Richard Bruton (Dublin North Central, Fine Gael)

This important legislation is the first Bill I have introduced in the Seanad and I am pleased to have an opportunity to hear Senators' perspectives on it. The purpose of the Bill is to give effect to a European Commission directive adopted in 2008 on temporary agency work. It provides a legal framework in which agency workers are afforded equal treatment in respect of their basic working and employment conditions as if they were directly recruited by a hirer to the same job. Other entitlements concern the right of access by agency workers to the collective facilities and amenities at the hirer's undertaking, including canteen, crèche and transport facilities, in the same manner as these may be available to direct employees of the undertaking. In addition, agency workers must have access to notifications in respect of job vacancies at hirer undertakings to allow equal opportunity in terms of such employment.

Senators will be aware that it has long been a view that agency workers were being abused in respect of their rights and action was needed to remedy the position. Some unfortunate cases have come to public attention and it is timely that the Government is correcting the matter by ensuring basic rights are protected for agency workers who are on temporary assignment.

The Government is fully committed to decent standards of employment across the spectrum of employment. It is clear that agency workers have, on an incremental basis, been brought within the scope of employment rights legislation over many years, including legislation on health and safety, payment of wages, redundancy payments and unfair dismissals. In terms of minimum standards of pay, temporary agency workers are already covered in legislation governing the national minimum wage. As Senators will be aware, the Government has, true to the commitment given in the pre-election period last year, reversed the reduction in the minimum wage rate. In addition, agency workers can seek to vindicate their rights and pursue grievances under employment law by accessing the same avenues of civil redress as are generally available to directly recruited workers, namely, the rights commissioner service and National Employment Rights Authority.

The Bill builds on existing standards of protection that are conferred on agency workers and reflects the Government's willingness to fully support the principle of fairer treatment for agency workers. Equally, the Government must have regard to other equally valid concerns that have been expressed in terms of the need to create a positive environment for businesses to grow and develop. A fully functioning labour market that contributes to the retention and future growth of jobs is important in these challenging times and we must maintain labour market flexibility in all areas, including the area of agency work, which provides flexibility for both workers and employers alike.

Although established statistical sources in Ireland do not capture data on this type of atypical work, in general estimates based on surveys conducted by private employment agencies suggest that temporary agency workers constitute approximately 2% of the active working population. This would equate to approximately 35,000 agency workers operating in both the private and public sectors. Agency work is a feature both in the public and private sector, with the preponderance of agency work in the public sector in health. Agency work has a legitimate and valuable role to play in the economy and is the option of choice for some people who benefit from the flexibility, personal freedom and income it provides. It also serves the business needs of employers in that this type of atypical working can be used to assist in managing the peaks and troughs encountered in the normal business cycle.

The Bill does not propose a change to the employment status of agency workers, nor will their entitlements to existing employment rights, including the right to a safe working environment and the right to claim redress for unfair dismissal, be affected.

As is currently the case, the triangular employment relationship between the agency worker, the employment agency and the hirer undertaking will continue under the Bill such that the employment agency that pays the agency worker's wage is the employer. In the case of unfair dismissal however, it will continue, as in the past, that where an agency worker is dismissed by a user undertaking, he or she may bring a claim under the Unfair Dismissals Acts against the user undertaking which, in that instance, is deemed to be the employer.

The fair treatment that the enactment of this Bill will bring about for agency workers will confer on them a greater level of employment protection than that which currently obtains and provide a harmonised floor of entitlements. Understandably, there are concerns among employers, employer representative groups, user undertakings and employment agencies about the additional costs the legislation will impose in meeting the equal treatment entitlements of agency workers in the same way as applies to direct employees. I acknowledge this is challenging at a time businesses are facing serious challenges endeavouring to maintain and sustain a competitive cost base. It is for this reason I have sought in this Bill to achieve the necessary balance of fairness and equity for agency workers against the legitimate concerns of employment agencies and hirer undertakings. It is imperative that we maintain, to the greatest possible extent, labour market flexibility, which will act as an incentive for employers and user undertakings to continue to avail of the important flexibilities that agency work provides.

Since publication of the Bill in December 2011, and during its passage in the Dáil, I have taken the opportunity to bring forward a number of significant amendments to strengthen its intent in certain aspects to provide greater legal certainty for all stakeholders affected by it. I believe the legislation before this House represents an appropriately balanced approach to meeting fully the directive requirements and the concerns that stakeholders have expressed.

