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Playing Host To Migrants(Business & Finance Via Thomson Dialog NewsEdge) Ireland has opened its borders to foreign workers. It is in everyone's interest to come to terms with this, writes Nicole Matthews. We are all familiar with the Statue of Liberty whether we've seen it on screen, in true life or, for many in the past, from a ship landing after a rough passage across the Atlantic. What many may not be familiar with is the last five lines found on Lady Liberty's pedestal. "With silent lips, Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door." Ireland has a long history of emigration stemming from famines to recessions to high levels of unemployment which forced many to leave for better prospects. Since the beginning of the 1990s, we have witnessed a transformation in this country which has led many to come to our shores in search of better prospects. Wilt we extend our welcome to this new wave of EU immigrants and set policies to create equal opportunities for all? In late December 2005, Pat Rabbitte, the leader of the Labour Party publicly voiced the question of whether we should be allowing eastern European workers unrestricted access to Irish labour markets. There followed a major public opinion poll recording a 78% vote for a reintroduction of the work permit system for admission of EU10 migrants. The same poll also showed a 54% majority supportive of the idea that immigration has a positive impact in Ireland's economy in general. Work permit reforms After years of debates and consultations with various stakeholders, Minister for Enterprise, Trade and Employment Micheal Martin introduced new employment permit arrangements which became effective on February 1st, 2007. Many facets of the old employment system will be retained, but the new system will allow for a "green card", the reintroduction of the IntraCompany Transfer Permit, the clarification of the system regarding spousal and dependent permits and the establishment of a new graduate permit scheme. Martin says that these measures will go a long way in tackling some of the problems encountered by EU and non-EU nationals coming to Ireland to work. "It emerged from research conducted by Forfas and the Expert Group on Future Skills Needs (EGFSN) that we had to aim for high-skilled workers particularly in areas where we are short, but also high-skilled workers because there was a surplus of low-skilled workers coming from the accession states," he says. In a bid to attract more high skilled-workers, work permits will be issued directly to employees for occupations with salaries over Eur 30,000. Work permits are granted for an initial two years with family reunification after one year. Green cards will be issued directly to employees earning between Eur 30,000 and Eur 60,000, but this scheme will be limited to certain categories of professionals. This is also granted for an initial two years, after which it can be renewed indefinitely. Family unification is immediate for green card recipients. The previous employment permits meant many workers were living and working in Ireland without their spouse and children and this new legislation is seen as giving foreign nationals more rights and attracting inward investment into the country. Freedom to toil In theory, this sounds like a better situation for all involved, and in most cases it is.' But there are still many underlying issues in the latest legislation. John Forde, chair of HR policy, Chambers Ireland, says that, while the new legislation is welcome there are several areas that fall short. "If you take into account recent developments, there are a number of nonEU migrant workers in Ireland at the moment whose work permits have run out and who are now at the risk of repatriation. Their employer didn't renew it so, at no fault of their own, these people are now sitting in limbo." This is a view shared by Daniel Griswold, director of the Centre for Trade Policy Studies at the Cato Institute and an expert on immigration policy. He says that workers should not be tied too closely to a particular employer as it can give an employer too much leverage over that worker and puts the worker at a disadvantage. "In the US we, by and large, have mobility and independence for workers, although it tends to be a system of employer sponsorship. In the HIB programme, the employer brings the HIB worker over but then, with some regulatory hurdles which are not insurmountable, workers can move from one employer to another. I think the warning brought up [by Chambers Ireland] is a legitimate concern and the right balance has to be struck," he says. The issue of portable work permits for all workers regardless of their income or professional classification is hardly a trivial matter, considering that the largest employment area for foreign nationals is the construction sector. The latest Central Statistics Office (CSO) figures for the construction industry show a continued growth of employment in construction with an increase of 2.3 % in January 2007, compared with the same period in 2006. Total figures for 2006 show a total of over 28,400 new jobs created in construction. These new jobs are spread right throughout the country across all regions, bringing the total number of people working in construction to more than 281,600, over an 11% increase from 2005. In the eventuality of an adverse shock to employment in this sector, or even in the more moderate case of a slowdown, the construction industry will be responsible for releasing a large number of long-term workpermit-holders. These workers, many of whom are well-anchored in Ireland, will be unlikely to move out of the country and might be