Worker Participation (State Enterprises) Bill, 1976: Second Stage.

Mr. C. Murphy

The Minister is still not here. Are we experiencing the dying seconds of this Dáil? This is a typical example of how the country is being run.

Mr. O'Malley

In the circumstances, will the House be adjourned until the Minister is available?

An Ceann Comhairle

It is customary to allow time for the Minister.

Mr. O'Malley

It is if something comes up unexpectedly, but this Bill was ordered for 3.30 today.

Minister for Labour (Mr. M. O'Leary)

I apologise for my late arrival. I move: "That the Bill be now read a Second Time."

The entitlement of workers to participate in company decision-making is based on the concept of the company as a social enterprise. In this light the company is no longer regarded as the exclusive property of shareholders: ownership of its physical assets is no longer regarded as conferring an absolute right to exercise control, without taking into account other interests such as those of employees or society generally. The company is now seen as a social institution, comprising a variety of interest groups such as shareholders, financiers, management, employees, customers and consumers, each of which is indispensable to the company's overall well-being and success. Industry in the future will tend to be organised increasingly along these lines. The Worker Participation Bill is designed to provide the framework in the State sector for this evolving situation in industry generally.

The Worker Participation Bill accepts that employees are entitled to participate in the decision-making of the companies in which they work. The seven State companies in which the legislation will operate are viewed as organisations of social enterprise in which the contribution of each individual, whether he or she works at desk or on shop floor, is considered on its merits.

The debate and discussion on worker participation has been proceeding here for almost a decade now. I believe that debate and discussion have yielded us all that analysis of ideas can yield. It is time for principles to be translated into practice, time for theory to be transformed into action. The legislation I am introducing here today would not be possible if this vital discussion phase had not taken place. In this connection I would like to thank the trade unions, the employer organisations, the Irish Productivity Centre, the Irish Management Institute and other bodies who have played an important part in stimulating interest.

Traditionally, of course, managerial prerogative has rested on property rights. Through direct ownership or through power delegated by shareholders, managers have claimed the right to manage enterprises unilaterally without reference to the employees in these companies. The justification of managerial prerogative has been based on property rights. That conception has, in recent years, come under attack from a number of directions. The development of a mixed economy with a large public sector has undermined the strength of the case based on private property rights. In many of the largest private firms, the link between ownership and control is now so tenuous that the property argument is decisively weakened. So much so that in a number of areas, for example in the payments of redundancy benefits, employees have turned the argument on its head by themselves establishing rights based on their "ownership" of their jobs though we still must wait for employee rights to be recognised fully in our general company legislation.

Managers increasingly accept that the process of traditional decision-making needs to be justified and demonstrated to be right. Increasingly it is realised by those who have little enthusiasm for the very idea of worker participation itself that there is no automatic prerogative for making decisions and in turn expecting them to be carried out. In the words of one recent management spokesman, managers do not have, if they ever had, a divine right to manage. In other words, we have come to a situation where management is beginning to accept the legitimacy of a different basis of authority, that being one of consent.

The assumption underlying the quest for improved participative systems is that the total resources of the company must be harnessed if company objectives are to be attained. For this purpose workers' knowledge and ideas can make a valuable contribution to the quality of company decisions if the company structure provides for this. Genuine participation should make for greater efficiency and more worth-while employment in the sense that the deeper interest and work satisfaction of those who take part in it will be catered for.

If we are to contribute positively to the body of experience required for developing the company structure of the future, it is imperative for us to develop management structures based on the consent I have been talking about. A less authoritarian, though no less efficient, management is required for today's workers who are better educated and better trained. Management based on the hierarchical principle is increasingly becoming an anachronism as the new industrial structures develop.

The question has been asked: "Why were State companies selected for the implementation of this legislation?" For many years now I have thought that the take-off point for worker participation in our economy should be in the State sector. Indeed, as far back as 1968 I contributed an article to a Symposium on Industrial Democracy—Dr. Hillery, the then Minister for Labour was another contributor—on the necessity of the development of forms of industrial democracy in the State sector. Companies in the State sector approximate more nearly to the ideal of the company as a social enterprise, the concept of the company on which I have already said this legislation is based.

State enterprises have already made a creative contribution to the development of our economy. Their economic contribution to the general well-being must now be augumented by their now adopting a pioneering role in the development of new techniques of management. Though the proposals in this Worker Participation (State Enterprise) Bill, 1976 are designed to meet the imperatives of work reorganisation which would in turn contribute to humanising relations in the place of work, the extension of worker participation, as envisaged, must also have a beneficial effect on the climate of industrial relations. One may speak positively of the achievement of the State sector in economic terms, but even on the most superficial examination, the conclusion is inescapable that industrial relations in the State sector reflect the same level of confrontation observable in private industry.

