the direct employment relationship. As there is no expectation or entitlement on the part of the end user to such ongoing commitment from the temporary agency worker, it follows that temporary agency workers can have no expectation, as an automatic right, of parity of terms and conditions with the employer's established staff.

Given the short term nature of agency work an implication of the equal treatment provision is that an agency worker on multiple short term assignments will get a different rate of pay each week where he or she is working with different end user clients of an agency. In practice it is often the case that one temporary agency worker can be interchanged or substituted for another by the supplying agency without any prior consultation with the end user. It would be entirely unreasonable that conditions negotiated with one employer or business could become statutorily binding on another enterprise, save for compliance with minimum statutory conditions of employment.

Some within the Irish trade union movement have argued that Ireland is one of only three countries not to have legislated for equal treatment of agency workers. More accurately, there is no specific regulation of equal treatment in Ireland, Sweden, Denmark and the UK, and all four countries have a system of agency pay. A further five member states - Bulgaria, Cyprus, Estonia, Lithuania and Malta - do not have any specific regulation on agency work or of pay in place. The simple truth is that across the European Union there is a wide diversity of practices adopted by the member states in response to the regulation of agency work. In the case of other member states who have adopted the equal pay principle and have regulations on user pay, there is a significant number within this group who allow derogations by collective agreement and have differing qualifying periods. In those member stateswhere user pay is the norm, the definition of what this means differs substantially, often allowing for specific elements of national labour law and practice to be taken into account. This reflects the folly of universal proposals to address such complex issues.

In debating the issue, it also clear that union pronouncements in Ireland about the alleged plight of agency workers have not been validated and are largely motivated by trades unions seeking to protect sector pay norms established through collective bargaining, rather than demonstrating a primary concern over agency workers. There is no significant accurate research on the use of temporary agency work in Ireland, but for different organisations the use of temporary agency work is vital. I offer the following examples. Many multi-national companies who operate systems that might be described as "coreflex".

Chairman

Perhaps Ms Murphy might summarise those. I am trying to give members an opportunity to ask questions.

Mr. Brendan McGinty

I apologise for my late arrival. In brief, we have a situation where in the multi-national sector there is a heavy reliance on agency work. Temporary agency workers may be used to supplement core staff as, for instance, in the case of an ICT company working for the quarter ends, or a medical devices company doing initial stocking of hospitals or clinics when a new cardiac stent is launched. The use of such workers is an essential tool in making sure that production schedules are kept and ensuring that the Irish site remains viable in terms of a company's overall cost structure of doing business in Ireland.

The same applies in the health services sector where we are aware that temporary agency work is often resorted to when skill sets or numbers are not necessarily available. It may be the case that in some situations temporary agency workers might be more expensive compared to direct hires but the simple truth is that it can be an attractive solution in response to some historical inflexibilities that might be associated with direct hires.

In the hotel sector, likewise, there is a seasonality factor that we can all recognise. Hotels must balance out the peaks and valleys of the volumes they experience in customer demand. Obviously the recourse to agency work is a necessary part of that flexible model in terms of hotels servicing their own markets.

With regard to the economy as a whole, temporary agency staff are often used by employers to deal with what is called the work life balance agenda. People may take maternity leave or additional maternity leave, carer's leave or whatever it may be across that broad domain of reasons for leave. The concern that we would have is that over-regulation in this base will act as a disincentive for that series of work-life balance issues. We see that as being counterproductive.

Chairman

We can read the rest of the material into the record. I wish to give time to a number of colleagues who have points arising from the delegation's presentation. I thank the delegation.

Deputy Dara Calleary

For the record, I am a former employee of Chambers Ireland. After listening to the presentations from the pillars of business here I am struggling to see what the troublesome issue is. According to this presentation, everything is all right. Among the workforce 2% are on flexibility and all the points made are true. However, the general secretary of ICTU, Mr. David Begg, was before the committee two weeks ago and he said that in the context of a new partnership agreement the issue of agency workers was "most assuredly a deal-breaker".

In his presentation to the committee, Mr. Begg described Ireland as a low-regulation labour economy. From the outside looking in, it appears to me that we have quite a number of major regulations, many introduced in the past number of years. I ask for the comments of the delegation on that.

Mr. Begg stated that if a substantial element of the workforce is employed via an agency the potential of reduced conditions of employment would be significant. All members of the delegation have addressed that point in their presentations but it is a general observation. He mentioned the issue of profiling. Mr. Mark Fielding spoke of unlawful discrimination and the need to avoid it. Mr. Begg gave the committee the impression that by using agency recruitment, an employer could put the burden on the agency by giving it a profile of the worker required. In that way the employer does not have to get down and dirty in terms of breaching laws. The agency does it instead and provides the employer with an identi-kit worker.

