Questions Nos. 1 to 10, inclusive, answered orally.

Employment Rights Issues

Questions (11)

Seán Crowe

Question:

11. Deputy Seán Crowe asked the Minister for Jobs, Enterprise and Innovation in view of the recent concerns regarding crèches and child care, if he will consider developing regulations on the recruitment, placement and employment of au pairs. [33495/13]

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Written answers (Question to Jobs)

Policy issues relating to childcare fall within the remit of my colleague, Ms Frances Fitzgerald T.D., Minister for Children and Youth Affairs. Issues relating to employment rights policy fall within my remit. Ireland’s body of employment rights legislation protects all employees legally employed on an employer-employee basis in Ireland. Therefore, once it is clear that a person is working under a contract of employment in another person’s home, on a full-time or part-time basis, that person has the same protection under employment law as other employees and as such, it is my view that no additional regulation is required.

It is important to distinguish such domestic employees from an au pair placement. A genuine au pair placement falls outside the scope of the employer-employee relationship.

The National Employment Rights Authority (NERA) has encountered individuals, described by their employers as au pairs, who have been found to be domestic employees and as such are fully protected by the State’s employment rights legislation. NERA investigates such employers who are using the term au pair to avoid their statutory obligations under employment law. Complaints received by NERA concerning au pairs would first be examined using the “Code of Practice Determining the Employment or Self-Employment Status of Individuals” in order to determine whether or not the person is in fact an employee. Where the employment status of the person cannot be established or is in dispute the matter is referred to the Scope Section of the Department of Social Protection.

Where a person has concerns that employees may be exploited or are receiving less than their statutory entitlement, the matter can be reported to NERA for investigation. Cases for redress on matters relating to Employment Equality or Employment Rights legislation can be made on the workplace relations complaint form available from NERA or online at ww.workplacerelations.ie.

Industrial Relations Issues

Questions (12)

Dessie Ellis

Question:

12. Deputy Dessie Ellis asked the Minister for Jobs, Enterprise and Innovation the timetable for finalisation of the legislation relating to work place relations. [33512/13]

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Written answers (Question to Jobs)

The Government is committed to reform of the State’s Workplace Relations Services. The system that developed over the last sixty years had become unwieldy and complex; it lacked consistency, involved long delays and in some cases proved expensive for users. In short, the system was no longer fit for purpose and it was for this reason that I have commenced a root-and-branch reform with the objective of establishing a world-class Workplace Relations Service. Significant progress has been made to date and I am happy to report that in the last eighteen months a number of priority actions have been successfully delivered within the target timescale.

While considerable progress has been achieved to date on an administrative basis, completing the proposed reform requires the enactment of detailed legislation in order to provide the statutory basis for the new structures and processes. A significant amount of work has been completed on the preparation of the Workplace Relations Bill which will give statutory effect to the Reform proposals. In July 2012, I published a policy document – Legislating for a World Class Workplace Relations Service - which was submitted to the Oireachtas Committee on Jobs, Enterprise and Innovation in order to give the Committee an early opportunity to shape the legislation. I had a constructive dialogue with the Committee on the basis of this document.

Enactment of the Bill will necessitate amendments to 22 primary acts, 12 specified parts or sections of acts and 71 statutory instruments. The Scheme of the Workplace Relations Bill has been approved by Government for priority drafting and was included on the 'A' list for the Government's Summer Legislative Programme 2013. Engagement is on-going with the Attorney General’s Office and I am committed to the enactment of the legislation at an early stage with a view to having the proposed new structures in place from 2014.

I intend to progress the reform programme to the next stage with the same determination that has delivered the achievements to date. I am working towards delivery of the new two-tier Workplace Relations structure so that from next year two statutorily independent bodies will replace the current five. In the meantime I intend to continue to progress the reform and bring about further enhancements for users of the services on an administrative basis in the coming months.

Registered Employment Agreements

Questions (13)

Seán Crowe

Question:

13. Deputy Seán Crowe asked the Minister for Jobs, Enterprise and Innovation the timescale by which he will legislate for registered employment agreements. [33494/13]

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Written answers (Question to Jobs)

In the judgment delivered on 9 May last in McGowan and others v the Labour Court, Ireland and the Attorney General, the Supreme Court held that Part III of the Industrial Relations Act 1946 was invalid having regard to Article 15.2.1 of the Constitution. The Article provides, in effect, that the exclusive power to make laws is vested in the Oireachtas. The Supreme Court took the view that Registered Employment Agreements are instruments having the status of laws made by private individuals. While the Constitution allows for the limited delegation of law making functions, the provision of the 1946 Act went beyond what is permissible under the Constitution.

The effect of this decision is to invalidate the registration of employment agreements previously registered under Part III of the 1946 Act. This is an important issue for many employers and their employees, particularly in relation to rates of pay and tendering for contracts. With these issues in mind, I intend as soon as possible to legislate for a revised framework that will be fully informed by the Supreme Court judgment.