Many reasons may be adduced to explain the incidence of industrial disputes in the State sector, but no one who examines the situation can be in any doubt that the large number of unions organising a relatively small number of workers is a contributory factor. It is true that by means of the Trade Union Act, 1975, I have already sought to alter this state of affairs. The functioning of the legislation envisaged in this Bill will lessen the potential for conflict in a multi-union situation by the substitution of a single electoral list for all workers in the elections to the boards under this legislation.

The legislation is concerned with worker participation at board level.

That is the area where the most important decisions in a company are made. Now, for the first time, in seven State companies, boards will be reconstituted to provide for the representation of employees. It is my conviction that the advent of employees as directors will add a new and fruitful dimension to the working of these boards as a whole. Employees will have a positive contribution to make to the boards' deliberations, for they will bring with them from the shopfloor a wealth of practical knowledge and experience of the company's operations. As a result, a new grouping in the trade union leadership will evolve, one which will be well acquainted with the realities of the economic situation in their companies, and one which I have no doubt will have a significant contribution to make in the development of economic policy in the State sector.

Deputies will recall that in July, 1975, I issued a document outlining the main features of my proposals for legislation to provide for the election of employees to State boards. These proposals were examined by the trade unions involved and were the basis for extensive consultations with other interested groups, including the Irish Congress of Trade Unions and representatives of managements on the boards concerned. The provisions in the Bill, as now drafted, are those on which there has been a broad measure of agreement since the publication of the proposals of summer 1975. It goes without saying that the co-operation and commitment of those affected by the implementation of this legislation is essential for their success.

The document of July, 1975 pointed out that the seven companies selected for inclusion in the initial legislation satisfied certain criteria which would seem to indicate that they offered the best prospects for effecting a successful adaptation to change. These criteria included operations of a commercial or quasi-commercial nature, involving a medium to fairly high level of technology and the existence of developed trade union/management relationships, preferably with some experience of joint consultation structures such as works councils. Deputies will also have noted that while some of the companies involved are relatively compact, others are much more geographically dispersed throughout the country. There was a deliberate policy decision to ensure the application of the legislation on a national scale rather than confining it to traditional industrial centres.

The total number of workers affected by the legislation will be in the region of 50,000 covering a wide range of occupations. The full range of the country's economic life is represented. The operations of the companies concerned include air services, production and processing of peat, shipping services, sugar manufacture and food processing, rail and road transport; electricity generation and fertiliser production.

Given the innovative nature of the legislation, the Government and I made a conscious decision to confine its scope initially to seven companies. The main reason behind this decision was to facilitate a close and effective monitoring of the scheme in operation to discover what lessons might be learned from its practical application and whether any changes might be called for in future legislation on the basis of this practical experience. Based on the successful implementation of the scheme in these companies, it is my intention to extend it progressively, by way of further legislation, to other State enterprises later on.

The central purpose of the measure before us is to enable elections to be held in seven State enterprises so that employees can be selected, by and from the work force, for appointment to the boards of the enterprises. The schedule to the Bill lists the State companies involved: Aer Lingus, Bord na Móna, B & I, the Irish Sugar Company, CIE, ESB and Nítrigin Éireann.

The provisions of the Act are brought into operation by means of an order made by me under section 3 which empowers me to prescribe an "appointed day" for the purpose of determining "election years" under section 6. For the purpose of the Act, election years shall occur in the year in which the Minister makes the first order under section 3 and every successive third year thereafter. Not later than the 15th September, in each election year, the Minister must prescribe by regulations the day for receipt of nominations of candidates. I should like to emphasise, however, that under section 13 implementation of the legislation can be suspended where a majority of the workers so decide.

Section 7 provides that the secretary of the State enterprise concerned shall be the returning officer for an election or, alternatively, any other person who, in his opinion, is acceptable to the majority of employees to act as returning officer. Under section 8, the returning officer is required to fix a day called the "stated day" by reference to which he decides which employees shall be eligible to vote and to stand as candidates.

Section 9 empowers me, in consultations with the other Ministers concerned, to prescribe, by regulations, the manner in which elections shall be conducted. In this connection, I should like to assure the House that, prior to the holding of elections, there will be consultations with all the interests concerned—including management and trade unions—as to the procedures which should be prescribed for the conduct of elections in each individual State company. Section 9, subsection (3) provides that where an election is contested—that is, where the number of candidates exceeds the number of seats—a poll shall be taken by secret vote according to the principle of proportional representation. There will be only one electoral list in each State enterprise, comprising the total number of employees eligible to vote. This is provided for under section 9, subsection (4) (u).

Section 10 provides that every employee who has completed not less than one year's service and who is not under 18 years of age shall be entitled to vote in elections. Section 11 provides that candidates must be over 18 and under 65 years of age and must have completed at least three years' unbroken service. I might say, at this point, that these age and service qualifications have been agreed in consultations with both unions and management.

