Micheál Martin (Cork South Central, Fianna Fail)

When Ireland was a relatively low-cost environment in manufacturing, we were quite successful in attracting investment at that end of the mobile investment market. However, as the world changed, we were obliged to adapt and develop other points of competitive advantage in the newer international economy and to move up the value chain. A key selling point in the armoury of IDA Ireland has been the evidence that Ireland's work practices are flexible while still reflecting the broad social protection to workers embodied in European Union employment legislation.

Generally, companies in the foreign direct investment sector tend to pay employees well and broader conditions of employment are also attractive. More than 1,000 such companies in the country employ more than 136,000 people in total and more than 50% of the workers concerned have salaries of more than €40,000 per annum. A considerable number of companies in this sector are clear that they need a stable operating environment in which rules and obligations are transparent and predictable.

However, my continuing contacts with this sector have made it clear that the importance of continued flexibility in the labour market to the sector should not be underestimated. Deputies will have seen how some of the larger EU member states lost competitiveness and labour market flexibility in periods of expansion that looked as though they would never end. However, they ended and it has proved extremely difficult for those member states to regain the lost labour market flexibility as those in secure employment are reluctant to agree changes aimed at assisting those in precarious employment or those who are out of work. This has been a feature of other economies. The key challenge in this respect is to find the appropriate balance at any given point in a society's development. In making decisions in the short term, one must bear in mind their long-term consequences.

The Government supports the concept of equal treatment in the area of employment relationships and its record in negotiating and agreeing an appropriate legislative framework to this end is solid. There is no question of employers being able to use the flexibility associated with agency working as a means of avoiding what are accepted as normal obligations in an employer-employee relationship. However, there is a very valid argument regarding both the content of what might constitute equal treatment and the period of employment after which it should become mandatory. While the draft EU directive provides for the effective protection of derogations regarding equal treatment negotiated at social partnership level in various member states, as drafted at present, the balance was not in accordance with Ireland's national needs or perspective. As an aside, Ireland cannot block an EU directive on its own. It is a physical and numerical impossibility.

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