Minister Killeen addresses the National Recruitment Federation’s Annual Conference

Role of National Recruitment Federation/Regulation of Employment Agency Sector

I want to start by wishing you well in your work of establishing and maintaining standards and codes of practice for the Recruitment Industry in Ireland. You have done this by going beyond the requirement on members of the Federation to adhere to the provisions of the Employment Agency Act 1971- and all other relevant Government legislation, by requiring that members must also agree to abide by the NRF’s Code of Conduct. The value of these basic principles should not be under-estimated.

I understand that the Federation has over 100 employment agencies in its membership, and represents a very broad spectrum of the recruitment industry.

I would like to take this opportunity to welcome all the Speakers to the Conference and to thank them and the Chairperson - Simon McRory - for giving of their valuable time in order to be here today.

The speakers come from a broad spectrum of areas of the Irish economy which impact on the day-to-day activities of the recruitment sector. I have no doubt, that the eight speakers here this morning will raise many issues of relevance to the audience. I wish you well in your deliberations.

Unfortunately, I can’t stay for the duration of the Conference as I have an an-avoidable commitment in the Dail later in the morning. However, officials of the Department are present and I have asked them to answer any questions delegates may have on any current issues.

I would encourage the audience to use the opportunity during these panel discussions to raise issues of concern to them so that everyone here comes away from today’s Conference having picked up a new – and perhaps different - perspective on issues facing the sector and how these will impact on all the various players involved in the sector.

Having read the Conference brochure, I note with interest that themes of the Conference include:

• what clients want from employment agencies and
• requirements of the law in recruitment.

I would venture that one of the requirements of employee clients of employment agencies is that those agencies, when acting as employers should abide by employment rights legislation. I trust that all of the members of the National Recruitment Federation comply with such legislation. (If not, please leave your name and address with my officials!).

The primary objective of Employment Rights legislation is to protect employees against arbitrary or capricious behaviour by employers; to protect the safety and health of workers and to foster labour market harmony by promoting policies that minimise conflict and maximise fairness.

Employment Rights legislation has an important role to play in promoting labour market stability. The economic benefits of employment security and agreed employment relationships in terms of co-operative work place relations; greater internal flexibility; acceptance of technological change; cumulative skills acquisition and greater incentive for investment in human resources are widely recognised and accepted. Employment Rights legislation has an input in respect of each of these factors, as employees who enjoy good working conditions are likely to be more productive, better motivated and willing to embrace change.

Despite these obvious advantages, the Government must however, remain alert to the necessity of adapting employment rights compliance and enforcement to changing circumstances. Following on commitments in the Government’s own Programme for Government and in Sustaining Progress, the Government has taken a number of significant decisions to address the complexity of legislation in the employment rights area so as to improve understanding and compliance.

In particular, our legislation makes it clear that the rights of workers from overseas are equal to those of Irish workers. The vast majority of overseas workers have an entirely satisfactory interaction with the Irish labour market – an interaction that is beneficial to all sides and the economy in general. However, there are instances in which overseas workers have not been getting their entitlements in certain sectors and particularly in cases where they may be relatively isolated. It was for this reason that the Government has recently increased the number of Labour Inspectors to 31. These inspectors, have completed their initial training, are now in place and are conducting inspections.

I believe, that the existing very formidable corpus of legislation and associated rights and protection must be borne in mind in any debate or discussions on employment standards as we are sometimes asked to react as if there were no social and employment protection framework in place in the State.

The challenge in a rapidly growing economy like Ireland’s is to ensure that there is adequate, timely and effective enforcement of compliance with the statutory and other provisions now in place. You will be aware that these are the continuing subject of detailed consideration in the current ongoing negotiations with the Social Partners. Employment agencies are no doubt monitoring developments, as any final agreement reached by the Social Partners in the area of employment standards, will impact on their day-to-day operations.

Review of the Employment Agency Act 1971

One area under the social partnership process which has been ongoing over the last few years, is the Review of the Employment Agency Act 1971.

As part of the Government’s commitments under Sustaining Progress, in June 2005, the Department of Enterprise, Trade and Employment issued a White Paper on the Review of the Employment Agency Act 1971. The deadline for submissions was 15 July 2005.

