Dáil Éireann Debate, Wednesday - 6 June 2012
270 Deputy Éamon Ó Cuív asked the Minister for Jobs, Enterprise and Innovation his views on whether there is a need to address rigidities in the market by reducing the degree of employment protection for permanent jobs. [26903/12]
View answerIt is important to maintain an appropriate balance in terms of labour market flexibility and protection of employees and this is something that is constantly under review.
The most recent evidence supporting the view that Ireland is among the least rigid labour markets is available from the OECD's most recent report on the subject of employment protection and the extent of its rigidity across OECD member states. Entitled "Legislation, Collective Bargaining and enforcement: Updating the OECD employment protection indicators (http://www.oecd.org/dataoecd/36/9/43116624.pdf), the report ranks Ireland among those member states with the least stringent employment protection systems. On a scale of 0-6, where 0 was the least stringent and 6 the most stringent system, Ireland scored 1.39 overall. This indicator was made up of three sub-indicators:
1. Protection of permanent workers against (individual) dismissal.
2. Specific requirements for collective dismissal.
3. Regulation on temporary forms of employment.
There have been no changes to Irish legislation governing either of the first two sub-indicators (unfair dismissal or collective redundancies) in the period since the OECD report was published in 2008.
In respect of the third OECD sub-indicator (legislation governing temporary employment), the Protection of Employees (Temporary Agency Work) Act, enacted last month, transposes an EU Directive to provide equal treatment between agency workers and directly recruited workers in terms of basic pay and employment conditions.
Even allowing for this legislative change since 2008, I am not convinced that Ireland's rigidity score would be significantly impacted relative to other OECD members, many of whom, as EU Members, were also obliged to transpose the Directive on Temporary Agency Work.
The OECD's analysis that Ireland is not excessively rigid in the application of employment protections is further supported by the report of the World Competitiveness Rankings for 2012 (http://www.imd.org/research/publications/wcy/upload/scoreboard.pdf), released last week by the Swiss Business School, IMD. This report ranked Ireland as Number One globally for the flexibility and adaptability of its workforce. In my view, this is recognition that Ireland is maintaining an appropriate balance between flexibility and protection in our labour market regulation.
I am aware that some EU member states, particularly Scandanavian countries, have pursued a "flexicurity" model, whereby greater flexibilities are available for employers in the termination of staff contracts. However, such a system is only viable where there are complementary balancing measures. Typically a feature of such models is significantly enhanced social protection measures, including generous and sustained income supports, an option that is not feasible in an Irish context in the current economic climate.
