Caoimhghín Ó Caoláin
Ceist:116 Caoimhghín Ó Caoláin asked the Minister for Enterprise, Trade and Employment his plans to increase penalties for non-compliance with employment rights legislation. [4117/06]
Other Questions.
Employment Legislation.
The issue of increasing penalties for non-compliance with employment rights legislation is likely to be raised in the course of the social partnership talks and will be addressed by the Government in that context. The Government takes the view that penalties should be proportionate in scale and effective in impact.
The imposition of penalties for non-compliance as well as redressing compensation to employees exists in over 14 legislative instruments from the Industrial Relations Acts 1946 to 1990 to the European Communities Protection of Employees and Transfer of Undertakings Regulations 2003. These penalties range from €1,269 to €12,500 for offences that range from failure to pay wages properly, failure to keep proper records, failure to co-operate with or giving false information to a labour inspector, failure to attend, comply with or give evidence to the relevant court, failure to comply with the conditions of employment fixed by an employment regulation order, and to effecting redundancies before the expiry of the 30 day notice given to the Minister.
Apart from penalties imposed under the legislation, redress or compensation is awarded to employees by the Rights Commissioners, the Employment Appeals Tribunal or the Labour Court. This ranges from one week's pay for unlawful deduction from wages to up to two years' salary for unfair dismissals, deterioration of conditions of employment after transfer of undertakings, or discrimination against fixed-term or part-time workers. The value of this redress or compensation increases as wages increase.
The levels of fines or redress are matters for the Rights Commissioners, Employment Appeals Tribunal or the Labour Court to decide on a case by case basis. In many instances the maximum level set down in the various Acts and regulations is not imposed. The labour inspectorate and the Department maintain that escalating penalties, interest charges, punitive damage and other such sanctions would enhance the compliance regime and underpin the general policy approach of our labour inspectorate.
I am concerned the Government is increasingly using the partnership talks process as an excuse to hold back on urgently needed legislation. We heard it in the response to the previous question, when Deputy Howlin and I were told that partnership talks were being used to negotiate protection for domestic workers. In this case the talks are being used to negotiate harsher penalties for rogue employers. SIPTU describes the penalties for non-compliance with employment rights legislation as "so paltry as to have absolutely no deterrent effect" and I agree.
Does the Minister agree that some employers calculate the savings to be gained by exploiting workers far outweigh the penalties imposed in the unlikely event of being caught doing so? Does he agree there is increased evidence of exploitation, particularly in the past year, that suggests we need to increase deterrents for these rogue employers, including penalties against them?
How many employers were subject to penalties for non-compliance with employment rights legislation in 2005? What was the largest such penalty imposed on an employer in 2005, a year of unprecedented revelations of worker exploitation?
Generally we agree with the Opposition in that we would like to see an increase in the penalties to act as a greater deterrent. While we are not waiting for social partnership discussions to conclude it will be discussed in that context. We are in favour of strong deterrents to prevent unscrupulous employers from breaking the law.
Our preferred policy, on which we have worked with the social partners, is to move towards a system that seeks and secures redress from employers, by agreement, where it is acknowledged that wrong has been done or the law has not been upheld. Going to court can sometimes be lengthy and is not always as effective as we might like to think. We have a variety of sanctions for employers found guilty of exploiting workers and so on, not least the withholding of work permits in the future.
We are taking a twin-track approach, namely, increasing the deterrents and establishing whether there are better ways to enforce labour law. The most recent and interesting case is Gama Construction in which our officials recouped and retrieved substantial funds and moneys for the workers concerned. The officials also sought assurances from Gama Construction about its future performance.
Unfortunately we saw in that case how Gama was rewarded for its waywardness by receiving the contract for the Castleblaney bypass. When will we see the results of this search for new ways of enforcing labour law? Ministers say they are looking at this, studying that or have commissioned a report from the other. When will something be done to change the actions of these rogue employers? There is a growing number of them and workers need to be protected.
I have formulated legislation which is going through House. If the Deputy co-operates we can get it through quickly. Committee Stage is scheduled for next week.
I told the Minister what SIPTU said.
It is not scheduled for next week.
We will find out soon when it is to be debated. It has reached Committee Stage. That is a substantive Bill to protect migrant workers. There is no point disagreeing. Most people accept it is a substantial advance on the current position.
We will debate that on Committee Stage.
That is action. An additional 95,000 people worked in the Irish economy last year. The Government has taken plenty of action on the economic front and in respect of the broad corpus of legislation in place.
It would be a good thing to employ inspectors to enforce the legislation.
We have passed the Minimum Notice and Terms of Employment Act, the Redundancy Payments Act, the Protection of Employment Act, the Unfair Dismissals Act, the Payment of Wages Act etc.
There are 31 inspectors for 2 million employees.
I hope the Labour Party supports the new Bill.
I do too.
Is the Deputy in favour of the Employment Permits Bill now?
Industrial Development.
