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Whistleblower petitions European Parliament:Labour Inspector said Workplace Relations Commission favours employers over employees

GEORGE MCLOUGHLIN made a Protected Disclosure in 2015 – when he was employed as a labour inspector with the Department of Jobs (DJEI) – concerning what he perceived to be a culture of deference to non-compliant employers in the management of the National Employment Rights Authority (NERA) (subsequently the inspection services of the Workplace Relations Commission).

As revealed in April’s Village the disclosure to Philip Kelly, Assistant Secretary Department of DJEI; and to Kieran Mulvey and Padraig Dooley, WRC Directors, alleged matters and issues outlined below.

The Department recognised the disclosure was protected, appointed former IBEC Director Turlough O’Sullivan to carry out an independent investigation of it and over the following six months McLoughlin provided detailed evidence to O’Sullivan to substantiate the criticisms he had made. In May 2016 he was informed by the Department’s Assistant Secretary that his allegations had not been substantiated.

He is unhappy at the manner in which the investigation had been conducted and at the appropriateness of the Department’s decision to appoint a long-standing employer representative and lobbyist to investigate allegations of a pro-employer bias in the management of the State’s primary employment-rights regulatory body.

He made the damning observation to Village that:
“The proper work of the labour inspectorate in ensuring that employers in low-pay sectors of the economy comply with the state’s most basic employment rights legislation is being deliberately undermined by a management that sees its primary function as facilitating some employers in circumventing the very legislation they are supposed to be enforcing thereby leaving vulnerable workers at the mercy of unscrupulous employers”.

In general the WRC told Village its fundamental role was ensuring employer compliance by affording employers in breach of the law time to comply. It takes pride in the fact that in only 5% of the cases of breaches is prosecution deemed necessary. This official forebearance seems to be at the heart of where McLoughlin feels the legislation is not being enforced.

Concerns Raised in Protected Disclosure:
(i) Inconsistencies in the Conduct of Inspections and Failure to Follow Up on Breaches Detected.
During the course of O’Sullivan’s investigation McLoughlin claims he gave him instances of a number of inspections where NERA/WRC managers had either turned a blind eye to blatant breaches of employment rights that ought to have been apparent in the records inspected or failed to follow up effectively to ensure that the employer became compliant and the employees affected were appropriately compensated.

“Following on my first meeting with O’Sullivan I gave him the contact details for a HR Consultant whom I had dealt with as an employer representative at a number of inspections over the years and who had raised concerns with me as to what s/he saw as glaring inconsistencies in the manner in which breaches of legislation detected at different inspections were pursued by different inspectors”. McLoughlin says “Mr O’Sullivan refused to interview this ‘witness’ as part of his investigation on the grounds that he would not be able to name the consultant or the businesses. In my view, in so doing he excluded evidence that was highly relevant to his investigation”.

At the very least, he says, “a question has to be asked as to the appropriateness of Mr O’Sullivan’s refusal to even hear this authoritative evidence in support of my allegations, particularly when we see that elsewhere in his report he does not appear to demonstrate anything approaching the same rigour, sensitivity or objectivity in determining the credibility of the line fed to him by NERA/WRC management”.

Over the course of O’Sullivan’s investigation McLoughlin says he gave him several examples of cases where breaches of the National Minimum Wage Act and Organisation of Working Time Act detected by inspectors had not been pursued on the instructions of NERA/WRC management.

In January 2016 he gave him extensive documentation relating to so-called ‘Sleepover Cases’ where agencies providing overnight in-home care to elderly or unwell clients where the hourly rate of pay to the carer was below minimum wage. “Despite the clear-cut nature of the breach and the manifest exploitation of the care-providers in this rapidly expanding sector, NERA/WRC management failed to provide effective regulation in this area and used every tactic and pretext available to it to stymie and circumvent proper oversight”. In several of these cases NERA/WRC management allowed employers to use the idea of the ‘notional break’ to understate hours worked and thereby artificially increase the apparent hourly rate to a level that would appear compliant with minimum wage legislation. McLoughlin told Village that “Clear and unambiguous evidence of this practice was provided to Mr O’Sullivan but this does not appear to have featured in his discussions with NERA/WRC management and is not referenced by him anywhere in his report to the Department”.