The Bill is divided into four parts and has two Schedules. Part 1 contains standard preliminary provisions. The main Part of the Bill, the protections that are applicable to temporary agency workers under employment law, are set out in Part 2. Part 3 contains a number of amendments to earlier enactments and to certain statutory instruments. Part 4 sets out the means of achieving redress in the event that a claim by an agency worker for breach of equal treatment in terms of basic working and employment conditions or other entitlements is made. The intention is that, on enactment, the Bill will, with the exception of sections 13, 15 and Part 4, have retrospective effect to 5 December 2011.

I refer to the most substantive provisions that I would like to bring to the attention of Senators. The first is the issue of retrospection. The directive has a transposition date of 5 December 2011 and I have obtained strong legal advice to the effect that the legislation should, on enactment, have retrospective effect to 5 December 2011 with the notable exception of the offence creating provisions in sections 13, 15 and Part 4. These latter provisions will come into effect upon enactment of the legislation. My advice in this context is based on the fact that implementation of the directive provisions is necessitated under obligations arising from membership of the European Union which, therefore, enjoy protection under the Constitution.

The intention to make the legislation retrospective to the date on which the directive was due to be transposed has given rise to considerable comment. The predominant reason for late transposition of the directive arises from the last-minute failure by the social partners to reach agreement in November last year on the derogation available under Article 5.4 of the directive to have a qualifying "lead in" period to the provision of equal treatment for agency workers. This, in turn, created uncertainty around collateral amendments to the basic provisions of the Bill that would be necessitated if such an agreement was negotiated.

In the interests of providing the greatest clarity to all parties affected by this legislation, my Department moved quickly, following the breakdown of negotiations with the social partners on 30 November 2011, on the qualifying period, to communicate with the various stakeholders. Advertisements were taken out in the national newspapers and the Department produced a guidance document and placed it on its website to cover the issues of greatest interest to all parties. My Department had at a much earlier stage engaged in a consultative process on the draft legislation in 2010 and, therefore, since the adoption of the directive in 2008 and the transposition date, there has been significant engagement and discussion on the proposed content of the legislation with stakeholders.

The directive provides also for certain derogations that may be availed of by member states under Article 5.

The first under Article 5.2 is generally referred to as the "Swedish derogation". This allows member states to exclude from the scope of the equal pay provisions agency workers who are engaged on a permanent basis and paid between assignments. Section 7 invokes this derogation and has, since publication of the Bill, been strengthened to provide for a greater level of protection to guard against potential abuse of the provision. The amendments that I brought forward to the Bill define a permanent contract as a contract of indefinite duration and require that agency workers must, in advance, agree to opt in to this type of contract arrangement with the employment agency. This is in addition to the existing requirement that such workers be paid between assignments at a level of not less than 50% of the pay to which they are entitled in respect of the most recent assignment and which should not, at the least, be less than the national minimum wage. While this model of permanent contract is not well known or used in Ireland, it is the case that if we do not legislate for it now in an appropriate manner as proposed in the Bill, as amended, we will lose the possibility to avail of the derogation for all time.

Article 5.3 of the directive provides the possibility for the social partners to conclude collective agreements that deviate from the basic working and employment conditions. While the system of collective bargaining envisaged under this article is more suited to the well established system of collective bargaining associated with mainland Europe, in the Irish context, it would cover registered employment agreements which are essentially sectoral or workplace agreements. The derogation recognises the national traditions, custom and practice in member states and allows a necessary level of flexibility in the workplace to the mutual benefit of employees and agency workers alike. Use of the derogation is not without limit but must have regard to the need to ensure overall protection for agency workers. Provision for the derogation is contained in section 8 and enables existing collective agreements to be upheld and facilitates the negotiation and conclusion of future such agreements at the level of the user undertaking or at enterprise level. The provisions for oversight and approval by the Labour Court of such collective agreements as set out in the section mirror that already in place in the context of agreements reached under the terms of section 24 of the Organisation of Working Time Act 1997.

The final derogation available under Article 5.4 of the directive recognises the voluntarist nature of industrial relations in the United Kingdom and in Ireland and was designed to meet the needs and flexibilities required in the labour market to accommodate the system in place in both countries. The derogation includes the possibility for a "qualifying period" before the principle of equal treatment would apply to temporary agency workers. In Great Britain and Northern Ireland a qualifying period of 12 weeks applies to temporary agency workers assigned to hirer undertakings. As I mentioned, agreement on this issue has not proved possible between the national social partners and, as a result, the Bill provides for the application of equal treatment to temporary agency workers from day one.