The IBEC presentation made the point that there is no research on agency workers, in terms of their value and their contribution to the economy, or in terms of how they may be a problem. I put this question directly to Mr. McGinty as he is involved in the partnership talks. Is it the case that the issue of agency workers is not the major problem it is portrayed to be? Mr. Fielding referred to the Irish Ferries situation. The unions themselves struggled to find case studies when they reported to the committee. The usual instances of Irish Ferries and Gama are thrown in all the time. How has it come to a situation where ICTU is saying that this is a dealbreaker? In fairness to Mr. Begg, he is not prone to hyperbole.

Chairman

I will take four questions to reflect the number of presentations.

Deputy Arthur Morgan

We should have brought the unions and the employer groups in together. We could have sold tickets, such would have been the entertainment value. Perhaps a mini-version of that is happening now at the pay talks. On the matter of those talks, it is most unfortunate that ISME is not part of that group. In fairness to Mr. Fielding's organisation, he represents a substantial part of the Irish employment sector.

I am mystified. If all the directives and legislation coming from Europe or similar legislation originating here will bring the world down around the ears of employers, how come those EU states and all our major competitors, with the exception of Britain, have such legislation in place? How do they survive? In many cases they are considerably more competitive than we are in terms of their economies.

I agree with many of the speakers who said that agency workers are not all foreign. Some are Irish and we have been making that case. I have done so and the unions have made that case too, forcefully. We take that point. Part of the problem is that there is a change in agency workers. Everybody accepts the need for a temporary worker or an agency worker during maternity leave or in the other examples given. The difficulty arises when these workers do not get equal treatment. I do not see why there is a difference in the creation of a position for such a person because the agency details must be administered in any case. It does not appear to me that there is a significant additional burden on the company in such cases. A member of the delegation said that 2% of the workforce was made up of agency workers and I wonder where this figure came from. My understanding is that there are no statistics on agency workers. We do not know how many there are, which is part of the problem.

I was interested to hear the comment that evidence of exploitation is anecdotal. It was suggested that such cases highlighted by the unions are only anecdotal. This line has been used by the Minister, Deputy Micheál Martin, on several occasions and I wondered from where it came. As least we have found out the answer to that question this morning. Is Mr. Keenan interested in meeting some of the people involved? Through my constituency and Dáil offices I have met some people who have outlined horrendous cases of exploitation. I would welcome if Mr. Keenan could meet some of these people. The delegation could then hear the personal cases and we could see where that leads.

I do not think there is any complication in terms of the need for flexibility. It is possible to employ someone for up to one year and then let him or her go. An employer can hire such a person directly and if there is no work to do the employer can let him or her go again. There is already provision for that which implies significant flexibility.

The point was made by the unions that what they are looking for is terms and conditions of equivalence, so that the anecdotal stories of exploitation that we hear can be stopped, which seems not unreasonable to me.

Deputy Deirdre Clune

Without repeating what has already been said I would like if someone could address the issue of why there are only three countries in Europe, namely Ireland, the UK and Hungary, that object to this directive. Why is it everyone else can manage or accept it? We have had Mr. David Begg and SIPTU before the committee. One of the cases referred to as anecdotal by Mr. Seán Murphy involved a rate of €18.50 as against €13.20 per hour fixed pay for permanent workers. I accept the point made about length of service.

Mr. Murphy mentioned that he worked previously on contract as a software engineer. I worked in this industry too, not on contract but as a full-time employee. Those engaged on contract at a professional level, such as software engineers, always received higher remuneration because of the higher risk and different working conditions including fewer holidays, lack of pension provision and insurance coverage. That was always accepted. It seems to be the case now that agency workers are receiving lower pay, especially at the lower end of the scale, which is an area of concern. I accept that agency workers qualify for maternity leave and such flexibility.

There are instances where an employer needs to hire agency workers for seasonal work. I can see the need for agency workers and we should protect that resource. However, there are concerns about the people at the lower end of the scale. There was a case involving contract workers laying pipes on a construction site who were not covered by registered employment agreements, REAs, and they received a lower level of pay. I would like someone to address this. There are concerns about exploitation among the low paid. I accept that most employers - this was referred to in the debate between employers unions - are excellent and show concern for their employees whether they are agency workers or permanent staff. However, there is a minority of employers engaging in exploitation of the low paid, which needs to be addressed.

Chairman

I call Senator Brendan Ryan. I will allow everyone to ask questions. The delegation can deal with all the issues raised.