McLoughlin also gave O’Sullivan details of a Dublin-based Home Care business where the inspector had detected breaches of the National Minimum Wage Act at inspection and referred the case to NERA/WRC management for prosecution in line with agreed procedures. NERA/WRC management refused the inspector’s request for prosecution apparently on the odd basis that the employees involved were not prepared to come forward as prosecution witnesses in the NERA/WRC case against their employer. McLoughlin made the point to O’Sullivan that central to the rationale for having a labour inspectorate in the first place is that breaches of legislation detected during inspections can be pursued on the basis of the documentary and other evidence secured by the inspector during the course of the inspection and should not have to rely on vulnerable employees being put in the invidious position of having to come forward to confirm the validity of such records in sworn evidence against their employer.

Here again, O’Sullivan does not address this case in his report and does not appear to have raised any concern with NERA/WRC management as to whether their decision to veto this prosecution had more to do with the fact that the business in question was owned by a cousin of then-minister Richard Bruton (and there is no allegation of impropriety here) than the pretext provided by management.

The WRC claimed in response to these allegations that clarification of the status of overnight workers was not provided until a 2014 Labour Court Recommendation. But McLoughlin alleges that even after 2014 NERA/WRC management continued to turn a blind eye to ongoing breaches of minimum wage in this sector and it was not until 2017 that the WRC could claim one modestly successful outcome and, even here, the arrears of pay recovered pale into insignificance compared to the £400M which the UK authorities recovered on behalf of overnight workers in that jurisdiction. And , of course, the WRC has yet to explain what happened to the arrears of pay due to the several thousands of workers affected by NERA/WRC management inaction in the social care sector between 2012 and 2017”.

(ii) Ongoing refusal by NERA/WRC management effectively to pursue widespread breaches of the Organisation of Working Time Act in relation to annual leave and public holiday entitlements detected at inspections.

As part of his investigation McLoughlin presented Turlough O’Sullivan with extensive evidence of his claim that NERA/WRC management was consistently refusing to pursue breaches of legislation relating to minimum annual leave and public holiday entitlements which had been routinely detected in inspections in the retail, hotels, restaurants, fast-food, homecare and other low-paid sectors of the economy. McLoughlin had been highlighting this problem with NERA management as far back as 2010.

The WRC told Village such prosecutions were not possible until introduction of the Workplace Relations Act in 2015 but McLoughlin had merely suggested such breaches should be forwarded directly to the Rights Commissioner which could have done much to achieve compliance in this area.

(iii) Fostering and deferring to political interference in the inspection process.
In his report O’Sullivan refers to McLoughlin’s allegation of political intervention in cases on behalf of non-compliant employers and claims that he has been unable to provide any evidence of this.
However McLoughlin disputes this: “in my first communication with O’Sullivan I provided him with details of the case of a construction company in the Mid West that I had inspected where the employer had been in breach of the Construction Industry Registered Employment Agreement and owed significant arrears to employees for underpayment of statutory minimum rates”. When this employer ultimately refused to pay the amounts due, he referred the case for prosecution in accordance with standard procedures. Before the case came to trial, according to McLoughlin, “the employer contacted a government minister who in turn made representations to NERA management on the employer’s behalf. I was instructed to cease contact with the employer by the NERA Regional Manager and when the case came to trial all charges against the employer were dismissed by the Judge on the basis of a technical fault in the Summons”.

The WRC told Village “The case for the Construction company in the Mid-West dates from 2010, and given the passage of time, it is not clear if representations were made in relation to this case.”. But McLoughlin had reported his concerns in relation to NERA management’s interference in this case, formally and in writing, in 2010. He considers it “wholly disingenuous and misleading for the WRC to now rely on the passage of time to avoid answering pertinent questions”.

(iv) Failure to provide effective regulation of sectors of the economy which have been the subject of widespread public concern.
On 2 November 2015 the Guardian newspaper published its report of a year-long investigation into the Irish fishing industry which showed that African and Asian migrant workers were being routinely exploited on Irish fishing trawlers. The extent of the abuse and exploitation described by these workers and by agencies working on their behalf was summarised by the Guardian to include:

• Withholding of pay, arbitrary cuts to rates of pay agreed in recruitment contracts, forced unpaid labour on net and boat repair in port.
• Rates of pay a fraction of the legal minimum.
• Workers’ passports being withheld by owners/skippers.
• Severe sleep deprivation, with workers being required to work in a near-continuous shift for several days.
• Reports of occasional physical abuse such as slapping …”

McLoughlin gave Turlough O’Sullivan a copy of the Guardian report for consideration in his investigation along with details of a relevant case which in September 2015 he had asked NERA/WRC to assign to him for inspection on the basis of complaints he had received alleging exploitation of undocumented migrant workers on a particular Irish fishing trawler – one which subsequently featured in the Guardian report. The boat working out of a port covered by the NERA/WRC Shannon office where McLoughlin was based. Given the nature of the complaint and that the records produced for inspection by the employer would be unlikely to show any undocumented workers, it was obvious that an effective investigation of this complaint would have required some advance surveillance and unannounced visits to gather information and interview employees before meeting the employer. Not only was McLoughlin’s request to inspect this vessel refused by his line managers without explanation but, by contacting the employer and his accountant by phone for details of employees in advance of any information-gathering, they sabotaged any possibility of effective inspection or sanction.

