VFI tells Oireachtas all about bureaucracy
The amount of bureaucracy demanded by Government agencies such as NERA, particularly in relation to the maintenance of various records, represents a major imposition on small businesses employing four to 10 people, according to the VFI.
Print16 December 2010
Putting the case for the VFI to the Oireachtas (from left): VFI President Gerry Mellett, VFI Chief Executive Padraign Cribben and the VFI’s Oireachtas Sub-Committee representative Tom Heraghty.
"It must be remembered that most of these employers are not human resource specialists, do not have the scale to employ human resource managers but are entrepreneurs who have built up a business giving good employment, with good conditions and in cases where the spirit of the law has been complied with, one wonders whether these police need to ensure that operators are penalised for not having a piece of paper telling them when somebody worked two-and-a-half or three years ago,” VFI Chief Executive Padraig Cribben recently told the Joint Committee on Economic & Regulatory Affairs which was looking into the cost of regulation to business, in particular small and medium enterprises.
The VFI Chief Executive was accompanied in the submission to the Oireachtas by VFI President Gerry Mellett and the VFI’s Oireachtas Sub-Committee representative Tom Heraghty.
The Oireachtas Committee heard that NERA inspections can be very expensive in terms of the paperwork demanded and the management time of both the owner and his/her accountant.
“There is no doubt that some of the inspectors in this area see themselves as being on a crusade and this was never intended by the legislation at the time of its enactment,” stated Padraig Cribben.
Other Government sectors to come in for criticism included EHOs who “have a particular role in respect of food and food preparation and many of the sentiments as expressed in relation to NERA also apply in relation to EHOs”.
He pointed out that while the smoking ban has been accepted by the vast vast majority of the Federation’s members and that the latest figures showed compliance somewhere in the order of 98-99 per cent, “Again we must ask whether it is necessary to come with slide rules and measuring tapes to assess whether an area is 49 per cent or 50 per cent enclosed. The real issue is whether the spirit of the law is being complied with and there are too many cases where a level of common sense is not applied.
“There is also the serious issue of the lack of joined-up thinking where a premises that may be 48 or 49 per cent compliant is deemed to be non-compliant and forces people out onto the street to smoke, thereby causing the potential for much more serious incidents and public disorder. There is significant cost on an ongoing basis on dealing with the demands and the whims of some of the inspectors in this area”.
Litter wardens also came in for criticism in the VFI presentation.
“As a result of a recent High Court case the publican is now responsible for the area outside his/her premises even though the premises may not be open. If litter is found within the precinct of the premises the publican can be charged in respect of that litter. The fact that a publican cleans outside his/her premises at close of business does not preclude him/her from being charged if litter is found there before opening time the following day.”
He pointed out that publicans pay rates, part of which was deemed to cover street cleaning.
“It would now appear that these rates are nothing more than a tax on business.”
Indeed, Local Authorities provide little by way of service “… but plenty in terms of charges by way of rates and water rates,” he continued, “Publicans engage with the local authority in respect of planning and in many cases in respect of Fire Officers. Fire Officers have a role in licensing of premises with Dance Licences etc. We are aware of one particular county where the Fire Officers are charging €700 for inspections charges. This is for a service that takes probably a maximum of two hours. Surely any charge for this type of service is not defendable. Rates are paid for this service.”
The VFI Chief Executive summarised the situation for the Oireachtas by stating that a small operator employing five or six people “needs to be an architect, an engineer, a human resource specialist, a tax specialist, a licensing law specialist, a hygiene specialist and many other things before he/she learns anything about customer care, marketing or running a business or indeed dealing with customers.
“We are not suggesting no regulation. We have seen where no regulation has taken us in other areas,” he stated, “What we are suggesting is a rationalisation of the various arms of regulation whereby there is more of a one-stop shop rather than having competing agendas at play as often happens. The combination of all of this regulation puts small operators at a particular disadvantage as the time consumed in dealing with the varying agencies could be better spent looking towards developing and building a business. There is also the clear additional cost of employing accountants or hygiene specialists or engineers to assess their requirements and for their advice.
“What we would like to see is a scenario where the relevant labour, hygiene, safety, refuse and other issues are dealt with by one quango rather than six. This would lead to significant streamlining and the greater possibility of generating additional jobs and having more secure businesses,” he concluded.
Dublin publican Bernard Molloy couldn’t agree with the sentiments in the submission more strongly.
He finds himself having to acquire 17 different forms of documentation just to go to work: A 7-Day Publicans Licence, a Music & Singing Licence, a Dance Licence, IMRO Certification, PPI Certification, Tobacco Registration, Grease Trap Licence (FOG), TV Licence, PSA Licence, Restaurant Certificate, Sky viewing agreement for pubs and an outdoor furniture permit.
“These all come with a price to obtain” he says, “and have inspectors to see that the above are adhered to. Not included in that list are the Fire Cert, the Architect’s Cert of building compliance an the fire logs which must be maintained on a weekly basis. And that does not include SEOs and solicitors fees. You also need a Certificate to state that you have a proper CCTV in operation for a Dance Licence.
“Who said we are not professional? All the above are not based on size. It’s required by the law. I do not know of any other industry in the world where one has to pay €200 a night (plus solicitor’s fees), for example, just to employ people.”
Barry O’Sullivan, Chief Executive of the Irish Nightclub Industry Association (INIA) echoes these calls for a reduction in bureaucracy – or at the very least the removal of ambiguity.
Specifically in relation to the smoking ban, the worst characteristic is that quite often compliance comes down to the interpretation of the EHO involved, he says.
There is a massive absence of assistance also. If a nightclub is about to invest a significant amount of money on a smoking area and calls in the EHO to meet with designers and architects, they will give no advance advice or assistance in terms of compliance. The operator is told to go ahead and build and the EHO will deal with compliance when it is complete which in effect puts the cart before the horse, he adds.
“The biggest burden on my members is sthe bureaucratic manner in which nightclubs have to secure their extensiuons (Special Exemption Orders). In most parts of the country, nightclub operators go to court every two to four weeks to apply for the ability to stay open for the coming two to four weeks. You cannot employ staff on that basis,” he says, “The burden of this bureaucracy on the courts, gardai, fire officers etc is reflected in the daily price of such an extension, €410 each night a nightclub wishes to stay open late. This is a job-killing tax for late night businesses.”
The off-trade feels much the same.
Evelyn Jones, Chairperson of the National Off-Licence Association, points out, “Retailers of Alcohol need to stay current in terms of revenue returns and just cannot risk falling behind in their VAT and PAYE payments. If this happens, the licensee will not get a Tax Clearance Certificate from Revenue and they cannot renew their licence with Customs and Excise without one. Should a licence-holder fall into tax arrears they have only 12 months to catch up while also staying current in the actual year (because the Customs & Excise licence lapses a year after the renewal date) and they are out of business.
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“There is no room for latitude here as the Revenue Commissioner will not issue the Tax Clearance Certificate unless taxes are completely up-to-date and Customs and Excise will not renew the licence without the Clearance Cert.
“So if the licence operator cannot afford to catch up in a year it is tough, even though they could maybe manage to do so in 18 months, for example and stay in business. This has proven a problem with many alcohol operators as the recession gripped so suddenly and it took time to rationalise the business by cutting costs, leading to business losses and tax arrears in many cases. A prime example of interdepartmental beauracracy hampering small business.”
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