Senator Brendan Ryan

I echo the point made by Deputy Arthur Morgan on the claim of anecdotal evidence of workforce exploitation. Mr. Eddie Keenan initially said nothing to support this claim and then qualified his comments by saying very little to support it. There is much evidence of such occurrences, whether anecdotal or otherwise, in the Balbriggan area which I represent. In this area there has been significant construction development in recent years. Local people could not get employment on these sites as the sub-contractors were not prepared to pay the REA rates. The local people were being substituted by agency workers or migrant workers. I have heard the Construction Industry Federation, CIF, claim previously that REA rates would be paid. However, CIF has been turning a blind eye to what is happening in practice.

There are issues concerning the testing of skills. Employers hiring directly for many years have been able to test skills. It is possible to hire a person on probation, extend it if necessary, and let the employee go if he or she does not measure up to expectations.

On the issue of students, I have employed students as seasonal workers and I am sure others here have done so too. It is possible to employ these people directly with no need for agencies so the claim in this regard is exaggerated.

On the issue of incremental pay scales, there is no difficulty in hiring an employee and starting him or her from day one at the first point on an incremental scale. The issue is equal pay for equal work, which is the essence of the debate. The purpose of all the European legislation in this area is to bring about equality. The objective is to have a common market across Europe, so the point made in this regard is unfair.

Mr. Seán Murphy from Chambers Ireland said that the debate is not just about exploitation of people at the lower end of the workforce. It is ironic to suggest that there is exploitation at the higher end of the workforce too.

Deputy Leo Varadkar

I apologise for being late and for asking questions that may have been answered already. As with much in employment law, the term "agency workers" is awkward. I do not know how one can define an agency worker in law. It is similar to the term atypical worker in that it could apply to many different types of people. The same laws may not apply properly for all of these. I have done agency work in the past as a doctor and I have been very well paid for it. The same applies for nurses and most people working in the public sector area who have been hired through agencies. In my constituency, Blanchardstown is a large multinational hub. Many companies there use the "coreflex" principle and it is important that they continue to be able to do so. This is where a company has a core workforce and can use agencies when the need for flexibility arises. This works very well in the information technology sector for example. I have never heard a complaint from an agency worker in this sector. There is, however, an issue with a different subset of workers at the bottom of the pay scale, in some areas of agriculture and construction. This does not apply to building labourers, but contractors who would not be covered by the REA as I understand it. This appears to be an issue; however, it is tricky to address this correctly in law. We do not want to throw the baby out with the bath water. The comparison with other countries is not valid given what happens in other countries with collective bargaining and other mechanisms. It is bogus for the unions to say Britain, Ireland and Hungary are the only countries opposing it, as it would not apply in some of the other member states. I refer to member states with different employment law systems, some of which have collective bargaining or sectoral agreements. If we were to replace social partnership with collective bargaining, it would change matters totally. The unions know they are making a bogus argument in that regard, although it sounds like a good one.

I will comment on the core issue. As I understand it, we all agree that our objective is to prevent workers from being exploited. It seems there is exploitation in a relatively small number of cases. Exploitation is relevant, regardless of whether it affects 1,000 or 10,000 people. We need to take action by means of a directive or national legislation. I would be just as happy to do it by means of national legislation. We do not always have to wait to see what comes from Brussels. I do not understand how anyone can reasonably object to the proposition that somebody who has been employed through an agency for a year should not be deemed to be directly employed. I do not think such a provision would be so onerous that any reasonable business would be unable to abide by it. The six-week provision proposed by the Labour Party is ridiculous as it would cover seasonal workers, for example. Why can we not provide for a nine-month or 12-month provision? It seems reasonable to me.

The problem with equal treatment is that it is difficult to define what it means. It could be defined in a way that would entitle an agency worker to equal pay for equal work after six months, under the same conditions as a worker who is directly employed and has been there for the same length of time. I do not see how any reasonable business could object to this, unless it were doing so for other - potentially sinister - reasons. Leaving the issue of the directive aside, why would employers object to legislation protecting agency workers on the grounds I have outlined?

Deputy Damien English

Most of the subjects I wanted to raise have been covered. The delegation has suggested there is not enough evidence of exploitation of agency workers. We have met people who claim it is going on. We report such matters and try to have them investigated. There seems to be this behaviour. There is no point in saying it is not happening. We have to accept that not all employers and agency operators are good. We have to accept they do not do everything right. Approximately 90% or 95% of such persons are genuine, but there are problems with some of them. Each of us probably has to accept this and consider how we can fix such problems. I am not convinced that new legislation will solve such problems. The people to whom I refer abuse the existing legislation. The problem is that we are not catching them. Perhaps the delegation can give us some advice in that regard. Are more officers and investigators needed to check up on employee conditions? Is stronger legislation required to punish those who willingly avail of services, even though they are aware that workers are not being treated properly by agencies or employers?

