Jim Walsh (Fianna Fail)

Yesterday morning, all of the Oireachtas Members in Wexford attended the local radio station to talk about the major challenge and the greatest crisis facing our country, which is undoubtedly the unemployment situation. Without covering all of the ground covered there, several items arose during the programme, including the issue of the VAT increase of 2%. We saw the effect of this during the January retail sales, where there was a 3.7% reduction, and this will obviously result in a commensurate shedding of jobs in the retail sector. We discussed redundancy costs being heaped onto companies by the rebate being reduced, the proposal to heap sick pay back on small businesses when it had been taken up by the State, which will have a consequent adverse affect on jobs, and the reinstatement of the JLCs, in which the Minister was involved and which imposes on employers unsustainable salary and wage levels that the Minister knows give support to maintaining if not increasing the unemployment level. We also raised the issue of the minimum wage, which is undoubtedly one of the highest in Europe and is adding to our uncompetitiveness. These are all important issues.

It strikes me that a Government which has three times announced 100,000 jobs as being its target up to 2016 would at least have instituted a policy whereby all policies, legislation and decisions were job-proofed and that any Minister of any Department coming forward with proposals that might adversely affect jobs, or, conversely, help create jobs, would carry out an evaluation. That has not happened.

This directive came about in 2008. We would all agree that the first part of 2008 was an entirely different economic era to the current situation in Ireland. Jobs and economic recovery must be a priority, and I, my party and the Opposition in general will support any constructive measures in that regard. However, when the Government is going in the opposite direction, it is not alone our right to raise the issue but it is required that we would strongly challenge and oppose this.

With regard to the competitiveness of our country, for many organisations the employment of agency workers was to get over the fact the JLCs had set wage levels on an uncompetitive basis. This was often with the connivance of unions, which had an easy life because they were operating nationally and were not involved in local collective bargaining, where greater work is involved. In my opinion, we should have moved on this more than a decade ago and I raised these points at that time within my own party, at conferences and in this House. We should have moved in this direction sooner and abandoned social partnership.

To the best of my recollection, the unions withdrew from social partnership some three years ago. The Minister has observed that because those involved could not reach agreement social partnership is the reason we now have in place a system which is unfavourable to employers, even when compared with counterparts in the North. The directive allows the hiring company to choose the comparator and provides that the comparable rate which may be paid to the agency worker is the rate the hirer company would offer to a new recruit it was hiring today. As I interpret it, the Bill does not seem to reflect this and that change may be significant. It has been put to me, as I am sure it has been put to the Minister, that where a company has historic pay scales which may not have been used for five or six years or more and where it moves to an agency service in order to maintain its presence in Ireland, it will be disadvantaged in that it may have to offer these scales. There is also the issue of the two pay scales the Minister mentioned.

I understand last September the Minister wrote to the unions on the issue of a derogation. He has mentioned that without the benefit of leeway in transposing the directive in the shape of a framework agreement, Ireland will be at a significant competitive disadvantage vis-À-vis our European trading partners. This will be particularly significant, given that our immediate and major trading partner, Britain, has already secured agreement for a waiting period of 12 weeks, an arrangement which I understand also extends to Northern Ireland. In the current climate in which we face significant challenges on the road to economic recovery we must avail of the flexibilities afforded by the directive. I understand Hungary has been granted a waiting period of six months and Slovakia a period of three months. I am sure the Minister can give other examples.

If we are serious about the maintenance of jobs which surely must be our first step before we look to creating jobs, we must ensure we are not haemorrhaging existing jobs. Unfortunately, I am concerned that this is precisely the effect the Bill will have, and the Minister has acknowledged as much in his letters to the unions. The economist Jim Power has predicted that it could cost in the region of 10,000 jobs. There is no point in having a plan to create 100,000 jobs in the next five years if we are endorsing legislation which will have the opposite effect.

The Minister is a person for whom I have some respect. He has his own difficulties within the Cabinet with colleagues who have different philosophies and ideologies.