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Joint Committee on Enterprise, Trade and Employment debate -
Thursday, 3 Mar 2022

Engagement with Representatives from the European Commission

I welcome everybody today. I advise people that we still have a health emergency. Our Oireachtas committee will be conducted without the need for social distancing at the moment. Normal capacity is back in the committee rooms and this is the biggest crowd I have seen during this Dáil. I am absolutely delighted to see so many people here today.

Witnesses and members have the option to come into the room or join remotely on Microsoft Teams. I advise everyone who is in the meeting room to practise social distancing and the regular protocol of washing their hands their hands when they come in and out. We have no apologies for today, which is good.

I will start straight into our engagement with Mr. Nicolas Schmit, European Commissioner for Jobs and Social Rights. It gives me great pleasure to welcome Mr. Schmit this morning. Prior to his appointment as EU Commissioner in 2019, Mr. Schmit was Minister of Labour, Employment and Social and Solidarity Economy in Luxembourg from 2013. Prior to that, he served as Minister of Labour, Employment and Immigration from 2009. As issues relating to jobs and social rights in Ireland are, of course, greatly influenced by policy and legislation at EU level, it is particularly important that both the Commissioner and the committee are acquainted with each other's perspectives and concerns.

To commence our discussion today, I now invite Commissioner Schmit to make some opening remarks on issues of mutual interest. They may well include issues relating to teleworking and the right to disconnect, labour shortages, occupational safety and health and the European Commission's approach to platform work. The floor is his.

Mr. Nicolas Schmit

I thank the honourable Chairman and members and wish everybody a good morning. It is a real honour for me to address this chamber on my first visit to Ireland as European Commissioner for Jobs and Social Rights. I am very grateful for the invitation to speak today at the committee and to be able to have an exchange of views on a number of topics that are of high importance both to the European Commission, European Union and certainly also to Ireland.

I am very impressed by the work the committee is doing. Despite its short lifespan, this committee has already made a significant contribution to improving the Irish labour market and economy. The pre-legislative scrutiny it carried out on the Right to Request Remote Work Bill 2021, for example, and its tireless work on the scrutiny of European Union legislative proposals, including those that have emerged from the European Pillar of Social Rights, are to be commended.

The European Commission is committed to building a strong social Europe that protects. This is the foundation of all the initiatives that we are proposing. Every action we take comes under the umbrella of the European Pillar of Social Rights Action Plan, which we presented almost exactly one year ago today in Porto on 4 March 2022 during the European Summit.

As members will know, the European Pillar of Social Rights sets out 20 principles. I just had a meeting with your Tánaiste; I am not sure if my pronunciation is very good. I remember very well he was Taoiseach at that time and signed the European Pillar of Social Rights in Gothenburg.

The European Pillar of Social Rights Action Plan contains three EU-level targets to be achieved by 2030. The first is that an average of 78% of people aged 20 to 64 should be in employment. Ireland proposed its own national target, which is close to this average.

It is higher than the current average in the EU, which is around 72%. The second target is to have at least 60% of all adults participating in training every year. In this regard, Ireland proposed a higher proportion, which I believe is 64%. The third target is to reduce the number of people at risk of poverty or social exclusion by at least 15 million. I always insist on saying “at least”. Among the 15 million, there are to be least 5 million children. I am convinced that Ireland will be a strong contributor, as it always has been, in achieving these targets, not least because of its ambitious draft national targets, which I mentioned. Ireland is already among the top performers of the Union in many aspects.

We have just had a discussion on the Irish labour market. The shortages in the labour market show the dynamic of the Irish economy. I must also mention the excellent educational outcomes in the Irish system, especially regarding individual digital skills. Ireland is certainly a country in which the digital transformation is very much ahead. The profound effect of social transfers on poverty reduction and improving equality indicators during the past decade all point towards Ireland being an extremely resilient nation and economy. How it came out of the Covid crisis shows this resilience and capacity to adapt and innovate.

It is imperative that the social dimension go hand in hand with the economic recovery. This is in the spirit of this Commission. We want economic innovation, modernisation and competitiveness. We are very much focused on the two big transitions: the climate transition, which is a must for every nation, and the digital transformation. Digital modernisation is key to the competitiveness of our economies, European society and our international competitiveness. Linked to that, we need to take fully into account the social consequences.

Let me say a word on Covid-19 and changes to the labour market. New work patterns have been born out of necessity, while others have been triggered and accelerated due to the possibilities offered by new technologies, especially digitalisation. More and more workers are engaging in platform work, which provides quick income but often puts individuals in a precarious situation. I will say more on this topic later. Perhaps we can discuss it because I have understood that the Irish Government is working a lot on these issues.

