One could possibly have surmised, and many within the trade union movement did, that individual cases of exploitation of migrant workers, such as that described above, arose primarily because of the isolation of the workers involved and the atypical nature of the employment and that if it were a more mainstream employment with unionised workers it couldn’t happen. However, in 2005 two high-profile industrial relations disputes, concerning GAMA Construction Ireland and Irish Ferries respectively and involving migrant workers, made it clear that this was not the case and that exploitative practices were also happening in unionised employments. These two disputes, more than any other, brought the issues of abuse and exploitation to the fore and mobilised the unions and the general public. While they involved exploitation and potential exploitation of migrant workers, there were also other factors at play which gave them a national prominence that the previous case did not have. One factor was the numbers of workers involved but the more significant factors was the presence of trade unions in the companies and the fact that the disputes attracted political attention.
The first of these, the GAMA dispute, involved the ‘posting of workers’, a form of labour migration which really only emerged in the 1990s, as a response to the EU freedom to provide services. What distinguished this new form of migration was that the employment of these workers involved a level of legal ambivalence with regard to whether their employment was governed by the labour laws of the host country or of the country of origin of the service provider. The ruling in 1991 by the European Court of Justice in the Rush Portuguesa case, which concerned a Portuguese firm ‘posting’ workers to its French based construction site, formed the basis of the European Union Posting of Workers Directive (PWD) in 1996 which theoretically applied the principle of equal treatment to a core of employment standards. Posted workers are only temporarily working in another member state, remaining employed in their home state, and thus are ‘mobile’ in the sense that transnational arrangements apply. The Directive stipulates that ‘workers ‘posted’ by an employer to perform work in another EU state should be guaranteed the minimum provisions as laid down by law or collective agreement in the host country’. However, the national implementation and enforcement of the directive was weak and there was a lack of cooperation between member states (Cremers et al. 2007).
6.3.1. The GAMA case
GAMA Construction Ireland was an Irish subsidiary of a Turkish construction company, which employed more than 10,000 people across Europe, the Middle East and Asia. The Irish subsidiary employed over 1,000 workers in Ireland, two thirds of whom were Turkish and one third Irish. In early 2000, the then Minister for Trade, Mary Harney had led a trade delegation to Turkey (Dooley 2005a) and subsequently GAMA had been invited to tender for Irish contracts. Since then the company had won a number of sought after public project contracts, including power plants, major road developments and local authority housing estates.
In February 2005 it came to light that GAMA was employing the Turkish workers on rates below both the industry agreed minimum and, indeed, below the national minimum wage. These workers were accommodated off site by their employers and spoke little or no English and so were highly vulnerable to social isolation and exploitation. It was Socialist Party TD, Joe Higgins, who brought the issue to public attention when he raised it in the Dáil39. He claimed that workers were made to work “grotesque hours” and were paid between €2 and €3 per hour when the minimum wage was €7 and the employment agreement minimum in construction was €12.96 (Parliamentary Debates 2005a). The company rejected the allegations and also pointed to the fact that all of their workers were members of the ‘appropriate trade unions in the Irish markets’ which indeed they were. These unions were SIPTU, TEEU, UCATT (Union of Construction, Allied Trades and Technicians), OPATSI (Operative, Plasterers & Allied Trades Society of Ireland) and BATU. And indeed ICTU and its member unions generally had good relations with GAMA which was also a member of the Construction Industry Federation (CIF) (Dooley 2005a).
A former SIPTU National Executive Member was critical of the unions and of SIPTU specifically: “In the Gama dispute, SIPTU and the other unions definitely sat on their laurels” (Interview, 2013). He went to describe how he first came across issues at a GAMA site in Fingal in 2000, five years prior to Joe Higgins raising it in the Dáil, when he got a call from an Irish girl about Turkish workers sleeping in sheds on the site. He and a colleague went to the site and posed as representatives of the Construction Industry Monitoring Agency. Their appearance seemed to cause total panic with workers dropping tools and running into buildings. When they began to talk about Registered Employment Agreements (REAs) and sick pay and pensions, they were told to get off the site immediately and to contact the head office. They went immediately to the SIPTU Construction Section and reported the situation and handed the matter over to it, “I believed for years that this was sorted. And the next I knew of it was when Joe Higgins brought it up in the Dáil five years later” (Interview 2013). It would appear that this 2000 report was neither documented nor pursued as no SIPTU interviewees knew anything of it and nor did it appear in any documentation.