I want to thank all the parties who made submissions including the National Recruitment Federation, the Irish Congress of Trade Unions - who are represented by Esther Lynch who is a Speaker here today and Parc Recruitment – who are represented by Frank Collins – who is also a Speaker here today.

The current position is that the Department is finalising the Heads of a Bill based on the submissions received. This process will be completed by the end of June 2006, in further consultations with the various interests. Government approval will then be sought to have a Bill drafted by the Office of the Parliamentary Counsel to the Government. It is hoped to publish this Bill in the second half of 2006.

Matters under consideration for inclusion in the Bill include providing for a system of registration of employment agencies based in Ireland, supported by an industry regulatory Code of Practice which will set out in detail, the practices and standards that employment agencies would be expected to follow. Another change is that a Statutory Monitoring and Advisory Committee - representative of all the various interests in the sector - will be established. This Committee will oversee the regulatory Code and make recommendations to me as Minister for Labour Affairs in relation to revoking or suspending registration and/or the prosecution of employment agencies who breach the Code.

I should add however, that it will be necessary to take account of (a) the potential impact of revised proposals from the European Commission on the draft EU Services Directive - which I will address shortly and (b) the free movement of persons, services and capital within the EU as laid down in the EU Treaty.

Revised Draft Services Directive

I think it is appropriate at this point to refer to the draft Services Directive which has been the subject of major debate over the last number of months. I think it is fair to say that this has been one of the most contentious proposals from the European Commission in a long time.

Many of you are no doubt aware, that following a Vote in the European Parliament last February, the European Commission undertook to prepare a Revised Draft Proposal to take account of the European Parliament’s amendments. This Revised Proposal was published on last Tuesday 4^th April.

It is therefore appropriate and timely that this Conference should be taking place when the European Commission’s modified proposal for a Services Directive has just been published.

My colleagues Minister Micheál Martin and Minister Michael Ahern will be working with our EU partners to get a meaningful Directive adopted consistent with ensuring that we strike the right balance between removing obstacles to the free movement of services, on the one hand, while upholding the integrity of national traditions in areas such as employment standards, on the other.

As you will know, Chairman, the Revised Proposal has excluded temporary employment agencies from the scope of the Directive. I note the disappointment of the European Confederation of Private Employment Agencies about their exclusion. I know that the industry has a lot to contribute to job creation at national level and at EU level and that a positive regulatory environment would contribute to the objectives of the Lisbon Agenda by helping to source scarce skills that the European Union needs.

Discussions on the modified proposal will get underway shortly. We are currently studying the new draft and we hope to see progress on it over the coming months. Creating a single market in services is important for our economy and for job creation.

We will see how the negotiations unfold over the coming months.

As you know, Chairman, the Services Directive has been a very controversial measure. Commissioner McCreevy has now proposed a carefully crafted compromise. It behoves all of us to study it in detail and to ensure that we get the best out of it that we can for Irish service providers and consumers while ensuring that important standards are maintained.

Revised Draft Services Directive and the inter-play with the Posting of Workers Directive 96/71/EC

A major issue in the discussions on the original Draft Services Directive was the inclusion of what was commonly referred to as the “country of origin” principle – and how it would impact on the Posting of Workers Directive 96/71/EC. It will be recalled that the original proposal in the Services Directive contained a derogation from the “country of origin” principle in the case of posted workers covered by Directive 96/71/EC.

However, following the removal of the “country of origin” principle as part of the European Parliament’s Vote, the European Commission undertook to examine the practical day-to-day implementation of the Posting of Workers Directive. To that end, the Commission also published on 4^th April, a Communication on Posted Workers, entitled "Guidance on the Posting of Workers in the framework of the provision of Services".

Employment agencies will be aware that the definition of a “posted worker” in the Posting of Workers Directive, includes workers who, during the period of posting, have an employment relationship with an employment agency in the country from which the worker is posted.

I should stress, that under section 20 of the Protection of Employees (Part-Time Work) Act 2001, such posted workers have the same employment rights entitlements as Irish workers employed in the company to which they have been posted.

