Comment: Is there too much labour regulation in Ireland? I was recently invited to address Isme members on the question of whether or not there is too much regulation of the labour market.

I was surprised by the invitation but pleased to accept. I took the opportunity of telling my hosts that I felt they had far more important issues to concern them.

Both this year and next our rate of GDP growth is expected to be twice that of the OECD as a whole, as well as twice that of the US, UK and Japan. We rank fourth in the OECD index of GDP per capita, so Irish economic success has not been hindered by labour market regulation. In fact countries which have aggressively deregulated their labour markets in the last decade or so have done less well - Switzerland ranks fifth, Canada 10th, the UK 15th, Japan 16th and New Zealand 21st.

In fact paid annual leave from work of 20 days is well below the EU average of 26 days and the minimum notification period for collective redundancies is 30 days, one of the shortest in the EU. In Sweden, which has one of the highest employment rates in the world, it is six months.

We are ranked 83rd out of 175 countries in the World Bank Group's Doing Business report, when it comes to "ease of employing workers", but we come 10th in terms of overall "ease of doing business". The World Economic Forum's Global Competitiveness Index for 2006-2007 ranks countries with high employment regulation such as Finland, Sweden, Denmark and Germany in the top 10.

Far from labour market deregulation leading to economic success, one of the strongest factors underpinning our achievements has been the strong sense of social cohesion. Economic activity and social progress are inextricably bound together.

Unfortunately the more unscrupulous members of the business community, are only interested in short-term financial gain. They see Ireland's decision to open its borders to the new EU accession states as merely an opportunity to boost profits by using vulnerable migrant workers to drive down labour standards, regardless of social cost.

We did not oppose the decision to open our frontiers in 2004, but we expressed our concerns that this would happen, if existing employment regulations and enforcement mechanisms were not greatly enhanced. We raised these issues with Government in the mid-term review of Sustaining Progress, but the response was cosmetic.

Regrettably it took the Gama and Irish Ferries disputes to create public awareness of the issue. But some business lobbyists and commentators continued to pooh-pooh the idea.

The Quarterly National Household Survey last month brought a rather more sober assessment from commentators. The ESRI has also now called for a pause in unfettered access to the Irish labour market for workers from Bulgaria and Romania.

The latest CSO figures show hourly earnings in construction are only rising by 1.3 per cent per annum, a mere third of the prevailing rate of inflation. It is clear that the industry's legally binding Registered Employment Agreement is being violated wholesale.

This situation underlines the necessity for implementing in full the Towards 2016 enforcement measures.

There are grievous fault lines in the current Irish model when we compare it with the Nordic model that we ignore at our peril. The key to enhancing competitiveness rests in innovation and skills enhancement.

But, while Fás states that jobs requiring third-level professional and technical qualifications will constitute over 60 per cent of employment growth in the next four to five years, 70 per cent of our workforce lacks any third-level education and 30 per cent never completed second level.

Less than 40 per cent of students are continuing to third level, compared to over 60 per cent in many competitor economies, according to the OECD. We can currently recruit highly skilled migrant workers from abroad, but for how long?

According to the OECD's 2005 research and development statistics, Ireland is 20th out of 30 countries in terms of GDP we spend on research and development. Without foreign multinationals, Irish investment is one of the lowest in the OECD. The Government plans to raise the percentage of Irish GDP spent on research and development to 2.5 per cent by 2013, this will barely bring us up to the OECD average.

Nor can we forget about the 70 per cent of the workforce who left school with just a Leaving Cert, a Junior Cert or no cert at all.

In Towards 2016 we managed to secure a review of workplace learning and upskilling programmes to create a new institutional framework for addressing deficits in the education system.

But we have a long way to go if we are to catch up with the growing knowledge economies of Scandinavia and many eastern European countries, including Russia.

That is why we should devote our energy towards addressing this far more important issue. There is absolutely no case to support the argument that our labour market is over-regulated, but it is true that the legislation is complicated, bureaucratically administered and excessively burdensome on small business when viewed against any benefit that accrues to workers. It is also grossly inadequately enforced.

What we need is stronger regulation, simpler to understand and properly enforced. The only people who would have anything to fear from this are those who have a vested interest in exploitation.

Jack O'Connor is general president of Siptu