Seán Connick (Wexford, Fianna Fail)

I am delighted to have the opportunity to contribute to the debate on the Employment Law Compliance Bill. For some time, I have expressed, both publicly and at meetings of the Fianna Fáil Parliamentary Party, major reservations with regard to aspects of this Bill. However, I take this opportunity to commend the Minister of State, Deputy Kelleher, on his efforts on our behalf, particularly in the context of the recent statement with regard to paying employees double time on Sundays. I acknowledge that the Minister of State has been extremely attentive in respect of this matter and is doing his best on our behalf. He has been, however, somewhat hindered by some of the mechanisms that were put in place in recent years. I hope action will be taken in respect of those mechanisms in the coming months.

The most significant element of the Employment Law Compliance Bill is that it will place the National Employment Rights Agency, NERA, and its powers and responsibilities, on a statutory footing. NERA was established on an interim basis in 2007 and from what I have seen of its operations since then and from what I have heard from employers and employees about the methods it has employed to date, I would be extremely concerned with regard to it being placed on a statutory footing. The approach NERA has taken towards many local businesses in my constituency has been, to put it mildly, heavy handed. Alarm bells started ringing approximately one year ago about NERA's activities when groups, not just employers but also employees, contacted my constituency office, either by telephone or in writing, and outlined the difficulties they were experiencing.

There is no doubt Members do not want to see workers being taken advantage of. The shameful treatment of workers in Irish Ferries in my constituency a number of years ago showed that a small number of employers will put their profits before the rights and entitlements of employees. It is, therefore, correct that we should put in place procedures to combat the abuse of workers. However, in light of NERA's actions in recent years, I cannot but think that our response to companies such as Irish Ferries has been similar to the approach of using a sledgehammer to crack a walnut. In trying to stop these blatant abuses of workers' rights, we are primarily targeting small companies that are struggling to survive in the current economic climate. NERA is putting these companies under pressure to such an extent that jobs are being lost in County Wexford and elsewhere throughout the country.

I have been a Member of the Dáil for 20 months. I come from a self-employed background and one of the most frustrating things for me is the lack of speed with which we deal with issues relating to government and Government policy. Business and what I refer to as the real world move at a rapid pace, but Departments and the House operate at a different speed level when dealing with issues of huge concern to the private sector.

Small businesses have huge difficulties at present. Most people who are self-employed consider their businesses and the work they are trying to do completely over-regulated. There is probably a huge lack of knowledge of employment law in the private sector. Most people who open small businesses concentrate on getting the rent down, the shop fitted out and the stock in place before taking on two or three people to work for them. A month or two later when things settle down they discover there is a raft of employment law of which they were not aware and with which they will have to deal as they try to run their businesses. The NERA has a role to play in that area in terms of its information campaign. A number of efforts have been made by the NERA over the last number of years to try to promote the importance of its work and role, but it has a huge role to play in ensuring that the information gets to all small businesses.

I understand 19 joint labour committees have been set up. They are the result of employment regulation orders with which, again, I have no difficulty. They have existed for a long time. However, the priority of the joint labour committees is to protect workers' rights. I believe they have failed in this, particularly with regard to the catering sector. They have failed to protect the most important item, which is jobs in the sector. Thousands of jobs have been lost because of a decision by joint labour committees, who purport to represent all the organisations representing hotels, restaurants and other sectors. I have found that most small businesses are not members of these organisations and they do not feel that the organisations broadly represent them. They are faced with a situation where a labour charge for Sunday work has been imposed on them.

I recall from when I was self-employed that while the rates collectors were nice people and I knew them very well, one was never happy to see them arrive with the bill because it was seen as another tax. This was particularly so if they arrived on a day when one had received a difficult bank statement or a machine had broken or one was faced with other costs. To have a NERA inspector arrive on one's doorstep is also very worrying for the employer, particularly if he feels he has been doing the right thing by paying his workers a fair rate and not over-working them. Despite that, he is now facing very stiff penalties, in view of some of the rules and regulations coming on stream.

The representative bodies of the JLCs must be much more flexible in their approach and more proactive in dealing with the issue. For over a year I have been raising the double time on Sunday issue, where we had the ridiculous situation of Dublin charging one and a third while it was double time in all the rural areas. This has cost us a huge amount of jobs throughout the country.