Following Higgins’ claims, the Labour Inspectorate of the DETE began an immediate investigation. It emerged that this was not the first complaint about GAMA, or the first investigation. In 2003 there had been complaints from the trade union, BATU to both Minister Harney and the Labour Inspectorate and complaints from another construction company directly to Minister Harney in 2002. The Inspectorate had investigated the BATU complaint and reached the conclusion that it was without substance. Brendan O’Sullivan, BATU: “We couldn’t produce any hard evidence. We couldn’t produce the individuals, they would have been sacked” (Interview 2013). Minister Harney and her officials had also rejected a claim from the competing construction company which claimed that it couldn’t compete with GAMA tender rates which was paying its construction workers rates of €5 an hour. The complainant was informed by the Secretary General of the Department that GAMA had co-operated with requests for documents and that “there are no further issues which we wish to pursue” (Dooley 2005b; 2005c). This begs a number of questions to which answers never became public, as to what level of investigations were carried out, why alarm bells did not ring when there were complaints coming from different sources? Was there any question of the state not wanting to find transgressions?
The case is illustrative of both the challenge for trade unions in catering for a migrant worker membership and the shortcomings in their ability to identify and respond to fundamental labour relations issues particular to such workers. The fact that the GAMA workers were not directly employed by an Irish company but were posted by a foreign subcontractor, a practice widespread in the European construction industry, (Balch et al. 2004 in Krings 2009a), that there were language barriers and that accommodation was provided by the employer contributed to the trade unions’ inability to identify the issues sooner. A former SIPTU Regional Secretary observed that, as Gama workers were coming into what were mainstream employment projects which recognised trade unions, there was a certain presumption on the part of the trade union movement that they would be treated equally. But he also told of an official in his region, who contacted him following an encounter with GAMA in 2004. The official had requested a meeting and it was originally suggested that he be accompanied by a member of management. He refused and insisted on meeting the workers on his own. The official found that there was something ‘not quite right’ and he was uncomfortable with it:
What he described to me was that the whole thing had an air of the ‘white mansions’ about it. It was a bit like going on to a farm in Alabama and interviewing the workers and they were all saying “yes boss, everything is fine boss” and he just knew that everything wasn’t fine but they weren’t telling him anything and all he could confide to me was his frustration. And subsequently the whole thing came out but people like him and others had been trying to get to the heart of it but they were being told over and over again by the members themselves that everything was fine (Interview, Former SIPTU Regional Secretary, 2013).
SIPTU officials had in fact held numerous meetings with both the company and the workers while Price Waterhouse Coopers had examined the books and found no evidence of wrongdoing. The workers said subsequently that these visits involved meetings of numbers of workers and they were afraid to speak frankly, in case colleagues informed on them.
The unions had become more actively and visibly involved in the dispute as the facts came to light. SIPTU, in particular, adopted a fuller role in representation and negotiation on behalf of the 600 plus workers involved. It also brought in staff from its new organising division to facilitate meetings with the migrant members and intervene on their behalf (Flynn 2006). Former SIPTU National Organiser:
It was after Joe Higgins made his public pronouncement in the Dáil that Jack O’Connor asked me to go in and see what I could find out. But I had nothing to do with construction. I was from the organising department. I started asking questions. I started going out the sites and having general meetings on the sites (Interview, 2013)
6.3.2. Beyond the media story
Following the commencement of the Labour Inspectorate investigation, GAMA announced an internal review and in March admitted to having uncovered underpayments. It said errors involving underpayments of between €50 and €3500 had been uncovered. It suspended three staff based in Turkey while an enquiry took place into “how the breach of the company’s policies and normal procedures took place”. The company said the underpayment was in the order of 96 cent per hour with workers receiving €12 as opposed to €12.96 an hour and they again denied making payments of €3 per hour (Dooley 2005d).
