John Perry (Sligo-Leitrim, Fine Gael)

This Bill comes to us from Europe and is part of a suite of workers' rights legislation. As we can see from the guidelines regarding Irish Ferries, workers' rights must be enforced and constantly updated. We need to be able to deal with new issues as they arise and while we have solid protection measures in place for employees, there will always be a minority of employers who will try to find a way around issues such as the minimum wage. We must be vigilant and protect against such practices. We must lead the way on this issue and support workers of all nationalities as best we can by ensuring they enjoy the benefits of the minimum wage and the protections afforded by trade union membership. The greatest investment any company makes is in its employees. Successful companies work in partnership with their employees in a spirit of transparency and collective thinking.

Irish Ferries re-flagged one of its ships, the MV Normandy, at the start of this year. That ship now sails under the flag of the Bahamas. This action was part of an effort to avail of low-cost contract staff. The company received a heavy subsidy from the State when redundancies were made in the past and this seems to have been the go-ahead for what is now taking place. The majority of staff on the MV Normandy is from Eastern Europe. It is unacceptable that workers' rights should be exploited in this way. Many members of the staff at Irish Ferries have been with the company for decades while the employees from Eastern Europe have far shorter tenures. The former are free to apply for voluntary redundancy under the terms offered but the issue is the management shift in the company from a permanent to a casual staff. Through its actions, Irish Ferries can reduce its wage costs by 50% in pursuit of the bottom line of profitability.

It is the case, however, that Irish Ferries worked within the law in the actions it took. I urge the Minister to lead the way in fighting against this type of behaviour. I am not sure what he can do because we operate in a system of free trade. It is important, however, that for any similar company with its head office in the State, there should be a law to deal decisively with issues such as security of tenure for workers. As an island nation, we are dependent on sea and air transport. It is critically important that we promote business in terms of the level of imports and exports. The responsibility is with the Minister to ensure there is transparency and that there is information on the number of staff on the payroll of such companies and the benefits they receive. We must work with our European partners to stop companies operating in EU seas when involved in these practices. EU law must be changed to protect workers and there is no reason that Ireland cannot lead the way in this fight.

Overall, the Bill is to be welcomed. Its provisions will emphasise the Government's role in protecting jobs. The high-cost economy which is influenced by stealth taxes and the stacked up costs affecting every business, impacts strongly on our competitiveness. The high cost of fixed charges is one of the reasons that many companies will utilise an option within the law to cut costs in regard to employees. The workforce is the backbone of the economy and we must ensure employees enjoy the respect and support they need.

Under the Bill, employers must provide information and consultation on issues they could previously have kept private from their employees. Such issues include the probable development of a firm's activities, the structure of future employment in the business and any decisions likely to lead to major changes in work organisation or contracts. The Bill also obliges employers to provide enough information to enable worker representatives to make adequate preparations for consultation. Good business is all about consultation with staff and such an approach makes good economic sense.

I also welcome the inclusion of penalties in the legislation, according to which employers will face fines of up to €30,000 for breaches of the law. As is the case with all Bills, the legislation is pointless if it does not contain penalties that will deter employers from not adhering to it. It is, however, unfortunate that the Bill does not legislate for companies that employ less than 50 people. This is a major mistake because the backbone of our successful economy consists of small companies which employ less than ten people. The definition of a small or medium enterprise in Ireland is considerably different to what is understood in other European states. A company with 50 employees might be considered very small elsewhere in Europe but constitutes a sizeable enterprise here. The Minister of State might respond in regard to the definition of an SME.

That the legislation does not apply for companies with less then 50 employees represents a major cop-out. In every town and county, companies mostly employ less than 50 people. There is no doubt that small firms have a particular need to be protected from over-regulation. They are the backbone of many communities which do not enjoy investment from large corporations. The Government must endeavour to protect them at all costs because they have driven the economy. We must ensure, however, that workers in small firms are not treated as inferior to their counterparts in large companies. People should not be treated with less respect or afforded fewer rights simply because their employer has fewer staff than a major multinational. It is a question of equality of access and services.

Another major fault of the legislation, which represents a transposition of an EU directive into Irish law, is the amount of time it took to come before the House. The process of consultation began three years ago and the deadline for submissions from interested parties was September 2003. The original target date for the enactment was March 2005 but it is now November. While I am not in favour of legislation being rushed through, neither do I support a situation where legislation takes three years to come before the House. It is far too long, particularly in the context of employee protection. When a need becomes apparent for legislation, we must endeavour to work quickly to fill the gap.

Notwithstanding these concerns, I support the Bill. It is very much needed to enshrine employees' rights. I am sure my colleagues will put down amendments on Committee Stage. I seek assurance from the Ministers that we will see action on the issues of Irish Ferries and the re-flagging of ships. Ireland must take a lead on this issue. We have witnessed first-hand that re-flagging of ships is wrong and should not be allowed. We must now meet our European partners to discuss in depth the issue, which will have a significant impact. It cannot be put on the back burner and must be addressed as a matter of urgency.

The protection of employees is vital to the growth of the economy, which has been facilitated in large part by small firms in every village and town. Small acorns have grown into a large oak. The tourism sector, in particular, comprising hotels, restaurants and the providers of other critical services, has been driven by small companies whose employees work passionately, often seven days a week. It is important that eastern European staff in the catering sector should enjoy the protection of the minimum wage and the other benefits enjoyed by Irish workers. It is vital that they receive the benefits of this legislation. They are here to make a living and the new law in regard to work permits will facilitate them.

It was reported in the newspapers during the week that up to 150,000 people from eastern Europe are working in Ireland. It is important that they are welcomed. They play a critical role in the growth of the economy and I have no doubt they will add considerably to Ireland's status as a tourist destination. The growth in our economy owes much to the services sector and we must ensure it continues to thrive. Small companies will continue to prosper as the backbone of the successful economy.

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