I accept that businesses are, in many cases, the main users of these services. Somebody has to be responsible for solving this problem. If it is not solved within the industry, legislation will have to be introduced. That is the problem. Members of the Oireachtas have a duty to ensure people do not continue to be maltreated, as they seem to be. Perhaps the delegates can suggest how we can get to the bottom of this. We have to face the fact that it is going on. We might not know what is happening or who is involved, but we know there will always be people who abuse certain situations. We do not want to support such persons. We have to tackle this problem of life.

The six-week provision included in the EU directive is unworkable. Can the delegations suggest a workable alternative? We need to find some common ground before agreement is eventually reached on a new directive. Some on this side of the table are in favour of a six-week period, whereas others think three or six months would be more appropriate. What do the representatives of the employers consider to be an acceptable period of time? Given that agreement will be reached soon, we might as well try to reach agreement among ourselves on what is fair and workable.

I would like to ask about the use of contracts in the case of agency workers. Is it possible for employers to give workers who have been referred to them by an agency a six-month or nine-month contract? Would that be a way around some of these difficulties? Is there any reason employers would not want to do this? What are the issues in this regard? We need to try to find a way to sort this out. Most of us have met people who are being abused by employers, although I am not sure if that counts as proof. Not all of the people in question are agency workers. We have to accept that not everyone is good. There is no point in denying it. The Minister keeps telling us at Question Time that there is no proof of mistreatment, but I am in no doubt that it is happening. However, we are not catching those who are misbehaving. I will be interested to hear the thoughts of our guests.

Deputy Mary Alexandra White

I have the graveyard slot because most of my colleagues have said what I was going to say. I refute the suggestion there is no evidence of exploitation other than anecdotal evidence. Some with poor working relationships with their employers have come to my clinics in Carlow-Kilkenny. Many of them have passed on their complaints to the regulatory authorities and others who might help them. I am concerned that the employers are so surprised that one or two other countries have not introduced this directive. Why are they so nervous - the word "intimidated" may be too strong - about the EU directive? As someone who comes from a business background, I am familiar with the problems of small and medium-sized enterprises. There is a danger that Ireland will move from being insufficiently protective of agency workers to being exposed when derogations are provided, under Article 5.3 of the proposed directive, to accommodate collective agreements. I would like to hear the views of the delegations on the degree of flexibility needed in the case of seasonal workers.

Chairman

I understand that, following a recent court case, collective agreements have no legal basis in this country. Is that correct? If so, is that one of the problems? Is it not time for such agreements to be placed on a statutory footing? There is no use coming in here and talking about collective agreements if they are not worth the paper they are written on. Is it not the case that a recent court case got rid of them? We need to be realistic. Everybody is talking about collective agreements, which is pointless if they do not have the force of law. Do I understand correctly that most of the rest of Europe has put in place laws to respect the equal treatment principle? Why are the Irish employers' groups continuing to object to any attempt to enact legislation here that will guarantee conditions to agency workers which are no less favourable than those afforded to their permanent colleagues, beside whom they do the same work? There is no suggestion the conditions should be more favourable. It is not as if permanent workers are doing a higher level of work - the two categories are doing the same work; therefore, they should receive the same pay. Is the principle of "same work, same pay" not a simple one? It has been claimed agency workers are entitled to the same rights as their permanent counterparts. Are they entitled to the same rights under fixed-term legislation? If they cannot compare themselves to a similar employee - a permanent member of staff who is working side by side with them - at the equality tribunal, they will have to compare themselves to another agency worker. Will they not lose their case in such circumstances? If so, how can it be suggested everyone has the same rights? Am I missing something?

Can anyone tell me whether there are any circumstances in which agency workers should be prohibited? If a properly mandated strike is taking place, should agency workers be allowed in to help to defeat it? I told Mr. Fielding on a previous occasion that I own a small business, although I do very little with it now. One of the problems I have is that it is not clear who should step into the breach when an agency worker experiences a breach of his or her rights. Is it the responsibility of the end user employer or the agency? Who is the employer? That is the big issue. Somebody mentioned that "employer" is clearly defined as the end user in the Unfair Dismissals Act 1977. Other than that, who is the employer? Do any of the groups recommend that the end user should be the employer, or that it should be the agency? We need to remove any ambiguity for once and for all. As Deputy English said, we should be able to get some agreement.