Some occupations faded because of the lockdowns, and many workers walked away from certain jobs in sectors that are now struggling to survive and recruit qualified staff. This is also a big issue. The construction sector is in major need of qualified, skilled people. So too is the hospitality sector. The Irish economy is very much focused on tourism and hospitality. Therefore, we have to make sure these sectors have an opportunity to come back after the difficult period caused by the Covid crisis.

Numerous workers have chosen to move to rural settings and to swap urban life and commutes for distant work, thus giving way to the creation of new jobs and services where they did not exist. This has accentuated already apparent labour and skills shortages across Europe in many areas. In health and care provision, there are many traditionally underpaid, difficult jobs that fail to attract new workers. We have seen how important the care sector is, especially during the Covid crisis. An ageing population points to the importance of having a sufficient number of qualified workers in the care and health sectors.

I am aware that Ireland has a very active, dynamic education policy to adapt its education systems to this transformation. It has strengthened its vocational and educational training, which the Commission is supporting very strongly because it believes, precisely in light of the transitions, that vocational training is an important tool in building the bridge between education or school and the jobs market. I will be interested in listening to the members’ comments and ideas on that.

On remote working, teleworking has become common practice among many professionals. I always say that remote working and the rapidity with which we introduced it — it happened in a few weeks or months whereby we all became accustomed to working on screens or by computer — saved our economy, especially our services economy. Ireland is very much a services economy. I am from a country that is quite similar to Ireland in that it has banking, insurance and all kinds of financial services. These were safe because we could continue working through remote working. This is a big change to how people work, and we certainly have to focus on how working conditions associated with remote working, occupational safety, health issues and even mental health issues are treated in this context.

Working time is certainly an issue. The focus of the directive adopted nearly 30 years ago is still very much on the industrial system of work. Circumstances have changed for many people and sectors. This year, there is to be an evaluation of the functioning of the directive. We really must reflect on how working time arrangements function and are organised in the new economy, which involves not only remote working but also new systems of work organisation. This is certainly an important issue. Afterwards, we can perhaps discuss the proposals made by the Irish Government on remote working and the right to disconnect, which has been introduced in some countries and which is under discussion in Ireland. It has been introduced in quite a number of companies. Big companies have introduced their own systems concerning the right to disconnect. It is a matter of how we can organise it at European level by respecting the specific needs of companies, different cultures and so on. We will start discussing this — next week, I believe — at a conference of social partners and experts in Brussels to determine what can be done at European level. I am aware that Ireland is very keen on subsidiarity and respecting social partners, social dialogue and collective agreement.

Let me say a word on health and safety at work. In general terms, we have proposed a new strategic framework on health and safety at work for the period 2021 to 2027. Through the negotiations with the European Parliament, we have made important progress on protecting people from dangerous substances, including carcinogens and mutagens.

The last achievement just before Christmas was really astonishing in that the Council member states adopted the proposal unanimously. There is an awareness of the need to better protect people here. Asbestos is another important subject. Unfortunately, it is still the case that many people die because of asbestos. It is very much linked to construction and to the renovation wave we need in terms of climate and energy. We have to make sure that not only workers but people are protected.

In regard to platform work, which I mentioned earlier, the Commission has made a proposal for a directive here. We have discussed this with the Tánaiste. We do not want to stop or hinder the development of platform work, which is a new model, a new activity, linked to technology on one side but also demands in our markets among people who like to have these kinds of services. We want to promote it. It is creating jobs and helping many mainly young people to enter the jobs market or to have a part-time activity, which is very good. At the same time, we have to make sure that this does not become the kind of world of work dominated by precariousness where people have very low earning and when they have an accident there is insurance and no social or hazard protection. This is the objective of the Commission's proposed directive. We are at the beginning of discussion on it in the Council and in the Parliament. The idea is that we need some kind of a level playing field for Europe because there are many differences in the legal systems, which we do not want to change fundamentally but we, at least, need this kind of level playing field in this area. The issue is the status of those working for platforms, namely, are they independent workers, self-employed or workers. Many of them are probably workers but they are not treated as such. They are considered by the platforms as self-employed and they are denied a certain number of rights that workers should get. I have raised the question as to whether in Europe there are many illegal cases across jurisdictions. We want to ensure there is more clarity and more security, including legal security, for those working on platforms. We need to bring the platforms, with all of their innovation parts, which we do not put into question, into the social framework we have created for all other companies. There cannot be a business model outside of the fundamental rights which have been established all over Europe.

There is also the issue of algorithms, which are part of the platform business model. The platform functions through algorithms, so we need to examine the rights of people in regard to algorithms. This is a new area. The Commission has proposed a special act on artificial intelligence and algorithms. We have to see what impact algorithms have on the world of work. This will open a very important discussion about algorithmic management.

