Mr. Neil McDonnell:

I apologise for my absence from the committee room. I had indicated I would attend but I would be afraid I would pass on something nasty. ISME thanks members of the committee for the opportunity to discuss the impact of changes to Covid-19 and other incentives for business.

We wish to state how helpful the main employment supports have been in preserving the relationship between employer and employee during the pandemic. Despite the size of the schemes, we understand abuse of the pandemic unemployment payment, PUP, and employment wage subsidy scheme, EWSS, to have been relatively small. However, we are aware of reported cases of abuse of PUP by a small number of employers paying workers for services on a cash basis when those workers were availing of PUP.

The commercial rates waiver and the warehousing of VAT and PAYE liabilities, which are not normally counted among the enterprise supports, have also provided a substantial boost to the liquidity of businesses which are starved of turnover. We are aware of some members who have already started to discharge their liability as trading improves rather than leaving reconciliation out to the start of 2023. The local authority restart grant, restart plus grant and small business assistance scheme for Covid were well received and highly successful in assisting businesses which remained closed. After a poor start, the credit guarantee scheme has now made approvals of around €500 million or 25% of the funds available. The future growth loan scheme, which provides longer dated debt, has proven far more successful and been oversubscribed. We are glad to see a revised version of this on offer.

We see some problems on the horizon as we exit the pandemic. In terms of recruitment, general operatives for production seem to be very hard to recruit. One member reports no applicants for two months. They would previously have been processing approximately 20 applications per month. Businesses are looking for guidance on recruiting directly from abroad. We have directed them to the EU recruitment portal and are looking into other routes. This has always been an issue for employers such as nursing homes, in particular.

Engineers are proving very difficult to recruit. Employers are looking for guidance on the visa process for recruitment of persons from outside the EU, including processing times, appeal processes and so on. It is likely that employers will press for more occupations to be taken off the ineligible occupations list. Queries to date have been on issues including sourcing welders and metal workers, who are currently ineligible for visas.

There are ongoing issues with workers in the night-time economy, who remain concerned at the possibility of further lockdowns or restrictions. Of course, this submission was sent to the committee before the restrictions announced by the Taoiseach, so this problem is likely to exacerbate.

Recruitment difficulties appear to be a widespread phenomenon in Europe and the US. We believe it is a multifactor problem. Factors include a general reluctance to return to workplace settings during the pandemic; a liquidity-induced consumer spending boom that has stretched supply chains everywhere; Brexit-induced administration that has increased back-office demands in import and export; improving economic prospects in eastern Europe that are attracting their emigrants, who have been a traditional source of labour here, home and driving wage growth in those economies; significant amounts of state and private sector capital expenditures drawing human resources; and the cost and scarcity of accommodation making even highly paid employment in Ireland, especially in the cities, more unattractive.

From a return to work perspective, some employers are reporting employees who are reluctant to return to a workplace setting.

In other cases, employees want to return to work but offices are not yet properly set up to accommodate them from a health and safety point of view. We are also getting a lot of queries on the redundancy process, fair selection criteria, standard redundancy templates, levels of redundancy payments and so on. We see this as indicative of the scarring effects of the pandemic which are going to hit us after Christmas.

We are also receiving queries on changing terms and conditions of employment to reflect reduced working hours or working from home. We have ongoing reports of difficulties with unvaccinated workers and issues around the redesigning of work, objections from colleagues and so on. Substantial numbers of personnel working from home on a semi-permanent basis will have implications for employers’ liability insurance and for capital expenditure where companies need to purchase laptops instead of desktops and to adequately equip employees for a working from home environment.

While we are grateful to the Oireachtas for the speedy enactment of the Companies (Rescue Process for Small and Micro Companies) Act 2021, it has yet to be commenced. Since we are likely to see a significant number of SMEs becoming insolvent post pandemic in the first quarter of 2022, we would like to see the Act commenced as soon as possible.

Although this is slightly off-topic, I must register our concern at the rapid rate of inflation in wage and input costs, most especially energy costs. This input inflation is running at rates not seen for more than a decade and will have to be passed on by SMEs to the end customer or to business. It is also clear that insurance reform has stalled or, indeed, regressed. The ink is barely dry on the revised awards levels set by the personal injuries guidance committee of the Judicial Council in March but they are already being ignored by some members of the Judiciary. Thus, despite the fact that awards levels in the round are seen to be declining, employers’ liability and public liability insurance are increasingly difficult to secure and, in some sectors, quotations are not being provided for certain activities. These sectors typically include businesses involving physical or sporting activity, especially for children. The liability attached to operators is effectively strict liability and underwriters do not see them as an insurable risk at any price. We can no longer kick the can of insurance reform down the road and this must be an area of urgent focus for 2022.