The European Commission’s Communication assesses in some detail the pro’s and con’s of Member States implementation of Directive 96/71/EC regarding:

1. Monitoring in respect of the Legislation
2. Ready access to information
3. Co-operation between Member States regarding compliance and
4. Irregularities, detection and sanctions applied

The Communication concludes that there is an urgent need for clarification of control measures which Member States can use, in the light of Article 49 of the EC Treaty as interpreted by the European Court of Justice rulings, and for an improvement of access to information and of administrative co-operation. It calls on Member States to ensure that the guidance and orientation provided in its Communication will have a visible impact in the very near future.

In order to access progress, the European Commission intends to adopt within 12 months a Report which will examine the situation in all Member States. In this connection, the European Commission intends to:

•  -  address to Member States and the Social Partners, a Questionnaire both on their own measures and also on how they perceive the measures or actions of others in this area. I presume that employment agencies will also be consulted as part of this process;

• -  monitor Member States compliance with the guidelines on access to information, Codes of Conduct and exchange of information;

• -   make a Customer-Feed-Back Form available and monitor "users" feedback on the European Commission’s own website.

If, as a result of all of this, the European Commission comes to the conclusion that compliance with the relevant provisions of Community Law and/or the co-operation between Member States under Article 4 of the Directive have not substantially improved, the European Commission will take the necessary steps in order to remedy this situation. My understanding of what is meant by this is that the Commission may amend Directive 96/71/EC or perhaps, take Infringement Proceedings to the European Court of Justice against individual Member States, if they deem such a course of action to be necessary.

I should say that at this stage, there is no indication yet from the current Austrian Presidency as to when it might facilitate a discussion on the Commission’s Communication.

The European Commission’s Communication will need to be considered against the background of the ongoing Draft Services Directive deliberations and also the continuing interest in the fate of the Draft Temporary Agency Workers Directive which is again attracting considerable Trade Union and Industry commentaries across the European Union.

Draft EU Directive on Temporary Agency Workers

The Draft EU Directive on Temporary Agency Workers is naturally of interest to those of you attending this Conference this morning. In this regard, discussions at European Council level on the European Commission’s amended proposal of 28 November 2002 have been stalled since late 2004.

The main outstanding problems lie in finding the right balance between protecting temporary agency workers and providing sufficient flexibility in the labour market, while at the same time, respecting the different practices and traditions at national levels.

In this regard, as you are no doubt aware, a number of Member States, for example, place restrictions on the use of temporary agency workers in sectors of their economies. We do not however, have any such restrictions in Ireland.

Article 5(4) of the draft Directive, provides on the other hand, that the principle of equal treatment in relation to pay should not be given to an agency worker until he/she has completed six weeks work in an employment/user-undertaking to which such temporary workers are assigned.

Ireland has stated that we would join any consensus which would meet our concerns of fair treatment and flexibility. Ireland has been looking for an appropriate “waiting period” to reflect the nature of temporary work in the Irish labour market.

Ireland has consistently sought to secure a flexible framework which would enable Member States to transpose the equal treatment provisions in a manner consistent with promoting job creation and making temporary agency work more attractive, while taking into account the varyinglabour market conditions pertaining to the different Member States.

In the light of the European Parliament’s Vote on 16 February 2006 on the Draft Services Directive, discussions on the Commission’s proposal of November 2002 may be re-opened at Council level – although I should say, that it is again unclear at this stage, as to what the current Austrian Presidency’s plans are in this regard.

Should the Austrian EU Presidency re-open these discussions, the Irish Government will continue to play a positive role in ensuring that a satisfactory outcome is achieved to reflect the concerns of all of the various interested parties in Ireland including employment agencies and agency workers.

Chairman, I have outlined in some detail to the Conference the various issues which are currently “live” at both national and EU levels which have a direct impact on the activities of the employment agency sector.

Delegates will appreciate that these issues are evolving and will continue to “run” over the coming months. I will be happy to meet with various interests – including the National Recruitment Federation – to update them on progress on these various issues.

In the meantime and in conclusion, I want to wish all here good luck in their work this morning – and later on in the afternoon – on the Golf Course!

ENDS

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