I thank the joint committee for receiving me and for giving me this opportunity. I am happy to engage with it on the issues I have just mentioned or any other issues members may have in mind. I look forward to our exchange.

I thank Commissioner Schmit. The first speaker is Senator Gavan.

I welcome the Commissioner and thank him for attending. It is great to have him here. This is a very useful change. I want to pick up on a few topics raised by the Commissioner in his speech, on which I am really interested to hear his responses.

The Commissioner mentioned that there are many traditionally underpaid, difficult jobs which fail to attract new workers and, at the same time, that workers are increasingly demanded better conditions and better pay. I agree wholeheartedly with that. I do not know if the Commissioner is aware that Ireland is an outlier in Europe in that it is one of only two countries that does not have a statutory right to collective bargaining. That is a major problem for us. When it comes to workers demanding better conditions and better pay, the only means of doing that is through collective bargaining which, as I said, in Ireland we do not have a statutory right to. In his role as Commissioner, will Mr. Schmit defend the upcoming directive on adequate minimum wages in the EU, in particular the collective bargaining aspect of the directive from aggressive lobbying? I fear that this directive will not be binding. I would be please to have the Commissioner's reassurance that the issue of collective bargaining will be fully included and that he will resist the aggressive lobbying to ensure that it will be binding rather than just a recommendation.

Mr. Nicolas Schmit

The issue of fair play is an important one. That is the reason we made the proposal on minimum wages. Comparing minimum wages in the European Union, Ireland has the second highest minimum wage. There is one country that has a higher minimum wage, which is the country I know quite well. This is one aspect on minimum wages. The Senator touched on another issue. The directive is a directive not a recommendation. It also addresses the issue of collective bargaining. The Commission as a whole and, in particular, the President of the Commission, are very much attached to the idea of a social market economy. It is not just a market economy; it is a social market economy. This means that collective bargaining and a fair relationship between employers and employees, are important in the context of this social market economy. The idea of promoting collective social dialogue but also collective agreements is one of the objectives of the directive.

The point is the Commission does not have large powers on this issue. The treaty does not give us such powers. There are good reasons for that. I do not want to put this into question, rather I am reflecting the treaty position on this point. For instance, we cannot impose a collective bargaining system or the role of trade unions or employers organisations in the different member states. It is possible for us to make proposals which interfere in industrial relations but this can only be done by unanimity. As the Senator will know, unanimity is not easy to achieve. Sometimes, we achieve it, but it is not easy. In this directive we also wanted to address the issue of collective agreements and collective bargaining. We have many different cultures. The Nordic countries want only collective bargaining and nothing to do with a statutory minimum wage. I had some difficulties with them on the statutory minimum wage issue because the Nordic system is built on collective agreements. In other countries, collective agreements are very low, especially in central Europe, where we at under 20% or sometimes even less.

However, we consider that for the social market economy, we need better systems of industrial relations and also a stronger collective bargaining system. How can we achieve that? Certainly, we leave it to social partners and member states to organise that. We have now asked member states to have a plan negotiated with their social partners on improving social dialogue and the collective bargain system. We cannot prescribe member states to do this, but we invite them through this plan. The plan is an obligation, it is not just on a voluntary basis that every member state should have this kind of plan. For the Austrians it is easy because they are at 95% of coverage by collective agreements - one cannot be better. On those where collective bargaining is low, there may be some reasons for that also, such as the structure of the economy and so on. However, they should work out a plan to gather with their social partners on how they can improve the system of collective bargaining. That is maximum we can do in terms of our legal competence for the treaty. We will certainly, once this directive is adopted and I hope it will be adopted with this element, follow up on this. We will ask member states to work on this plan together with their social partners and obviously in the objective context they have. Some have very strong unions and others not. We have a difficult situation in some central European countries but we are inviting member states to work on this according to their traditions and legal systems.

The Commissioner has given a clear answer. It is probably not as positive as I wanted it to be but I understand the point he is making in terms of the limitations that he sees in place in this regard. There is certainly food for thought there.

As my time is limited, I will move on to a second topic, which is the one the Commissioner addressed as the so-called “platform economy”. Having agreed with one of the earlier parts of his speech, I will now respectfully disagree with something in the opening statement provided. He stated:

No one is trying to "kill" or hamper the platform economy from developing. Quite the opposite. We want it to thrive.

