Feargal Quinn (Independent)

I welcome the Minister and am very interested in what he has had to say. I was impressed, as Senator Carty noted, that temporary agency workers account for only 2% of the work force. I employed quite a few people in my career and I would like to tell the House about one such employee, called John, who worked in our Ballinteer store. About 18 years ago, he came to me in mid-December and said: "I have worked here for nine years and I will be 65 on 31 December. I plan to retire". Our company had a policy of encouraging retired people to come back and work part-time, particularly those with skills. John had worked at various jobs during his lifetime. He told me:

I have worked here for nine years and haven't missed a day. I wake up in the morning looking forward to coming to work. I look at my watch on a regular basis, thinking that it must be 4 o'clock in the afternoon, only to discover that it is 6 o'clock. The day had gone faster than I thought.

I was very impressed with this and we talked about it. Unfortunately, John died on Christmas Day that year, some five days before he was due to retire. His wife had also wanted him to come back to work on a temporary basis. She died three days later, so we had two funerals in the local church that day. We talked about John and the fact he said he woke in the morning looking forward to coming to work and looked back on his day thinking it was 4 o'clock to discover it was 6 o'clock. We set that as a target for those who worked with us. At the time we thought that was for full-time employees, but should it apply to agency workers of whom there were very few? We decided that it should also apply to them. John's words had a huge impact on us and left a mark. It reminded us of the responsibility that employers have.

The EU's fundamental function is to provide its citizens with a better quality of life and this directive is consistent with that aim. It may well be that a lot of employers intend to implement it, but do not get around to doing so. I hope this new measure will help to prevent unfair competition between different member states. If, for example, Portugal has loose employment protection and Ireland has strong employment protection, companies are most likely to shift their operations to Portugal. It is not that Portugal is more efficient, but that companies can pay less there. We must therefore try to prevent this race to the bottom, which is so detrimental to the workforce.

We must remember, however, that Europe competes with the rest of the world, so we do not want to find ourselves putting in such constraints that would prevent us from competing internationally. We should be aware of that fact. In spite of the economic downturn, the agency work industry is continuing to create jobs that otherwise would not exist. Agency work is helpful in people's transition between unemployment and work, while also providing a flexible form of labour that allows more people to enter the labour market. In particular, agency work further enhances the employability of workers through training and investment.

Proposals for a directive to regulate temporary agency work were first raised in 1982, but were blocked for years largely due to opposition from the UK. There was a fear there that the country's highly deregulated labour market might suffer from granting rights to its 1.4 million agency workers.

The directive will harmonise EU-wide legislation on temporary workers, which varies considerably between member states. In Ireland, the existing protection is quite strong. However, in Germany, the Netherlands and Spain, the situation is quite different. For instance, there is a ban on the use of agency workers in the public sector in Spain or in the construction sector in Germany. As this situation is being reformed, some experts believe it could prepare the ground for a better economic recovery. Look at the fact that many companies have recruitment freezes but that does not mean they are not busy. They can get a temporary person into the workplace to continue to compete in the market.

We must ensure we do not make Europe uncompetitive by introducing regulations that do not apply to the rest of the world. There has been some criticism of the directive, for instance by the Small Firms Association, which says it will give short-term, fixed-term and agency workers the same terms and conditions as full employees. From day one it will make things very difficult for companies employing temporary workers. I understand people are worried about jobs but we must examine the broader, long-term picture of improving people's rights in the workplace. Let us look also at the fact that we are still importing workers into Ireland in spite of the recession.

For the past three years I have been president of Eurocommerce, which is based in Brussels and represents 6 million shops in Europe. It represents 31 million retail workers but I do not know the proportion of agency or temporary workers. It represents the retail, wholesale and international trade sectors in Europe. The organisation has met trade unions and welcomes the directive, describing it as "well adapted to the needs of the commerce sector" and "a fine example of 'flexicurity' in action". The general consensus is that European labour markets are too rigid. Labour market rules must be made more flexible with a combination of easier hiring and firing rules with good levels of social protection, including high benefits for the unemployed and a pro-active labour market policy. This is one of the main challenges of the EU's long-term vision for economic, social and environmental reform through the EU 2020 goal.

I am interested in the view of the Minister of State on the fudge whereby the UK Government, in agreement with the social partners such as the TUC and the Confederation of British Industry, opted out of offering agency workers the same pay and basic conditions as full-time staff from day one, as the directive assumes, and instead implements the measures after a 12-week period. Is it beneficial to implement the directive before the December deadline? Why not do so?

Implementing what the directive requires is not totally straightforward. For example, there is an argument about which terms and conditions agency workers should be entitled to enjoy on an equal basis with directly employed workers. What about alternative dispute resolutions to avoid tribunals? Can smaller employers insist on different treatment if they have formal pay bands? Could we see workplace agreements established to get around the agreement? Perhaps the Minister of State can elaborate on these matters.

These concerns have been expressed but this is a step forward for social Europe. The number of temporary agency workers, which in many member states is still a relatively insignificant proportion of the labour force, will undoubtedly increase over the coming years, as barriers to the use of such work are removed. I welcome the legislation, which is a step in the correct direction.

I have some concerns, particularly about the need for Europe to be competitive in the years ahead and the difficulty if we introduce regulations or constraints that limit the ability of Europe to compete with others. In the immediate years ahead we will not be able to compete with India and China on pay but we should not burden ourselves by introducing regulations that make it difficult for us to hire people. Part of how we will solve the employment problem is by making it more attractive to take on people. The more constraints introduced, the more difficult it is. The objective is correct - let us see if we can get both correct.