Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

Question 4: To ask the Minister for Enterprise, Trade and Employment, in view of recent revelations of abuse by subcontractors, the measures he is taking to ensure that the official net payment documented by employers corresponds to the actual payment received by employees; and his views on whether the existing system of documentation is sufficiently detailed and transparent to act as both a deterrent to and indication of abuse. [11552/06]

Tony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

In accordance with its remit under employment rights legislation the labour inspectorate is empowered to examine particular employer records. In this connection, inspectors can examine copies of statements of pay, payslips, and reconcile these with the payroll records. In addition, inspectors can examine the working time records an employer is obliged to maintain. The preparation and production of false records is an offence.

In this connection, however, the Deputy is advised that the Department in its discussion document, Report on the Mandate and Resourcing of the Labour Inspectorate, recommended a streamlining of the record keeping requirements to tie in with the statements of pay. In addition, the report called for a significant revamping of the statement of pay so that there will be absolute transparency in the rate of pay per hour, the hours worked, the relevant calculation in respect of all deductions made and the eventual remuneration paid. The report of the employment rights compliance group, which informs the current partnership talks, indicated that there was a consensus between the social partners on progressing this proposal.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

The nub of the problem is that a payslip can say one thing while the reality may be different. What, specifically, will the Minister of State do to amend this? Is there a legal difficulty in terms of access to bank account details which are the only real way to verify the actual payment made? How does the Minister of State intend to overcome the difficulty created where an employer makes deductions for accommodation or other expenses related to the work?

It is clear we all agree there is a problem because the employment rights group and the partnership process are focusing attention on this issue. What specific solutions has the Minister of State for the problem? If we take the example of the situation at Moneypoint, the ESB was unable to ascertain what was going on, despite the fact it had audits. It was not the arrival of the labour inspectorate that started the review process. The company and the main contractor had attempted to ascertain what was going on but were unable to do so because of the difficulty in getting accurate information.

This is a central issue for the partnership talks and in ensuring that migration and the arrival of accession workers here do not distort the labour market in an unfair way. What can the Minister of State do to ensure we have the powers to know who is paid what and whether fair deductions take place?

Tony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

The Deputy is right that this is an important issue that must be addressed urgently. The issue features strongly in the current partnership negotiations and in the two reviews already completed by the Department. The Payment of Wages Act 1991 states that an employer shall give or cause to be given to an employee a statement in writing specifying clearly the gross amount of the wages payable to the employee and the nature and amount of any deduction therefrom. It further states that the employer shall take such reasonable steps as are necessary to ensure that both the matter to which the statement relates and the statement are treated confidentially by the employer and his agents and by any other employees. This is fine as far as it goes, but clearly one would need important additional information such as the number of hours worked and the rate per hour if one were to pursue cases successfully.

To be fair, in the case of Moneypoint the auditors for the ESB discovered the underpayments and raised the matter with the ESB which then pursued the issue. First it informed the relevant union, the TEEU, and had a memorandum of agreement with the subcontractor to deal with and resolve the matter. This process was at an advanced stage before the matter came to the notice of the Department's inspectorate. I would prefer the issue had been brought to the notice of the inspectorate earlier. It might well have happened that it did not come to the inspectorate's notice at all, which would have been unhelpful.

Arising from the points made by Deputy Eamon Ryan, there are issues with regard to how other State agencies interact with the labour inspectorate and the Department. For example, information available to the Revenue Commissioners or the Department of Social and Family Affairs could be of major importance in terms of determining how to proceed with particular cases. The new legislation will include provision for an interchange of information among these agencies.

The Deputy raised the matter of deductions. Specified deductions are provided for under the legislation. Some employers say that in view of the high cost of accommodation, the deductions are particularly low. Be that as it may, there are standard maximum deductions in place.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

The Minister mentioned new legislation. Does that refer to amendments to the 1991 Act? How or when does the Minister of State intend introducing legislation? Are there constitutional or other legal difficulties around the area of exchange of information between the Revenue Commissioners and the Department or labour inspectorate in forming an accurate assessment of real pay? Is that a simple process or does it introduce further difficulties?

The case involving Moneypoint concerns one of the largest contracts in the country. However, even in the smallest contract of employment it is very difficult to ascertain the real rate of pay unless we have access to bank account details. Is there not a concern, especially with our permit system, that the power of the employer to hold the permit in small localised employment situations is excessive? This power would probably dissuade an employee from disclosing that net pay was much lower than the declared pay on the wage slip. Do we not need to look wider and further in terms of the implications of the recent discovery of these false pay rates? Should we not amend our migration and permit system to ensure we have full transparency and do not allow situations evolve where a gross pay rate is a multiple of the real pay rate?

Tony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

I will take the last point first. When the new legislation is passed the permit will be held by the employee, but it will be held on foot of an offer of a particular job. This will ensure a more level playing field for the employee. In the majority of cases, except for Gama, the employees involved in cases did not need work permits because they are EEA nationals.

Ultimately, the more successful we are in finding illegalities and cases where workers are being mistreated, the better placed we will be to deal with the issue. Rogue employers are gradually coming to the view that, through one means or another they will be found out and not just accidentally by the labour inspectorate, regardless of its staff numbers. The fact that so many people are now attuned to this happening will ensure that gradually more and more unscrupulous employers are found out.

I am not in a position to give a judgment on the constitutional issues. There could well be a problem with regard to the examination of bank accounts, for example. Traditionally, there was a view regarding constitutional bars that was considerably less liberal than the current view. I am not aware that any of the recommendations in the report on the mandate and resources of the inspectorate would require action that would be likely to run foul of constitutional issues. If I become aware that this is the case, I will revert to the Deputy.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

What legislative changes does the Minister of State intend to make? Does he plan to introduce new legislation or amend the existing law?

Tony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

That has not yet been decided.