Deirdre Clune (Cork South Central, Fine Gael)

We are having this debate in changed circumstances to those that were in place when the framework for this legislation was drawn up under the social partnership agreement Towards 2016 in 2006. In that time the employment situation has changed considerably. The Government and the social partners could not have predicted such a haemorrhaging of jobs as has been seen recently. There was a record increase in the number of people on the live register in January and February, with twice the number joining the dole as did in November 2008. Over 340,000 people are now unemployed with the Taoiseach admitting unemployment could reach 400,000 by the end of the year. If the rise continues at the current rate, the final figure will be much higher. There is general agreement that unemployment could reach 11% by December.

The National Employment Rights Authority, NERA, was established to support employees' rights at a time when the citizens of new accession EU member states could seek employment in Ireland. The economy needed them to fill vacant positions. Since then, we have had a harsh dose of reality. The Bill must now be considered in the context of rising unemployment and ensuring employers are kept in business and can continue to offer employment.

Employees need protection and support from the State from unscrupulous employers. We all know of the high profile cases such as the Gama workers. There are other reports of abuse across all employment sectors. I am not singling out or giving absolution to any one but there is a need to protect employees. There is also, however, a need for balance and a fair approach. In 2006, NERA carried out over 2,000 inspections for minimum wage compliance with breaches in only 104 cases. In 2007, there was a similar detection rate with one prosecution. The minimum wage legislation is only one measure to protect workers with a raft of other measures in place such as health and safety, work time, maternity leave, etc.

Mr. Pat Crotty, chairman of the Small Firms Association, recently informed the enterprise committee that a small firm employer will need knowledge of 40 items of employment law to ensure compliance with employment regulations. We must keep in mind the current pressures on businesses. This Bill should not view employers and businesses as being out to exploit workers. Many hard-working employers are committed to growing their businesses and offering employment. This Bill will only add to the increasing bureaucratic burden on employers.

The House has debated the difficulties faced by small businesses in the current economic environment. We must recognise that they need to be protected and supported rather than having onerous legislation imposed on them. According to representatives from small businesses, the Bill, as drafted, will stifle the employment creation potential of many small firms. As they informed the enterprise committee, would they risk being the subject of 23 new criminal offences as contained in the Bill to employ someone in order to grow their business? The safer bet, they claim, is to stay as is by not increasing employment, but actually reducing it where possible.

The legislation will change the existing relationship between employers and employees. It will potentially criminalise employers, giving NERA the power to impose on-the-spot fines without giving an employer a chance to rectify a problem. Provision for fines of up to €250,000 and prison sentences for non-compliance is also made.

Employers will be obliged to register employees and obtain passport identification in respect of them in certain circumstances. They will be also obliged to provide employees with statements of service when they leave their positions. That is fine for companies with 100 or more employees which would have the human resources personnel in place to deal with such tasks. However, the provisions of the legislation will also apply to businesses that employ only one person. The Government must recognise that small businesses are being overburdened. Like previous speakers, I wish to ask the Minister of State whether a regulatory impact statement, RIA, might be completed in respect of the legislation to identify the effect it will have on employers and the costs to which it will give rise.

Small businesses are the backbone of the economy and we are becoming increasingly reliant on them. Such businesses must be protected. We must acknowledge the risks taken by those who establish a business and employ, for example, two to six people. These individuals are obliged to pay rent and high local authority charges. Representatives of the Vintners Federation of Ireland came before the Joint Committee on Enterprise, Trade and Employment yesterday and indicated that water charges have increased threefold in the past two years. That is a major burden on any small business.

It is becoming increasingly difficult for businesses to operate in this country. The banks are not facilitating them because they are not releasing funds. When the recapitalisation scheme was implemented, the Minister imposed a condition in this regard. However, representations have been made to Members on all sides with regard to how difficult it has become for businesses to access funds. These businesses are viable, are a strong presence in their communities and have a future. It does not make sense, therefore, that they are not being supported during this difficult period. There is no doubt they will get their affairs in order. However, the banks are not making funding available to them.

The Minister of State indicated recently that the question of the minimum wage must be addressed. I do not believe we can afford to reduce the minimum wage but I am of the view that it should be frozen for a number of years. As the Minister of State is aware, the minimum wage is set at €8.65 and everything is relative to it. I accept that employing people has become expensive but I do not believe those at the lower end of the income scale should be targeted. Ours is a high-cost economy and it is becoming difficult to do business here. In that context, I would support a freeze being imposed in respect of the minimum wage.

The Bill will impose an additional burden on employers which they cannot afford during this difficult period. Is it really necessary to establish the National Employment Rights Agency, NERA, as an autonomous body? Would it not be possible to have NERA inspectors operate under the aegis of the Department of Enterprise, Trade and Employment? There are now so many inspectors in NERA that it recently turned its attention to the restaurant and hospitality sector outside Dublin. Many establishments which serve food on Sundays have been obliged to stop doing so because the employment regulation order that is in place — to which a blind eye was previously turned — is being enforced. Increasing numbers of these establishments cannot trade on Sundays because it is impossible for them to pay their employees double time. The latter is unnecessary in this day and age.

I have spoken to many people who were let go because their employers could not afford to pay double time. The individuals in question are students or young mothers — who would be covered from a child care perspective — who want to earn money by working on Sundays. The situation is ludicrous. Some progress has been made in respect of premium rates for Sunday work but we will be obliged to see how matters develop. It does not make sense that, in respect of this matter, there is one rule for Dublin and another for Cork and other places. In an era when people expect to be able to shop on a 24-hour basis, one would certainly expect to be able to order soup and a sandwich in one's local pub on a Sunday. Pubs should not be obliged to shut down their kitchen operations on Sundays as a result of a restrictive regulation that makes no sense. It is bureaucracy gone mad.

The Bill is over-burdensome and unnecessary and should be reconsidered in light of the changing economic situation. It will be responsible for jobs being lost rather than being protected. I will be particularly interested in discussing on Committee Stage section 45, which relates to electrical contractors and which is particularly over-burdensome. Many members have been contacted by such contractors in respect of this section. I look forward to the debate on Committee Stage and to highlighting the difficulties being experienced by employers.

See this speech in context