Subsection (1) of section 11 provides that only a "qualified body" shall be entitled to nominate candidates. Under subsection (6) a qualified body is defined as a trade union or other body recognised by the State enterprise concerned for the purpose of conducting collective bargaining negotiations. I am convinced that any approach to worker participation must be based on the already existing trade union structure, especially since the vast majority of employees in the seven companies are organised in trade unions. To attempt to introduce new forms of representation without the support and co-operation of trade unions would be to ignore one of the basic realities of Irish industrial life. For that reason, I am satisfied that the provisions in the Bill about nominations are the only ones which have any prospect of general acceptance and success.

Under section 13, I have provided an "opting out" provision whereby a trade union, or a number of trade unions, representing not less than 15 per cent of employees eligible to vote, may call for a ballot to determine whether or not a majority of the work force favours holding an election. This provision, I believe, is an essential feature of the Act. It is not my intention to impose industrial democracy on workers who do not want it. Where a majority vote against the holding of an election, it lapses for three years: otherwise, it is proceeded with in the normal way.

Section 23 empowers me, after consultation with the other Ministers concerned, to prescribe, by order, the number of members of the reconstituted boards, including the number to be appointed under the Act. Where the total number is a multiple of three, elected representatives must constitute one third: otherwise, the proportion must be rounded upwards to the number which is next to that which would constitute one third.

Since it is not possible, at this stage, to determine, in advance, the size of the reconstituted State boards, I have refrained from specifying the numbers in the Act. In order to afford the Government Ministers concerned a degree of flexibility in this respect, I feel the best solution is to allow the number to be prescribed by affirmative order under the Act. In this connection, Deputies will have noted that under section 4, subsection (4), a draft of an order to be made under this section or under section 25 which deals with quorums, requires the prior approval of the Oireachtas by way of affirmative resolution of each House. This will ensure that there will be no diminution of the authority or responsibility of the Oireachtas as regards determining the appropriate size and quorum in relation to individual State enterprises.

Mr. G. Fitzgerald

Initially, I want to complain on behalf of some of the members of the party who were present in the House who were expecting a script of the Minister's speech, as is normal in these circumstances. Personally I am disappointed that the scripts were not available. They have been delivered since, but it is hard to understand why they could not have been ready as this Bill has been listed on the Order Paper for almost a week.

At a time of economic chaos and economic recession such as we are experiencing, and at a time when even our Constitution is being attacked by those who should be defending it, there is a danger that people's minds will be diverted from the importance of worker participation. Worker participation means people who are working in an enterprise being involved in decisions being made which affect their working life. Worker participation is of prime importance. The Bill before the House is entitled Worker Participation (State Enterprises) Bill, 1976. It is the first measure affecting worker participation that has been brought before this House and to say the least it is disappointing in its content.

When one realises that almost three-and-a-half years have been spent, we are led to believe, by a unit of the Minister's Department working specifically on this subject and the implications of this subject, one is amazed at the omissions of this Bill rather than its contents. I fully support the idea of humanising the workplace and of giving greater incentive and greater encouragement to involvement of people in that workplace at all levels. I believe this involvement must play an important part in our future society, and I would go further and say that the success or failure of modern society will depend to a large extent on how we solve the problem of the interrelationship between employment, remuneration, working conditions, environment, education, health and leisure.

Despite the recession, we cannot postpone attemps to solve issues of this nature. The public should be made aware, not only those who work in industry but people generally, that the time has come for this type of involvement to be created at all levels of society, even outside of State enterprise. There is a danger of a lethargic or complacent approach to this question. The Minister, in his opening remarks, said that approximately 50,000 workers had participation in the State companies referred to. However, it is important that all the workers involved in these companies should be conversant with and interested in the development of worker participation of a meaningful nature. Such worker participation is not contained in this measure. This is just a window-dressing operation, an effort by this Minister and his Government to fulfil one of the points in the 14-point programme announced three-and-a-half years ago. It bears little relation to a system of worker participation which would give individuals within a company proper involvement in decisions affecting their working lives. What this Bill is doing is giving worker participation in State companies at board level only without taking into consideration structures that exist in some companies and without involving workers at management level. In building a house you start with the foundations, build the walls and then put on the roof. I submit that in many of the State companies mentioned, the Minister is putting on the roof and from there on he is probably asking companies where works councils are not effectively operating, where workers are not meaningfully involved, to go ahead and put the walls and foundations under it. It is questionable whether such a structure can survive or benefit the employees of such companies.

In the first half of 1975 our party issued a paper on the subject of worker participation at vital decision-making level. The paper outlined our views on the works council concept and its involvement from there to board level. The subsequent documents on the subject issued by congress and by the EEC Commission contained much of what we had outlined, and it is generally accepted by all bodies who have studied the subject that board level participation will not work unless development of participation at the lower levels is undertaken first.

