Beware of sweatshop employers seeking ‘flexible’ work conditions

SOME powerful employers are behaving disgracefully in their treatment of a small number of weak workers.

These employers — some of them very profitable companies — have taken advantage of workers they hire on a temporary basis from agencies, usually at lower rates of pay and with lesser employment conditions than full-time workers enjoy.

They like to call this flexibility. In reality, it is exploitation.

There are times when there is genuine and worthwhile use of agency workers that is mutually beneficial for both employer and employee.

Some companies have needs that are genuinely shortlived and they are prepared to pay handsomely to hire someone to fill a task for the time required. Some workers enjoy moving from job to job, unworried by the lack of job security, believing that taking up short-term contracts allows for better pay. They also find the variety of jobs interesting.

Agencies and employers who engage in these practices are doing nothing wrong, especially as there is little point in taking on the cost of giving somebody a full-time job that will become redundant a short time later.

Unfortunately, it does not always work out that way. It’s fine if the job is genuinely temporary but not if it is a real, full-time one that is being filled on a rolling temporary basis by the use of a dishonest process.

Too often you get to hear stories of companies filling what are permanent positions by the use of cheaper agency workers who are hired and then fired before they have been in their position for 11 months when, by law, they should be made full-time.

They are replaced then by other people on the same basis, to be let go again before another 11 months have passed.

It’s not just the lack of permanent status that is wrong. All sorts of entitlements are denied to the exploited workers such as sick pay, holiday pay and overtime pay.

A woman would have no chance of maternity pay, for example. Often these workers are not paid the full rate for the job, even when they are working alongside others who are paid properly.

It is often foreign workers, without union representation, who get this raw deal, or those who have low or no recognised skills.

Employers, finding no shortage of people willing to take up the agency positions because of need, seek to displace full-time workers with the cheaper alternatives.

Many Irish employers have played this game, the most notable being the disgraceful Irish Ferries which paid off its staff and replaced them with foreign-based agency workers to whom the Irish minimum wage of €8.65 per hour did not apply.

Domestically-based companies have to pay the minimum wage, but their trick is to close a department or operation and to “outsource” to a contracted supplier.

Property redevelopment provides an opportunity also to change the terms and conditions on which people are employed. This is particularly popular at present in the hotel trade where a change of ownership sees a hotel close and then reopen under new management. The staff are laid off and new staff hired on a different basis.

It is about to happen again at top Dublin retailer Arnotts as it is being redeveloped.

Nearly 600 people are being made redundant as the operating business reduces in size while building work takes place. The company will then hire new staff after the reopening, but the test will be to see whether the new employees are taken on with much inferior and temporary terms and conditions compared to those who stayed during the redevelopment.

There’s one distribution company in Dublin that has set up a sham agency which “places” people with the parent company for short periods before sacking and replacing them.

The pay rates are below industry norms and, as usual, none of the statutory entitlements apply.

All of this means that when you hear an employer talk about the “flexibility” provided by its use of agency workers, you should look out for exploitation.

Incredibly, Ireland, which boasts the highest minimum wage in the EU (with the exception of Luxembourg) has failed to date to implement the EU directive on temporary agency work.

This has the stated objective of providing the minimum level of protection for temporary agency workers.

There is no need for this in such a prosperous country where so many companies have made such big profits in the last decade.

Ireland is one of three countries in Europe where it is legally permissible to treat agency workers differently to regular staff.

Yet the Economic and Social Research Institute has estimated that migrant workers earn on average 15% less than their Irish counterparts and, in the case of those from eastern Europe, 30% less.

Thankfully, the country’s largest trade union, SIPTU, has taken up the cudgels on behalf of the exploited. Its leader, Jack O’Connor, has identified the creation of a new underclass of people with “absolutely no workplace rights at all”. His members have complained about agencies regarding people just as numbers.

SIPTU has made sorting out this issue a precondition of its entry to the national partnership talks, which was a brave approach because the issue is said to effect less than 2% of the workforce. It seems to be getting somewhere.

DURING a Dáil debate this week, the Minister of State for Labour Affairs, Billy Kelleher, said legislation is being prepared to regulate the employment agency sector. The idea is that licensed employment agencies will be required to comply with the terms of a statutory code of practice that will set out the appropriate practices and standards.

You can expect that the new laws will extend the scope of registered employment agreements, which set down minimum terms and conditions in some sectors of the economy such as construction and hotel work, to include workers who are recruited through employment agencies.

It will also be unlawful for any employee, including agency workers, to be paid less than the minimum terms set out in registered employment agreements where they apply.

Which is well and good, but there have to be concerns about the extent of the monitoring that goes on in this country. Even if there are increased powers for labour inspectors — which would give them the authority to prosecute employers who refuse to comply with employment rights without having to refer the matter to the gardaí — there are concerns that there will not be enough of them to do the job. The compliance record to date has been very poor and provides little confidence that worthwhile new laws will be implemented fully.

Matt Cooper is the presenter of The Last Word on 100-102 Today FM, broadcast Monday to Friday, 4.30pm to 7pm.