Just ten minutes away from here is Camden Street and I stay in a hotel just beside it. Each evening in the darkness, one sees young people gathering with their bicycles. They are not being paid; they are just gathering outside like the hiring fairs of old, waiting to see if they will get a fare to deliver some fast food. They have no rights. They are deemed to be self-employed. The only word I would use to describe this is "exploitation". I would be concerned at the Commissioner’s point of view that he wants this platform economy to thrive. I do not want it to thrive. I want it to be regulated. I do not want my son or daughter to have a future whereby the wake up in the morning and look at an app on the phone to see whether they have work that day and what kind of work it will be. I am concerned with that statement and I would like to give the Commissioner the opportunity to respond and reassure us that the EU will take concrete and resolute steps to effectively regulate this platform economy in order that all workers have rights.

Mr. Nicolas Schmit

I can agree with the Senator. If I say we are not against the platform, as I said before, because this corresponds to new technological possibilities and to a demand in our society, that should not mean that this economy and these platforms are developing just on an absolutely unacceptable level of protection or wages. I have nothing against the platform and I am even in favour of them developing. However, they can only develop of they respect the fundamental social labour rights in place.

We all see these young guys, as the Senator described, in our cities. They are mainly guys, by the way, there are not so many girls but there are many young guys. They have no minimum wage. They have a very small salary or they do not have a salary because they are considered self-employed. If they have an accident, they have no protection. We want to change that. We have to force the platform to respect that. I have a strong conviction that one cannot allow these kinds of companies – because they are companies, even if they call themselves platforms – to just develop and earn a lot of money by keeping the social standards at the lowest possible level. This is what we are aiming at. We want to change this. We want to state clearly that these young guys, as most are guys, have the right to be protected. They first must be recognised as workers because they are not entrepreneurs. If I were a young person obliged to earn some euro because otherwise I would not have an income, I am not an entrepreneur because I have a bicycle; I am waiting, as the Senator described. What we are doing here is not going against the platform. We are against the working conditions of most of the platforms; perhaps not all of them, but many or most of them. This is what we are doing.

I am convinced that the platform can adapt to that. They absolutely can because some have already. I would not say that working conditions are fantastic but they have respected at least the basic working conditions and salaries and they also consider the people working for them mostly as workers. Some are considered self-employed but then they have to respect them also as self-employed with rights. By the way, we are now introducing the right for self-employed also to negotiate collectively with the platforms, which was up until now more or less impossible. I am sorry that I have perhaps not been well understood, as the Senator read my statement. It is clear that what we want is fair social conditions for platform workers. This means that, for many of them, they have to be recognised as what they are in reality, namely, workers with all the rights in terms of wage and social protection. That is the meaning.

I apologise for being rude but I am running out of time. I have two other quick questions. How quickly does the Commissioner expect the directive on the platform to come into play?

Mr. Nicolas Schmit

This does not depend on us, it depends on the Council. Therefore, it is important that we get a qualified majority in the Council. It also depends on the Parliament. Both institutions have started their deliberations. I am optimistic and I hope that we can have this, perhaps, by the end of this year. That would be very good because it is quite a short amount of time for a difficult proposal. It will then take time until the member states have transposed this directive, as it is not directly applicable.

I just have one minute left and I want to ask the Commissioner one last question. I appreciate his patience with me. Does he agree that the fiscal rules need to be amended to allow more investment in jobs? Further, does he agree that they should at least be suspended until 2023, given the inflation crisis and the terrible war that we are seeing?

Mr. Nicolas Schmit

We had a discussion yesterday at the College on this. We certainly are convinced that we have to follow up very tightly on the situation the Senator described, with the war and inflation. A final decision has not yet been made on this. My colleagues-----

Does the Commissioner have a personal view he could share?

Mr. Nicolas Schmit

Commissioners have personal views, obviously, but they are in the College. However, one can easily guess what my view is.

Bonjour, vous êtes le bienvenu à notre comité. C’est une semaine sombre pour toute l'Europe. Je crois qu’on a souvent dit que l’Europe a besoin d’une nouvelle énergie. Je crois que on a trouvé cette énergie dans la crise en Ukraine.

Mr. Schmit is very welcome. It is great to see him here. We have three speakers who have to fit into 14 minutes so I will be brief. How does he see the crisis in Ukraine impacting on his work? We already see 1 million people displaced from Ukraine and our labour markets will open up to those people. We see the impact on the energy supply routes and in Germany's decisions, where, following the abandonment of nuclear energy, there is now a significant shift in its approach. Elsewhere will follow suit. In the agriculture sector there is a shortage of supply from the traditional grain markets and a shortage of fertilisers. How does Mr. Schmit perceive this impacting on his work, which is extraordinarily important? We are trying to come to terms with a new economy, as he outlined well in his comments. I would like to hear his perspective on that. Perhaps my colleagues can speak now too, rather than be squeezed out.

