Shane Ross (Independent)
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Senator Quinn on the Order of Business raised the matter of sharing time on this matter. If he comes in, I will share time with him.

This issue is the need for the Tánaiste and Minister for Enterprise Trade and Employment to make a statement on the campaign of the National Employment Rights Authority to review the pay and conditions records of employees in the restaurants sector. This issue, which has arisen suddenly and is affecting small businesses greatly, is as a result of the agreement between the social partners and, I assume, the National Employment Rights Authority which was set up to protect the rights of employees. While that is a laudable objective, the authority has taken unto itself certain powers, which it is entitled to do, and is exercising them in a manner which is suppressing and damaging small businesses, one of the most obvious examples being O'Brien's Sandwiches. There is an article in the Irish Examiner today which addresses this problem. While the decision of the NERA to travel the country at random, audit small businesses and see how their employees are treated may be well intentioned, it has had the effect of putting one or two businesses out of action and is causing great difficulty to others which are threatening to close shortly.

The problem is that two separate and anomalous employment rights orders were issued under the Act by the joint labour committee system. One applies to Dublin and the other applies to areas outside Dublin. They state specifically that employers must pay one and one third of the wage rate in Dublin, and double outside Dublin on Sundays. That is strange. It would be very nice if everyone could get double pay on Sundays and there is nothing wrong with that as an aspiration. When businesses are compelled by law to pay double pay and are unable to do so, however, they will collapse. The result will be that employees will be laid off. That has happened in at least one case of O'Brien's and will happen in others.

What struck me as strange is that if this is a social partnership issue, under the employment rights order there is no clause for inability to pay. There usually is, even if it may not be used to great effect or may have been used disingenuously in the past. If employers cannot make a profit because they must pay double to their employees on Sundays, why can they not plead inability to pay? Several employers have told me their employees are happy to be paid the same rate as on weekdays, but this is not permitted under this order. Both parties are in an unsatisfactory situation. The employer must close their business and the employee is out of a job. That is a real danger.

Sunday trading is becoming a normal part of activity in this country, as it is in the United States, the UK and Europe. The idea that employers should have to pay double rates for Sunday trading is outdated. If a business wishes to open and employ people and the employees wish, as is the case in O'Brien's, to work for those rates, it is reasonable. The Minister of State will have seen, as we all will have, the appalling unemployment figures yesterday. It is illogical that there are willing employers and employees and yet businesses are closing down.

I ask the Minister to take action to ensure the activities of the National Employment Rights Authority do not have the effect of closing businesses whose employees are treated well, by agreement, and where bona fide employees and employers are unable to participate in a mutually profitable joint venture.

Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome the opportunity to speak on this issue, which has been raised by Deputies and Senators in both Houses. It is an issue that is causing disquiet among employers and employees who have found it difficult to retain jobs because of the downturn.

The Tánaiste and myself are fully aware of the pressures on small businesses in the current economic climate. It is important that I outline the backdrop against which NERA came about. It came about because there was exploitation of workers which involved a number of high profile cases in particular, including GAMA and Irish Ferries. The social partners entered into discussions. A commitment came out of social partnership that would establish the National Employment Rights Authority. There is a full chapter in Towards 2016 on the establishment of that authority.

The authority was set up on an interim basis in 2007. A labour inspectorate was appointed and recruitment took place. Many Deputies in the other House consistently highlighted the fact that the Government was not fulfilling its obligations under Towards 2016 to have the 90 labour inspectors appointed by the end of December 2007. Time has moved on and 81 labour inspectors are in place. There are language inspectors also to enforce the employment rights.

I share the Senator's concerns. I have met with various representative organisations — the Irish Hotels Federation, the vintners and others — who are being affected by enforcement of the regulations orders, which are the law of the land. While NERA was established to enforce minimum statutory employment rights, it is obligated under its charter to ensure it enforces employment rights. NERA is not the issue. The issue is the rates of pay being struck by the joint labour committees, JLCs.

I have been examining this issue. There is also a commitment in Towards 2016 to streamline the number of JLCs. We have one for Dublin-Dún Laoghaire and one for the rest of the country. We hope to have an amalgamation of JLCs and to make the process more streamlined but the rate for Sunday work is time plus one third in Dublin-Dún Laoghaire and double time in rural areas, and that is creating major difficulty.

There is no doubt that NERA has enforced the rates of pay. Until then it was obvious that the employees were not receiving double time on Sundays. Having said that, many people were satisfied with the rate of pay they received on Sundays simply because it was casual work. It suited people in rural areas to work in small restaurants, pubs providing Sunday lunch, etc. There is a substantial body of evidence available, not only anecdotal but from Deputies and Senators on all sides of both Houses who raised the issue, of restaurants and pubs no longer serving Sunday lunches because of the enforcement of the employment regulation order.

There is a view that it is NERA that is causing the difficulties. I urge Senators and Deputies, when they meet with representative organisations who are highlighting their difficulties in meeting the new pay and conditions that are being enforced, to get them to speak to their members who are on the JLCs. A JLC is made up primarily of those who represent the employers and the employees, and there is an independent chair. I urge all to highlight this issue and to speak to the employer representatives. They may also want to speak to the employee representative because the Senator is right, people are losing their jobs.