John Perry
Ceist:117 Mr. Perry asked the Minister for Enterprise, Trade and Employment the reason the number of people working for companies backed by Enterprise Ireland fell by 218 in 2005; and if he will make a statement on the matter. [4066/06]
Job creation and retention in Enterprise Ireland-supported companies are day-to-day matters for the agency itself, and not ones in which I am directly involved.
Provisional figures indicate that in 2005 the number of jobs gained in Enterprise Ireland companies amounted to 12,212. That was offset by job losses of 12,430, giving a net decline of 218. I emphasise that those 2005 figures are provisional and will be finalised only when the 2006 Forfás employment survey is undertaken later this year. This time last year, the provisional figures for 2004 indicated a net job loss of 1,317 in Enterprise Ireland companies. However, outturn figures for 2004 now show that Enterprise Ireland companies created 15,933 jobs and lost 13,956 jobs, resulting in a net gain for 2004 of 1,977 jobs.
Where did they find the figures?
They come with a warning.
Where did they find those 2,000 jobs?
They were created towards the end of the year.
Despite the pressures experienced in some sectors, total unemployment in Ireland remains relatively low, at 4.3%, and economic growth is estimated at 4.8% for 2005. With more than 2 million people in work, Ireland enjoys one of the lowest unemployment-to-employment ratios in the EU 15.
In recent years, Irish manufacturing firms, particularly in more traditional sectors, have operated against a backdrop of significantly declining external demand, downward price pressure, and an increasingly competitive international environment, together with upward pressure on costs and the strengthening of the euro against our key trading partners' currencies. In contrast, the 12,212 new jobs created in Enterprise Ireland client companies during 2005 are heavily concentrated in high value-added, knowledge-based companies that offer greater security in the face of intense international competition. The headline figures do not reflect the considerable churn taking place in the Irish economy or the quality of jobs being achieved.
Irish manufacturing companies must increasingly compete though innovation, adopting best practice, maintaining a relentless focus on driving productivity gains and increased automation to maintain competitiveness. In addition, companies need to be outward-looking in their development strategies.
Enterprise Ireland's strategy for 2005 to 2007, which I launched last year, sets out the role the agency will play in transforming Irish companies into market-focused and innovation-driven companies with the ability to complete successfully in world markets. A significant initiative under the strategy is the productivity improvement fund, which supports manufacturing companies to adopt advanced technologies and focus on skill developments to improve productivity, thus laying the foundation for export readiness. Research and innovation are also critical to success in the increasingly global marketplace for all companies, regardless of sector.
Additional information not given on the floor of the House.
Enterprise Ireland encourages sustained levels of research and development activity through its RTI scheme and research and development initiatives. In addition, support for entrepreneurs to establish high-potential start-up companies, HPSUs, is vital to ensure a constant stream of companies providing valuable employment opportunities as such companies grow in scale. In 2005 alone, 75 HPSUs were established with Enterprise Ireland support in sectors as diverse as biotechnology, photonics, medical devices, functional foods, ICT and entertainment.
I am confident these measures will ensure a fully integrated approach to developing Ireland's indigenous enterprises.
I am not much the wiser from that reply regarding why employment fell in Enterprise Ireland-supported businesses in 2005. The Minister said a great deal, but I was not sure exactly what.
They may have to have a recount.
I am an expert on recounts.
It is a worrying development that Irish-owned indigenous businesses are coming under pressure. We saw the decline in manufacturing in 2005. The enterprise strategy report, Ahead of the Curve, was excellent, and the Minister has said that some aspects are being implemented. What action does he intend to take — I see none in the Finance Bill — to improve the take-up of research and development? The Government seems to be making no effort to promote research and development through greater incentives. The 20% incentive that the former Minister for Finance, Mr. McCreevy, introduced some time ago apparently is not being taken up. Perhaps it is not attractive enough or offset against payroll costs. Does the Minister have any initiative to ensure greater involvement by Enterprise Ireland in assisting companies in research and development to create added value and additional employment in 2006?
Enterprise Ireland and I have the substantive commitment to research and development. I am working with it to enhance and grow the number of companies engaged in meaningful research and development. Part of Enterprise Ireland's new strategic vision involves a defined objective in terms of the number of companies. In essence, it wants to double to more than 1,000 the number involved in significant research and development, which means spending more than €100,000. I am also working with Government colleagues to develop a medium-term strategic position on further ramping up research and development and investment in the country.
This Government, more than any in the history of the State, has created a new platform of research and development expenditure through the programme for research in third level institutions, PRTLI, and the SFI. We now wish to move beyond that to prepare ourselves and ensure that we are competitive enough to withstand the pressures of globalisation and so on. There is a great deal of action on the Enterprise Ireland front on research and development, and the kinds of technology-based companies now emerging as having high potential growth are quite significant and cutting it with the rest globally.
Perhaps I might say something.
That concludes Question Time.
I welcome the Ceann Comhairle back. We missed him.
Written Answers follow Adjournment Debate.