It was only after the furore that the publication of the Guardian article had generated that any effort was made to address this deficit and, even then, the main thrust of its activity was once again on policing work permits rather than on enforcing employment rights.

In his report O’Sullivan again accepted without any critical analysis NERA/WRC management’s rationalisation of its failure to ensure proper regulation in this sector on the basis that the workers in question are self-employed and so beyond the inspectorate’s remit. This is not so as the Guardian investigation showed. When this was put to the WRC it told Village that since 2016 it has trained inspectors, prosecuted 12 cases and secured five convictions. A UN Special Rapporteur’s Report of February 2019 has issued an unprecedented rebuke to Ireland for the manner in which the Department’s work permit system is making migrant workers vulnerable to modern slavery and serious abuse.

A separate area of public concern that McLoughlin drew O’Sullivan’s attention to related to the “alarming exploitation” of domestic workers/au pairs on which the Migrant Rights Centre Ireland (MRCI) had been campaigning for some years and which had been highlighted in an ‘RTE Investigates’ report.

A survey of 554 domestic workers/au pairs carried out by the MRCI found that 58% earned less than €120 per week and almost four in five had no written contracts while the ‘RTÉ Investigates’ programme found evidence of “widespread employment abuses among the estimated 20,000 au pairs working in Ireland”, leading one international expert to describe this country as “The Wild West” in terms of employment-rights regulation in this sector. One worker featured in the RTÉ programme worked 12 to 14 hours per day for six days a week and was paid €100.

McLoughlin provided O’Sullivan with statistics for NERA/WRC inspections of domestic workers/au pairs during the period 2011 to 2014 inclusive during which a total of 143 inspections netted a grand total of 16,751 in arrears of pay for the entire four-year period – an average of 147.21 per inspection. The WRC informed Village that its approach was “perceived internationally as being both progressive and innovative”.

McLoughlin says his point to O’Sullivan was that the level of inspection activity in the domestic worker/au pair sector clearly did not reflect the level of widespread non-compliance that was evident in the concerns being highlighted by workers, stakeholders and media and was further evidence of the “light-touch” approach to regulation that he had complained about in his disclosure. Here again, O’Sullivan makes no reference to these legitimate concerns in his report and we are left to assume that he considers NERA/WRC management’s token efforts in this area to be fit for purpose.

(v) The Negative impact of policing the Employment Permits Regime on the core work of the Inspectorate:
The first tranche of documentation that McLoughlin provided to O’Sullivan after their initial meeting elaborated on his concern that the additional role in policing employment permits that NERA/WRC management assigned to labour inspectors from 2010 has had the effect of not only diverting scarce resources away from the inspectorate’s core remit in monitoring and promoting employment rights but has so fundamentally altered the perception of the inspectorate in the eyes of vulnerable migrant workers as to undermine their trust.

Traditionally, the labour inspectorate did not have any role in policing employment permits and the ethos in the Department had always been strongly against requiring labour inspectors to take on this additional role.

George McLoughlin claims to have been subjected to a long series of punitive actions by NERA/WRC and DJEI management for having raised his concerns about the management and direction of the labour inspectorate. He has taken cases against the Department under the Protected Disclosure Act and the Unfair Dismissals Act. He lost both cases at the WRC and on appeal to the Labour Court but a further appeal of his Unfair Dismissal case to the High Court has resulted in that case being referred back to the Labour Court for rehearing. He also has a further appeal against a WRC decision in a case taken under the Protected Disclosure Act due to be heard by the Labour Court.

McLoughlin has also had a Petition accepted by the European Parliament protesting at the manner in which the WRC and the Department are, effectively, judge and jury in their own case in that his case against the WRC and the Department falls to be determined in the first instance by the WRC itself and, on appeal, by the Labour Court which is a sister organisation of the WRC and part of the same respondent Department.