The Senator mentioned the article in The Irish Examiner today. It was also acknowledged that NERA is only doing its job. It is obligated to enforce the law of the land. These are only minimum statutory entitlements. Nobody would encourage abuse of workers, and that is primarily the reason the NERA was set up in the first place.

NERA has dramatically increased the number of inspections recently. I will give the House some statistics to indicate how active it has been in this area. NERA has been active in implementing its remit as evidenced by the number of inspections undertaken which, at the end of October of this year, stood at 25,155. The number of inspections in the corresponding period in 2007 was 11,000; it has more than doubled the number of inspections that took place so far in 2008 compared to 2007.

Of those inspections to date in 2008, breaches were detected in 4,212 cases. In the same period in 2007, breaches were detected in 2,037 cases. Statistically and percentage-wise, it is approximately the same as the figure for 2007 to 2008. To date in 2008, €2.53 million in underpayments of wages due to employees has been recovered by NERA inspection services compared to €2.25 million in the corresponding period in 2007.

The significant increase in inspection activity in the catering sector in 2008 was a result of NERA's targeted campaign. It has targeted campaigns in other areas also. The construction sector was targeted, and rates of pay are struck by registered employment agreements by the JLCs. Rates of pay for a substantial body of employees are struck by the machinery of social partnership and the industrial relations process. That has evolved since the Industrial Relations Act 1946.

I share and fully understand the concerns expressed by Senator Ross. There are restaurants in my own constituency that no longer serve Sunday lunches. I assure the Senator they did not make that decision lightly. Many of the staff involved would have worked with them for a number of years, and no business likes to inform people they no longer can afford to pay the double rate of pay now being enforced by NERA.

We must try to streamline the JLCs and get their representative bodies to assess the new conditions in the context of the downturn in the economy and the fact that businesses heretofore were not paying the full rate. There should be some mechanism of reflecting the reality of what is happening in the real world, so to speak.

This issue has been raised consistently. It was previously raised in the context of an accusation that the Government reneged on its commitment to appoint the labour inspectors. Some people are now saying the labour inspectors are too enthusiastic in enforcing the law, but the Senator would not stand over a situation whereby people were being exploited. The fundamental purpose of NERA is to enforce statutory minimum entitlements of pay and conditions.

I have spoken to representatives of NERA on many occasions. I met the chief executive officer, Ger Deering, on a number of occasions. I have spoken to the staff. I attended a recent conference of the inspectors and urged them to embrace the idea of enforcement and the spirit of education and information, not only in terms of employees but employers also. In fairness, NERA has rolled out an education and information programme for employes as well as employees. I share the Senator's concerns but the JLCs strike the rate which is the law of the land and NERA, like any other statutory body, is obliged to enforce the law as it is part of its charter under Towards 2016.

The compliance Bill, which will give statutory effect to NERA, was published in March. It is hoped it will come before the Dáil towards the end of this year or early next year. That will set up NERA on a statutory footing.

I am aware of the Senator's concerns. They have been relayed to the various representative groups on the JLCs. It is they who will have to discuss and reflect on the new realities in the context of a downturn in the economy and, more importantly, the fact that the rates are now being enforced and employers are obliged to not only pay the new rates but reimburse back pay, which is putting major pressure on some companies. However, the Senator would not expect me to condone the exploitation of workers or the non-payment of wages to which they are entitled.

Shane Ross (Independent)
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I agree with the Minister of State about the exploitation of workers and the setting up of the NERA to stop that. There is no question but that is laudable, but it is somewhat of a red herring in this context. If the JLCs have it in their power to change the rates, will the Minister of State and the Government bring the same pressure on them to do so as we, as Members of the House, can do because they have far more clout than us?

Billy Kelleher (Cork North Central, Fianna Fail)
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The Senator should never underestimate his own clout. The JLCs are representative of the industry. I am sure the employers' representatives on the JLCs have raised this matter. I understand it was raised last April and can be raised again within six months. I urge the representatives on both sides to come together and reflect on the difficulties being experienced by businesses in the context of the double-hour rate that applies on Sundays in places outside the Dublin-Dún Laoghaire area.

I assure the Senator that I have received many representations, not only from employers but also from employees in small towns and villages who have been let go and who have no possibility of obtaining any form of work on Sundays. Most employees were quite satisfied with the rates of pay of which they were previously in receipt prior to the instigation of the inspection process. The JLCs have statutory power to strike the rates and if they agree new rates, these must be implemented under the employment regulation orders.

Shane Ross (Independent)
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There is a major sense of urgency with this matter. Some people have been told to comply by 21 November. Does the Government realise that some companies will go under if they are obliged to pay back money?

Billy Kelleher (Cork North Central, Fianna Fail)
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Some companies will be obliged to pay back money. If officials of NERA inspect businesses and discover that pay and conditions are not up to standard and that back money is due, the employers concerned are obliged to pay such back money. I tried to highlight this issue previously. I met representative groups and tried to encourage them to see that if changes are made, the industry can continue to operate and levels of employment will be maintained in rural areas where it is difficult to obtain a number of hours work on Sundays.

Restaurants are closing or are ceasing to trade on Sundays. I am aware of a number of pubs which previously served lunch on Sundays but which have stopped doing so because it is no longer profitable. The people who would have worked in these establishments each Sunday are being let go.