Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I welcome the introduction of the Bill. One of the fundamental cornerstones of the profit theory is the higher the risk, the greater the reward. In other words, a person who risks his or her money in a highly volatile investment usually expects a greater reward as a result of taking a greater risk. This principle seems to have been turned on its head in employment practice throughout the western world. Today it is generally those who are paid least who face the greatest employment risk, while those who are paid most face the least risk.

Unemployment in Ireland has fallen in the past ten years. However, in many cases the new employment which replaced the employment that was lost is precarious. That means that it is insecure, uncertain and often low paid, in which the risk is shifted from employers to workers. This takes the form of bogus self-employment, to which I will return later if I get a chance, zero-hour contracts, if-and-when contracts in the so-called gig economy, as well as changes in the working hours of those in more common forms of employment. While the quantity of employment has undoubtedly risen in recent years, the quality of employment has fallen drastically in tandem in the same period.

The precise number of employees on precarious contracts in Ireland is unknown, but I suspect it is a moveable feast. However, some information can be gleaned from statistics compiled by the CSO. Ireland has the second highest level of underemployment in the European Union after Spain. Some 7.5% of employees in Ireland report seeking additional hours; the EU average is only about half of that rate. In the past ten years the number classified as underemployed in Ireland has increased by over 50%. This compares with growth of just over 30% across the European Union during the same period.

This is not a problem at the fringes of the job market. Individuals on precarious contracts work in all sectors and all occupations. Casual labour has traditionally been a feature of the construction and hospitality sectors, but it is now rapidly growing in other sectors, including the health care and early child-care sectors. The advent of social media has placed pressure on the traditional media, which is reflected in the fact that an increasing number of contracts of individuals employed in the media can be described as precarious. A recent study estimated that up to 40% of third level lectures are now being given by lecturers on atypical contracts. The same increasingly applies in the IT sector. Therefore, the practice is widespread. Needless to say, this has negative consequences. It certainly has negative consequences for employees. I argue it also has negative long-term consequences for employers. For employees, the position is obvious. They cannot afford to get sick, or to have a car crash or a family emergency. If they have any of these things, they will not be working or earning. They are often in a permanent state of limbo, at the whim of their employers. Their lives could be said to be permanently on hold. They cannot plan their lives and certainly not their finances. In many cases, they cannot access credit because they cannot prove how many hours a week they are working because there is nothing to indicate it, a point to which I will return, but that is not all. Generally, they are lower paid and have lower job satisfaction. They enjoy less on-the-job training and are considerably less likely to be promoted. All of the research shows that they form the category at the highest risk of poverty in the population.

I have also seen a huge amount of anecdotal evidence of the consequences for their mental and physical well-being. Many studies have shown that the negative effects of job insecurity on physical and mental health can be as great as or greater than the effects of unemployment, thereby giving the lie to the old canard that it is better to have any job than no job. All of this is underpinned by a system of distorted incentives, created no doubt in good faith. It is something at which we will need to look as we go through the year in dealing with social welfare issue.

This segmentation of work has given rise to growing income inequality across the world, as the gains from economic growth are increasingly being divided between those in full-time secure jobs and those who are not. High levels of income inequality will in the long term threaten growth and social stability. The sense of injustice that has arisen from increasing income inequality and the sense of insecurity which has arisen from the increase in precarious work practices have fuelled populist movements across the world.

In reading the documentation surrounding the committee's report on its discussions on the previous Bill I noticed that IBEC had sought to construct a completely alternative narrative. I understand it is seeking to argue that nowadays people want to work like this because they can look after their families or they need more leisure time. It has suggested they are very lucky that employers have now reached the stage where they are able to facilitate them and that we are all one big happy family, but that is not the reality. It is the reverse of the truth. The reality is that for the overwhelming majority of those on precarious contracts, their conditions are not chosen but imposed.

I said there were significant costs for employers and there are. The cost of administering all of this tends to make a business less competitive. There is obviously lower employee commitment and staff co-operation. Teamwork is also lower. Much of the research has shown that while there may be some short-term savings for employers, they are more than offset by long-term losses in productivity.

During the debate on the committee's report the then Minister of State, Deputy Carey, claimed that the Government Bill was infinitely better than the one debated by the special committee, even as amended by it. I have read the Bill before the House as carefully as I can and the validity of that statement is not immediately obvious to me.

I want to raise a number of issues with the Minister, the first of which is the 18-month reference period. In her opening contribution she stated that one of the things that underpinned the legislation and had helped to shape it was the study carried out by the University of Limerick. To the best of my recollection, the study recommended a reference period of nine months. I think the committee then agreed on a compromise period of 12 months. Today a period of 18 months has been presented to us. I do not see any logic to it.

