Speech by Minister of State Killeen at the Labour Relations Commission Symposium ‘New Perspectives on Workplace Change’

Employment Rights Compliance - programme for legislative and organisational change - Towards 2016In Croke Park on Thursday 9 November, 2006

I welcome the opportunity to address this important symposium to speak about employment rights and compliance in the context of the national partnership agreement - Towards 2016.

Ireland’s comprehensive body of employment rights legislation protects employees against arbitrary behaviour by employers, provides for the safety and health of workers and fosters labour market harmony by promoting policies that minimise conflict and maximise fairness.

While a broad level of compliance with employment rights exists there is a widespread recognition that compliance with legal requirements needs to be underpinned by adequate enforcement. This requires, in addition to the proactive promotion of employment rights and enhanced inspection arrangements, the active and responsible contribution of employers, employees and trade unions. Compliance must have the active support of the Social Partners. It must educate people and promote entitlements. It must also place particular emphasis on workers from overseas. Confidence in the maintenance of Employment Rights will be assured by having easy access to independent and workable means of redress supported by a fully resourced inspection regime to ensure compliance.

It is against this background that a major package of measures has been agreed by the parties to Towards 2016 to provide for enhanced public confidence in the system of compliance. This New Compliance Model seeks to maximise the effectiveness of the substantially increased compliance effort and simplify the adjudication and redress mechanisms available in the employment rights area. The general approach of the new compliance model is that matters be resolved at the level of the workplace where possible; that interactions between employers and trade unions or employees be supported by the enhanced employment rights promotional and educational efforts directed at them; and that initiation and ownership of cases will rest with the complainant, insofar as possible.

The package of measures will include the establishment of a new statutory Office dedicated to Employment Rights compliance, a trebling of the number of Labour Inspectors to 90 together with more staffing resources for the adjudicative bodies such as the Labour Court, the Employment Appeals Tribunal and the Rights Commissioner Service.

A new statutory Office of the Director for Employment Rights Compliance, or ODERC, will be established under the aegis of the Department of Enterprise, Trade and Employment, led by a Director at top management level. The ODERC will be supported by a statutory Advisory Board with an independent chair. Towards 2016 also provides for a major enhancement and expansion of the existing Labour Inspectorate with the number of Labour Inspectors within ODERC to be trebled by the end-2007 and the provision of legal, accounting and other administrative support to ensure its effective functioning. Recruitment arrangements for the Director and senior management of the ODERC are at an advanced stage and I intend to establish the Office on an interim basis as soon as possible. The Government is also committed to increasing the staffing resources of the Employment Rights Bodies generally. This will support both the accelerated processing of cases through the adjudication and redress system and our objective that employment rights cases, will be heard in the first instance by the Rights Commissioner Service with subsequent appeal to either the Employment Appeals Tribunal or the Labour Court. Additional support staff will be provided for the Employment Appeals Tribunal, the Labour Relations Commission and the Labour Court and additional Rights Commissioners will be provided, increasing, as necessary, in line with the Commissioners’ caseload.

No matter how good a compliance system we have there will always be instances where issues require to be resolved – fairly and quickly – as such matters are often harmful to the individual and damaging to employment relationships. I am particularly pleased that the new compliance model has found favour with the Social Partners as it will not only be effective in promoting compliance but will also retain the fairness and impartiality so necessary while providing for ease of understanding and use. The informal yet fair and effective Rights Commissioner Service will be the initial point of contact with the adjudication process. Penalties for non-compliance will range up to €250,000 with adjudication bodies being able to award up to two years pay by way of redress.

I also propose to make provision for improved record keeping in order to protect workers’ employment rights and to ensure consistency between statutory employment records and record keeping requirements for employers in relation to, for example, taxation and social welfare. Employers will have clear responsibilities in relation to the maintenance and production of up-to-date statutory records. Failure to do so will be a criminal offence subject to summary or indictable proceedings. Where redress proceedings in relation to non payment of statutory entitlements are being taken to the Rights Commissioners, Employment Appeals Tribunal, Labour Court or Court of Law, the onus of producing evidence of payments made or deductions from pay and hours worked will rest with the employer.