We brought this to the attention of the Minister of State and I am aware he has been in touch with the joint labour committees. However, I first raised the matter last July. Why has the joint labour committee not met, if it is the representative body of all these groups who are lobbying Deputies on all sides of the House? Why has it not been able to deal with this issue? It is clear to everybody that this is causing huge concern and is costing jobs. I call on the joint labour committee to meet immediately about this sector and to deal with the issue as quickly and efficiently as possible.

I have a number of letters — I will not give the names of the individuals concerned — that give a flavour of what we are facing in terms of the reaction of small businesses to NERA and this Bill. The first letter is from a landlord whose tenant is an Indian restaurant. He states:

As I am sure you are aware, the Employment Compliance Bill (Or Anti Employment Bill) shall be coming before the Dail for enactment within the coming months. I hereby plead with you not to support this Bill in order to save thousands of jobs and business's throughout Ireland. The hospitality and catering sector can simply not afford to have anymore anti business legislation enforced upon it. I should add that I have no problem with employment laws in general and that I would never tolerate any abuse of an employee in any shape or manner. However, the pendulum has swung severely to the left in this country now and the results of this can be seen at the many lengthening dole queues throughout the nation as I write.

I also received a letter from the representative of one of the major hotels in the county. He says:

The hotel industry is a seven day week operation more so than any other industry in the country. Any employee joining the industry is fully aware of the business and what it entails and accepts that weekend and Sunday work is the norm. I would note that Sunday opening for retail outlets has only been widespread over the last 10 years due to consumer demand but yet they are only obliged to pay a third premium.

The payment of double time for Sunday means that for the most basic job within the hotel we are required to pay €20.13 per hour. This is before the imposition of holiday pay and Employer PRSI which brings the ultimate hotel cost to in excess of €24. This is uneconomical and while the hotel industry is a seven day week operation, the rest of the week is in effect subsidising the Sunday. This has already seen hotels curtailing their services and hence the number of staff they require on a Sunday While we have not yet taken this course of action, it is certainly one that we are considering.

Within the JLC, there is no clause to claim inability to pay, and as a result we are legally obliged to pay all entitlements under the JLC even though it could lead to the closure of our business. [This business employes over 400 staff].

2008 has been a very difficult year for our hotel group, with sales decreasing on average 15-20% since June on the comparable months from last year. As a result we are now running a wage percentage of 41% to 30th September 2008, which when you consider that we have 2 of the quietest months of the year (October and November) still to feed into this figure, it will ultimately mean a likely wage percentage of in excess of 42% for the year. This is certainly not sustainable.

One can see the difficulties people are encountering in the industry. For that reason I am hugely concerned about what we are about to do with the NERA. The NERA has been particularly vigorous over the last year in targeting small businesses. The previous speaker alluded to the fact that it has targeted the hotel and catering sectors. Wexford is no different. I have met a large number of employers and employees who have told me about the problems that these NERA inspections are causing them. Hotels, pubs and restaurants are curtailing their services on Sundays. Many of them no longer serve food on Sundays and jobs are being lost as a result. How is our local tourism industry going to survive if visitors to Wexford and other counties have difficulty getting a meal on a Sunday? It is crazy.

Many of the businesses being affected by these inspections are struggling to survive at present. They are facing the uncertainty of whether they can pay their bills and wages each week. Instead of recognising the difficulties they are facing and offering them some sort of assistance, we are inflicting NERA inspections on them. A number of employees of one business came to my office after a NERA inspection and presented me with a petition asking the Government to stop NERA from ensuring that they are paid the Sunday premium. They did not want the money, even though NERA insisted that they take it, because they saw Sunday as part of their normal working week. They were afraid the business they worked for would have to close on Sundays because it would not be able to afford the extra wage costs.

This particular business was also caught for lump sum payments, which is very difficult for a small business to take on board. I have heard that some lump sums are a minimum of €15,000 and sometimes more. In fairness to the employers, I believe they genuinely did not know that they were supposed to pay the particular rate at the time. This relates to my earlier point about ensuring the information gets out to the businesses concerned. Government agencies should not make people fear for the security of their jobs. People are already fearful in the current climate. Unfortunately, that is exactly the result of NERA's operation.