When I was rushing to this meeting - one might not think it, but this is my third meeting this morning - I had a chance to read an article in The Irish Times, under the headline “Picket Stops Deliveries to Lansdowne Stadium Site in Casualisation Protest”. I did not have time to read it all. I do not know what it is about. A problem of this nature is being reported in the paper of record, as far as I can see. One of the protestors at the site is quoted as saying “the move to contract labour [is] unrelated to a downturn in the industry”. The man in question believes the employer in this case is “offering redundancies to about 40 staff even though it [has] more than enough work”. He said the relevant section of the company “has never been as busy” and that “it’s cheaper to have contract workers, that’s why they’re doing it”. That is a black and white example of a case in which the problems under discussion at this meeting are being experienced. It is obvious that something happened yesterday, as The Irish Times reports that “deliveries to the building site for the new Lansdowne Road stadium in Dublin were abandoned yesterday after it was picketed in protest at the practice of hiring lower-paid contract workers throughout the construction industry”.

Mr. Eddie Keenan

Can I respond?

Chairman

Yes. I am raising the issue.

Mr. Eddie Keenan

The people involved in the dispute represent an unofficial grouping outside the trade union movement. We are unsure of where exactly they come from. I have met members of the group. The same group was around a couple of years ago - its members show their faces in protest every so often. We are not sure what they are protesting about on this occasion. They have complained about pensions and foreign workers, for example. They have protested about every worker on site without giving any details of their grievances. Some workers were wearing union-approved high visibility jackets and others were not. I know some of them. This unofficial grouping is outside the trade union movement. When we raised this matter with the trade union, we were told it did not deal with the grouping in question.

Chairman

That deals with that. When I saw the article in The Irish Times on my way down here this morning, I thought I had better raise it in the interests of getting clarification. I thank Mr. Keenan for that clarification. Some of the points made in dealing with these issues have been very well made. We are keen to hear all sides of the story. We have invited representatives of the trade unions and the employers to meetings of the joint committee. I have raised issues with the trade union movement as well. One of the problems I have is that I do not know who is considered to be the employer when the going gets tough, to put it in a nutshell. Maybe I am missing the point. We need to ensure that the buck stops with somebody and that rights can be asserted. The counter-argument, which may be that there is no breach at all, can be made at that stage. If rights can be asserted, at least the debate can start from a common platform. That is where I am coming from in this context. I thank Mr. Keenan for clarifying the Lansdowne Road issue.

Mr. Brendan McGinty

I will try to deal with a number of the headline issues.

Chairman

Yes.

Mr. Brendan McGinty

The committee will forgive me if I do not manage to cover all the issues.

Chairman

If we get answers to our questions about the headline issues, we will be satisfied.

Mr. Brendan McGinty

I wish to make it clear that this debate is about interfering with a commercial relationship, as well as with an employment relationship. It is very different from most of the debates one hears about employment rights. We need to bear in mind the commercial relationship that usually exists between the end user and the employment agency. We find it extraordinary that this debate is taking place at this time, in the context of everything that is going on in the economy. This morning's newspapers and last night's news reported that we are facing economic challenges. That is one of the real issues being considered in the context of the partnership talks. We are struggling to get consensus about how we should make progress with the big issues of the day. We need to make a decision on what is right for the people. We are making the case for the constituencies we represent in the social partnership process.

For some time, the trade unions have expressed concern about the level of compliance with the regulations which are in place to protect employment rights. I emphasise that we have been over this ground. During the negotiations on Towards 2016, we spent months trying to deal with the concerns of trade unions about a variety of issues. As a result of the Irish Ferries case, we put in place the provisions that led to the exceptional collective redundancy legislation. Under the current deal, we have agreed arrangements that improve the protection afforded to temporary agency workers. A new licensing system for employment agencies is to be introduced. It is proposed that it will be accompanied by a statutory code of practice. The National Employment Rights Authority has been established on an interim basis and will be put on a statutory footing in due course.

I make it absolutely clear that there is much more capacity for the rights of agency workers to be vindicated than there has ever been before. I respond to Mr. David Begg's suggestion that this will be a deal-breaker by making it clear that employers will not sign up to arrangements, in respect of agency work or any other aspect of labour market regulation, that will decrease labour market flexibility. We could not do that in the current environment. Multinational companies that have brought foreign direct investment to this country have claimed that the introduction of the proposed agency work measure would increase their direct labour costs by approximately 30%. Is that the message we want to send to the foreign direct investment community? I do not think so.

I will address some of the more specific issues raised. I was asked to explain how companies in other EU member states are surviving. We fear the introduction of this directive will ensure that we end up with the worst of all worlds. Not only will we have to work within a directive that clearly says we have to embrace equal treatment - while there will be a six-week derogation, it will be worse than useless - but we will have to compete with other member states that have all sorts of domestic arrangements that enable them to work around these principles which, according to the trade unions, are already in place in such countries. I refer to arrangements such as collective agreements and different definitions of "user pay", and so on. If an unfettered directive is introduced in the manner advocated by the trade unions, we will send out all the wrong messages - we will be at an immediate disadvantage compared to the other countries in which this measure is in place. Essentially, the unions are calling on the Government to legislate for the terms of the directive in an up front way.