Much discussion has been devoted to this subject for many years. Lip service has been paid to it by too many people and by too many organisations and I suspect that people may fear they are conceding certain functions. I agree with the Minister that the time has come to take action. I would be the first to agree that you cannot entirely legislate for worker participation, that all you can do basically is to create a climate within certain guidelines and, perhaps most important of all, give encouragement in that direction. I believe that in this Bill the Minister has missed the opportunity of doing something constructive not only for the workers but for the State companies referred to.

This legislation leaves a lot to be desired. I would like to quote from a speech by the Minister delivered on 14th July, 1974, at the Irish Congress of Trade Unions' second annual summer course in Cork where, among other things, he said:

I am among those who would reject any suggestion that worker representation on the boards alone of itself brings significant change in the position of workers in industry or the extent of their influence over the management process.

He agreed then that confining worker participation to boards of directors was not enough and in view of what he said then it is hard to understand why the Bill does not give worth-while recognition to the bodies, particularly those among the seven mentioned where there has been a reasonable level of participation. Some of it has been very satisfactory and I would compliment those concerned, referring specifically to companies such as B & I and Comhlucht Siuicre Éireann. As a result of the measure before us we do not know to what extent there will be links between existing works councils and boards of directors.

On the same subject I should like to quote from a bulletin of the Council of Europe, the second of 1974, "Forward in Europe", page 25 where it refers to resolution 564 and says:

Member States are urged to introduce legislation based on a number of guiding principles. Works committees must be given full and adequate information on the operation of the company and its financial results. All firms employing more than 50 persons must have works councils elected by the employees and exerting real influence on decisions. All companies employing more than 1,000 people must have a supervisory board at least one-third of whose members would represent the employees.

One must see the continuity of this structure. The great omission in the Bill is that there is no reference to training and education. Yet the Minister in that speech in Cork referred to the election of directors and stated:

I am submitting proposals to the Government on the whole field of worker participation including provision of the necessary funds for training and education.

I agree entirely with the sentiments expressed there, but there is no reference to this very important matter in the Bill. In this measure there could be a second benefit for the country generally but specifically for the companies mentioned because the Minister is referring to restructuring boards. I would not be one-sided in saying that not only should there be education and training for the worker directors on those boards but also for the traditional type of director of whom the vast majority were excellent people and had attributes and capabilities or some gift to contribute to their boards. A few were appointed perhaps because they were political supporters of one party or another. My greatest objection to such an appointee would be as regards qualifications. I would not question closely his political affiliations or even the fact of there being a reason for his appointment if I thought he had something worth while to offer. I would forgive him any such involvement if he had a worthwhile contribution to make. The restructuring of State boards mentioned in section 23 of the Bill which will be brought about through the involvement of workers gives the Minister the opportunity to provide training and education for worker directors and equally for the selection of members or directors on the other side of the spectrum who should be qualified or selected for some specific contribution they can make to the board and perhaps a certain amount of educational training given to them so that they could best use their qualifications or talents for the benefit of the State company. There is a second area of benefit for the State bodies concerned.

I am concerned about the omission of any reference to training or education in the Bill. We have a vast number of people involved in the seven enterprises mentioned and many of those at different levels in the company structure would like the opportunity of being nominated and participating at least in the elections for directors of these boards. In regard to this educational training I should like to know from the Minister what Government funds have been made available for this purpose, to whom they have been given and to what useful purpose they have been put up to date. This involvement of the entire work force would at least give the opportunity to anybody among those interested of securing education and training. Obviously, there are fields with which the majority of workers will not be familiar. They will have to get an opportunity, for example, of being able to read financial results, budgets, forecasts and projections and know what these are all about.

I believe many workers in State enterprises would have much to contribute from their practical experience. The danger is that that involvement in State boards alone is not enough because too often those boards are concerned with forward policy-making but the major decisions affecting the conditions of the worker are made at levels of management where we must have involvement in all of those State bodies. I mentioned B & I and CSE as having reasonably good structures of work councils. We also have the reports issued by the working parties on Aer Lingus and the ESB recommending first level works councils. There is encouragement in these reports but there is no such encouragement, no such hope given in the Bill.

I should like to refer to communications. The Bill has a few sections dealing with the appointing of directors, the reconstitution of the board, how these directors are nominated and the nominating bodies concerned. Then it goes into great detail regarding the operation of the election and the organisation of it. Some of this detail could well have been left to the discretion of the returning officer because he is being given certain powers, powers which I question, yet the Bill goes into a lot of detail in regard to his specific duties in organising the election.

Yesterday morning I listened to a radio programme on the primary school boards of management. The point was made that there was no communication between the parents' representatives and the parents. The reply was given that although they were elected by the parents they had no specific function to report to the parents and were not under any obligation to do so. I do not want to see a similarly remote appointment of directors completely removed from the workers they are supposed to represent on the board. If that were the case the system would break down completely. I accept that there are certain areas of secrecy regarding company policy that they would have a duty to remain silent on for the benefit of the company. I believe the Minister must involve himself in these areas, difficult though they may be. Unlike the boards of management of the primary schools, he must have specified functions that can be followed by the people themselves.

