Photo caption:  The delegation to meet with Minister Browne to discuss damages awarded in defamation cases were (from left): Neil McDonnell, ISME; Vincent Jennings CSNA; James Coghlan, Astropark Ltd; Stuart Lodge and Liam Gleeson, Lodge Service

Damages should be capped at €75,000

Dublin 12^th April 2024:  An ISME and CSNA delegation has met with Minister of State at the Department of Justice, James Browne TD, as the Department prepares to publish the legislation amending the Defamation Act 2009.  Both of the business representative bodies have called on Minister Browne and the Government to introduce an immediate cap for serious defamation.

Government must introduce an immediate cap of €75,000 for serious defamation.  The time is now.

The Supreme Court has now confirmed that capping of damages is constitutional and that this is exclusively a matter for the Oireachtas.

As the level of damages recommended by the Supreme Court in Higgins -V- DAA is excessive, inconsistent with the Judicial Guidelines on serious injuries, and is almost certainly repugnant to Article 10 rights under the European Convention on Human Rights, the cap must be introduced.

On occasion, higher damages should be awarded, for instance where a plaintiff has lost their job as a result of a defamatory allegation; or where a business has had its reputation damaged as the result of a defamatory allegation (e.g. Dominion Voting Systems v. Fox News).  However, these instances should be dealt with on a “vouched” basis, similar to special damages in personal injuries cases. Awards of up to twice the vouched loss should be awardable by the Courts. This is consistent with legislative provisions under the Unfair Dismissals Act 1977.

The adoption of the anti-SLAPP Directive (which protects journalists and media outlets from aggressive litigation) by the EU Parliament, means that Ireland must introduce robust and meaningful protections for defendants, as well as significant penalties for offending plaintiffs. Compensation for defendants must be equivalent to three times the damages sought by the plaintiff, or the maximum jurisdiction of the Court in which the claim is brought, whichever is the greater. This level of award is consistent with legislative provisions under the Protected Disclosures Act 2014.

Neil McDonnell, CEO of ISME said: “Any reform to the Defamation Act without addressing legal costs will be almost meaningless. As we have previously advised the Department of Justice, the real power in defamation litigation is not the ability to exact damages from defendants, it is the ability to inflict large costs upon them, without any hope of recovery if the defendant wins. The Government must therefore introduce legislation giving effect to the minority report of the Review of the Administration of Civil Justice within the lifetime of the 33rd Dáil.

Vincent Jennings, CEO of the Convenience Stores & Newsagents Association (CSNA) said: “CSNA welcomes the proposed amendments to the Defamation Act that will prevent frivolous and vexatious claims against our members. Unless serious harm has been suffered by a customer there should never be opportunities for chancers to enrich themselves.  Asking for a receipt or proof of payment or refusing to accept a particular payment type should never be considered “actionable””.

Stuart Lodge, CEO of retail security company Lodge Service International said: “Over the past fifteen years the situation, in regard to the litigation in Ireland, has become progressively worse and has now deteriorated to an extent that we are seriously questioning whether it is still viable to conduct business here. We also believe that we are not alone; and this claims culture is deterring other suppliers and investors from doing business in Ireland. We also propose that retailers and their representatives should be able to question customers in relation to their purchases or activities in their stores, without fear of actionable cases been taken against them.”

Due to a concerning increase in the use and abuse of “analogous proceedings” such as complaints under the Equal Status Acts, 2000 – 2015, ISME and CSNA are seeking the extension of anti-SLAPP protections to proceedings brought in the Workplace Relations Commission (WRC). Furthermore, we believe that plaintiffs under the Equal Status Acts, 2000 – 2015 should be required to lodge a deposit of €500 with the WRC before it hears a complaint under this Act.

Despite the fact that complaints about lawyers to the Legal Services Regulatory Authority enjoy absolute privilege under the Legal Services Regulatory Act 2015, this has not stopped some lawyers threatening defamation proceedings, and having complaints withdrawn as a result. Therefore, the anti-SLAPP provisions in the reform bill must be explicitly extended to protect complainants to the Legal Services Regulatory Authority (LSRA).

28^th March 2024:  ISME has responded to ICTU’s comments over the past week which suggest the unions are finding hard to absorb the messages in the SaveJobs campaign. It is entirely incorrect to suggest that current labour market changes “merely bring Ireland into line with EU counterparts. While trade unionists are describing the labour cost adjustments as “modest” the fact is that the open market has decided otherwise. They are anything but modest and any SME owner will confirm that fact.