Another reservation I have about the Bill is the level of powers being given to NERA and the free hand it is being given in carrying out inspections. Under the Bill, NERA is given the legal right to carry out unannounced inspections on any business premises in the country, even when there is no suspicion of any wrongdoing. The civilian equivalent of this would be to give the Garda the power to enter and search a private home without any cause. In my view, all inspections should be by prior appointment only. If one is due for a tax audit, the Revenue will write to inform one of the date. NERA should not be any different in that regard.

We have also been told that one of the instructions given for NERA inspections is that they be carried out at a reasonable hour. I know of a case in my constituency where NERA inspectors entered a restaurant at 8 p.m. on a Saturday night — the busiest time in the restaurant's week, and the only time it was anywhere close to making a profit — and insisted that the restaurant owner sit down with them and go through all the employment records. The owner had to debate whether to shut down the restaurant to deal with the inspectors. Is 8 p.m. on a Saturday night NERA's interpretation of a reasonable hour? That is absolutely ridiculous and should not be tolerated by business owners or this House.

I am very concerned about the lack of accountability for this State agency that we are about to put on a statutory footing. I have raised many issues in that regard in recent months but I was told that nothing could be done because NERA is an independent body. There is no mechanism in place where Members of this House, or people affected by the inspections, can raise legitimate concerns about the activities of NERA and have them addressed. I understand an advisory board is being established and the director of NERA is required to have regard to the advice of the board. However, he merely "has to have regard" to the advice. Does having regard to advice mean that the issues raised will be acted upon? I am worried by NERA's lack of accountability and I urge the Minister to consider the matter.

One of the sanctions specified in the Bill is that a business owner who has been found guilty of malpractice will bear the cost of the investigation, but there is no reference to NERA bearing any costs for the loss of business to a company that was investigated and found not to be involved in any malpractice. A measure of that nature would be an interesting option to consider and could make NERA inspectors more accountable for their actions. It would make them more understanding of the huge pressures businesses face in today's market and I hope it would bring an end to the practice of inspecting busy restaurants not only on Saturday night, but on any night. There is plenty of time during the day to carry out their work.

I am also concerned about the criminal charges that are envisaged as sanctions under the Bill. We will make it a criminal offence for an employer not to display a notice telling employees how to contact NERA. Surely that is going a step too far? Most businesses now have a wall full of certificates, notifications and paperwork on them already. Perhaps the matter could be addressed by the dissemination of information by NERA. There are no less than 23 new criminal offences under the Bill. We have already seen the difficulties caused by criminal offences to fishermen, yet we are treating another area of small business in the same manner. What self-employed person would be given any incentive to try to grow a business by hiring employees when it would be much safer to continue working at his or her current level? Many of the criminal charges are a further obstacle to job creation and I am extremely concerned by them. As the fines range from €5,000 to €250,000, I can foresee a scenario where the key will be handed to the NERA inspector or a court because businesses will not be able to cope.

All speakers have alluded to the fact that we are in difficult economic circumstances at present. The first concern for anyone with an interest in the economy, be it Government, State agencies, workers, employers, the joint labour committees and the social partners, must be to create conditions that will promote the retention of the maximum number of people in employment. We must be aware of the current circumstances and the impact the terms and conditions of the Bill will have on the ability of businesses to provide employment. Everyone has a duty in this regard. However, I am concerned about the role of NERA as it currently operates and as it is proposed to operate under the Bill. Perhaps a two-year sabbatical could be introduced to allow businesses to get back on their feet. That time could be well spent on the education of employers and employees regarding their rights and of the role NERA will have in the future. I urge the Minister of State, Deputy Kelleher, and the Tánaiste and Minister for Enterprise, Trade and Employment to take on board the serious concerns that exist about this Bill and to consider the various measures proposed in it and whether they will help or hinder the process of maintaining employment in the small business sector.

Flexibility is key in small businesses. I have a very good friend in the grocery business. He told me he employs a number of girls to work on his deli counter. Under employment law they must have a break between 11.30 a.m. and 2.30 p.m., which is the busiest time for the deli counter. He cannot afford to give his staff a break during that period but under employment law he cannot afford not to allow them to take an hour's break. He is in a difficult situation. In the real world people have to show flexibility in terms of working time and working hours. The reality is that those workers work during that four-hour period and take their break before or after it. NERA must be watched very carefully and encouraged to be pro-jobs, especially with a view to job retention, in addition to its current role of protecting workers' rights.

See this speech in context