The normal budgetary cycle in which people prepare their accounts, tax returns, etc. and plan their budgets is 12 months. The Minister mentioned the need to account for seasonal adjustments. One 12-month period contains all the seasons. One does not have to go past a 12 month period to measure seasonal adjustment. On the other hand, I suggest to the Minister that 13 months might be an appropriate period. Somebody has to be working for at least 12 months to be covered under the terms of the Unfair Dismissals Act. To ensure those people are protected, a period of 13 months would be much more logical. I have a real problem with the bands as proposed by the Government. Only four bands are proposed and they are very wide. I welcome the introduction of the one hour to ten hour band. That being said, we must bear in mind that precarious contracts give unscrupulous employers immense power to control and manipulate their workforce. The larger the bands, the greater the capacity for manipulation. For example, take a situation where somebody is in the 11 to 24 hour band. If that person is proving troublesome or is acting in such a way that the employer would prefer if he or she is not around, if that person is at the top end of the scale, the employer can move him or her gradually towards the bottom end of the scale which would result in a tremendous penalisation. More than half a person's income can disappear.

The Minister will say there are anti-penalisation measures in the Bill to deal with that. We will argue this on Committee Stage and put forward the appropriate amendments. I do not think the anti-penalisation measures do what they say on the tin. They are quite weak. They would need to be strengthened and the bands would need to be narrowed. Another reason to argue for a narrower set of bands is that if a person, who works 20 hours per week in the 11 to 24 band, is seeking credit and goes to the credit union for a loan, all he or she will be able to produce is evidence that he or she is working in a band of between 11 and 24 hours per week. In other words, all the person giving the loan will be sure of is that the person seeking it is working for at least 11 hours per week. Increasing the number of bands would not completely eliminate that problem but it would certainly mitigate it. Take the example I have given. If the band was up to 16 hours, then 17 to 24, that person would be able to show that he or she was working for at least 17 hours per week. That has to be seriously considered.

I received some documentation today from the Mandate trade union which contains some of the terms under which people are already working by way of collective agreements. Despite what we have heard from IBEC and others, those arrangements are working very well. It is very instructive to read them and to look at the bands. The bands are generally for approximately five hours, not 11 or 12 hours. We will have to look at that very closely. There are a number of other matters which are more Committee Stage matters but I would like to refer to them now. I have a difficulty with the exclusion of casual work. The term "casual work" is not defined in the Bill and if somebody doing "casual work" is not covered by the terms of the Bill then the protection and rights afforded by the Bill do not extend to him or her. If something as wide as casual work is excluded without any definition, it will enable certain employers to say that they are classifying some work as casual work and, therefore, the people doing it are outside the terms of the Bill. In fact, they could even go to the extent, as sometimes happens with bogus self-employment, of getting people to sign a declaration that work is casual work. I do not think the anti-penalisation measures sufficiently deal with that issue.

I welcome the extension of the information provisions, but I am not convinced that a criminal offence is required. Generally speaking, employment law has functioned reasonably well without the necessity of importing criminal law into it. The solution would be to make the civil enforcement process more transparent and much more efficient, which would involve employing extra personnel at the Workplace Relations Commission and various other bodies dealing with this area. A law which states somebody can go to jail for 12 months if he or she does not provide information in time seems a little disproportionate. I have no overwhelming objection to it, but I think that the matter could be more easily resolved through changing some of those structures and procedures to which employees have to have resort.

The Bill claims to practically eliminate zero-hour contracts and if-and-when contracts. The only way to really eliminate zero-hour contracts and if-and-when contracts is to guarantee a minimum amount of hours of work. It need not be very many - a couple, three or four. That is not provided for in the Bill and we have to look at that. There is a glaring gap in the Bill in that it does not seek to do anything about the phenomenon of bogus self-employment. I recently had a meeting in Limerick with tradesmen who work in the building sector. They are building houses for the State. Their employer called them in about two weeks and said that they were self-employed from Monday on, that they were independent contractors, responsible for their own tax and PRSI, and that they did not have any rights relating to unfair dismissal, notice or minimum terms, things which had been built up painstakingly over many years. It is amazing that this can happen in this day and age. To take a simple example, there is a distinction in a tax law between how an employee and a self-employed person are treated. As Deputy Willie Penrose will probably be aware, there is a whole raft of case law, fine distinctions and detailed judgments on what an employee is and what self-employment is, yet we are in a situation in this country where an employer can get out of bed on Monday morning and decide, at the stroke of a pen, that a person is self-employed. That is not acceptable. I note the recent joint report by the Department of Finance and the Department of Employment Affairs and Social Protection. I dismiss it as spin. We all know the figures and have plenty of anecdotal evidence of the growth of this phenomenon. It is a scam which is costing the State a lot of money. The Departments' joint report estimated that it was costing €60 million a year. It is a multiple of that figure, about which there is no doubt.

I have a question for the Minister. If somebody is entering into a precarious contract with part-time hours or whatever else, the sort of person the Bill has been designed to deal with, and the employer says there is a job but the person must sign a piece of paper stating he or she will be self-employed, does that render the legislation null and void where it relates to that person?

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