“Wage inflation is the precise reason we are witnessing significant business closures around the country, particularly in the services sector,” said Neil McDonnell, CEO, ISME. “The simple fact is that consumers, including ICTU members, are unwilling or unable to pay the price increases which this year’s increase in labour costs are dictating.”

Ireland has the second highest minimum wage and the fourth highest median wage in Europe. Low wages are not the problem here, high costs and lack of accommodation are.

The manner in which the National Minimum Wage (NMW)/Living Wage is being calculated ignores the fact that workers in large firms are paid €287.67 per week (38%) more than workers in SMEs; and public servants are paid €351.92 per week (46%) more. This is based on figured from the fourth quarter of 2023. Small business cannot afford to be benchmarked against such high wages.

“As long as Ireland remains at or close to full employment, we will not see the labour cost issue impact unemployment levels,” said Neil McDonnell. “What we will see is a progressive closure of small businesses such as childcare facilities, nursing homes, restaurants and convenience stores, especially outside our main cities, where multinational chains provide many of these services.”

The business closure statistics released this week by PwC do not lie and reflect the unfortunate commercial reality for small businesses continuing to try to make a profit.

“If the trade unions do not believe the evidence-based case currently being provided, perhaps they should ask their own members about access to childcare, nursing home and hospitality facilities, particularly those in rural areas,” said McDonnell.

Recently, in response to ongoing significant concerns at the treatment of the SME sector by policy makers in Ireland, ISME and a number of other trade organisations initiated a nationwide campaign focused on the cumulative increases in labour costs and representation on the Labour Employer Economic Forum and the Low Pay Commission.

Campaigning for National Minimum Wage reform; Tax reform; and Industrial Relations reform, the slogan is “Save Jobs – Sign the Pledge” where ISME and its affiliated organisations have been securing support for these objectives.

As part of the campaign, small businesses are seeking a seat at the Labour Employer Economic Forum (LEEF). Neil McDonnell said: “The government has ignored the SME sector repeatedly in our request for representation on LEEF.  This is not an acceptable situation, and it is far from equitable. In reality SME employers must be represented pro-rata on LEEF. That is sixty per cent. This is a major issue for us, which we will continue to pursue.”

Among those organisations who have initially signed up to the Savejobs.ie campaign with ISME are the Irish Hairdressers Federation; Restaurants Association of Ireland; Irish Hardware Association; Nursing Homes Ireland; Retail Excellence Ireland; Hair and Beauty Industry Confederation; Vintners’ Federation of Ireland; and Convenience Stores & Newsagents Association.

ISME has a total membership of 10,500 across Ireland, which is a combination of both individual SME’s and a number of leading affiliated trade organisations.

Spearheads nationwide campaign on Labour Costs

Launching the SME campaign were – back row (from left):  Adam Weatherley, ISME Skillnet; Sean Collender, Restaurants Association of Ireland; Stuart McNamara, Irish Craft and Artisan Distilleries Association; Damien Heffernan ISME.  Front row (from left) Neil McDonnell, CEO, ISME; Elaine Dunne, Federation of Early Childhood Providers; Aidan Finnegan, Family Business Network; Suzanne Bannon, John Bannon Pharma; Tara Buckley, RGDATA; and Marc O’Dwyer, Chair of ISME. Photo by Siobhan Taylor.

12^th March 2024:  In response to ongoing significant concerns at the treatment of the SME sector by policy makers in Ireland, ISME and a number of other trade organisations have today launched a major nationwide campaign focused on the cumulative increases in labour costs and representation on the Labour Employer Economic Forum and the Low Pay Commission. As part of the campaign, they are calling for a permanent nine per cent Vat rate for the food service, entertainment, experiential and grooming sectors.

The pledge for the campaign National Minimum Wage reform; Tax reform; and Industrial Relations reform. The campaign slogan is “Save Jobs – Sign the Pledge” where ISME and its affiliated organisations will seek wider support for its objectives.

ISME has a total membership of 10,500 across Ireland, which is a combination of both individual SME’s and a number of leading affiliated trade organisations.

National Minimum Wage

The manner in which the National Minimum Wage (NMW)/Living Wage is being calculated ignores the fact that workers in large firms are paid €287.67 per week (38%) more than workers in SMEs; and public servants are paid €351.92 per week (46%) more. This is based on figured from the fourth quarter of 2023. Small business cannot afford to be benchmarked against such high wages.

