Government plans to introduce legislation to regulate employment agencies have run into trouble with the European Commission, writes Martin Wall, Industry Correspondent.
The measure was regarded as one of the key elements in its commitment to strengthen employment rights under the terms of the national agreement Towards 2016.
Minister for Trade, Enterprise and Employment, Micheál Martin, said the commission had signalled that the measures being contemplated by the Government may run foul of EU treaty provisions.
Under legislative proposals, drawn up by the Government on foot of commitments in the Towards 2016 agreement, employment agencies providing workers for employment in Ireland would have to have an establishment or presence in the country.
"The commission are arguing that if you have an agency in Poland or France, it should be allowed to operate from France into Ireland without necessarily having a presence or base here," Mr Martin told The Irish Times. He said that the department had sought advice from the Attorney General and was also seeking clarification from the commission.
Trade unions and employers' representatives have recently been informed of the potential problems.
Mr Martin described the issue as a "fundamental concern".
"[The commission] is more or less saying the rules are European," he said.
The Minister said that this stance would appear to be contrary to assurances given by the commission in the context of the discussions over the introduction of the services directive. He said that recruitment agencies were outside the scope of the services directive.
Under the terms of the Towards 2016 deal, the parties agreed on the need for improved regulation of employment agencies and agency workers.
It said that legislation would be introduced to reinforce the existing system of regulation by requiring all employment agencies established and/or operating in Ireland to hold a licence.
It said that the conditions for granting a licence would be set out in the legislation. Draft legislation put forward earlier this year said that employment agencies would have to follow a code of practice.
Under the legislation, agencies would not be allowed to pay workers less than the national minimum wage or rates lower than those set out in negotiated employment agreements for particular sectors
The new legislation would also define an agency and an employee.
It is understood that there are now over 500 employment agencies operating in Ireland and the trade union movement has expressed strong concern at the activities of some of these.
In a major speech in April, Jack O'Connor, the president of Siptu, the county's largest trade union, hit out strongly at what he said was a growing number of rogue agencies.
"Migrant workers are particularly exposed to exploitation by crooked employment agencies operating on the fringes of the law.
"These agencies exploit the vulnerability that comes with language barriers and ignorance of Irish employment rights," Mr O'Connor said.