I am pleased to have the opportunity to present this important Bill to the Seanad.
The Bill is designed primarily to provide a legislative basis for the granting of full labour market access to nationals of the EU accession states after accession takes place in May 2004. From the date of accession, nationals of these countries will no longer require employment permits to work in Ireland. It also puts in place a safeguard mechanism whereby a requirement for employment permits may be reintroduced in respect of nationals of the relevant countries, should the Irish labour market suffer an unexpected disturbance during a transitional period after EU enlargement takes place.
I am availing of this opportunity to put the employment permit regime generally on a more sound statutory footing. The Bill incorporates a provision whereby, for the first time, a requirement for employment permits in respect of non-nationals working in Ireland is set out in primary legislation, together with penalties for non-compliance by employers and employees.
Before going into detail on the provisions of the Bill, I wish to place it in context as part of the general enlargement of the EU, as well as this Government's approach to matters pertaining to economic migration matters. Members will be aware that an additional ten countries, namely, the Czech Republic, Hungary, Poland, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Malta and Cyprus, are to be admitted to the EU with effect from May 2004. From that date, they will be party to the treaties governing the European Communities. However, this does not apply to provisions in relation to labour market access. In this area, given concerns surrounding possible labour flows and possible labour market effects, the EU has put in place a transitional measure, during which each member state will be able to exercise discretion as to the extent of access to their respective labour markets. The exception to this arrangement provides for full access to the EU labour market for Malta and Cyprus.
This is a wonderful opportunity for us, as a people, to extend the hand of friendship and solidarity to these new member states and to forge new alliances with these countries, many of which will find themselves in a similar position to Ireland after we joined in 1973, in terms of economic situation, size and population. The Bill provides the necessary legislative vehicle to allow us to do that.
The essential components of the transitional arrangements that have been agreed at EU level apply equally to Ireland and all other member states. The arrangements provide that for two years following the date of accession, national measures rather than Community rules will be applied to the newly acceded member states. In effect, this means that we can choose to be as flexible or as restrictive as we like in relation to labour market access for nationals of these countries.
Two years after accession, in May 2006, Ireland will have to decide whether it then wishes to apply the full body of rules on freedom of movement, or the acquis. The expectation is that most member states would apply the full acquis at this stage. However, member states may opt to continue the national measures operated in the first two years if they wish to do so and it is expected that this will only happen where granting full freedom of movement may pose a threat to their labour market.
The transitional period should come to an end after a maximum of five years, but it may be prolonged for a further two years in those member states where there are serious disturbances of the labour market or a threat of such disruption. This case would have to be demonstrated. Finally, national measures in the transitional period may not be more restrictive than the provisions in force at the date of signing of the accession treaty. Austria and Germany have the right to apply national measures to address serious disturbances, or the threat thereof, in specific sensitive sectors in their labour markets, which could arise in certain regions from cross-border provision of services.
I wish to set the current economic migration situation in the broader context of the Irish labour market on the whole. From 1997 to 2000, Ireland experienced an unprecedented level of growth in the region of 10%, year on year, in both GNP and GDP. This strong performance has brought about an unprecedented growth in the labour force. In the past five years we have seen our labour force grow by 200,000 to a current figure of 1.85 million, while the numbers employed have grown by 300,000 to a current figure of 1.77 million.
The current level of unemployment is 4.5%, compared with an EU average of 7.9%. This level of employment growth has, in turn, given rise to significant labour shortages and a rapid increase in the number of foreign workers. These have come not only from the countries of the European Union, the citizens of which enjoy freedom of movement under EU law, but also from a wide range of other countries.
While the longer-term growth potential of the economy may still be reassuring, the short-term outlook has weakened somewhat. This is particularly the case with regard to unemployment. The year 2002 saw some 25,538 notified redundancies, the highest level since 1988. This constituted an increase of 28% over those notified in 2001 which, in turn, saw an increase of 49% over 2000. The trend is continuing with relatively modest growth forecast for this year and next. However, in relative terms, unemployment is still low and the indications are that we will still have a need for both skilled and unskilled labour from overseas in the years immediately ahead.
In 1999, 6,000 work permits were issued in respect of workers from outside the European economic area – a record at the time. By 2002 this figure exceeded 40,000. Persons coming here to work on foot of work permits are fully compliant with our immigration requirements and made welcome in their places of employment and their new communities. Much of this labour migration is of a temporary nature and consistent with the broader pattern of intra-European labour migration. In future we should be able to meet the great bulk of our economic immigration needs from within the enlarged European Union. However, we should also be able to attract particularly skilled personnel from the wider world.