The Government will provide statutory protection to an employee who, in good faith, has made a complaint to an appropriate authority, including to ODERC, against his or her employer under any employment rights provision and who is subsequently dismissed or otherwise penalised arising from the complaint.

In order to ensure enhanced co-ordination between organisations concerned with employment rights compliance the ODERC will develop an ongoing structured dialogue with the relevant bodies and, where possible, develop and agree memoranda of understanding between the Labour Inspectorate and these bodies. In addition, the existing monitoring and inspection activity in relation to compliance in the electrical contracting sector will be strengthened by amending legislation to support new organisational arrangements while the Labour Inspectorate will be empowered to join with the Department of Social and Family Affairs and the Revenue Commissioners to work together in the Joint Investigation Units. Such units will have a particular focus on the employment status of workers.

The new employment rights compliance model will be supported by more intensive promotion of employment rights, obligations and entitlements to employers and employees and to workers from overseas in particular. The Social partners and other organisations will be invited to bring their knowledge and networks to bear on the design and delivery of this education and awareness programme. This will include a publicity campaign, with an emphasis on workers from overseas and on the sectors in which they are employed in significant numbers, setting out their rights in a range of languages.

Much employment arises because of procurement by the State of construction services particularly to meet national objectives. Towards 2016 marks the agreement between the Social Partners that contracts for such services should reinforce Employment Rights standards and facilitate compliance. This is a comprehensive and coordinated response by all parties to ensure that all people working on such projects, be they employed by main contractors or sub-contractors, get the agreed terms and conditions while meeting requirements for competitive tendering and value for money”.

The changing patterns within the Irish Labour Market in recent years, with many migrant workers coming here to work, have brought an increased risk of exploitation not only in terms of employment rights generally but also in relation to the initial facilitation and establishment of such workers. This is particularly the case in regard to agency workers who may be employed outside the State and who come to Ireland to fulfil a contract.

The existing legislation governing employment agencies dates from 1971 when many Irish workers emigrated, mainly to the UK to work.

The parties to “Towards 2016” have agreed on the need for the improved regulation of employment agencies and agency workers in the context of a review of the 1971 legislation. New legislation to be published before the end of this year will reinforce the existing system of regulation by requiring that all employment agencies established and/or operating in Ireland hold a licence. In this regard, the legislation will set out the conditions for the granting of a licence.

The new legislation will also put in place a statutory Code of Practice covering standards of behaviour for employment agencies. Compliance with the Code of Practice will be a condition of licensing. The terms of the Code will be developed in dialogue with the parties to the agreement and other relevant interests.

In preparing the legislation, in consultation with the Social Partners and other interested parties, it will be necessary to have regard to ongoing discussions and developments at EU level in relation to posted workers and the Draft Services Directive.

Other matters under consideration for inclusion in the Bill include providing for the establishment of a Statutory Monitoring and Advisory Committee - representative of all the various interests in the sector. This Committee could oversee the regulatory Code and make recommendations in relation to revoking or suspending registration and/or the prosecution of employment agencies that breach the Code.

Collective redundancy situations

Towards 2016 also provides for an agreed structured response in the event of situations of exceptional collective redundancies. This demonstrates the resilience and capacity of Social Partnership to act responsibly in situations which could be damaging to good Industrial Relations and responds to widespread public concerns while being mindful always of the necessity to ensure sustainable employment and conditions.

In order to ensure that redundancies are in fact genuine as opposed to situations where workers are simply replaced in the same job by new workers performing the same tasks at lower wages, legislation is currently being drafted in the Department of Enterprise, Trade and Employment to set up a Redundancy Panel in accordance with the agreed terms of Towards 2016.