On further investigation by the Labour Inspectorate, Higgins and the unions, a complex tale of destroyed work records and workers’ money being paid into Irish, Turkish and Dutch bank accounts emerged. In fact, according to former SIPTU National Organiser, the inspectorate asked Joe Higgins and SIPTU if they could follow the money trail because it just didn’t have the resources. What they established was that each worker before leaving Turkey was given a document in English to sign which said that their money, apart from their small allowance in Ireland, would be paid through Finance Bank in Holland and would then be transferred to a company called Ryder Investment which was a registered company in the Bahamas and from there would go back directly into GAMA accounts. “So when we checked it out we saw a payment made to John X at Finance Bank and then transferred out the same day to Ryder Investment…and that money was never to be paid to those workers” (Interview, 2013). As much as €23,000 was found to be in some of the Dutch accounts of which the workers claimed to have known nothing while the company insisted that this was an agreed method of payment. The inspectors found that while GAMA did pay workers less than the minimum construction rate, the rates were probably not as low as alleged by Joe Higgins (Dooley 2005e). The inspectors recommended a further more detailed investigation be carried out, going back some years and that the Director of Corporate Enforcement be asked to carry out an investigation of GAMA’s accounts.
On the political front, it came to light that GAMA had benefited substantially from a scheme whereby exemption from payment of social insurance for a period not exceeding 52 weeks can be granted in respect of the temporary employment of people who are not ordinarily resident in the state. The Department of Social and Family Affairs (DSFA) confirmed that 1,867 workers had been covered by the scheme since it began in 2003 and, of those, 1,324 had been employed by GAMA (Dooley 2005f). In addition, nearly 1,000 work permits had been issued to GAMA since January 2004 despite there being a ban in place on the issuing of such permits, because it was considered that there were sufficient building workers available within the expanded EU. A department spokesperson said that GAMA was facilitated under a scheme whereby teams of employees could be brought to Ireland to work on major infrastructural projects for a specified period of time. The Irish Times was unable to find any information on such a scheme (Dooley 2005g). In March, Minister for Employment, Micheál Martin revealed that he had stopped the issuing of work permits to GAMA until the DETE investigation was complete (Dooley 2005h). The fact that GAMA appears to have been in a somewhat privileged position with regard to access to schemes that were not available to all, calls into serious question the role of the state and the statutory agencies in all of this. To what extent was it the result of failure of regulation or a deliberate decision on the part of agencies and individuals to facilitate circumnavigation of regulation in order to meet budgetary targets and achieve deadlines?
While all parties awaited the outcome of a GAMA challenge to the publication of the Labour Inspector’s report, the workers took industrial action in pursuit of their outstanding monies. Some began an occupation of a GAMA construction site in Dublin as SIPTU met with GAMA. Meanwhile, the company announced that 140 work permits were soon to expire and these workers would then be repatriated to Turkey. As well as this threat there were claims by the workers of other forms of intimidation. The Government intervened with the Minister for Enterprise, Trade and Employment, Micheal Martin, counselling GAMA against any threatening or intimidatory tactics (Dooley 2005i). Despite this, only two weeks later, GAMA informed the 230 workers engaged in the dispute that they would be removed from the payroll and be asked to vacate their accommodation and that those whose work permits had expired were being repatriated.
This move came hours after the High Court ruled that the Labour Inspector’s report into GAMA, which was now complete, could not be released, pending further proceedings. In court the barrister pointed out that the Turkish workers were on secondment from the Turkish parent company and that they were employed under Turkish contracts of employment governed by Turkish law. The judge granted an injunction and leave to seek a judicial review. Subsequently, the Court found that the powers of the Inspectorate under the relevant Acts did not permit it to produce a general report on a particular workplace (including matters outside of those relating to minimum wages or working time), which could be circulated or published generally. Thus the preparation of the report was ultra vires (beyond the powers) and could not be published (Higgins 2005). The Supreme Court did subsequently rule that it could be released to the relevant statutory authorities, i.e. those State bodies with a prosecutorial function in relation to the matters identified in the report, those being the Garda Fraud Squad, the DPP, the Revenue Commissioners, the Director of Corporate Enforcement, the Competition Authority and the GNIB. In an ironic twist, the Court awarded half of GAMA’s costs against the Minister for Enterprise, Trade and Employment (Carolan 2005). Despite contributing substantially to the investigation process that led to the report, it was never seen by either Joe Higgins or SIPTU.