The Government has decided that Ireland's national measures for the transitional period will be to grant full access to the labour market to nationals of the new member states from the date of accession, May 2004. There are a number of reasons for this. First, arguably most important, this will send a strong and unambiguous signal to the new member states that we intend to show solidarity and promote their integration into the Union from the outset. We intend that this should set the tone for longer-term relations with these states.
Second, there is no reason to believe there will be a large flow of labour migration to this country from these states after accession. Experience to date supports this view. Previous enlargements of the European Union were accompanied by fears of a "flood" of nationals of the new member states entering the Union which never materialised. The many studies carried out in this area in recent years do not support the argument that there will be large, disruptive flows to the labour markets of most existing member states.
Furthermore, I suggest that, if we choose to restrict access to the labour market by continuing the need for employment permits, these new member states could well feel let down, given the relatively healthy state of our labour market. This would be contrasted with the positions adopted by the Netherlands, Denmark, Sweden, Spain, Greece and the United Kingdom – with which we share a common travel area – which will all apply full freedom of movement for work.
Economic migration to Ireland from the accession states has been very positive in recent years. Personnel from these countries accounted for about 35% of work permits issued in 2002, or some 13,752, of which some 33% were renewals. While there is clearly a high rate of turnover in personnel, anecdotal evidence suggests that personnel from the accession countries are generally highly regarded by employers because of a strong work ethic and reliability.
The Bill before the House contains a provision that allows for a possible reintroduction of a need for employment permits if there should be a labour market shock warranting such measures. The presence of this clause in no way means that I have a pessimistic assessment of our economic prospects in the coming years, or that I expect an unmanageable influx of migrant workers from the new member states. It is, however, a prudent measure as we move into a new phase in EU enlargement and an uncertain economic climate. Not to avail of the option of a safeguard measure would mean that domestic legislation would in fact be more liberal than the treaties governing the European Union in respect of the freedom of movement of EU workers. It would also run counter to assurances given by the Government in the context of the second referendum on the Nice treaty. Other member states have also indicated that they will avail of safeguard measures allowed by the accession treaty.
The legislation is a necessary instrument to give effect to the core policy decisions in this area. At present, the employment permit system is run on foot of an order under Article 4 of the Aliens Order, 1946. The Government's legal advice is that this would not provide a sufficiently robust statutory basis for introducing the measures contained in the Bill being discussed. Any legislation to underpin the national measures we propose to introduce for the transitional period must be enacted before 16 April 2003, the date for the signing of the accession treaty. Otherwise, there is a danger that such measures might be held to constitute a more restrictive regime than was in place at the time of the signing of the treaty. This would be contrary to the provisions of the accession treaty. This is the reason this Bill is being put to the House at this time and it is in the public interest that it be enacted before 16 April.
With this Bill, I take the opportunity to put the employment permit system on a sound statutory footing. Section 2 was first introduced as an amendment to the Immigration Bill 2002, introduced in this House by the Minister for Justice, Equality and Law Reform late last year. The introduction of that provision was intended to remedy a very basic defect in existing law – the absence of a specific offence and related penalty that can be applied to an employer who knowingly employs a person not entitled to work in the State without an employment permit. However, as it is proposed that the Bill before us will be enacted before the Immigration Bill 2002, I am now taking this opportunity to include this section in the Bill before us. It will subsequently be deleted from the Immigration Bill 2002. I suggest this gives greater coherence to the proposed measures now before the House.
We have in recent years experienced what many other developed countries of the western world have already undergone: a growth in illegal economic migration. While the majority of employers and employees abide by all of the rules and regulations of the employment permit schemes in place, there are those individuals who do not operate within the confines of the law and will look to take the easy option wherever possible.
The Bill states explicitly the requirement for an employment permit where it is proposed to employ a non-EEA national, and creates a criminal offence for both an employee and an employer where a contract of employment is entered into without such a permit. It has long been a source of concern that there is a great legal imbalance between employer and employee when it comes to the law on the employment of non-nationals. No right-thinking person can agree that it is fair that while it is an offence for the non-national, in general, to be in employment without an employment permit, the employer can take such staff on with impunity. Furthermore, it is unacceptable that some unscrupulous employers should be able to gain an economic advantage over compliant employers through illegal employment. The provisions contained in the Bill redress the existing imbalance. They send a clear message to employers, in particular, that exploitative activity of this nature is unacceptable and will not be tolerated.
Work is continuing on preparing the more comprehensive employment permit legislation agreed by the Government last year and I intend that that Bill should be published shortly after Easter. The current proposals are not in any way a substitute for that Bill.
