Labour Inspectorate wants greater powers to police employers

In April 2005, Ireland’s Minister for Enterprise, Trade and Employment announced the appointment of 11 more labour inspectors, influenced by a controversial internal departmental report on the Labour Inspectorate’s role, and with mounting evidence of exploitation of migrant workers by some employers.

An ongoing review of the role of the Labour Inspectorate- which is responsible for ensuring that employers comply with employment legislation - has coincided with recent allegations of exploitation of migrant workers at firms such as Gama Construction and Irish Ferries, which have attracted significant media attention. As a result, the government has faced growing demands for the number of labour inspectors to be increased. It is widely accepted that the existing contingent of 21 labour inspectors in Ireland is insufficient to police a labour force that is now close to 2 million.

Ireland’s Labour Inspectorate (IE0302203F) dates back to the early decades of the 20th century, but its role has expanded exponentially in the years since. Reflecting the complex and uncoordinated manner in which the expanding framework of employment rights law has evolved over the years, the role of the Labour Inspectorate is now largely characterised by 'fire-fighting'.

The issue has been prominent in the Irish media, and the Minister for Enterprise, Trade and Employment, Micheal Martin, has faced lobbying from trade unions, with the Irish Congress of Trade Union general secretary, David Begg, and the Services Industrial Professional and Technical Union (SIPTU) general president, Jack O’Connor, pressing him to increase the number of labour inspectors and boost the resourcing of the Labour Inspectorate.

In response, Minister Martin announced on 12 April 2005 that he is appointing 11 additional labour inspectors, who will place a specific emphasis on sectors where migrant workers are concentrated. The group will consist of a team leader and 10 labour inspectors. This expansion of the Inspectorate will bring the authorised number of labour inspectors to 32, who, together with support staff and their colleagues in the Employment Rights Information Unit and the Prosecution Unit, make up an integrated group dedicated to ensuring people get their entitlements. The additional inspectors are aimed at strengthening the Labour Inspectorate’s capacity to ensure that workers in these sectors receive their entitlements under employment rights legislation.

In a statement, Minister Martin said: 'This significant increase will allow the Inspectorate to do a lot more of what it does best - ensuring compliance with the law and ensuring workers get their entitlements.'

The Minister has asked that the additional inspectors concentrate their efforts on issues of concern to migrant workers. The Inspectorate will now be able to offer a better service by responding faster to complaints and enable it to dedicate resources to in-depth investigations, it is claimed.

Report on Labour Inspectorate

The announcement that the number of inspectors is to be increased to 32, followed a recent internal Department for Enterprise, Trade and Employment report examining the Labour Inspectorate's role - conducted in line with a commitment in the current Sustaining Progress national agreement (IE0301209F and IE0304201N): - which called for a number of measures to be introduced to ensure that labour inspectors are better equipped to police workplace breaches of labour law. The report looks at the role of the Employment Rights Compliance Section (ERCS) - which incorporates the Labour Inspectorate - of the Department of Enterprise, Trade and Employment, and focuses on the role of the Labour Inspectorate

A source in the Labour Inspectorate recently told the specialist Industrial Relations News magazine that its remit has 'become so wide-ranging. It is trying to do everything, but it is just skimming the surface. We also have to respond to a political and media agenda.' In relation to this, high-profile cases - like the current investigation at Gama - take up a disproportionate amount of the Inspectorate’s time, the result being that its ability to plan and address other concerns is hindered.

The internal report places heavy emphasis on the practical experience of the current quota of 21 labour inspectors, as they seek to ensure that employment law is observed. A number of problems are identified, and proposals are raised for further discussion. Several themes are presented, including the need to: simplify/consolidate employment law and remove anomalies; place more emphasis/resources on education/awareness/information; and clarify the mandate and role of the Labour Inspectorate.

Legislative issues

In terms of issues related employment legislation, the ERCS is of the view that legislation should be consolidated, distilled and simplified. The penalties for non-compliance are deemed by the ERCS to be generally inadequate, the suggestion being that they should be increased substantially, with the heaviest fines for failure to maintain records. On-the-spot fines are proposed for certain offences, with a 'penalty points' system. The ERCS believe that labour inspectors have (confusingly) different roles under different Acts and, to remedy this, an alignment of inspector roles under different Acts is proposed. It is suggested that Employment Regulation Orders (EROs) and Registered Employment Agreements (REAs) are complex and ambiguous, and that they should be updated, restructured or abolished as appropriate.