I understand this is the Commissioner's first visit to Ireland in his role so he is very welcome. I thank him for visiting. His opening statement was very interesting. I am particularly interested in people who find it difficult to get work because of disadvantage such as people with disabilities, migrants, disadvantaged youth and, in Ireland, Traveller and Roma communities, and any initiatives that might be in place to assist those people to gain employment given that they start with disadvantages anyway. Two years ago, an initiative was established here, called the Open Doors Initiative, whereby the private sector got involved in supporting these groups. This has grown quite strongly and many thousands of people have been impacted and supported. Does Mr. Schmit have a view on how the private sector and, indeed, the public sector could be further incentivised to support these groups?

The Commissioner is very welcome to Ireland and to this meeting. I was interested in his comments regarding the right to disconnect and remote working. He said that it has a positive impact for rural areas and rural communities across Europe. I am from a region that is within an hour of four cities and prior to the pandemic people travelled back and forth to the cities. It was a round trip of two to three hours every day. They quickly adapted to remote working with Zoom, Microsoft Teams and the like. Like other member states, we are focusing on putting through legislation to support employees with remote working. As the Commissioner said, it creates a great opportunity for rural areas. Something else is possible as well. I could be remote working for a company in Ireland and living in Ireland today, but could decide next week I want to move to Faro in the Algarve. What does the Commissioner see as the European Commission's role over the next months and years regarding the rights of employees and the rights of employers where people will in the future decide, for example, they are working for a company in Dublin but living full time in Italy? How does the Commissioner see his and the Commission's position on that?

Mr. Nicolas Schmit

I thank the members for their questions and comments. I enjoy very much being back in Ireland and in Dublin.

On the issue of the crisis and this war, we fully agree that what is happening in Ukraine is a catastrophe and something unacceptable. It is a profound change in our international system, especially in Europe but also globally in the international system. The positive side of that, if we can say that, is that probably Mr. Putin miscalculated one thing. He thought that he could divide Europe inside and he could divide Europe from the US. The positive thing is that we are now closer allies to the US. I know the special situation of Ireland in that context with regard to NATO and so forth, but I am giving the broad picture. We are closer than ever to the US and we have shown the highest degree of solidarity inside the Union. We really move together. I always say this. There are some people who say that the founding of the first European community was based on steel. Ireland was not yet part of that; it was steel and Ireland had no steel. It was steel and coal. It was not Schuman and all the fathers of Europe, but it was Stalin because people feared the invasion and the policies of Stalin. In a way, what Putin is doing is the same thing because we have understood that our collective response and our solidarity are the right response to a new threat that we had undervalued and underestimated. This is a very important effect of this crisis.

It is clear that all that has an impact also on my portfolio. Some say that now we have to invest much more in defence and the like, and that this has to be transferred from somewhere. It is the choice between butter and cannons. What is important, and we have to reflect on it, is, first, that what Putin is playing on is not just dividing European countries but also European societies. He tried it by funding certain parties. What Stalin made with the communists, he makes with other political families. I will not go into this but the members know that very well. It is dividing our societies and undermining the cohesion of our societies. The cohesion of our societies is key, especially in times that are much more insecure and uncertain. This depends certainly on economic strength but also on social resilience. We have taken the lessons from the Covid crisis and we have to take the lesson of this crisis. Social should not now be considered a second priority. We still have to invest in social, first in education and more equality. That comes to the Deputy's question, which is a very good example of what has to be done on social and those who are still excluded in our societies. We have broad groups of people who are not taking part as they should in the social developments.

On the other impacts, certainly on prices, we are in a difficult period. Even before the attacks and the aggression, we had inflationary tendencies after Covid. We all expected these to be relatively temporary, but now there is a risk that they will last. Not everybody, but many of us experienced the oil shock in the 1970s. Well, we have something like the oil shock in the 1970s. Our economies have changed but, nevertheless, we still have a high dependency on oil and gas from some countries and especially from Russia, so there will be an economic impact. There will also be a social impact through the increase in prices. I saw that the Irish Government has already taken some measures to mitigate the social impact of this. This is an important issue and I believe we have to invest a lot in the coming years.

I was asked about the Stability and Growth Pact. The priority for different reasons - climate reasons, organisation of our economies reasons and energy dependency reasons - is huge amounts of investment, certainly private but also public.

Not everything can be done on the private side. We have also to increase public investment in infrastructure. Public investment in renewable energy, for instance, is important to lower the dependency in that sense.

On agriculture, an important topic in Ireland, there was a ministerial meeting a few days ago. We have a problem of grain prices going up, which has an impact on living costs but also for farmers. Much animal feed is imported, partly also through Russia or Ukraine, and this has an impact on costs for farmers. This means that the cost of meat and other food is increasing. This is a tricky issue of how we try to keep inflation down. As to whether we can do it only by means of monetary policy, I am not convinced. It is another tricky issue. Certainly, we have to take these inflationary tendencies seriously.

