The Irish Ferries dispute is not just a stand-off between big business and trade unions. It's a watershed for the whole of Irish society, writes Fintan O'Toole
A fortnight ago, the Irish Ferries office in Liverpool began a promotion aimed at British tourists, boasting of "the company's unique knowledge of the country" and promising to reveal "the undiscovered Ireland". For a company that is planning to register its ships as Bahamian or Cypriot and to replace its Irish crews with a largely Latvian workforce, the claim to a unique knowledge of Ireland might be a case of pushing the boat out a bit too far. But it has, perhaps inadvertently, helped to reveal the undiscovered Ireland.
In seeking a migrant workforce that will earn less than half the Irish minimum wage, Irish Ferries has brought to a head an issue that has been largely hidden. Contrary to the insistence this week by the employers' body IBEC that "the circumstances in Irish Ferries are unique to the shipping industry and have no direct relevance to companies operating in and employing people in this jurisdiction", the evidence suggests that this dispute has much wider consequences for Ireland as a whole.
In fact, the core issue in the Irish Ferries dispute - the displacement of Irish jobs by low-paid migrant workers earning €3.60 an hour - could hardly be more relevant to the general Irish economy. On Wednesday, new figures from the Central Statistics Office showed that 40,000 of the 96,000 new jobs created in the year to last September went to migrant workers, mostly from the new EU states of central Europe. These new workers have been essential to the sustaining of growth, and whole areas of the economy - construction, health care, horticulture and the hospitality industry in particular - would be unable to function without them. But some of the new arrivals clearly are displacing Irish jobs. In the industrial sector, 11,000 jobs were lost in the last year, but 8,000 extra migrant workers were employed.
Many of the new arrivals work in decent jobs with conditions comparable to those of their Irish-born counterparts. But many work in the undiscovered Ireland, where official rules don't apply. The statutory minimum wage is €7.65 an hour but there are no statutes in the undiscovered Ireland. The population of this hidden nation is made up of people like Jal, who came from India to work in a restaurant in the midlands. He was employed originally as a tandoori chef but ended up doing that job and that of a curry chef and that of a kitchen porter. He also cleaned his employer's house on his day off. He worked 66 hours a week for €150. The employer gave him a cheque for €275 each week and Jal had to give him €125 back in cash. When his work permit expired, his employer refused to renew it unless he paid him €500.
Ana from Sri Lanka was employed as a home help in a private home in Kildare. She was paid €112 per month for working up to 12 hours a day. She was not allowed out to meet friends, had her hair forcibly cut and was verbally and physically abused.
Tomek from the Ukraine got a job with an Irish family business. He worked 13 hours a day, seven days a week, with no holidays. He was paid cash and never received a payslip. His average pay was €2.08 per hour.
Isobel from the Philippines worked as a "mother's aid" in Dublin, living in. She worked 12 hours a day, six days a week, minding children and doing all of the household chores. She was paid an average of €2.73 an hour. She was also expected to clean her employer's parents' house for no extra money. She never received a payslip.
Isobel kept a diary of the hours she worked and when her employer found it in a search of her room he dismissed her immediately. She was forced to leave the following morning.
These names are invented, but the facts are all real. They feature in a report published recently by the Labour Relations Commission, dealing with complaints that were examined and upheld by statutory agencies.
Research into the conditions of migrant workers conducted by the Equality Authority has found the non-payment or delayed payment of wages, excessive working hours, especially for manual workers, levels of pay below the minimum wage and a poor understanding of health and safety procedures among workers who were not members of trade unions and who did not speak English. Among the rates of pay for migrant workers that were cited - all of them well below the minimum wage - were fruit pickers getting no hourly rate but being paid piece rates only; forestry workers getting €1.25 to €2.50 an hour; window cleaners getting €5 an hour; a nurse getting €5.50 an hour; and a cleaner getting €6 an hour.
The employers who exploit migrant workers and flout Irish labour laws may be a minority, but they are not an insignificant, or indeed an isolated one. The Minister for Transport, Martin Cullen, this week turned the sod on the new Clontibret-Castleblayney bypass, the contract for which was awarded to the Turkish construction firm Gama even after it was found to have been underpaying its workers. The construction industry, in which a quarter of the 40,000 new migrant workers who arrived in Ireland over the last year are employed, was revealed earlier this year by the chairman of the Revenue Commissioners Frank Daly to have a significant problem of non-compliance with the law. He pointed to "the increase in the number of non-resident contractors" as one source of the problem. Although his primary concern was with the evasion of tax, it is a fair bet that sub-contractors who don't pay tax are probably not complying with labour laws either.
There is concrete evidence that the exploitation of migrant labour is anything but a marginal issue. Tax revenues have not grown in line with the boom in job numbers, and Ulster Bank's chief economist Pat McArdle has estimated the shortfall at €400 million. This can be explained by two factors: a growth in the black economy, and low wages for many of the new workers. This latter conclusion is supported by Central Statistics Office (CSO) figures that show that, in the year to last June, industrial earnings in Ireland rose by just 2.7 per cent. The significance of this figure is that it is well below the minimum four per cent wage rise guaranteed for the same period by Sustaining Progress. The new workers, in other words, are being paid less than the nationally agreed rates.