forced into a grey economy. Another area of potential concern for Government and workers alike is in the area of mutual skills recognition. Effectively, the current situation does not recognise a medical degree from an EU accession state as being equal to an Irish-acquired degree. The system currently relies on the Medical Council and Nursing Council to make decisions on a case-by-case basis. In contrast, in the US there is standardised testing for the practice of medicine and US exams must be sat by everyone from outside, regardless of where their degree is from. This ensures an equitable and fair system for all. Minister Martin says that this is an issue which is at the top of the Government agenda. "We have a National Qualifications Framework and they have set up a unit which is looking at developing a European unit and liasing with the European Quality Framework. We hope to get mutual recognition across Europe in all the sectors but certainly in our medical and nursing areas as, at times, it can be cumbersome enough so we need to get mutual recognitions sorted with the Medical Council and bodies like that." The key is in striking a balance in incentivising high-skilled professionals into the country while ensuring against fraudulent qualifications. "There is a clear public interest in ensuring that immigrant professionals are able to meet the needs of consumers. On the other hand, there is a danger in overregulating to the point that it becomes a type of protectionism keeping out perfectly fine doctors or other professionals who could contribute to society and the economy," says Griswold. In the presence of a well-defined system of accreditation, as is the case of the US, there are fewer reasons for protecting access to certain professions. However, the European model so far has been to accept national accreditations and merge them directly into EU-wide system for recognising various degrees. Until recently, in the case of Ireland, the EU approach meant recognising relatively compatible qualifications certified in other EU15 states. With the accessions in 2004, this has changed dramatically. A simple extension of the existing EU approach will mean that qualifications issued by smaller, completely unknown schools located in eastern European countries will have to be fully recognised on par with those issued by well-established universities. In addition, several of the EU10 states have education systems that do not meet international standards. A welfare black hole? A further issue highlighted in the media is the increasing cost of child benefits going abroad to immigrants' children living overseas. This figure, due to a sharp rise in applications, could reach a reported Eur 112m per year. Economically, it is dangerous for a country involved in high levels of immigration growth to have a generous welfare state, as it is seen to create a disincentive for immigrant workers to contribute to the society. "I think that is something that the Government of Ireland needs to avoid. The people of Ireland have no obligation to pay such benefits to immigrant workers in Ireland. They should learn from the same mistakes made in France, which is now faced with restless immigrant populations where unemployment is high and they feel segregated and marginalised in society," says Griswold. This could also leave the door open for potential abuse of the system as currently an EU national could simply come to Ireland, get a PPS number and return to their home country. Meanwhile, child-benefit payments would still be received from the Irish State, creating a huge drain on taxpayers. Enda Kenny, leader of the Fine Gael party, says that when the childcare supplement was introduced, the question posed by the Opposition was this: if you want to introduce it that's fine, but why is it not targeted at the point it is needed most - childcare costs in Ireland? "Childcare supplements were introduced by the Government on the basis of childcare costs in Ireland. The question I asked of them was, if you recognise that there is a problem as to the level of childcare costs in Ireland, why then was the childcare supplement not targeted to deal with that problem in this country? They tied this into child benefit which is not an issue at all but is going to cost Eur 112m and a lot of it is not going towards childcare costs in Ireland but is going towards supporting the children in other European countries," says Kenny. If we take Poland as an example of a country from which we have many nationals working in Ireland today, childcare costs are not equal to Ireland and, in many cases, are subsidised by the Polish government. According to a report by the European Foundation for the Improvement of Living and Working Conditions, parental fees for out-of-school education establishments cannot exceed 25% of the average national monthly income which in 2004 was Eur 572.40. If this works out at approximately Eur 143 per month and the Irish Government is giving Eur 1,000 per year to supplement it, then over 12 months they are paying for well over 50%. In relative terms, the Polish recipient of Irish welfare for childcare is receiving more per capita than Irish. Forde says that a good model to look at would be the US model, although even within that model there is room for improvement. One of the key elements of the American approach to immigration which has worked reasonably well is that it has a smaller welfare state and immigrants who come to the US don't have the option of signing up to a lot of welfare programmes. With Romania and Bulgaria now in the EU, immigration is an opportunity for all involved, provided it is managed effectively. "We would be anticipating up to 10,000 applications