On immigration, we have to be in full solidarity with the Ukrainian people. Hundreds of thousands of people who had housing, who had everything and who had jobs in Ukraine have been pushed out. Their lives have been destroyed. There is their children's future to consider. We have to show absolute solidarity. I have exactly the same view. I must say also that this is a change because we had an immigration crisis not so long ago. This time it is different, perhaps because it is in Europe. We have to be in full solidarity, which is also a cost.

We have to support those countries that are on the front line - we have to call it that. We have to support them. We will finalise next week the mobilisation of European funds to support these countries but also in order to support the families, including many women and children, because the men are fighting in Ukraine. We can see that they might become workers. Certainly, some will. We have to encourage them. Most of them have in mind to go back home but nobody knows when and under which conditions they will be able to do that.

On the poor, the disabled, etc., we have a programme in disability, especially a strategy for creating equality. Accessibility is one issue. There is still a lot to do. We have to encourage companies to reduce their prejudices against disabled people. We have to allow disabled people to get better training and better skills. If we have a shortage on the labour market, there are many people who want to work. We have to give them the possibility to work. We will come up with a proposal on how to better integrate disabled people in our labour market.

Migrants are somewhat in the same situation. It is not wise to leave them outside the labour market for months and years and then say that they are not integrating in our society. How could they integrate because they cannot work? Now there is a new picture. We should skill them. We should reskill them. We should use their will in most cases to be part of the society and also the labour market.

I will finish now. There were a lot of questions. On Roma, we have a strategy. I note there is also a community here in this country.

On remote working, I have no answer yet to this question Senator Ahearn asked but it is a real question. Here, we have to start a reflection at European level because this is a real European subject but I cannot give the Senator an answer yet. We have really to start deal with this issue.

I thank the Commissioner. I call Deputy Paul Murphy. He will be followed by Deputy Shanahan.

Most of my questions are about the Commissioner's area of responsibility but, seeing as the question of Ukraine and refugees has come up, if it is okay, I will ask a quick question about that. I agree with the Commissioner that Europe has to open its borders to refugees coming from Ukraine and must express the greatest possible solidarity and support for them. Will the Commissioner confirm that he agrees that Europe should open its borders for all refugees coming from Ukraine regardless of skin colour or passport?

Mr. Nicolas Schmit


Moving on to remote working, the question of occasional remote working or teleworking has not been a feature of the discussion in this country at all. The draft Bill we are dealing with only deals with a worker transitioning to full-time remote working, whereas it is different in Luxembourg and there is draft legislation in Germany to give workers the right to say, for example, that for 10% of the days they will work from home. Is the European Commission in general is in favour of the idea of occasional teleworking or remote working?

Mr. Nicolas Schmit

In principle, remote working - now teleworking - has become part of our system of how people work. We see after the Covid crisis, where at the beginning people were very much in favour of even mainly working by means of telework, there are now some doubts and people want to be also part of a team and go back to their offices. We have to find the right balance. The Commission, as such, cannot dictate the right balance between telework and workplace presence. The principle that telework is now part of the work organisation is something we should consolidate. How this happens, for instance, how many hours I should be on telework and how many hours I should go to my place of work, is partly a matter of my life and the constraints of the company to organise the work in the office or wherever. If I like to be mainly at home and all the others want to be, we have to find some kind of balance. I would say we should establish some principles - I can imagine that - but it is not up to the Commission to go into detail and say that it should be one third or two thirds of the time. This is up to social partners. Often among the social partners you get some basic line, and then social partners have to discuss and negotiate how this can be implemented. When you are working in a bank it is quite different from other types of companies where the constraints may differ.

In principle, I said, "Yes". We have to recognise telework as part of our work organisation. Unfortunately, not everybody can work on telework. If I am a nurse in a hospital, it is more difficult to be on telework. However, we should look pragmatically at how solutions can be found. I see an important role for social partners.

The work-life balance directive states that paternity leave must be compensated at least at the level of sick pay. Thankfully, in Ireland we are moving towards having sick pay that will be 70% of workers' wages. Will the Commissioner confirm that once we have legislated for sick pay, it means that we must have paternity pay in this country of at least 70% of workers' wages?

Mr. Nicolas Schmit

If the directive says that, it has to be respected.

On a related point, is there - because I could not find it - any directive relating to a minimum pay for maternity leave?

Mr. Nicolas Schmit


Does that create a certain discrimination that will, in particular, affect single mothers?

Mr. Nicolas Schmit

There is a right to maternity leave. There are also now some standards for compensation for those who are on maternity leave, which depend on the remuneration you get when you are on sick leave, which the Deputy mentioned. This is left up to the member states but they must respect these minimum standards.

