Security firms whose tax affairs are not in order to lose licences

Geraldine Larkin explains her strategy for regularising the security industry to John Downes

Geraldine Larkin explains her strategy for regularising the security industry to John Downes

Overseeing the process of reform in the "bouncer" business is Geraldine Larkin, chief executive of the Private Security Authority. The PSA was set up by the Government under the 2004 Private Security Services Act to regularise what had previously been very much an "informal" industry.

So far, the PSA's work has led to the licensing of contractors who provide private security services, as well as the commencement of licensing of some 20,000 to 25,000 individuals estimated to be employed as either "static" security guards or door supervisors.

The latter process is continuing and includes a requirement for applicants to complete approved training and to undergo Garda background checks. In fact, the first batch of some 4,000 licences have been issued over the Christmas period.

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A minimum of 300 of these applications are also expected to be refused, mainly due to concerns about a previous criminal conviction, with letters to this effect due to be issued to applicants from early this month.

Since licensing of the sector was first introduced, it is also an offence to employ an unlicensed security contractor.

Last October, this led the PSA to secure its first "landmark" prosecution against CCE Developments Ltd, a subsidiary of Clare Civil Engineering Co Ltd, for two counts of employing an unlicensed security guarding contractor.

These developments, according to Ms Larkin, introduce far greater regulation to a sector which for too long has operated informally. Describing the PSA licence as a "living document", she says that her authority continues to "monitor, monitor, monitor" what can be a cut-throat business at times.

"When we started our inspections in 2006 it was very much a different type of inspection. At that stage we were looking at companies to see were they licensed. If they weren't licensed we were contacting their clients. We were making sure their clients knew they weren't licensed," she says.

"So those clients were effectively dropping unlicensed security companies. If they don't drop them, we have powers of prosecution. So now, with companies all being licensed, the focus is: are they maintaining their licences?"

Larkin stresses her team of seven regional inspectors use announced and unannounced visits, and employ undercover methods at times, but do not do "cold call" when it comes to inspections.

The number of PSA inspectors appears relatively small given the size of the industry. For her part, Larkin says she is confident she has enough inspectors now. She notes that her complement of inspectors is due to rise to 10 shortly, and that office staff also provide support.

"We don't cold-call inspections. Our inspections are very much strategically led. They're led both in terms of our own information from the licensing process and indeed information that we get from the industry themselves, and complaints that we receive. So we prioritise and target that information . . . for an inspection to happen, there actually has to be a lot of work done beforehand," she says.

"What we tend to do is that we would bring the entire inspection resources of the PSA either on a region or a town or a city and each team of inspectors will probably only target two or three places that they will simultaneously target."

An indication of the challenges which the PSA has faced, however, is provided by the fact that, of about 190 targeted inspections of contractors carried out by the PSA last year - mainly security guard companies - approximately 80 per cent were found either not to be paying the correct wage or to have Revenue issues, or both.

Ms Larkin explains that often the employees affected are vulnerable to exploitation, and may not be aware of their rights under employment legislation. Interestingly, statistics previously released by the PSA reveal that it received applications for licences from 96 different nationalities.

"We're finding companies who got tax clearance certificates back in the 2005 financial year for the purposes of licences in 2006 haven't made any returns to Revenue since," she says. "Now the real revelation of that will be next year [ 2008] when we start renewing those licences, when they have to go back to Revenue and look for a fresh tax certificate."

In the past month alone, two companies have also been found to owe arrears of up to €50,000 to their employees, she says.

Often, companies might underpay their staff in an attempt to undercut their rivals, in a fiercely competitive business.

"There's a very vulnerable workforce here. In the sense that there's a certain amount of fear that if they come forward they won't get paid, and that they'll be in a worse situation than they were when they started off," she says.

"At the moment we would have closed accounts on about 800 cases this year, and what we're finding is that companies will shave money off the extent of their payment to individuals, where they can, because that ultimately reflects back on themselves," she says.

For the future, Larkin says the PSA's focus will be on continuing to raise standards in an industry which has examples of both "best practice" operators, and others who simply "are not at the races".

To this end, the fact that contractor licences fall to be renewed from March of this year could very well see companies, partnerships or sole traders losing their licences - or others simply getting out of the business because they know their licence will not be renewed.

The PSA will also turn its attention to other issues this year, such as event security and locksmiths, while licensing of the cash-in-transit industry will be mandatory from the end of March.

"We're constantly moving the bar, changing the bar, bringing about this raising of standards," she says. "And as time goes on I hope that we'll stop, or at least reduce, mistreatment of individuals through the industry . . . so it becomes more of a permanent job and there's more opportunity for career progression."