The next omission is difficult to understand. Seven designated bodies are referred to in the Bill. The appropriate Minister for Bord na Móna, CIE and the ESB is the Taoiseach. The appropriate Minister for the Sugar Company is the Minister for Finance. The appropriate Minister for Nitrigin Éireann is the Minister for Industry and Commerce. The appropriate Minister for Aer Lingus and B & I is the Minister for Transport and Power. I should like the Minister to tell me why many other State bodies have not been involved. In his opening remarks the Minister said that the criteria followed in selecting the designated bodies included operations of a commercial or quasi-commercial nature involving a medium to fairly high level of technology and the existence of developed trade union/management relationships. Why have Irish Steel Holdings Limited not been included? They would appear to meet the necessary criteria. Why have Irish Shipping Limited not been included, particularly in view of the fact that B & I have been included? We had a row in this House last year because Irish Shipping placed an order for the building of ships in Japan. Why not consider worker participation on the RTE Authority? Some excellent people have been with RTE since its inception and they could make a very useful contribution to the well-being of that authority. No doubt the Minister has his own reasons for the selection of seven but I find it hard to understand why some bodies were omitted. I fail to see any difference between B & I and Irish Shipping. I do not know why Irish Steel holdings have not been included when the Irish Sugar Company have been included. For the last six months all the State companies have been listed on the Dáil Order Paper.

I should like to refer to section 11, which stipulates the nomination of directors. I take the point made by the Minister that it was important that the trade union movement be involved in any approach to worker participation, but I am not happy with the final set-up as a result of section 11. We are told that the nominating bodies can be a trade union or a qualified body. It appears that a qualified body is one that engages in collective bargaining. The first question one must ask is: are we excluding certain persons in those companies at middle management level? I believe we cannot afford to do so. The Minister will say that this is not the case because the section does not stipulate that it must be a union member so nominated. The reality is that a qualified body or trade union will naturally nominate one of their own members. One could then ask: is it in breach of section 40 of the Constitution in relation to the rights of the individual? Are we depriving a number of people who could, of course, if they so wished, join one of the qualified bodies concerned? They may not wish to do so. To have it meaningful to all workers no worker must be barred from being nominated, if he is qualified as a candidate for election to a board.

There are other aspects about section 11 that I am not happy about. For example, in the case of CIE— I agree this is probably the extreme case—there are 36 unions representing 17,900 employees and one could assume that three or four members will be elected to that board, but that would be a very small representation for so many workers. If the "constituencies" are defined by the trade union or qualified body nominating we must consider if this will give greater strength or chance to the representatives of a big union being nominated. Will the big union have an advantage over the small union in having one of its members elected to a board? Secondly, is it fair that a big union with a large percentage of the membership should have the opportunity of nominating only one person? I should like to have the Minister's views on why he did not look at the principle of representation on a different basis, possibly by a certain percentage of the workers having the right to nominate a person.

I should like to deal with some of the concerns mentioned. In the ESB there are 18 unions and about 10,500 employees. Those employees are based in Dublin and at least 12 other centres throughout the country. Did the Minister take into consideration the possibility of ensuring Dublin and provincial representation on that board? Did he take into consideration the possibility of having the various sections of the ESB represented, the generating section, the transmission section, the distribution section and so on? I am worried that the strong union has a better chance of their representative being elected to the board and that a Dublin based member has a better chance of winning at the expense of a member elsewhere. We can also express a similar view about the sugar company. Our sugar factories are located in different parts and there are a number of food plants. Was any consideration given of how they would be represented? I am not confining my remarks to geographical representation. There are many workers involved and it is imperative that this Bill gets the scrutiny it deserves for the successful development of worker participation in industrial democracy within our society.

If the Dáil is still in being, I will have an opportunity of going into these points in greater detail on Committee Stage. I am concerned about the preliminary poll and the necessity for it. I should like to know what would happen if a crank group, anxious to disrupt the election process or the introduction of worker participation, sought support and reached the 15 per cent of the work force needed. I would not like these people having such an opportunity and I would ask the Minister to guard against it. The Minister's explanation was reasonable to the extent that some group of workers would be given the opportunity of saying they do not want this. However, I would hate to see a crank group getting the opportunity of upsetting the operation of this and putting a certain amount of cost on the designated body who must bear the cost of the election.

The Bill went into great detail about election procedures but left a number of points hanging in mid-air. I am referring to the polling day arrangements and making it easy for workers to cast their votes. Aer Lingus employees could be in different parts of the world at the time of an election and CIE long distance haulage drivers might be outside the country, certainly they would be far away from their depot. I hope the Minister will consider giving these people the opportunity of voting at their depot, supervised by the staff of the returning officer. I was surprised to see the Minister giving so much power to the returning officer. I am referring to subsection (4) of section 11 where the returning officer has the power to disqualify a candidate's nomination. That subsection states:

...he shall rule that the nomination is invalid and his decision shall be final and shall not be appealable.

