Margaret Cox (Fianna Fail)

I declare an interest, since I am the owner-manager of a recruitment agency operating in Galway. That was also detailed in my declaration laid before this House.

I welcome the Minister of State and thank both him and the Leader for arranging this debate, which comes at a time when recruitment agency legislation is under review. I intend to speak specifically to that today and leave my colleagues to deal with some of the other issues, such as employment rights.

The Employment Agency Act came into force in 1971, when such agencies were just beginning to operate in the State. The Government at that time identified the need to bring some regulation to the area, and that regulation has remained unchanged since. It probably indicates the success of the recruitment agency area that there has been no need to introduce additional legislation, most recruitment agencies being operated very well and tending to regulate themselves.

The recruitment agency field is self-regulated through membership of the National Recruitment Federation, which was formerly the Irish Federation of Personnel Services. That federation has over 100 licensed recruitment agency members. They have their own code of conduct to which anyone joining the federation signs up and agrees to keep. That is self-regulating and ensures that we have a very good industry.

Speaking in general about the industry, a recent survey, the 2005 National Recruitment Federation annual survey, estimated the size of the Irish industry at €1.3 billion. The Minister of State and his Department will know that there are over 450 licensed employment agencies in Ireland. Not all will be operating as such, since many licences are held by small organisations such as accountants, who would recruit on behalf of some of their clients. If they do so, they must have a licence to operate. There are just under 10,000 people employed in permanent jobs in the industry, making it significant by any standards. Many are in small, owner-managed organisations with one or two people, but there are also several international groups working in Ireland. A significant number of people, amounting to approximately 10,000, are employed in the industry on a full-time basis. It is estimated in the National Recruitment Federation survey that 85,000 people obtained permanent jobs using employment agencies in 2004.

Employers approach recruitment agencies and tell them they have vacancies, after which the vacancies are advertised by the agencies. Alternatively, suitable candidates are found on the agencies' databases. The agencies create a match between the qualifications of the applicants and those desired by the employer. This service is useful to the candidate because it gives him an opportunity to find out exactly what he is getting involved in. He can find out information on the company through an intermediary working on his behalf. The agencies are also working on behalf of the employer and therefore they always have two clients. This ensures that a fair and honest service is provided.

We are having this debate because reference was made in the House to people who have been exploited by recruitment agencies. It is fair to say, and the Minister of State will accept, that any exploitation that has occurred is unacceptable and that it has not been engaged in by Irish recruitment agencies. The very well-publicised case of the female employee on Irish Ferries had nothing to do with an Irish recruitment agency — a foreign agency was involved.

I understand very few complaints about recruitment agencies have been made to the Department. The complaints are generally not about an agency employee doing something wrong, rather it is a matter of understanding exactly what is involved, particularly given that an increasing number of people from other European countries are obtaining jobs in Ireland through recruitment agencies in their countries of origin. Issues arise regarding these agencies' understanding of how people work in this country.

The issue of temporary workers and how they are charged was discussed. An example was given of a person being paid less than the minimum wage while the charge to the company was perhaps €12 or €13. It is important to clarify for everybody, including agency employees, that the rate a client pays to the recruitment agency for the provision of a temporary worker consists of a number of elements, including the gross pay paid to the worker. On top of this, a charge of 8% is levied for holiday pay, and 4.5% is levied in respect of public holidays. There is also a need to provide employers liability insurance, which can amount to 1% or 2%. Redundancies also need to be provided for, and this involves a provision of 4%. Employer's PRSI amounting to 10.75%, needs to be provided for, and a VAT charge is also imposed. These costs arise before an agency's margin is determined. From this margin, the agency must pay its own staff and pay for its premises. This explains the considerable difference in charges. The rate is all-inclusive and automatically covers all the rights mentioned by Senator Coghlan in respect of temporary workers. These concern unfair dismissal, redundancy, holiday pay, health and safety, discrimination, the minimum wage and force majeure leave.

An issue arises regarding the services directive. It is important to place on the record that Ireland is continually trying to export its services. We very much support Commissioner Charlie McCreevy in respect of his trying to extend the provisions of the services directive to allow recruitment agencies operate throughout the European Union. We would like to see the barriers removed. I am not sure of the view of the Minister of State and the Department in this regard. The recruitment industry has adopted a very positive view on Mr. McCreevy's position.

I thank the Minister of State for attending and for all his dealings with us on this issue. I look forward to having some discussions in the House on the review of the Employment Agencies Act.