The Government has decided not to "opt in" to tough new EU legislation designed to crack down on employers that hire illegal migrants.
The decision follows lobbying from the employers' group Ibec, which is concerned the new rules would increase bureaucracy for Irish companies.
Justice commissioner Franco Frattini presented a draft EU directive on illegal employment in May that would introduce criminal penalties for employers found to have hired illegal workers. Under the proposal, errant firms or farmers could be forced to pay back EU subsidies, banned from bidding for public contracts for five years, forced to pay hefty fines or close and be liable for both civil and criminal convictions.
The directive would also force the Government to increase the number of labour inspections to cover 10 per cent of all Irish companies.
Presenting the directive in May, Mr Frattini urged EU member states to support the proposal because it would take away one of the "pull factors" for illegal migration, which led to the exploitation of illegal workers and the enrichment of traffickers.
Under current EU rules, Ireland and Britain must choose to "opt in" to proposals on illegal immigration for them to take effect. The two states have three months from the presentation of a commission proposal to signal to the EU that they want to take part.
A spokesman for Mr Frattini confirmed yesterday that the Government had said it did not want to opt in to the draft directive on illegal migration at this time. He said the commission respected the decision and Irish domestic legislation would remain in place rather than the EU law.
EU member states are expected to agree the new draft directive at a meeting in December, he added.
The Government confirmed it had not "opted in" to the proposal but a spokesman said it did not rule out adopting the legislation at a later stage when it had already been passed by other EU states.
But Opposition MEPs criticised the decision. Labour MEP Proinsias De Rossa said the Government's decision offered "a lifeline to criminals".
"This is a problem occurring all across Europe and it is not acceptable that the Government 'opts out'," he said.
"The Government is prepared to criminalise illegal migrants who come to Ireland but not the firms that employ them. That is hypocrisy."
It is unclear how many illegal migrants are working in the Republic but the commission estimates between 350,000 and 500,000 illegal migrants travel to Europe every year to join an existing population of up to eight million illegal workers.
Ibec, which worked with the European employers' body BusinessEurope to lobby against the new directive, said the proposals would only lead to more red tape.
"Ireland already has, through the Employment Permits Act 2006, a thorough set of measures to prevent exploitation. Ireland does not need another layer of legislation on top of this," said Brendan McGinty, director of industrial relations at Ibec.
Current penalties in the Republic include fines worth €3,000 to €250,000 and/or one to 10 years' imprisonment under the Employment Permits Act 2006.
The Government's decision not to take part in the new EU proposal on immigration illustrates the challenges posed for the creation of a common EU immigration policy.