I question the wisdom of that. If the returning officer is a company secretary of the designated body and if he is aware of an individual who may have created problems he should not be able to prevent such a worker being nominated. I fear that subsection could be used to disqualify an individual in certain circumstances. I must stress that I accept the majority of the people involved are responsible.

That sums up most of my points. I look forward to going into this Bill in more detail on Committee Stage. I want to hear from the Minister on the important section with which I am not pleased. It is not enough to say that three or four people will be representing, say, the ESB 10,500, CIE 17,900, B & I 1,500, Comhlucht Siúicre Éireann 3,500, Aer Lingus 4,000, Bord na Móna 4,200 and NET 10,500 which will grow. Bord na Móna spread from Ballincorrig to the east coast. Why did the Minister not give some consideration to representation between certain areas of the country rather than in Dublin and the provinces as I suggested earlier in relation to CIE or the ESB?

There are many workers who should be represented. It is imperative that this measure be seen to work effectively and produce results for State bodies and to create better and more harmonious relationships within those bodies. The Minister is taking an onerous load on his shoulders. He should not push through this measure without being absolutely satisfied that he selects the best method. I am not suggesting he does not have good reasons for his proposals but I would like him to spell out for me, in the interests of the success of this measure and of making a worthwhile contribution to the semi-State bodies mentioned, why he did not select other ways and means of nominating. Many different combinations could be used and it is important that the right one be used from the outset. If the Minister is happy with his proposal and can explain it to me, that will be all right but, as I said, I would like his reasons spelled out in greater detail than anything he said in his opening comments.

Communication, training and education are of vital importance to the success or failure of this scheme. Government funds must be made available, if necessary, towards education and training so that these people can take their places and make an important contribution at board level representing the people—at what area of the shop floor does not matter.

Let me again refer to the exclusion of certain people. Nobody should be excluded. This is a new venture for this country. It is not as I would like to see it; far from it. To me the end result has been a disappointment but it is important because it is the first measure of this kind to pass through this House. Therefore, we must all ensure it succeeds, within its limitations.

Mr. F. O'Brien

I welcome this Bill which is long overdue. The only way we will stabilise industrial relations is by proper communication. One of the ways to communicate is to have workers on the board. They will know what is happening and management will know how workers are thinking. This is very important. This is only a start because much has been done in the area of industrial relations. I listened to the Opposition grudgingly saying that this was something worth while. Industrial democracy has been operating throughout Europe for over 50 years. Fianna Fáil were in power for a long time but they did not do anything about this. Therefore, when one hears this kind of criticism from them one must treat it with a certain amount of contempt.

This Bill must be treated very seriously. In welcoming it, I suggest we look at the whole area of industrial relations and start at the shop floor. Shop floor participation must be encouraged. We should also look at works councils and at what we can do to ensure that there will be the necessary communication. Then we must look at the board and board participation from the workers' side.

It could be said that the trade union movement has been dragging its feet in industrial democracy. In my view, the unions have not put their weight behind it, possibly because they feel it might weaken their power. Any power group, including politicians, are always nervous of somebody trying to impose his view on them. If we look at this from ground level, council works level and management level and get that three-tier system operating, I believe that would take a tremendous load of the day-to-day operations off the trade union movement. As politicians we know that if we could arrange for our day-to-day activities to be done by somebody else, we could give more time towards encouraging and developing a better attitude towards industrial democracy, encouraging management to re-equip, to educate workers and to do a series of developments that would increase productivity, profits and wealth in which the workers would themselves participate.

Whether we like it or not the worker is basically concerned with his take-home pay and how he can improve it. Both management and unions must concern themselves with improving productivity. That is an area to which the Minister will no doubt apply his mind. Obviously, he is doing so even now. The Minister's Department is monitoring industrial disputes. With the right type of structure in industry there would be no need for such monitoring. The possibility of a dispute would manifest itself at an early stage and at that stage it could be taken care of with no dislocation to the economy. Those countries in Europe which are progressive, where standards of living are high and monetary systems are not being daily devalued, are those countries which over the years have introduced into their economies worker participation. In these countries there are no petty disputes. The overall concern is with the health of the economy and its continued well-being.

Over the last 30 years it has been regrettable that at no stage did this country do anything to introduce a progressive attitude towards worker participation in industry. Opposition Members can say little about this Bill other than that it is a step in the right direction. Some may say that we have been three years in Government and are only now taking this step. But this is a whole new venture and I believe that in due time we shall have further essential legislation in this area. For too long this area has been the Cinderella of industry. Trade disputes effect us all but so far we have failed to take the whole area of industrial relations seriously. This is a first step, but it is only a first step. It marks the introduction of a new philosophy in industrial relations.