If the European Commission sets a minimum standard for paternity leave - something I agree with - does it not make sense for the Commission to also set a minimum standard for maternity leave to avoid a situation where women and men are potentially paid at significantly different levels? Women and men doing the same job may get different amounts when on maternity or paternity leave.

Mr. Nicolas Schmit

I agree. I know of countries where women get full compensation when on maternity leave. That should be the case but, when this directive was negotiated, it was probably difficult to get approval from a sufficient number of member states. For the specific period during which women are out of work because they are on maternity leave, they should be paid their full salary. This is not the case in all member states, however. I know of a few where it is the case but I see the Deputy's point with regard to what he qualifies as discrimination.

In the context of his portfolio and in conjunction with his Commission colleagues, has the Commissioner considered the question of a four-day week? There is a big campaign around that.

Mr. Nicolas Schmit

No. We have not discussed this issue yet.

Cuirim fáilte roimh an gCoimisinéir. He is most welcome and I am delighted to have him here. I will reflect on some of the points he has made. He mentioned corporation tax. I will point out that, as the Commissioner will know, Ireland has moved significantly to harmonise tax rates in respect of large employers. With respect to Ukraine, all of the Commissioner's comments are absolutely valid. We support them all. As he will know, we have dispensed with the requirement for a visa. There is visa waiver in place for all Ukrainians coming to Ireland. Ireland will certainly do its part and everything it can do to welcome refugees, to try to integrate them and to allow them to access our employer base as quickly as possible.

With regard to the general discussion we are having, the Commissioner will be well aware that we have three pillars of employment in this country. We have foreign direct investment, the public sector and the SME community, which is made up of the small and medium enterprises. In this country, the SME community employs approximately 900,000 workers. Within that, there is great variance between large and small employers. With regard to the whole idea of harmonisation of working conditions, wages, insurance and pensions, does one size fit all? Can one size suit all? We are probably in agreement but I have to ask the question. If you look at wage disparity in this country, you will see that high-level public servants, including ourselves, are paid well, as are people at the higher levels in the pharmaceutical industry. However, there is a large number of people who are not paid well. That is the first question.

This committee has done quite a bit of work with regard to the platform economy and one of the things that has recently come up, and which Europe will have to address, is that we have very large US multinationals that are using subcontracted employment services to employ people here in order to keep them at a remove from the main entity in the US. We are going to have to find some way to properly codify that relationship.

In his submission, the Commissioner highlighted his desire for people to undertake onward training. There are many people in this society who have to pay to access further education. Perhaps the Commissioner could have some discussions with our Department of Enterprise, Trade and Employment on tax credits for people who want to engage in onward education.

I will refer to two other areas, if I may. One is that of our agricultural sector. As the Commissioner will know, we are a very large exporter of agrifood to Europe and across the world. He has highlighted the difficulties that are coming with regard to inflation in the price of commodities and so on. Ireland is a price taker and distribution is largely controlled by conglomerates in this country. Is Europe developing any special initiatives to support food manufacturing in Europe, particularly at the primary producer end? Is there something we can do that will help the primary producer rather than the processor or multiple retailers?

We are doing a lot and talking a lot about climate change and rolling out climate measures in this country at the moment. Europe needs to do more in providing funding for research to develop climate technologies and to assist in their roll-out.

Mr. Nicolas Schmit

On the more general points, we are all in diverse economies. I come from a country whose situation is not so different from Ireland's. We have thriving sectors that pay fairly high wages. Our public sector must also pay good wages because otherwise nobody would want to work in it and the public sector needs qualified people. We also have SMEs, whose situations differ greatly. Agriculture is another issue. Farmers deserve to have a decent income. In that sense, my response is that one size certainly does not fit all. We have to take this diversity into account. However, it is clear that, in our society, there must be some kind of ground floor of social rights and a minimum wage to which everybody has to adapt. Otherwise, nobody would ever go to work in an SME or in the hospitality sector as they would not be paid enough to allow for a decent standard of living. I was a minister for labour. By the way, yesterday I had a meeting with the president of SMEunited and we discussed these issues. SMEs are the driving force in our economy and they are also largely job creators but, if their standards are very far away from the minimum standards people expect, they will not get the skilled people and those who really want to participate in a more innovative economy. You have to find the right balance. I agree that you cannot just say that big companies and all others must be treated exactly the same but there must be a floor with regard to social protection, wages and so on.