Local Enterprise Offices Establishment

Questions (14)

Aengus Ó Snodaigh

Question:

14. Deputy Aengus Ó Snodaigh asked the Minister for Jobs, Enterprise and Innovation the timetable for completion of legislation for the establishment of local enterprise offices. [33496/13]

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Written answers (Question to Jobs)

In February this year, priority drafting of the County Enterprise Boards (Dissolution) Bill, 2013 commenced. The purpose of the Bill is to dissolve the County Enterprise Boards and transfer their functions, assets and liabilities to Enterprise Ireland. Following extensive consultations with the Department of the Environment, Community and Local Government (DECLG), officials from my Department are finalising the text of the draft of the Bill in close consultation with the office of the Attorney General. The draft of the Bill will shortly be discussed by Government, and published, with a view to its early enactment once the Bill has completed its passage through the Houses of the Oireachtas.

Prompt Payments

Questions (15)

Gerry Adams

Question:

15. Deputy Gerry Adams asked the Minister for Jobs, Enterprise and Innovation if consideration will be given to further legislation for prompt payments, if the code of conduct for prompt payment fails to impact directly on the cash flow of small and medium enterprises. [33492/13]

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Written answers (Question to Jobs)

Prompt Payments for goods and services rendered is critical to the effective working of any economy and is an issue on which this Government places great emphasis. In an effort to help ease cash flow difficulties for Irish small businesses operating under the current economic environment, while at the same time, setting an example for businesses in the private sector to improve their payment record by paying each other more promptly, Ireland has introduced, on a voluntary basis:

A 15 days prompt payment requirement for all central Government Departments to pay their business suppliers within 15 days of receipt of a valid invoice. This arrangement applies to all valid invoices received on or after 15 June 2009;

A similar arrangement has now being extended beyond central Government Departments to our State Agency Sector to include the Health Service Executive, the Local Authorities, State Agencies, and all other Public Sector Bodies, (with the exception of the Commercial Semi-State bodies). These new arrangements apply in respect of valid invoices received on or after 01 July 2011.

The most recent set of composite figures published are for Quarter 1 2013 and show that 92% of Government payments, valued at €468m, were paid to suppliers within 15 days. The Quarter 1 2013 returns also shows that 91% of Agencies’ payments, under the remit of my Department and valued at €28.3m, were paid to suppliers within 15 days. The Late Payment Directive which established EU law in the area of prompt payments was originally introduced in 2000 and was recast in 2011 to modernise the law in this area. The Recast Directive (2011/7/EU) came into effect across the EU on 16 March 2013. The issue of prompt payment is now covered in Irish law by the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. No. 580 of 2012).

This legislation will act as a deterrent to late payment and as a driver for payment on time by establishing a clear expectation in law that payment will be made according to agreed terms. It lays down the specific deadlines for the payment of invoices and establishes a right to compensation in the event of late payment in all commercial transactions, whether they relate to transactions between private or public undertakings, or between undertakings and public authorities.

The Action Plan for Jobs 2013 contains commitments in respect of a Code of Conduct on Prompt Payments to improve cash flow for business and to take steps to enhance awareness of the need for prompt payments by all elements of business. Minister Perry recently announced agreement for the text of a Code of Conduct on Prompt Payments aimed at improving cash flow between businesses. The Code of Conduct is being developed by the Business Representative Bodies in Ireland with the support of the Department of Jobs, Enterprise and Innovation. Signatories to the Code will undertake to:

- Pay suppliers on time, within the terms of contract and in accordance with legislation;

- Give clear guidance to suppliers on payment procedure; and

- Encourage good practice by promoting adoption of the Code.

Prompt payments legislation serves as an important mechanism that can help to improve cashflow for businesses. I believe the publication of a Code of Conduct on Prompt Payments combined with the recent implementation of the Late Payment Directive and the 15 day prompt payment arrangement for the Public Sector, represents significant progress on the issue of prompt payments in Ireland in 2013.

Employment Data

Questions (16)

Caoimhghín Ó Caoláin

Question:

16. Deputy Caoimhghín Ó Caoláin asked the Minister for Jobs, Enterprise and Innovation the way job numbers, job losses and job creation figures correlated with exports over the past ten years. [33502/13]

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Written answers (Question to Jobs)

In the period between Quarter 1 2008 and Quarter 1 2012 the economy experienced the loss of 321,000 jobs. Throughout this period, those sectors which rely mainly on trading in the domestic market suffered the greatest job losses. For example, the Construction sector directly accounted for over 150,000 job losses between 2008 and 2012, while 48,000 jobs were lost in the Wholesale and Retail sector.