We inherited many good things from Britain. We inherited their parliamentary system and their legal system. One thing we did not inherit was their trade union system which was born out of an industrial revolution. But we, unfortunately, adopted their trade union system and we have had to pay the penalty for that mistake. It is time we shook off the shackles and evolved our own system designed to meet the needs of our industrial development. This Bill deals only with semi-State organisations but I believe the message will go out that this legislation is not necessarily intended only for semi-State organisations. Only when we organise industry on a proper basis with the right types of dialogue between management and worker will we really know where we are going.

We are a small homogenous nation. We have to work together. The world is in a state of economic crisis. Those nations with the right type of approach to industry are standing up to the economic blizzard. In fact, some are relatively unaffected by it. I see no reason why we cannot achieve the same objective. We are a young nation and we can evolve proper industrial relations and, in doing so, develop a keen sense of competitiveness and a keen sense of awareness of the problems that face us as against the selfish attitude of always asking: "What is in it for me?"

This is only a first step. The previous speaker spoke about the education of the workers. I believe our work force is quite well educated. I believe they have sufficient intelligence to get themselves elected to negotiating bodies. I am not too concerned about education. In fact, I would be afraid that anything of that sort would create a privileged class within the work force and only that privileged class would be elected to boards of management.

As far as I am concerned, our work force are dedicated. When elected to the board they will be able to look after themselves and the interests of their fellow workers. If a company is making profits the workers will benefit. I should like to ask the Minister to talk about the whole question of profit sharing and possibly to consider how he could give the right incentives to encourage profit-sharing.

This whole area of industrial relations is to do with the right attitude. We must leave behind us the day of the "they" and "us" and "talking across the table". We need a new attitude of togetherness to develop our nation in a patriotic sense. We need to get our industries working efficiently and then talk about sharing out the profits and dividends. A man who invests his money in a company receives a profit. Like the shareholder, the worker is giving his time, his life, his sweat to that same company and I believe he is also entitled to receive profit. The Fine Gael Party have always advocated this and we have had policies on industrial democracy before. We did not wait until 1975 to bring out a paper on industrial democracy. The Fine Gael Party have always been concerned about the right of the worker to participate in management, in profits, to give of his best and accept responsibility. Only in this way can we achieve any worthwhile economic goal.

There was some talk about elections to the boards. This must be done in the democratic way. The workers will select, nominate and elect to the board the men they want. There may be groups who may feel isolated. There are minority groups in our society today who put themselves forward for election to this House but they do not receive enough support to be elected. I do not think the existence of minority groups can be used as an argument.

The last speaker said that elected representatives might become remote from the workers. Any member of this House knows exactly what happens if he becomes remote from his constituents. The same thing will happen to the worker elected to the board. Elections will be held from time to time and the workers will have their say. The people elected to the board will not be elected for ever and I have confidence that the workers will have the good sense to elect people who will represent them well.

As far as the Government are concerned, their slate is clean on that issue. The Opposition should concern themselves about their operations six years ago.

I welcome this Bill. I am sorry I had to bring this matter in. I believe the Opposition are bringing this matter in to suit their own purpose. Fianna Fáil were there for 16 years and did nothing about industrial relations and if they were there another 16 years they would do nothing about the matter. It took the Coalition Government just three years to bring this Bill in. I have no doubt it is a start to a long line of good legislation to ensure that workers have a proper say in their work places.

Mr. Brennan

This legislation may be described as a first effort to give expression to a subject which has exercised the minds of many people in the past. This subject, under the broad term of workers democracy, proved very useful as a talking point. But I found, when I was Minister for Labour, that when one gets down to the basics of trying to formulate policy under the general heading of workers democracy one finds hundreds of proposals, all different. This is one.

We are very much in favour of workers' democracy but perhaps our concept might be different from what others visualise. We saw workers' democracy, if it could be ideally instituted, as a source of bringing together the social partners—workers and employers—in mutual understanding by involvement leading to the benefit of both and eliminating industrial strife, thereby contributing to the general wealth of the nation as a whole. I would go as far as to say that neither this nor any other nation will ever achieve any worth-while measure of greatness unless there is absolute co-operation between workers and employers to generate the necessary wealth to put the country in the position in which so many other nations find themselves having had that same measure of co-operation.

Workers democracy, as we see it, is capable of doing this if ideally instituted. Over the years people have seen this in many different ways. Some felt it was a take over by workers, putting the boss in his box, so to speak, declaring the policy to suit the workers only. Others advocated different types of workers democracy. The symposium to which the Minister has referred, in which he took part, contained papers read by eight or nine people all advocating different systems and none quite agreeing on any particular system. Some advocated sharing in the profits, others advocated that shares would be allocated to employees who were a certain number of years in employment, others believed in the bonus system. Some advocated board membership, which is what we are doing here. These are only some of the many ways of worker participation which have been advocated.

