Taoiseach Bertie Ahern confirmed in the Dáil that Irish Ferries has been refused permission to remove its vessels from the Irish register to re-register under a flag of convenience.
He said that on the advice of the Attorney General, the Minister for the Marine had "declined an application from the company to remove the vessels from the Irish register to be transferred to the Cypriot register".
Mr Ahern warned he had been advised there was "little prospect" of regulating the employment conditions of staff on vessels not under the Irish flag.
Socialist TD Joe Higgins (Dublin West) raised the issue in the wake of Irish Ferries' decision to reject a Labour Court recommendation against its plans to replace 543 Irish staff with lower-paid immigrant workers.
Mr Higgins said that "workers on the Stena Line, a competitor of Irish Ferries, are getting trade union rates at the current time, but what will happen their conditions if Irish Ferries get away with this? This is truly a race to the bottom," Mr Higgins added.
"Because if Irish Ferries are allowed to sack these workers then every grasping boss around this State will feel that they have carte blanche to sack permanent workers and to replace them with cheap and vulnerable, exploited and mainly migrant labour."
He asked what the Taoiseach was going to do about the Irish Ferries decision to reject the Labour Court recommendation. Mr Ahern said: "That's the job of the Labour Court. I'm not an independent arbitrator in this case. I support that recommendation. That's what should be implemented. The Labour Court had set out a very fair and comprehensive decision and that's what should be followed."
Mr Ahern also called on both sides to get back into talks on the issues and "resume negotiations on such changes as are necessary in order to redress the commercial needs of the company".
The Socialist TD said the Taoiseach was "king of the European Union last year. Why didn't you introduce legislation so that within the EU no sweatshop of a boat could ply the waters with impunity? You still can."
But the Taoiseach said there was little prospect of regulating employment conditions of staff employed on vessels not under the Irish flag. "It's not just a European issue - it's an international issue. A lot of these flags of convenience are used from outside Europe as well, and that's why it couldn't be regulated when this issue was looked at previously on a number of occasions in Europe."
Deputy Higgins said Ibec and the Irish Exporters' Association were "callously" now "fully backing semi-bonded labour by Irish Ferries".
This pointed to a "growing pack of corporate wolves, who believe now that workers are not entitled to a decent job, a decent wage, decent working conditions with health and safety as they pursue their super profits".
Hitting out at the Taoiseach, he said: "You verbally denounced Irish Ferries. You said they shouldn't do it. Do you feel humiliated today that the company has responded to you with a rude gesture? Or is it in fact that Irish Ferries might think that really behind the scenes the Government is showing no commitment to fight what they are doing?"
He called for legislation to outlaw Irish Ferries' plans, but Mr Ahern said the issue was an international one, and could not be easily resolved.