“It is ridiculous to benchmark SME pay against public sector pay in Ireland. Average Public Sector pay significantly exceeds that in the private sector – even in multinational companies,” said Neil McDonnell, CEO, ISME. “The gap between public and private sector pay in Ireland is bigger in Ireland than in any EU countries other than Portugal, Spain and Italy, where private sector pay is far lower.”

Use of public sector and multinational pay rates are therefore an unfair benchmark against which to set pay in small businesses.  It is important to state that future NMW increases must not exceed the Consumer Price Index. Also, The 8.8% rate of PRSI must apply to the entirety of the NMW.

Labour Employer Economic Forum (LEEF)

It is beyond comprehension how SMEs do not have pro-rata representation on the Labour Employer Economic Forum and the Low Pay Commission. Small and medium businesses make up 99.8% of total businesses, and employ 60% of workers in Ireland, yet the stakeholders on LEEF are the big employers and unions. The owners and employees in Ireland’s SME sector are being continuously snubbed by Government on LEEF.

Neil McDonnell said: “The Taoiseach and government has ignored the SME sector repeatedly in our request for representation on LEEF.  This is not an acceptable situation, and it is far from equitable. In reality SME employers must be represented pro-rata on LEEF. That is sixty per cent. This is a major issue for us, which we will continue to pursue.”

Vat rate at 9%

The food service and grooming sectors require the permanent establishment of a 9% VAT rate. This is backed by contemporary evidence, where recently there has been a spate of closures, particularly in the food service entertainment and experiential sectors.

There is no “right level” of Vat. Even at 9%, Ireland’s reduced Vat rate will remain in the top third of EU Vat rates. Our top rate of 23% is also seventh highest in the EU and should revert to its long-established historic rate of 21%.

It is proven that higher Vat rates do not increase the exchequer tax yield. They discourage spending and reduce yield. That is why high taxes are imposed on cigarettes.

Wider government support for SMEs

Small businesses in Ireland employ 1.3 million people, but the promised Government support for small business of €257m, is less than one tenth of what it will spend on the 10.25% pay increase for the 385,000 people employed in the public service.

This is evidence, once again, that the Government and policy makers are taking the SME sector for granted. At some point it will be required to properly recognise in policy terms the role of SME and the deficits in supports that needs to be addressed.

Campaign

A campaign has been established, which has a working website, savejobs.ie and ISME members and a range of other trade and employee representatives will be joining in. In an election year, national and local politicians can be expected to hear from SMEs in the coming months, particularly as we head towards the European and local elections.

Among those organisations who have initially signed up to the Savejobs.ie campaign with ISME are the Irish Hairdressers Federation; Restaurants Association of Ireland; Irish Hardware Association; Nursing Homes Ireland; Retail Excellence Ireland; Hair and Beauty Industry Confederation; Vintners’ Federation of Ireland; and Convenience Stores & Newsagents Association.

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6^th February 2023 – ISME welcomes the decision by IBEC to host a round table meeting of business groups this week, to discuss the impacts on labour costs and business competitiveness arising from recent measures implemented by Government.

“While we are frustrated it has taken so long to acknowledge the issues facing small businesses in particular, belated recognition is better than no recognition at all,” said Neil McDonnell, Chief Executive, ISME.

The carnage we have seen in the small business sector since the start of the year has been entirely predictable. In a letter to the Taoiseach and those ministers heading economic ministries last July, the ISME Chair, Marc O’Dwyer made clear the negative consequences of such a large adjustment in the minimum wage and other cost increasing measures being introduced by Government.

While Government has hailed the promised support package of €257m for small employers soon to be commenced, this amounts to one tenth of the increase in public sector pay announced last month; despite the fact that small and medium businesses employ about 1.4m workers; almost four times the workforce on the public payroll.

The increase in VAT and labour costs between November and January is simply too large for small businesses and consumers to absorb. Therefore, businesses are closing down.

Government will say that the drive towards the “living wage” is based upon adequacy metrics set by the EU, requiring minimum wages of 50% of average, or 60% of median wages, whichever is higher. This is true.

However, Ireland is unique in Europe in that 48% of our workforce is either employed by the public service or in a large or multinational business. Despite the fact that large businesses make up only 0.2% of Irish firms, they employ 34% of the workforce. Public sector wages are at a premium of 33% over private sector wages, and 53% over small company wages. This size of public/private pay gap is only seen elsewhere in Spain and Portugal, where private sector wages are far lower than ours.

The very high level of wages enjoyed by workers in multinationals and in the public service simply cannot be matched by small employers. Benchmarking our minimum wage against these high wages is therefore doomed to fail.