6.3.3. Migrant worker issues on the national agenda
The issue of migrant worker rights was now very much to the fore in both trade union activity and discourse. ‘Rights and entitlements for migrant workers’ was the theme of the trade union May Day rally in Dublin in 2005. The event was organised by the Dublin Council of Trade Unions and co-ordinated by SIPTU Branch secretary, Eric Fleming, who said that the treatment of migrant workers had become a national issue, “there is now growing public awareness of very high levels of exploitation of migrant workers in construction, services, and other sectors” (Dooley 2005j). In June, the ICTU conference voted to place the rights of migrant workers at the top of the agenda in any talks on a new partnership deal. The conference also passed motions calling for the establishment of an ombudsman or commissioner for migrant workers (Dooley 2005k).
The GAMA dispute, which eventually involved three trade unions and a protracted series of unofficial and official action, was finally resolved through the Labour Relations Commission in August 2005, six months after first coming to public attention. GAMA agreed to pay all its Turkish employees €8,000 per year of service to cover overtime worked. SIPTU confirmed that all GAMA employees were now receiving the legally binding registered employment agreement rates and being issued with proper wage slips. All of the Turkish employees received the monies from the Dutch bank accounts and were paid substantial sums to cover underpayments. At this point almost all of the original 600 workers had returned to Turkey, with only approximately 83 remaining in Ireland.40 The dispute marked a turning point for the trade union movement in its approach to organising and representing migrant workers. It brought the issues around exploitation on to the national stage. It introduced the concept of posted workers and the complex problems such posting brings into the Irish situation for the first time. It also pointed up the fact that despite beliefs to the contrary, unionisation per-se does not automatically ensure against exploitation and that there are other factors at play. These factors include language barriers, isolation, complex employment relations, the employer being non-Irish based, weak legislative implementation, a weak labour inspectorate and weak, or complacent unions, operating on the basis of membership as all. It became clear that the traditional service model of trade unionism as had been operating in Ireland, was failing to address the needs of migrant workers such as those in GAMA, and that a more pro-active, and diversified, organisational model was required. The factors described above created fertile ground for exploitative employers and concomitant new challenges to trade unions to identify such situations and to provide imaginative and effective solutions. While some individual trade unions looked to structural and organisational change, the dispute primarily became a catalyst for a trade union campaign to improve labour standards with calls for further legislation and greater enforcement. ICTU made a submission to the Minister for Enterprise, Trade and Employment calling for a range of improvements in legislation and enforcement including putting the burden of proof of compliance with labour law on employers; a requirement that companies competing for public contracts furnish the equivalent of a tax clearance certificate in respect of the employment conditions of their workers; that accredited union officials be given certain limited legal powers of access to employment records of companies in a supporting role to the Labour Inspectorate; and that there be a further increase in the Labour Inspectorate to 75 (ICTU 2005). Other than the appointment of 11 new labour inspectors, these calls went unheeded.
Finally, the GAMA case, as a transnational dispute involving posted workers, needs to be considered alongside other such disputes and their outcomes. Most significant in this respect was the Laval case in Sweden in 2004 when the refusal of a Latvian construction company to pay its workers the local rates prompted a union blockade of the building site in Vaxholm, Stockholm, followed shortly afterwards by a blockade on all the company’s sites in the Stockholm region. The workers were Latvian and had been posted to Sweden in much the same way as the GAMA workers were to Ireland. In 2007, this case went as far as the European Court of Justice which, in what was seen to be a very significant ruling, found in favour of the company. In short, the ECJ held that the trade unions were precluded from attempting to force, by means of collective action, a provider of services established in another Member State to enter into negotiations on rates of pay constituting more favourable conditions than those resulting from relevant domestic legislative minimum provisions (Bell 2008; Woolfson and Sommers 2006). It was the Laval dispute that first exposed weaknesses in the protective floor of minimum standards offered by the Posting of Workers’ Directive.