Gerald Nash (Louth, Labour) | Oireachtas source

That is fair enough. I thank the Minister for his response, and I thank especially Deputy Farrell and her colleagues for taking the time to construct a thoughtful and well considered Bill that is designed to address the issue colloquially known as low-balling.

I accept the Minister of State and the Department are making efforts to improve the procurement situation and the management framework for major projects. It is fair to say that some lessons have been learned from the catastrophe, in the context of public expenditure, that is the national children's hospital and the national broadband process farrago. Have the Government's interventions gone far enough? It is arguable that they have not.

The Bill attempts to address some of the inadequacies inherent in the system. It is crucially important that those inadequacies are addressed in the context of the vast sums of taxpayers' money, derived from the hard work of the citizens of Ireland, that will be deployed in delivering the €140 billion national development plan over a period of ten years.

Never were value for money, transparency in public tendering and delivering on tenders for critical public infrastructure more important than they are now. Over the years, tenderers and contractors have, quite frankly, taken the State for a ride. They have routinely added fat to contracts, safe in the knowledge that, if they came in with a lowball tender way below what anyone would consider a reasonable price for a job, they would get the job and could then come calling again to say that they did not have sufficient resources to compete the job and the State would ask how much was needed and when it could put the money in their bank account. I am summarising the course of events, but that has been the case. It has been quite typical of situations we have seen over the years.

In fairness, the Bill presents a considered approach to the problem. If we do not address the question of lowballing in tendering and procurement in a comprehensive way, we will end up paying a very heavy price. There will be a cost to the State. This will not only be a financial cost, but a cost in terms of the underdevelopment of the critical infrastructure we need to make our economy and society work. There will also be a critical cost in respect of the State meeting its climate mitigation and adaptation targets. We are in trouble on that count, as the Minister of State will know from the report the Climate Change Advisory Council published yesterday.

I am very interested in section 2 and the way in which the Bill seeks to address that particular issue, which is that a red light goes off when it becomes clear that a tender is way of the radar. I know there are structures within the Department to examine abnormally low tenders but nobody could say that they are effective enough. Section 2 of this Bill tries to go a little bit further and to enhance and improve the system as it relates to the examination of those issues. The Minister of State mentioned that it is a requirement under the current code of practice in the Department to examine absurdly or abnormally low tenders. It is the case that there is a requirement to reject tenders that do not comply with social, environmental or labour law or regulation. However, while this is theoretically true, it has not always been put into practice. We know that from direct experience. I know that from speaking to the constituents I represent and my trade union colleagues. I have been raising this issue time and time again, ad nauseam, for as long as I have been in these Houses.

I will now address one of the key issues, which was referenced by colleagues in their earlier contributions. This is the issue of bogus self-employment and the misrepresentation of the reality of the employment relationships of construction workers. That goes to the absolute core of this problem. While the Minister of State may say that labour law must be complied with, the reality is that the practice of bogus self-employment is not, in itself, unlawful in this country. It is undesirable and not something that should be tolerated, but it is tolerated. I will go further and say that, in some respects, the gaps in our law encourage the practice.

I introduced legislation in the Seanad in 2017 in respect of the misclassification of someone's employment status and the misrepresentation of its true nature and my colleague, Senator Marie Sherlock, introduced legislation with a similar intent this year. The 2017 Bill was rejected out of hand when it was quite routine, under the guise of the so-called new politics, that much-derided term, to simply send Bills to the place where Bills go to die with the promise that Government would consider them at some point in the distant future. However, the Government at that time made a point of voting against the Bill in question on Second Stage. I find that curious because the reality is that there is only one winner when it comes to the phenomenon of bogus self-employment, that is, dodgy and bad bosses.

The truth is that the phenomenon of bogus self-employment cheats the State by way of lost PRSI and income tax revenue. Because the employment status of workers is deliberately misclassified, their entitlements under the social protection system are affected. Misclassifying the employment status of their workers enables dodgy contractors to win contracts but it leaves those workers in a tremendously invidious situation as regards their employment rights and social benefits, including holiday leave, sick leave and so on. This issue is at the core of the problem, which is why I am dwelling on it in the context of the Bill before us. It is real problem. I have made attempts to ensure that those who are caught up in these insidious practices are protected and that the true reality of their relationships with their de facto employers are recognised properly.

The contractors operating these kinds of systems should be subject to the full force of the law. That is why the legislation which I and my colleagues introduced sought to describe employers who are involved in these kinds of practices as tax cheats and to ensure they were treated as such. If you decide to tender for a contract with the Department of Transport, you need a tax clearance certificate. You need a clean bill of health from that point of view. It is high time that we started treating employment rights and the phenomenon of bogus self-employment in the same way. The Minister of State is right that, theoretically, if a contractor does not comply with social, labour or environmental laws he or she will not be considered for a contract, but the situation is somewhat different in practice.

This goes back to the very grey area of bogus self-employment. I had reasons for establishing the sectoral employment order system back in 2015, a system which is operating in the construction sector. One of the reasons was that I wanted to ensure a level playing pitch with regard to labour costs for all of those decent contractors who were applying for various tenders in the normal way, through the procurement process. Those decent employers are being undercut all the time by people who are engaged in dodgy practices. It is simply not good enough. It is not something this Government, or any government, should stand over.

We are not going to be able to deliver the national development plan or to successfully award the kinds of contracts the Department wishes to under that plan if we do not have a sufficient number of skilled building workers to deliver the projects. The Minister of State should mark my words: we need to deal with the issue of bogus self-employment. We know from our own experience on the ground that, while the number of apprentices is improving, there are families across the country who have been tradespeople for generations but who will not encourage their own sons or daughters to get involved in the building sector because of the phenomenon of bogus self-employment. The Irish Fiscal Advisory Council recently concluded that we need approximately 30,000 additional building workers in this country. There is no chance whatsoever that we will achieve that target if we do not deal with the fundamental issue affecting that sector.

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