There must also be a possibility for people working in SMEs to retrain, because that is another issue. There is a great need for SMEs to retrain, reskill and upskill their people because, as we have seen with the Covid pandemic - and even independently of the pandemic because it really just accelerated the issue - SMEs have to digitalise and modernise. If you are a shopkeeper, you have to be more digitalised than ever. Especially during the Covid pandemic, many shops tried to digitalise overnight to sell their products through the Internet and so on. To do that as a small entrepreneur, you yourself have to reskill. That was one of the messages I got yesterday from SMEunited. It told me that we always talk about the workers but that we must also talk about the small entrepreneurs as they also have to reskill. I fully agree with that. As to how this can be done, for example, through subsidies or tax credits, I am favour of doing it through any means possible. It is up to member states to find the right approach to further promote education, training and skilling through the most adaptive instruments because what they do in respect of big companies should be different from what they do for SMEs.

I will finish on the matter of subcontracting. This is an issue. It shows that we also have to do something to create level playing fields. If there are new formulas whereby you can hire people and refuse them all sorts of social rights and wage levels, that will develop and an economy will be created wherein people do exactly the same work but do not have these rights.

This is something we have to look at. The platform economy is an example, but that exists in other places. In that sense, it is attractive because you can create your own platform, not pay people correctly, and say you are not a member of my staff, you are just a self-employed person working for me or providing me with services, so I will just pay you for the service and I do not care about all the rest. This is a problem for the whole economy and for the financing of the social system and leads to inequality between people.

Pensions is one other area. Mr. Schmit has highlighted the importance of pensions in his submission document. We have a new system based on auto-enrolment. We are trying to get people into a pension plan much earlier because it is something that was not happening. We do not have a significant number of contributory pensions here. I do not know if Mr. Schmit understands the concept, but we have done away with defined-benefit pensions. It could be something the Commission could talk to the Department of Finance about. We used to have a very large pension reserve fund in this country, and we have had to access it to create equity for other spending. Like Europe, we have a pensions time bomb in this country. This is something that will have to be addressed. As Mr. Schmit knows, we have an ageing demographic, with people living longer and the question is how their lifestyles are to be funded and how they are to meet their costs over the course of their lives. That is an observation Mr. Schmit might take away also.

Mr. Nicolas Schmit

We certainly have an eye on pensions. They are part of the country-specific recommendations. We all know the challenges for our pension system. One of the challenges is what Deputy Shanahan mentioned, demographics. On the one hand, Ireland is not too badly placed in terms of its birth rate and immigration. However, we must watch two things. The first is the sustainability of our pension system and the second is the adequacy of what the pension system gives to people. The problem of adequacy is that if people have a very low pension, this means we are creating a new area of poverty in society of elderly people who are in poverty, which is not good for society. Therefore, it is a real issue everywhere. Pension systems differ from one member state to another, but we must observe and do some surveillance on how pensions evolve and encourage countries to adjust their pension system, bearing in mind the major constraints of financial sustainability in the long term and also guaranteeing the adequacy of the pension system for people.

Before we finish, I have a question on the European social pillar. My question is on training. Mr. Schmit suggests that 60% of adults should have some form of training each year. Is that achievable, given the lack of resources in that regard? Does he have a minimum time in mind that it will take to get to 60%?

Mr. Nicolas Schmit

We are all aware that training and lifelong learning have become more important because technology in all areas is changing and jobs are changing. Therefore, this is an objective, which I consider to be a realistic one, because there are countries achieving it. They are the better-performing ones in the labour market, in innovation and at the level of companies. The 60% is an average. The countries at 20% will not achieve 60%, which is the reason we ask countries now to make proposals for their national plan. Ireland has proposed 64%, so it is above the average. It is not starting tomorrow but in 2030, so countries have some time to do it. It will cost money, which has to be shared between companies and public finance, and sometimes even people themselves. We all know that people are more reluctant to do it themselves. That is why we have proposed the idea of some kind of individual learning account where people have money to invest in their own training. It is to make them aware that training is important for their professional career. It is about their professional career, which is no longer linear. It might change a lot. We must incentivise people to invest.

It is realistic that there is a need for effort. The point is that many people who do not get this kind of training are among those who already have a low level of training. Very often, their jobs might be in danger. The approach is that we also have to bring in those people, the ones who do not get the training because they are not well trained. It is a vicious circle. This is a challenge for everybody, but some member states, for instance Denmark, are above 60%.

I thank the Commissioner for the response. That concludes our consideration of the matter today. I thank him for taking the time to come to the committee. I hope we will have further engagement with him going forward. I hope he has a productive time in Dublin and that he enjoys the rest of his time here.

Mr. Nicolas Schmit

I thank members for the questions, the exchange and also very much for the support. It was a great pleasure to be here.

The meeting is now adjourned. Our next meeting is at 9.30 a.m. on Wednesday, 9 March 2022. If anybody is free, we will take a photograph with the Commissioner on the plinth.

The joint committee adjourned at 11.17 a.m. until 9.30 a.m. on Wednesday, 9 March 2022.