Concern has been expressed about the plight of people at the lower end. We have a well-developed system of employment regulation orders under the joint labour committee system. As Mr. Keenan mentioned, registered employment agreements are used in some sectors, including construction. Ireland has the second highest national minimum wage in the European Union. That is all feeding into a much more enhanced regime of compliance with employment rights regulations. I emphasise that we have supported that regime. We do not want anyone to be unable to have their employment rights vindicated. We have to strike a balance between what is socially acceptable and the need for this country to operate on the international stage at the leading edge of economic performance.

Senator Ryan asked what the problem is with people being placed at the first point on the incremental scale on day one. When we speak to employers, we hear many concerns about what I call "plus payments". I refer to things like bonus arrangements, incentive plans, share options and pension arrangements. We need to reflect on the profile of the wider terms and conditions associated with employment. How can such arrangements apply to agency workers who may work with one employer today, another employer tomorrow and a different employer next week? That would be a typical work pattern in the hotel sector, for example. We are dealing with complex issues that are not properly understood and appreciated by those commenting on them in the wider sphere.

The wider issue of who is responsible for what has been settled, as far as the employment law of the land is concerned. The Legislature has already intervened to make it clear that the party responsible for paying the wages of a temporary agency worker is deemed to be the employer. That party is usually the agency. The only exception to that rule is in the case of an unfair dismissal. In such circumstances, the end user is usually deemed to be the employer. That is the long and the short of it. There is no mystery in this regard. All the other protection in relation to matters like redundancy, holiday pay and the minimum wage are well capable of being vindicated. We have travelled a considerable distance to address the concerns of the trade union movement about some of these wider issues. We will honour those commitments. We had this argument during the negotiations on Towards 2016. We are not prepared to go further in that respect. We want to work in an environment in which people who have a job can keep that job and people who want a job can get a job. That is only fair and reasonable.

We are having this discussion at a time when the wider environment is not particularly positive. People need to reflect carefully on the burden employers are being asked to carry. The scale of this problem has not been quantified. We have had what I would call hard cases being trotted out. Nobody wants to see that. As we all know, hard cases lead to bad law. The Chairman spoke about issues like strike action in the context of the use of agency work. Can somebody give me a practical example that demonstrates the extent to which such difficulties are being encountered? We need to apply the classic adage when we ask why we are trying to solve a problem when we are not sure it even exists. I do not know of any major dispute here in which employers have been shown to be using agency workers, on a tactical basis, to frustrate the interests of the trade union movement. This is another example of the use of a sledge-hammer to crack a nut.

The wider issue, which is much more serious, is the extent of labour market regulation. When the international investment community looks at Ireland, it sees fewer advantages compared to those that were historically offered here. We still have many things going for us, one of which is our capacity to respond to change. We have a reasonably flexible labour market, although the strings have been tightened somewhat in that regard. This is another notch on that rope. The Legislature and the Government need to consider the impact of this change carefully.

Mr. Eddie Keenan

Some members of the committee have cited anecdotal evidence, particularly in respect of the construction industry. The issue of exploitation was thrown across the table all the time during the negotiations on Towards 2016. When I asked those making such claims to produce the evidence, they failed to do so. I know they had a line to RTE in all cases, including a case that had been resolved a few months previously. All the information being provided is anecdotal. I am not saying anything about anecdotal evidence that I have not said to representatives of the unions. I assure Deputy Morgan and Senator Ryan that if there is exploitation, we do not condone it. The National Employment Rights Authority is available to deal with cases. I presume all of them have been reported to the appropriate authorities. We keep hearing about it, unfortunately. I will hear about it again in Government Buildings this afternoon. I ask those making claims to produce the evidence.

I wish to compare the Irish position to the position in the rest of Europe. I am sure the members of the committee are familiar with the Laval case. That would not have happened in Ireland as our system of registered employment agreements would have prevented it. The requirement that certain rates of pay have to be paid here has the force of law. Employers must abide by registered agreements. Nonetheless, two official strikes are taking place at the moment. Members of the Irish Congress of Trade Unions are unhappy with issues covered by a registered agreement. There is a flaw in the agreement in so far as it allows unions to go on strike as long as they follow certain procedures. We have not pushed too hard to have that loophole closed off, but we may have to go down that road. We are operating on the basis that ICTU is trying to sort these matters out. Several companies are affected by strike action - pickets are being applied several days each week, and so on. Such cases are not covered by the media.