In order to prevent a flood of small business insolvencies, Government must immediately introduce a package of measures to mitigate the losses being suffered:

• • The 8.8% lower rate of PRSI must be extended to cover the full extent of the minimum weekly wage.
  • The 9% VAT rate must be reintroduced for the hospitality sector.
  • The 23% VAT rate, the introduction of which the Department of Finance appears to have suffered a bout of collective amnesia, must revert to its historic 21% norm.
  • Further increases in the national minimum wage must not exceed CPI.
  • Until the fiscal rules restricting state spending on workforce training can be relaxed, the 1% training levy should be temporarily suspended, and the €1.4bn surplus in the National Training Fund should be wound down.
  • Unless and until the state reintroduces the statutory redundancy rebate, which employers have paid for with a 0.5% PRSI levy since 1979, employers PRSI should be reduced by 0.5%.
  • Government must immediately publish its report on the labour market impacts of its cumulative adjustments to labour costs.
  • In order to avoid future repetition of recent mistakes, Government must provide for credible engagement with the small enterprise sector. The Labour Employer Economic Forum is a talking shop for Big Business, Big Unions, and the semi-states. By the recent admission of trade unionists, the last LEEF meeting did not even discuss the minimum wage change.

The ISME Chair’s letter to the Taoiseach is available here:

https://isme.ie/isme-writes-to-taoiseach-on-national-minimum-wage-concern/

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Issued on behalf of ISME by Heneghan

January 15^th, 2024:  ISME has today voiced its support for Minister for Public Expenditure and Reform, Paschal Donohoe TD, in the ongoing public sector pay talks.   Minister Donohoe is right to stand his ground in the public sector pay talks and must continue to hold firm against unreasonable expectations from the trade union sector.

ISME, the Irish Small & Medium Enterprises Association, represents more than 10,500 direct and affiliated SME businesses throughout the Republic of Ireland, employing more than 245,000 people.

Neil McDonnell, Chief Executive, ISME, said: “While the economic situation Ireland faces now is far better than that faced by his Government predecessors in 2009, that is only the case because Brian Cowen’s Government and Ibec heeded the ISME call at the time to suspend the social partnership talks because unions were unable to agree to measures to stabilise the economy.

Irish people should never again be subjected to the record unemployment levels that followed the austerity measures and the €100bn bailout of the public sector at the time.

While all workers have suffered the effects of inflation over the last two years, workers in the public service have enjoyed the greatest levels of protection and job security, while being consistently paid a 25% premium over workers in the private sector. This gap between public and private sector is not seen anywhere else in Europe beyond Portugal, Spain and Italy, where private sector wages are far lower than here. For several years, ISME has called for Government to reduce this gap to 10% by 2025, something that now looks unachievable.

Despite changes to public sector pensions in 2013, they remain far more generous than those available to private sector workers, and they are paid for by taxpayers. The latest evaluation of the liability for public sector pensions puts the funding deficit at €176bn, equivalent to 79% of our current national debt of €223bn.

ISME acknowledges that trade union officials have a difficult job to do, and that they face loud calls from their members on a daily basis. However, a one-size-fits-all solution is no longer appropriate in dealing with our public sector. We acknowledge that there is a recruitment and retention issue in some areas of the public service, but not in all.

Resources must therefore be prioritised to those with greatest need. Government and taxpayers are also entitled to productivity, change and value for money in the delivery of public services. The market forces productivity and efficiency on private sector workers. It in incumbent on Minister Donohoe to do the same for the public sector.

Before pay talks resume, as we know they will, Minister Donohoe should complete a rapid audit of the delivery of commitments in the Public Service Reform Plan completed by his predecessor Minister Brendan Howlin in November 2011. This might stimulate a more realistic approach to negotiations. It does not appear to ISME that many of the structural reforms promised in Health, Education, Justice and Local Government have in fact been delivered upon.

Lastly, in order to put an end to the theatre of late-night negotiations in the Workplace Relations Commission, ISME has long called for the establishment of a standing public service pay commission, as exists in the UK. Rather than deal with complex issues of remuneration for over 315,000 public sector workers who perform radically different jobs, this would impose a discipline and structure on the pay-setting process, which is currently absent, resulting in the usual sabre-rattling threats of widespread strikes by trade unions. This is unsustainable.

The taxpayer and small employers are denied a voice at the public sector pay talks. It is Minister Donohoe’s duty to represent that voice and we wish him well.”

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Issued on behalf of ISME by Heneghan

For information

Neil McDonnell / ISME – (087) 299 5658 (available for comment)

Nigel Heneghan – (086) 258 7206