Section 2 of the Bill contains almost exactly the same provisions as sections 4 and 5 of the Immigration Bill 2003, which has already been passed by this House. Subsection (1) simply restates the present law – at Article 4(1) of the Aliens Order, 1946 which is to be revoked by subsection (12) of this section – making it an offence for a non-national to take up or be in employment in the State in the absence of an employment permit issued by the Minister for Enterprise, Trade and Employment. This reflects a key principle underpinning the economic migration regime in Ireland: that permission for non-EEA personnel to work in the State is a concession granted by the State rather than a right.
This restriction does not apply to all non-EEA nationals. Subsection (10) lists the categories of non-nationals exempt from this requirement. These categories are as follows: recognised refugees and members of their families who have been admitted to the State to join them; programme refugees admitted under section 24 of the Refugee Act; current EU nationals, nationals of the three additional countries of the European economic area – Norwegians, Icelanders and citizens of Liechtenstein – and Swiss nationals, all of whom are entitled to participate in the Irish labour market by virtue of membership of the EU or other international agreements; and other non-nationals whose permission to remain in the State includes a condition that they may work without an employment permit. The last category includes, but is not limited to, those who, though not refugees, have been given permission to remain in the State for reasons of a humanitarian nature.
Subsection (3) is a new provision which creates a specific offence for an employer to enter into an employment contract in the absence of the necessary employment permit. Until now, it has been an offence only for an employee to take up employment without such a permit, which has been a source of concern to me for some time. Senators will agree that it is right we should take this legislative opportunity to redress the imbalance that has hitherto existed; it makes no sense that, in the context of what can be seen as an exploitative relationship, the person doing the exploiting should go unpunished.
A measure of the relative degree of wrongdoing on either side of the contractual relationship between an employer and a non-national employee in such cases can be seen in the subsection which specifies the punishments. The lesser offence is that of the employee but it is an offence nonetheless. The employer's offence can be prosecuted as a summary offence, or in the Circuit Court on indictment. If prosecuted on indictment, an employer may be fined up to €250,000 and may face a prison sentence of up to ten years. Subsection (4) places an onus on employers, before they employ a non-national, to carry out a reasonably thorough check to satisfy themselves that the prospective employee does not require an employment permit, or that an employment permit has been obtained if it is needed.
The fact that employing a non-national without an employment permit is to be a serious criminal offence makes it necessary to ensure there are sufficient powers to enable such offences to be identified and detected. Accordingly, subsections (5) to (9), inclusive, provide powers for the Garda to search premises, by warrant of the District Court if necessary, to punish the obstruction of such searches and arrest without a warrant a person who obstructs.
The only addition to this section since it last came before the House is subsection (11), which specifies that, if a requirement for an employment permit is reintroduced for nationals of the new EU member states, preference shall be given to applications in respect of such nationals over applications in respect of third country nationals. This is in line with the accession treaty which obliges member states to operate any transitional measures on a Community preference basis.
The provisions of section 3 relate specifically to the accession states. Subsection (1) exempts citizens of the accession states from the requirement to obtain an employment permit to work in the State. Citizens of countries which become member states of the European Union after this legislation is passed who are not immediately granted freedom of access to the labour market under the relevant treaty of accession will be granted full access to the Irish labour market under this section. This will, in effect, exempt the eight accession states to which transitional measures apply from the need for employment permits. As there are no transitional measures in relation to Malta and Cyprus, citizens of those countries will be exempt from this requirement under section 2(10)(c) of this legislation.
Section 3(3) provides that, if the labour market is experiencing or is likely to experience a disturbance, the Minister for Enterprise, Trade and Employment may make an order providing that section 2 shall apply to some or all of the accession states. This will mean that citizens of these states will require employment permits to take up employment. This subsection has been included as a safeguard in the case of an unexpected shock to the domestic labour market. Such an order would apply during the transition period only and cease to be valid as soon as the full acquis on freedom of movement applies to the states.
Subsection (4) provides that citizens of the new member states who are already in employment in Ireland at a date after accession would not be affected by a reimposition of a requirement for employment permits for citizens of the new member states. This should ensure such persons would not be at risk of losing their jobs in such circumstances. A six week working period prior to the reimposition is considered appropriate to avoid the possibility of tactically dated employment contracts designed to avoid reimposed regulations.
I trust that my remarks have conveyed the important public goals to be attained by enacting this legislation. Senators will appreciate the unusual urgency attaching to the legislative timetable in this matter. It is with the greatest reluctance that the Government has had to introduce these proposals at this late stage but legal advice is that this is the prudent approach. I commend the proposals to the House.