The recovery of amounts due to employees is deemed to be legally difficult, and a simpler legal process is proposed so that clients may pursue their cases themselves. There is also perceived to be a legal ambiguity with respect to the format of records that must be held by every employer, and it is proposed that a standardised comprehensive record-keeping format be introduced, in parallel with a revised and standardised universal statement of pay. At present, the ERCS argue that the burden of non-compliance proof rests on the inspector and that, instead, it should rest on employers - using records.

It is also proposed that where non-compliance exists, employers may be required to engage qualified third parties to undertake comprehensive audits of records (at employers' expense). The possibility of self-policing mechanisms is raised, in terms of a requirement for an annual declaration by employers of compliance with employment rights legislation.

Focus/mandate issues

According to the ERCS, there is ambiguity regarding whether the focus of the inspectorate should be on outcomes or volume of activity and, in view of this, it is suggested that compliance outcomes should be recognised as more important than volume of activities.

Organisation issues

It is suggested that the number of inspectors is not aligned with any defined level of ambition/expectation regarding mandate and international best practice and, due to this, it is suggested that the number of labour inspectors should be increased from 21 to 50, and that the regional presence of inspectors should be increased.

Awareness/training issues

It is proposed that increased priority be given to employment rights awareness/education and developing a highly effective information service using a dedicated budget line. The ERCS suggest that the school curriculum lacks employment rights content, and to rectify this, a module on employment rights should be put into the curriculum for second-level students.

The following principles are proposed for any system of employment rights compliance: it must be effective in promoting high compliance with employment rights legislation; it must be fair; it must be simple to understand and use; the client/customer must know where to go for information and vindication of rights; waiting periods for service must be short and problems resolved speedily. Further principles are: allowing clients/customers to retain ownership of problems, while facilitating confidence that the problem will be resolved; any system must adequately serve both the 'public interest' aspects of legislation and the use of legislation to vindicate the employment rights of one or more workers; and it must provide good value for money.

Future model?

In its document, the ESRC discusses possible future models of employment rights compliance. At one end of the spectrum is an 'empowerment' model with the existing 'bureaucratic' model at the other end. It will be up to the social partners and the government to examine possibilities between these two extremes. Under the empowerment model, it is envisaged that the Labour Inspectorate would focus on 'public interest' employment rights, while the remaining rights would be referred to and adjudicated by streamlined employment rights bodies.

The main features of an 'empowerment' model would be:

• increased focus/resources on education/awareness, plus promotion of employers’ duties and responsibilities under employment rights legislation;

• clear obligations on employers to maintain records which are adequate to show that employment rights are being observed, and substantial fines for breaches;

• the Labour Inspectorate to focus on enforcing legislation where it is unreasonable to expect workers to vindicate their own employment rights. This involves the maintenance of adequate records by employers;

• for all other employment rights, employees could initiate complaints before Rights Commissioners, but trade unions and employer bodies could also initiate complaints, even where they are not directly involved with the employer;

• labour inspectors could impose on-the-spot fines; and

• all decisions of the Labour Inspectorate and Rights Commissioners could be appealed to the Labour Court/Employment Appeals Tribunal.

Under the bureaucratic model, inspectors would continue to carry out their existing roles in respect of all employment rights legislation, but this would require a substantial increase in inspection resources for the effective discharge of these roles. It is anticipated that, under both models, there would be increased expenditure of EUR 500,000 on awareness/education in respect of employment rights.

Commentary

The Minister of Enterprise, Trade and Employment has recently faced mounting pressure - for instance, from the media, opposition politicians and trade unions - to increase the resourcing of Ireland’s Labour Inspectorate. In view of this, in April 2005, the Minister announced the appointment of 11 more labour inspectors, influenced by a controversial internal Departmental report on the Labour Inspectorate’s role, and with evidence of exploitation of migrant workers by some employers being uncovered on a regular basis. It is widely accepted that the existing contingent of 21 labour inspectors in Ireland is insufficient to police a labour force that is now close to 2 million. However, the new 32-person Labour Inspectorate will still face a formidable task in trying to police breaches of labour law. (Tony Dobbins, Industrial Relations News)