I propose: "That the Bill be now read a Second Time."
I am pleased to have the opportunity to present this important Bill to the Dáil. Enactment of the legislation gives us a wonderful opportunity, as a Government and people, to extend the hand of friendship and solidarity to the new European Union member states and to forge new alliances with these countries, many of whom will find themselves in a similar position to Ireland after we joined in 1973, in terms of economic situation, size and population.
The Bill is designed primarily to provide a legislative basis for granting 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 also taking this opportunity to put the employment permit regime on a more sound statutory footing. This 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 specifically in dedicated primary legislation, together with penalties for non-compliance by employers and employees.
Before explaining the provisions of the Bill, I will place it in context as part of the general enlargement of the EU, as well as the Government's approach to matters pertaining to economic migration. An additional ten countries are to be admitted to the EU with effect from May 2004, namely the Czech Republic, Hungary, Poland, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Malta and Cyprus. From that date, they will be party to the treaties governing the European Communities. While the treaties provide for full freedom for citizens of the accession states to move freely through the enlarged EU, they do not provide for unchecked, automatic access to all community labour markets. In this area, given concerns surrounding possible labour flows and 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 two accession states, Malta and Cyprus.
The essential components of the transitional arrangements that have been agreed at EU level apply equally to Ireland and all other member states. They 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 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, 16 April 2003. 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.
Turning to the current economic migration situation in the broader context of the Irish labour market, from 1997 to 2000, Ireland experienced an unprecedented level of growth of approximately 10%, year on year, in both GNP and GDP. This strong performance has brought about an unprecedented growth in the labour force, which, in the past five years has grown by 200,000 – currently 1.85 million – while the number employed has grown by 300,000 and is currently 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 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 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. This is particularly the case in relation to unemployment. There were 25,538 redundancies in 2002, 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 year 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 that 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 are made welcome in their places of employment and their new communities. Much of this labour migration is of a temporary nature and is 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 newly acceded member states from the date of accession, May, 2004. There are a number of reasons for this. First, and arguably most importantly, 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 countries.
There is no reason to believe that there will be a large flow of labour migration to Ireland from these states after accession, and 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.
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% or 13,752 of work permits issued in 2002, of which 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 contains a provision that allows for a possible re-introduction 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 pessi mistic assessment of our economic prospects over 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 Irish domestic legislation was more liberal than the treaties governing the European Communities 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.
This 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. 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 signing 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 the 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 am taking the opportunity to put the employment permit system on a solid statutory footing. Section 2 was first introduced as an amendment to the Immigration Bill 2002, introduced in Seanad Éireann by my colleague, the Minister for Justice, Equality and Law Reform, late last year. The introduction of that provision was intended to remedy a basic defect in existing law, that is, 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 this Bill will be enacted before the Immigration Bill 2002, I am taking the opportunity to include this section in the Bill before us. It will subsequently be deleted from the Immigration Bill 2002. This gives greater coherence to the proposed measures.
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 the rules and regulations of the employment permit schemes in place, there are individuals who do not operate within the confines of the law and who 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 it is an offence for the non-national, in general, to be in employment without an employment permit while the employer can take such staff on with impunity. It is also 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 the legislation will be published shortly after Easter. The current proposals are in no way a substitute for that Bill.
Regarding the provisions of the Bill, section 2 contains almost exactly the same provisions as sections 4 and 5 of the Immigration Bill 2003. Subsection (1) simply restates the present law, at Article 4(1) of the Aliens Order 1946, 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 this State is a concession granted by the State rather than a right.
This restriction does not apply to all non-EEA nationals. Section 2(10) lists the categories of non-nationals who are exempt from this requirement. These categories are: 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.
Section 2(3) is a new provision which creates a specific offence for an employer to enter into an employment contract in the absence of the neces sary 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. I am satisfied that it is right that we should take this legislative opportunity to redress the imbalance that has hitherto existed
A measure of the relative degree of wrongdoing on either side of the contractual relationship between employer and non-national employee in such cases can be seen in section 2(3), which specifies the punishments. The lesser offence lies with the employee but it constitutes an offence nonetheless. The employer offence, on the other hand, can be prosecuted either 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 in addition face a prison sentence of up to ten years.
The effect of the defence set out in section 2(4) is to place an onus on all employers, before they take on an employee, to carry out reasonably thorough checks to satisfy themselves either that the prospective employee, if a non-national, does not require an employment permit or that a permit has been obtained.
The fact that employing non-nationals without an employment permit is to be a serious criminal offence makes it necessary to ensure that sufficient powers exist to enable such offences to be identified and detected. Accordingly, subsections (5) to (9) of this new section provide powers for a garda to search premises, by warrant of the District Court if necessary, to punish the obstruction of such searches and to arrest an obstructer without a warrant.
Section 2(11), which specifies that, in the case where a requirement for employment permits is re-introduced 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 current member states to operate any transitional measures they may have in place on a "Community preference" basis.
Let us now move to section 3, which contains provisions specifically relating to the accession states. Subsection (1) exempts nationals from the accession states from the need to obtain an employment permit to work in the State. It states that countries that become member states of the EU after this Act is passed, yet who are not immediately granted freedom of access to the labour market in the treaty of accession concerned, will be granted full access to the Irish labour market. This will effectively exempt the eight accession states to whom transitional arrangements apply from the need for employment permits. As there is no transitional measure in relation to Malta and Cyprus, they will already be exempt from this requirement under section 2(I0)(c) of this Act.
Subsection (3) provides that if the labour mar ket is experiencing, or is likely to experience, a disturbance, the Minister may make an order providing that section 2 shall apply to some or all the accession states, meaning that nationals of these states will require employment permits to take up employment. It is simply there as a "safeguard" in the case of an unexpected shock to the domestic labour market. This requirement would only apply during the transition period and would cease to be valid once the full acquis on freedom of movement applies to these states.
Subsection (4) provides that in the event of a re-imposition of a requirement for employment permits for these new member states, at a date after accession citizens from these states already in employment in Ireland would not be covered by this requirement. This should ensure that such persons would not be at risk of losing their jobs in such circumstances. To avoid the possibility of tactically dated employment contracts designed to avoid re-imposed regulations in such circumstances, a six-week working period prior to the re-imposition is considered appropriate.
I trust that my remarks will have conveyed the important public policy goals to be attained by enacting the Bill before the Dáil and 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.