By what Church permission or instruction is the priest allowed to skip the Act of Penitence and the Kyrie Eleison
On some occasions, for example, when the Mass is joined to another rite such as the celebration of a sacrament or the Divine Office penitential rite can be omitted (GILH 94-95). Other than this the Act of Penitence cannot be skipped. Regarding The Kyrie...
After the Act of Penitence, the Kyrie is always begun, unless it has already been included as part of the Act of Penitence. (GIRM 52)
what effect has that on the entire Mass?
Assuming the priest is skipping The Act of Penitence and The Kyrie without valid reason, the mass becomes illicit. Assuming that everything else at the Mass is as per the rubics, skipping these parts does NOT invalidate the Mass.