The Panel will deal with compulsory collective redundancies and will enable employee representatives to request the Minister for Enterprise, Trade and Employment to ask the Labour Court for an Opinion as to whether or not proposed collective compulsory redundancies are in fact genuine, without any replacement/displacement. Both IBEC and ICTU will be represented on the Panel, with the Chair being provided by the National Implementation Board (NIB). The Minister may on his own initiative refer such a case to the Labour Court for an Opinion.

If proposed redundancies are found by the Court not to be genuine, such cases may be deemed to be unfair dismissals under the Unfair Dismissals Acts 1977 to 2001, with a right to take a case to the Employment Appeals Tribunal (EAT) or a Rights Commissioner as the case may be. The new legislation is expected to provide for an enhanced level of awards in such cases. Furthermore, such an Opinion by the Court would lead to the Minister for Enterprise, Trade and Employment conducting his or her own examination of the application for an employer rebate.

The proposed revised arrangements will not interfere with normal and legitimate business activity, where these specific circumstances do not arise and will not become a normal feature in the conduct of industrial relations but, rather, should only be used in these exceptional circumstances.

The legislation necessary to give effect to the new mechanism will be published before the end of this year. The necessary amendments to the Protection of Employment Act 1977, Redundancy Payments Acts 1967-2003 and the Unfair Dismissals Acts 1977-2001, will all be based around the definition of an exceptional collective redundancy situation and the agreed circumstances in which it applies.

A central conclusion of the recent NESC reports on Migration Policy is the importance of labour market policy. The success or failure of migration depends, to a significant extent, on how well the labour market works for both migrants and Irish citizens. The employment permits system, which supports labour market policy, also has an important contribution to make in the protection of individual worker’s rights and supporting employment standards.

The Employment Permits Act 2006 puts in place a statutory framework within which a responsive, managed and skills-based immigration policy can be implemented and introduces important new protections for migrant workers.

The Act provides that an application for a Green card/ Employment Permit may be made by either the employer or employee; but in all cases the Card/Permit will be granted to the employee. This ensures that workers are aware of their status and should lead to a reduction in the numbers becoming undocumented. Employers are also prohibited from deducting recruitment expenses from the remuneration of employees. An employer who contravenes any of the provisions of the Act is guilty of an offence and may be liable for fines and/or imprisonment.

Other protections prescribed in the Act include a prohibition on the retention by employers or persons acting on their behalf, of personal documents of the employee, including passport, driving licence or identity card; the requirement that permits should contain a statement of the entitlements of the migrant worker including their remuneration, their right to change employers, and any deductions for board and accommodation; and the requirement that permits should be accompanied by a summary of the principal employment rights of the employee. It is intended that the new economic migration arrangements will take effect in early January 2007.

As part of the comprehensive package of Employment Rights, following on a review undertaken by the University of Limerick on behalf of the LRC, the Joint Labour Committees, which establish terms and conditions for a range of sectors, will be modernised. Furthermore, it is a reflection on the extent of change in Irish society that the Social Partners have agreed to the development by the LRC of a code of practice for people employed in other peoples’ homes.

Of more interest to the generality of people was the provision in Towards 2016 for the Social Partners to make a joint recommendation to Government as to the amount of the increase in the National Minimum Wage to take effect on 1 January 2007. In the event, no agreement has been reached between ICTU and IBEC. Accordingly, ICTU has referred the matter to the Labour Court asking that the Court examine the national minimum wage and make a recommendation to me on the matter. In accordance with the terms of the National Minimum Wage Act, 2000, the Court is currently engaging in a consultation process as part of its examination of the application.

Finally, the successful implementation of the new system of employment rights compliance sets challenging targets for us all; the Government, employers, employees and the Social Partners alike. I am confident that we can all respond positively to these challenges and build a compliance model which will serve us well into the future.

Thank you.

ENDS/LA 216