per annum so, on our part, we have to make sure that this happens in a seamless and much more customer-friendly way into the future," says Minister Martin. Niche skill workers In Australia, visa applications are weighted according to the job categories that are under- resourced. While many have touted this as an idea that Ireland could pursue, Martin says that, at the moment, we are concentrating solely on employment vacancies. "The legislation that I have passed allows something like that in the future to be passed, which is good from that point of view as it is flexible and it's a framework which will facilitate adaptation into the future. We have opted in the short term to go for an employment-based approach which means that there has to be employment vacancies," he says. Griswold, however, says that there is a danger in micro-managing the skill profile of the workers coming in. "It isn't always necessarily those with the PhD or those earning a certain amount that are most needed in a country. Labour markets have niche needs. Here in the US, our approach - which I generally think has worked - is to allow companies a wider degree of freedom in deciding who they need." Immigration provides a wealth of opportunities for countries when managed effectively. Ireland and Denmark represent policy extremes in dealing with migration from the EU10 states. Ireland adopted an unrestricted mobility approach to the EU10 while Denmark chose to restrict new labour inflows. On the other hand, both countries had a similar approach to regulating access for EU10 citizens to their welfare services. In Ireland, concerns about increased levels of immigrants due to what is seen as an overly restrictive policy on immigration by some member states forces Ireland to accept a disproportionate surplus. The other side of the argument is that the countries that restricted labour migration now face a growing concern about the possible deterioration of their economies' competitiveness. A broader issue which needs to be tackled in the perception of immigration is the actual numbers of foreign workers who are employed in Ireland. Kenny says that before the Government can tackle the issues around immigration we need to know the scale of the issue. "As the current situation stands, we don't know how many people from other countries are in Ireland. We don't know what their skills are, we don't know how these skills are being used and we don't know what their intentions are. There is a great deal of confusion and lack of clarity in Ireland at the moment." This has led to calls for a centralised data processing system to record immigrants residing in the country for which current numbers being touted of 400,000 are mere guesstimates. According to figures compiled by Chambers Ireland, the actual number of foreign workers is far less then people think. "You still hear on the street "all these foreigners coming in and taking our jobs" but the figures based on the actual labour force show that only 10% of the workforce are foreign nationals. Bear in mind that this is not just eastern Europeans but includes Poland, Britain, Lithuania, France, the Czech Republic, Latvia, Germany, South Africa, Slovakia, Spain, China, Italy, the Ukraine and the USA," says Force. Forde also says that the survey shows that, across industries, tourism has the highest proportion of foreign nationals whereas the public service has the lowest. "The public service promoting the whole area of equality and representing the population should probably be parallel or have approximately 10% of employees speaking foreign languages and representing the population. What we currently have instead is 5% in the public sector, with the main sway of our foreign nationals being from English-speaking countries." Citizens, not users Prof James Wickham, a sociologist in Trinity College's Immigration Initiative, says that one of the many things that we don't know yet is, are these people here to stay? "Ireland is now part of a global labour market and some of these groups see themselves as being very much part of this market so we shouldn't repeat the mistakes that were made in France and Germany. We have to make it clear that we want citizens not consumers and a free market for labour not property. EU membership should not give the Irish the right to buy property in Bulgaria while refusing Bulgarians the right to work in Ireland." Griswold says that while Ireland is a great success story and the Government has made some good economic decisions, in the future the challenge will be in managing this. "Ireland has adopted some measures that have allowed it to prosper, such as labour market flexibility and allowing employers to hire and, if necessary, fire workers. They must now ensure that they do not create so many regulations that they eliminate jobs on the lower rungs of the ladder, and that they avoid having such a generous welfare state that people lose the incentive to work." He also says that the Government must not try to micro-manage the skill profile of people who come in but let market signals sort that out. At the same time, the Government needs to guard national security and the interest of taxpayers and society at large. Currently, the Government, in tandem with the EGFSN, is doing exactly that in identifying Ireland's current skills profile through the launch of a new national skills strategy this month. The core recommendation of the EGFSN envisions that, by 2020, Ireland II will have 93% of the labour force with qualifications at, or above, Leaving Cert level and 48% with a third- or fourth-level qualification. This begs one question: how will the EGFSN know which professions, qualifications and degrees are