The sectors which have proved most resilient in maintaining or increasing employment levels during the economic crisis are those which are engaged in exporting goods and services. In examining the relationship between exports and employment, therefore, it is more appropriate to examine exports and employment for companies supported by the enterprise development agencies – which focus on exports - rather than the economy as a whole.

These companies account for the bulk of Irish exports (80% in 2012) and directly employed 294,000 in 2012. They are indirectly responsible for a similar number of jobs in ancillary and support services.

Table 1 shows the numbers in employment in companies supported by IDA Ireland, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta between 2003 and 2012. The value of exports in these companies over the same period is also provided.

The table shows a reasonable correlation between employment and exports in these companies throughout the period 2003-2012. When exports performed strongly in the period 2003 to 2007, employment in agency assisted companies grew, with 23,500 jobs added in that period. As exports declined between 2008 and 2009, employment fell sharply. In the period 2008 to 2010, 45,000 agency supported jobs were lost.

Exports recovered again in 2010 and grew significantly during 2011 and 2012. In the past two years, enterprise agency supported employment has increased by almost 17,000. This is a positive development, bearing in mind the time lag between export growth and employment growth. This lag effect is due to the fact that firms may be operating below capacity when exports start to grow, or that firms may be reluctant to increase employment until export gains are seen as long-term and sustainable.

There are also many variables that need to be considered in examining the correlation between employment and exports, including the constituent components of our exports which change over time as some sectors of the economy experience a decline and new sectors start to emerge and grow. It is notable that since 2002 Services Exports have increased from €37 billion to over €90 billion in 2012 and now account for almost half of total exports. Other variables include the competitiveness of our firms and the degree of labour intensity of various sectors, which in turn are influenced by technological and innovative improvements.

Table 1 – Agency supported companies: Employment and Exports 2003-2012

-

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Employment,

- 000

300.2

298.5

307.8

319.6

323.7

316.6

283.6

278.0

285.8

294.8

Exports -

€ billion

92.3

94.9

101.7

122.8

132.1

135.6

124.7

130.1

140.7

146.3 (est.)

Notes :

Data on exports is compiled by Forfás in the Annual Business Survey of Economic Impacts 2011 and captures data in respect of IDA Ireland, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta.

Data on Employment is taken from the Forfás Annual Employment Survey.

Microenterprise Loan Fund Issues

Questions (17, 48)

Pearse Doherty

Question:

17. Deputy Pearse Doherty asked the Minister for Jobs, Enterprise and Innovation if he will compare the interest rate of 8.8% payable under the microenterprise loan fund with the interest charges by banks to small and medium enterprises. [33499/13]

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Pearse Doherty

Question:

48. Deputy Pearse Doherty asked the Minister for Jobs, Enterprise and Innovation if he will consider seeking a reduction in the interest costs of the microenterprise fund in order to promote take up of the scheme. [33498/13]

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Written answers (Question to Jobs)

I propose to take Questions Nos. 17 and 48 together.

Microfinance Ireland (MFI) offers loans for 3 or more years at 8.8% fixed rate for all types of business needs including working capital and financing of business equipment to people who have been refused credit by the Banks. The Banks are offering standard variable rates for business loans and overdrafts for working capital at interest rates ranging from 6.5% to 8%. The interest rate charged by MFI reflects the higher risk profile, lack of security and possibly lack of trading history of many of the MFI applicants. The rate charged by MFI gives the customer the certainty of a fixed interest rate and fixed monthly repayments.

I can confirm that with over six months trading history now behind it, MFI is currently reviewing feedback in relation to the features of the Loan Scheme in order to ensure that the loan is as accessible as possible to potential applicants while at the same time providing reasonable protection to the taxpayer and private funding underpinning the Fund. Launching a variable rate loan product is being considered as part of that review. I should add that there is no feedback or evidence that a modest lowering of the interest rate will materially change the level of applications as the motivation for applicants to apply for the loan is based on their needs of having access to credit - having already been declined by their bank.

The key challenge for MFI is to ensure that people are aware that there is support for new and existing viable businesses with perceived or real higher trading risk that have been refused credit by Banks. In that regard MFI has been engaged with key influencers across the country to get that message across. To date this has included:

- Meeting regularly with the Local Enterprise Offices and other support enterprise agencies at national and local level to ensure that the loan offering is understood and supported by them in their dealings with local communities;

- Mailshots to every TD in the country to ensure they have loan information, brochures and website details available at their regular clinics;

- Meeting the Banks and the Credit Review Office to ensure that they refer people declined by them to MFI;

- Make presentations at local micro and small business seminars and workshops across the country in order to heighten awareness of the loan fund.

In addition MFI has run three radio campaigns across both national and local radio stations to raise awareness of the loan fund amongst local communities. The loan fund is demand led and there will be on-going promotional and awareness activities to ensure that awareness of the scheme is promoted to its full potential amongst relevant micro business groups across all sectors of business.