Government must act now to help employers keep people working – SFA

"With unemployment forecasts this year now exceeding the 500,000 mark, it is time for the Government to set aside traditional thinking and take real action to solve this horrendous problem," O’Boyle said in his opening statement at a meeting with the Minister for Labour Affairs.

The SFA is calling on Government to move now to support employers in keeping people in employment, saying that small businesses are letting staff go, not because they have no work for them, but because they simply can't afford them due to the “excessive costs of employment”.

O’Boyle suggested a number of measures to the Minister for Labour Affairs to reduce the cost of employment, such as reducing employer's PRSI and removing or reducing the minimum wage, which, he said, is now the second highest in Europe.

He also suggested to the Minister that people made redundant, and who cannot easily find a new job, should be given the opportunity to keep their skills current by offering their expertise for free to small companies , while maintaining their job-seekers benefit (as they will still be actively seeking employment during this time).

This would be a ‘win-win’ scenario, O’Boyle said, also adding value to small businesses, which would hopefully grow because of the expertise, enabling them to take on more staff over time.

“Simply using the old model of sending unemployed people for re-training in FAS centres will not work in the post-Celtic tiger era – lack of skills is not the issue, it’s purely lack of employment opportunity that is keeping most people out of work,” he said.

Rights of the employer must be protected
O'Boyle also called for employment protection legislation to be subject to a rigorous regulatory impact assessment before its introduction, saying that “while it is accepted by the small business community that employees are entitled to protection  in employment, this must be clearly balanced with the rights of  the employer, as the risk-taker and job creator”.

He criticised the fact that this was not done in the case of the Employment Law Compliance Bill 2008, which is due to be discussed by the Joint Oireactas Committee (JOC) on Enterprise, Trade & Employment at the end of June.

"In its current format," O'Boyle said, "this Bill has the potential to cease all employment creation in small business going forward. From a small business owner-manager perspective, would you really risk being the subject of 23 new criminal offences, just to employ someone to grow your business? It is a lot safer just to continue along in a small fashion by yourself."

The proposals in the Bill contain new and wide-ranging powers in relation to search warrants, information on owners of motor vehicles, name-and-shame provisions, compliance notices, and enforcement orders and fixed payment notices, the SFA said.

"These are more reflective of competition and corporate enforcement legislation, and in the current Bill are disproportionate and in many cases impractical", O'Boyle noted.

The SFA is calling on the Minister to make “serious  amendments” to the Bill  before he presents it to the JOC.

O’Boyle also said the administrative burdens that the Bill places on employers are “onerous, disproportionate and oppressive”.  

“It is our view that the Bill in its current form is overly burdensome on employers, will introduce unnecessary bureaucracy and complexity into the  workplace and will criminalise employers for minor offences.

“Moreover, it will stifle job creation in the small business sector at a time when we most need it.”

The SFA said it now believes that the over-burdensome nature of the totality of employment law in Ireland is stifling business growth opportunities, given the large number of one-man operations or very small businesses in the country.

"The difficulty arising from the introduction of more and more employment law is that whether you employ one person or 5,000, your liability is the same, and therefore you have to become  knowledgeable in over 40 major pieces of employment law," commented O'Boyle.

"There needs to be a greater recognition by Government of the hidden costs of regulation and its overall impact on competitiveness.

“In the Report of the Business Regulation Forum, it was estimated that excessive regulation cost Irish businesses over €500m a year. Think of what extra business activity that €500m could have generated? Lighter regulation is associated with higher productivity and lower unemployment, which is essential in the current environment,” O’Boyle concluded.