In an attempt to allay certain fears as part of the partnership process, we agreed to allow registered employment agreements to apply to agency workers. As Mr. McGinty said, we did that under the agency legislation that we discussed during the Towards 2016 talks. The decision to allow these workers to participate in registered employment agreements was part of the partnership agreement. They are not satisfied with that, however. They are now looking for more. We agreed a few other things with the trade union movement when it was decided to establish the National Employment Rights Authority. The unions are now backing away from those agreements.

Mr. Mark Fielding

We need to get back to the basics. The six-week proposal mentioned by Deputy Varadkar is not workable for small and medium sized enterprises. The designated length of time should be a year. There would be no difficulties in such circumstances. A system whereby agency workers are deemed to be employees after six weeks, and all the rights and responsibilities are put on the employer, will not work. Businesses are using agency workers as service providers rather than as employees - it is as simple as that. We have to transmit the message that these people are not our employees. We are simply using a service. As a previous speaker mentioned, they are interchangeable. It seems as if the word "exploitation" has been used 847 times during this meeting, in the context of what the members of the committee hear at their clinics. I respect what members are saying. I accept that they are meeting people who feel they are being exploited. I receive telephone calls on a daily basis from employers who tell me about the problems they have with their employees. I do not rush off to get new laws put in place to meet their needs. These things have to be worked out. There will always be crooks. We already have legislation aimed at stopping such people.

I often hear people asking for evidence of exploitation. I can inform Deputy Morgan that it was the Minister of State, Deputy Kelleher, who mentioned the 2% figure. It came straight from him. The National Employment Rights Authority, the Labour Relations Commission and the Employment Appeals Tribunal have said they do not have evidence. The evidence is not there. The members of the committee have said they are meeting people in ones and twos. I am sure they are making complaints. It does not seem to be coming through. It is not happening. It is not an issue being encountered in the small and medium sized enterprise sector. The employment agencies are quite willing to step up to the mark by looking after their employees in the proper way. The businesses that avail of the services of such agencies, which are the clients in each case, come into play under the Unfair Dismissals Acts only. I agree that companies that break contracts should be held liable for doing so. This is all sorted. We do not have to start giving these people extra rights. They already have the rights they need.

It is proposed that a business with 60 employees in a competitive market, which takes on three or four agency workers, will be required to consider those workers as full-time employees after six weeks and to consult them. They may be down the road with my competitor two months later, in the knowledge that I have had difficulty meeting pay demands and so on. In such circumstances, all of my linen would be washed in public. It would be crazy to write such a system into law. I do not want to dictate to the Members of the Oireachtas, other than to say that if I were one of them, I would not be pleased to hear union representatives claiming that this will be a deal-breaker. It reminds me of someone taking their ball and going home because the others will not play by their rules. We need to reflect on what is likely to kill our economy. This will be another nail in the coffin. We need flexibility. Those who are pointing out that the rest of Europe is doing this and that should consider that we can gain a competitive edge by retaining the existing provisions relating to workers who are currently being looked after by their true employers - the employment agencies.

Chairman

I assure Mr. Fielding that the committee wrote to the Taoiseach after his last appearance at this committee, asking that ISME be considered as part of the talks process. We followed through on that.

Mr. Mark Fielding

He is no longer with us. That is what happens when ISME is mentioned.

Chairman

We will blame Mr. Fielding for the Taoiseach's resignation.

Mr. Seán Murphy

I appreciate the attendance of Deputies and Senators throughout the worthwhile presentations made at this valuable meeting. We are particularly sensitive about one of the issues regarding the directive. The indications we are getting from Brussels is that subsidiarity will apply. The Irish solution for the Irish market will develop within the Irish market. I understand that although negotiations are taking place at a pan-European level, the employers and the unions are willing to devolve any decision on this matter to local level. That is why it is particularly important that legislators are aware of this issue.

Deputy Calleary, a former colleague, spoke about the regulatory burden. When we surveyed employers in the Irish market, we learned that the main issue they face is legislation relating to human resources. They are concerned about lawsuits and Employment Appeals Tribunal cases. They are kept awake at night by worries about the nine grounds for equality cases. Those who are used to managing staff are sensitive to the issues that need to be policed and acted upon to avoid being sued. If one pays €4,000 on an Employment Appeals Tribunal case that one wins, one will still have spent that money and had to endure many sleepless nights. I stand over such cases. I would say that in any environment.

Chambers Ireland strongly supported the establishment of the National Employment Rights Authority. It is on record as saying there were once more dog wardens than labour inspectors in Irish society. NERA should be allowed to do its job. We do not support any cowboy who acts incorrectly and exploits staff. It is important to state that none of the employers on this side support that.

On pan-European issues, Deputy Varadkar made the point that these are collective bargaining arrangements, that there are caveats and ways out. Agency workers are often employed at the trainee scale. There are significant differentials in pay and in methodology of payments. That does not apply in our sector, given how we have developed our employment and our union agreements.