This is why the trade unions, and SIPTU in particular, take the Irish Ferries conflict so seriously that talks on a new agreement to succeed Sustaining Progress are effectively stalled until it is resolved. While the official union line is that no one dispute should hold up the talks, the calling of a national day of protest for next Friday is a clear expression of the view that Irish Ferries is not just another local row. The whole social partnership model is unsustainable if prestigious companies can simply ditch the hard-won apparatus of agreed commitments and rules, and even opt out of the Irish state. A process that has contributed hugely to the success of the Irish economy over the last 15 years loses its credibility if the State that sponsors it is unwilling or unable to enforce its basic rules.
While the Taoiseach has expressed his opposition to Irish Ferries' plans, it is not at all clear that his governments have been seriously worried about the use of migrant labour to undermine wages and conditions in the Irish economy. In 1999 the Irish government refused to support a draft EU Directive on Seafarers' Rights which would have made it far more difficult for Irish Ferries to do what it is currently attempting. In spite of the urgings of both the Human Rights Commission and the National Consultative Committee on Racism and Interculturalism (NCCRI), Ireland has refused to ratify the 1990 UN International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. Just last year, the Government told an international conference that "we have no plans at present to sign and ratify the Convention" because doing so would involve changes to, amongst other things, Irish employment law.
The Labour Inspectorate, which is supposed to enforce employment laws including the minimum wage, is seriously under-resourced, and the Department of Enterprise, Trade and Employment under Mary Harney actually opposed an expansion in the number of inspectors even when the Department of Finance declared its willingness to come up with the necessary funds. While the workforce has been expanding rapidly, the presence of the inspectorate has weakened. The numbers of workplace visits undertaken by the inspectorate in 2003 was 7,168. In 2004, it was just 5,160. Twenty prosecutions were initiated by the inspectorate in 2003. In 2004, the figure was just 14.
The evidence from the first half of this year suggests that the number of inspections and prosecutions has continued to decline. Last April, there were in effect just 13 inspectors actually in the field even though 31 posts have been sanctioned. The Estimates for next week's Budget contain no provision for an increase in this number.
The combination of a vast supply of cheap labour and extremely lax enforcement of labour and tax laws is obviously bad for the migrant workers, but its effects are rippling out into the general workforce. Most respectable employers are genuinely opposed to the exploitation of migrant workers and the chief executive of the Chambers of Commerce of Ireland, John Dunne, probably spoke for many of them when he told an Oireachtas committee recently that "migrant workers will play a key role in fulfilling our labour needs in the coming years. Any person or company who acts in a way that calls into disrepute Irish employers and jeopardises this continued supply of labour should be reprimanded accordingly."
But a lack of enforcement allows those companies who don't care about disrepute to undercut those who do. The pressure of competing against the rogue operators is already making it hard for decent companies to hold the line. If a highly respectable bastion of the Irish Stock Exchange such as Irish Continental Group, which owns Irish Ferries, can so openly discard Irish workers and Irish labour standards, the message to other companies is clear: follow our lead or be driven out of business.
It is important to remember that, for all its doomsday talk, Irish Ferries is not a desperate employer driven to extreme measures by the threat of extinction. The company has portrayed its radical plans as being necessary to "secure our survival". Yet, in its annual report for 2004, Irish Continental notes that "the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future".
That expectation does indeed seem perfectly reasonable. The group's operating profit before exceptional items was €26.5 million. At the ferries division, of which Irish Ferries is the major part, operating profit was €24 million.
The company's three executive directors were paid a total of €1.25 million last year. Its chief executive, Eamonn Rothwell, also has a range of share options, including 150,000 shares which can be purchased at €5.30 each by January 2007 if the company does well in the meantime.
Last week, even in the midst of the crisis, those shares were trading on the Dublin Stock Exchange at around €9.65 each - a potential profit of €4.35 per share or €650,000 on these 150,000 shares alone.
The incentives to maximise profits are obvious. But at what cost to the wider society? Irish Ferries considers itself a highly ethical company, and boasts in its annual report of its commitment to "good corporate citizenship, conducting its business with integrity and respect for others". It aims to "offer a positive employment environment" and to "respect the environment and communities within which it operates". It claims to have "positive employment policies that provide equal opportunities for all existing and potential employees".
It also boasts that "we have collective agreements in place with a significant proportion of our employees and if and when disputes arise we are committed to following the dispute resolution mechanisms set out in these agreements".
These principles were undoubtedly expressed with some sincerity in the annual report last April and it can be assumed that they represent a benchmark by which the company expects to be judged.
How a positive employment environment equates with replacement crews accompanied by security men is not clear.
How the ditching of its Irish workforce and the re-flagging of its vessels translates as respect for the community in which it operates is hard to fathom.
How €3.60 an hour for Latvian workers represents equal opportunities for existing and potential employees is something of a mystery.
How the abandonment of agreements and the rejection of a Labour Court recommendation demonstrates a commitment to partnership is perhaps beyond the comprehension of the ignorant.
What is not beyond comprehension, however, is the consequence of these developments.
Migrants treated as second-class workers will become resentful and alienated and will gradually retreat into ghettoes.
Irish workers displaced by cheap migrant labour and ultimately forced to accept lower wages and worse conditions will end up blaming the migrants. Each will become prey to extremist ideologies that will widen the gulf between them.
To the extent that it has come to symbolise the challenge of avoiding this outcome, the Irish Ferries dispute is a watershed, not just for the trade union movement, but for Irish society as a whole.