needed by 2020 and in what proportions relative to the overall labour force? Twelve years ago hardly anyone could have imagined that Ireland will need more bankers and investment fund managers than industrial engineers. We are in danger of allowing not just micro-management of the skill profile of this country by the Government but micro micro-management of the skill profile in this country by the EGFSN. And those letters stand for the Expert Group on Future Skills Needs, just to reiterate. An oxymoron or just a mouthful? Details of the work permits What do the new employment permit arrangements which became effective on February 1st involve? ask Melanie Crowley and Aoife Henry. While the old work permits system has remained in place, albeit in a slightly modified form, the Employment Permits Act 2006 has allowed for the introduction of a new type of employment permit, namely the green card, the re-introduction of the IntraCompany Transfer Permit, the clarification of the system regarding spousal and dependent permits and the establishment of a new graduate permit scheme. Work permits Since February 1st, 2007, work permits are issued directly to employees for occupations with salaries of over Eur 30,000. Work permits are granted for an initial period of two years which can be renewed for a further period of three years. A more stringent labour market test has now been introduced with employers required to advertise in local and national newspapers for at least three days in addition to registering positions with Fas. It is only in very exceptional circumstances that work permits will be granted for salaries under Eur 30,000 and the list of occupations for which work permits will not be granted remains in place. Family reunification for work-permit-holders is only allowed after one year has passed. Green card permits The most significant change brought about as a result of the commencement of the 2006 Act, is the introduction of the new green card system. Green cards are essentially employment permits available to most occupations with annual salaries of over Eur 60,000. In certain limited circumstances, green cards may be granted for positions with annual salaries of between Eur 30,000 and Eur 60,000 but this is limited to certain ICT professionals, health professionals, professional engineers and technologists, construction professionals, certain researchers and natural scientists, some business and financial professionals and some specialist managers. There is no labour market needs test required prior to the application for a green card which is issued for an initial period of two years following which it can be renewed indefinitely and permanent residency can be sought. The new green card system replaces the old work visa/work authorisation scheme and allows for immediate family reunification. Intra-Company Transfer Permits The Intra-Company Transfer Scheme which was discontinued a number of years ago has been re-introduced. Intra-Company Transfer Permits will now be available to senior management, key personnel or those undergoing a training programme who are earning a minimum annual salary of Eur 40,000 and have been working for at least 12 months with the overseas company prior to the transfer. Intra-Company Transfer Permits will initially be granted for a period of 24 months but are renewable thereafter subject to a maximum stay of five years. Spousal/Dependent permits This new scheme will allow the spouses and dependents of employment permit holders (whether green card/work permit or Intra-Company Transfer Permit) who are entitled to reside here to apply for work permits. In such circumstances, no labour market needs test is applicable. Graduates It is now possible for third-level students to apply to remain in Ireland for a period of six months following receipt of examination results to allow them sufficient time to seek employment. Thereafter, if their search for employment is successful, either a green card or Work Permit may be applied for dependent on the circumstances. General What is interesting is that built into the new arrangements are mechanisms which provide for the protection for immigrating employees going forward. >From February Ist, 2007, green cards and work permits are granted and issued directly to an employee. Furthermore, the Department of Enterprise, Trade and Employment has provided that all permits will henceforward be accompanied by a summary of principal employment rights. While it is now possible for either an employee or an employer to make an application for an employment permit, the 2006 Act contains a specific prohibition on an employer making deductions from the remuneration of, or seeking to recover from, the holder of an employment permit any charge, fee or expense relating to either the employment permit fee, the recruitment of the employee or any amount paid to the employee in respect of travelling or expenses incurred in connection with the taking up of employment in the State. An employer who contravenes these provisions of the 2006 Act may be found guilty of an offence and liable to a fine of up to Eur 50,000 and/or imprisonment for up to five years. Interestingly, while it is suggested that employees should remain in employment for at least a year, there is no prohibition on employees leaving their employer at any stage. For employers who fork out Eur 1,000 for an employment permit (or indeed Eur 1,500 for a renewal of an employment permit), this might prove a bitter pill to swallow. Melanie Crowley is a partner and Aoife Henry is a solicitor with Mason Hayes and Curran. Copyright 2007 Moranna Ltd. All Rights Reserved. Source: Financial Times Information Limited - Europe Intelligence Wire. |