Dara Calleary (Mayo, Fianna Fail)

When we adjourned yesterday evening I had expressed my concerns over the lack of a derogation and particularly the impact that would have on our cost basis by comparison with the Northern part of the island and other locations in the UK with which we compete for industry. The consequences of that will be felt throughout IDA Ireland's work in coming years as it seeks to sell Ireland as a location for investment. It will be immediately obvious that we have this difficulty and I reiterate what I said last night. There is an onus on ICTU and IBEC in the few remaining days to try to reach agreement on this. They should knock their heads together in the interests of what everybody in the country and in this House seeks, which is job creation. We need to remove another competitive anomaly, which in this case is in our own hands.

Existing domestic legislation gives very substantial protection for temporary workers, which this directive reinforces. To make a point, as some have, that temporary workers are treated in some sort of third-class way is wrong and ignores the legislation already in place. Temporary agency workers work in many spheres. Last night, we spoke about the health area and there is also the service industry. However, there are also very high level agency workers in IT, agriculture, banking and finance - areas that are already under significant pressure. This legislation has been in gestation for some time - the negotiations began ahead of the crisis we are experiencing. Unfortunately, its imposition comes at the worst possible time. What was good in 2007 and 2008 in terms of worker protection may now be another negative for our cost base management in 2012.

The responses of the various organisations are starkly different. The American Chamber of Commerce Ireland submission in 2010 stated: "Transposing legislation needs to strike the appropriate balance between the need to maintain temporary agency work as an instrument of business competitiveness and labour market flexibility, and fairness in the protection to be afforded to agency workers." I do not believe we have that balance. While we have given the protection, by not getting a derogation we have struck the balance on the other side in terms of competitiveness. That is the biggest danger of its operation. Given that the American Chamber of Commerce Ireland represents organisations employing nearly 300,000 people here, we should sit up and take notice.

This needs to be placed along with the other decisions taken in recent weeks affecting our competitiveness and thereby impacting on the Government's aim for job creation, which everybody shares given our current unemployment crisis. Increasing the rate of VAT by 2 percentage points adds directly to companies' bottom line in terms of fuel and inputs. The decision on the redundancy rebate will hit many companies this year and force them to make decisions they otherwise might not have had to make. There have been various decisions from Departments, including the Department of the Environment, Community and Local Government waste management costs coming down the tracks in 2012. A large number of companies have received invoices this year for waste costs for the first six months of the year and not beyond that because waste management companies claim they cannot predict what the cost of waste disposal will be in 2012. All of those changes are eroding our competitiveness and sending the signal to businesses that while employment creation is an aim and aspiration, the reality is that we are introducing many terms and conditions that are blocking employment creation and will ultimately cost jobs.

Some 340 employment agencies will be affected by this. I welcome that an RIA for the Bill has been published - a number of Ministers could learn from the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, in publishing RIAs with legislation. Approximately 35,000 people are directly affected by this directive. The National Recruitment Federation claims the figure is approximately 42,000. While as a proportion of our labour force it is relatively small, it is sending the wrong message and is anti-competitive.

It is a message that will be used by competitors seeking investment around the country as a means with which to beat Ireland and run down its reputation as a place to do business.

I have no doubt that the Minister and his officials put every effort into sorting out the qualifying period issue. If we are serious as a society about job creation - I address this directly to IBEC and ICTU, in particular, ICTU as it is an all-Ireland organisation - then the social partners, rather than walking up and down O'Connell Bridge and putting banners on Liberty Hall, must explain why, in terms of this directive, workers on the Northern part of this island have one level of protection while workers on this part of the island have another. It is the lack of agreement between the social partners, in this case between IBEC and ICTU, that is forcing this uncompetitive situation on us.

As politicians, including Members of this House and the Seanad, we are blamed for everything. However, the organisations blocking agreement on this, and who because of the construct of this directive in terms of the European understanding of social partnership, have that veto, have a bigger responsibility in this case. They have a responsibility to knock their heads together, to on this occasion leave outside the door whatever grievances they have with each and to, for a change, act in the interests of job creation. This is a test for them. Implementation of this directive is a test for the organisations who hang on to what used to be social partnership. So far, they have failed that test and they have failed it abysmally. They now have a chance to step up to the mark and to get agreement before this legislation progresses to Committee Stage, thus sending to the people in 2012 the signal that they as organisations are real about job creation and are willing to do what needs to be done to facilitate it. If they did that in 2012, they would do the State some service.

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