I will turn to the issue of software, an area close to my heart. I was not an engineer; I was a technical writer as it happened. The pay scales were not particularly high for me, yet I got extreme experience, as did all my colleagues in that area, working in multiple environments, which enabled me to get into a full-time position in a company later. It is a classic example of how somebody uses experiential gains via short-term contracts that could not have been gained in a full-time context because, as a technical writer it took me three months' effort out of a five or ten man years' project. It is really important to keep that skill alive.

France is a prime example of where one finds the collective bargaining arrangement. I worked in Gemplus near Marseilles in the town of Gemenos. If I may be allowed to digress for a moment, the Lonely Planet states in regard to the 1st arrondissement that white people should not walk in that area and yet it is a very good area. In France and in many other European countries immigrant groups are being fenced out of the workforce. Unemployment might be running at 10% or 12% of the workforce but the reason for the banlieue riots is that young people there cannot get into the workforce. That is partly because they do not have the human, capitalist skills or the experience to get in.

The flexible arrangements we have in this society enable people to integrate much more rapidly than is the case in those other societies where there is a more difficult pathway into full-time work. However, as we make additional legislative changes there will be more paperwork, more issues and fewer incentives to become an entrepreneur, to take on staff or to drive a business. Each time additional paperwork is required it has an unintended consequence in that people decide they will not go through it again, that they will not hire an extra person but will sweat the staff they have to deliver the output, covering the person who is sick for six or eight or ten weeks. We need to start thinking about that.

There is one other issue I would like to address. It relates to profiling. This will probably be discussed continually over the next three to four months. Would the members of the committee, as experienced elected political representatives, trust a postal survey to determine their political campaigns? I very much doubt it, yet the profiling issue was posited by ICTU at the last presentation following 280 responses to a postal survey from ICTU centres around the country. I have a MSc in politics. Anybody who does research will question postal surveys in general on the basis of their efficacy, their validity, and their scientific nature. Having a debate on profiling centred on approximately 280 letters from a sample group with a certain agenda, the lack of questioning of research in this society in public discourse and in the coverage of the research, brings into question the validity of how this society evaluates such matters.

The last thing I want to say is that one of the factors that got this country going in the late 1980s and through to the 2000s was our collective hunger to be flexible, to put out the mat, to welcome people and say we will hire them. One of the concerns our organisation and, I suspect, my colleagues on this side has is that hunger is becoming just that little bit less; we are that bit less flexible; that little bit less willing to go the extra mile. That is something we need to think about in the context of discussions about, for example, strikes. In an environment and economy where we have doubled our workforce from 1.1 million to 2.2 million, we must have done something right. The wealth levels here are unprecedented. Everyone is prepared for a downturn. We must have been doing something right. We need to consider what we did right and what are we doing to damage the potential that derived from what we did right. There will always be egregious examples of exploitation. Nobody backs those. The legislative agencies, the public servants who are paid from our taxes to do a job should do their job and ensure that does not happen. That is all I want to say. I thank the committee for its time.

Chairman

Thank you. I thank Mr. Brendan McGinty, Ms Rhona Murphy, Mr. Martin Whelan, Mr. Eddie Keenan, Mr. Jim Curran, Mr. Mark Fielding and Mr. Seán Murphy for attending. We have had the trade union movement here to express their views. We thought it only fair to hear the other side of the argument. That opportunity was given today. I am aware you have other demands on your time. I thank you for attending, particularly at an early hour, but this is the time at which our meetings are scheduled. The employers will leave here at least knowing that we start work early as well. We are hidden away and are not on camera. Perhaps the employers will tell the people outside that we start work early. This is our third meeting this morning.

We had a very interesting exchange. The views of the various employer organisations have been clearly expressed. We will take these into careful consideration in formulating policy and in proposing or supporting legislation brought forward to regulate this form of employment. Some points have been clarified for us in that regard. We found this a frank exchange, which is important. I thank you for responding to points we raised that you might not have been expecting. We have been in that position ourselves, not knowing what is coming. You answered in a very frank and forthright way. That is extremely important to our work as a committee. We appreciate that and appreciate your attendance here today. I have no doubt those issues will be discussed at another forum which is under way. We look forward to your attendance. On the last occasion on which Mr. Mark Whelan was here we intimated that we would invite him back soon. I do not think he thought it would be quite so soon. However, it is important that all sides of every argument are fully ventilated and fleshed out so that whatever decisions are made are made on the basis of full information. Again, I thank you for attending and appreciate your attendance.

The joint committee adjourned at 11.50 a.m. until 10 a.m. on Wednesday, 14 May 2008.