While Deputy O'Brien gave a recital of clichés, he made one or two truthful statements. He said that the trade unions did not evince any particular anxiety to move towards a genuine workers' democracy. I am not sure if the system we are enunciating now is the best of all that have been advocated by different people over the years. It is certainly the easiest to bring in. I am greatly concerned about whether or not it will have the effect which everybody desires, particularly since it is being tried out on the State-sponsored bodies, which are a totally different proposition to the private company and private enterprise. One could visualise as the ideal situation one where workers participating in a company in which they are employed look on it as their own company, in which they are a part, having a knowledge of all the eccentricities, all the difficulties, the way to success, how better profits could be made, how the output could be improved and unit costs reduced, all redounding to their benefit as much as to the boss's.

This is real worker participation which could completely eliminate industrial strife and lead to vastly improved output and competitive production capable of competing against other countries who already have the benefit of this type of worker democracy. I am not too sure whether the boys down on the floor will be happy just because there are a few of their number upstairs on the board. I am not quite clear as to what extent they will communicate with the people who elect them to the board. How do they report back? To what extent would the other workers feel they are involved in decision making? To what extent will they be aware of the progress or failures of the company, or market prospects, of unit costs and of marketing competitiveness, which are the things which lead to the success of a company? No worker wants to be attached to a company that is failing. If we are put in a position where we would have part of the responsibility for the success so much the better.

The election to the board of the State-sponsored companies by one-third the number of directors and the boards being reconstituted by a complexity of trade unions—which will lead to very much increased overheads—is not the ideal method of worker participation. The last speaker referred to workers democracy in other countries. In Germany where there are three or four unions it is easy to understand them operating a system of worker participation, but compare that with this country where we have almost 100 unions. The experiment is well worth trying but I am pessimistic of its outcome. Will it have the effect of creating better industrial relations? Will it be of benefit to the workers as well as the employers? All those in private enterprises should seriously study and adopt some system of worker participation because if it can lead to their having a continuous flow of production without interruption by strikes, if it can lead to the workers getting a better income and better conditions generally, both parties will be amply rewarded.

The employer will be in a position to discuss his unit costs with his workers, and generally the whole set up should have that family atmosphere which would only lead to mutual success. I wonder if the State-sponsored companies are the best companies in which to try this out. State-sponsored companies are often accused of allowing Parkinson's Law to operate unlimited, and it is a known fact that corporations are not personally motivated by the profit making motive and never fail to overload their organisations with executives. Complaints have come before this House that the salaries of State-sponsored executives are unknown, and that they are not accountable to the Comptroller and Auditor General.

The present Government gave an undertaking before the election that these companies would be made accountable to the Comptroller and Auditor General by some means, and the only thing we have got in that respect since, was the promise of an all-party committee which would have statutory powers in relation to State-sponsored bodies. The members of that committee, as far as I am aware, have not been appointed. It would be a step in the right direction although it would not completely fulfil the Government's pre-election promise. Lest the Ceann Comhairle might think I am digressing I am referring to that matter so that the directors now being appointed to State-sponsored bodies could perform the function of examining how the State-sponsored bodies are controlled. They could do a lot to ensure that the necessary economies are effected, that a better system is evolved and they could generally contribute to the improvement of the conduct of the companies to which they have been appointed as directors. That task would not, to the same extent, devolve on them if they were in private companies, but if they are to take the view that their only interest in the company is to ensure that they get all that is possible out of it, then we will not be achieving in the interests of our worker democracy what has been suggested we can achieve.

Deputy Fitzgerald rightly referred to education and to training in the knowledge of the task which will have to be performed. Those of us who are not skilled in a particular direction can hardly expect to take on a job without some training and this would apply to persons appointed as directors. Training would enable them to see that demanding too big a slice of the cake could ultimately lead to the curtailment of the company's activities, could ultimately lead to fewer people being employed, contribute to inflation and generally would not create the industrial atmosphere conducive to the production of wealth, about which we have been speaking. This is the type of training that the people who will be appointed will require. While there is nothing in the Bill about that, there is nothing in it to preclude the Minister from having these people attend at the Irish Management Institute or some other such source of information and training to equip them for the important work they will have to do. If they interpret their role as directors as one of providing worker democracy or worker participation, then they have a mighty task to perform; but if they look on it as a means of promoting the interests of the worker only, irrespective of what effect it might have on the running of the firm, on the unit costs, or on the efficiency of the firm, then they are not fulfilling the best requirements of worker democracy as we visualise them. It is for that reason that some training should be provided for those who will take on the important role of directors even in the State bodies.

The method of appointment could be an involved one, and it may be possible to devise a means of simplifying it. One can easily see how it could lead to jealousies and efforts to put forward candidates in competition with each other, which would not create a good atmosphere among the workers concerned. A large number of unions will be involved in some undertakings, some of them much stronger than others. In the case of a contest where more than the requisite number are nominated, will the strength of the union prevail to ensure that only their nominees will be accepted?

To what extent will the returning officer, who will be the secretary of the company or somebody appointed by him, be in a position to have things so arranged that all sections of workers governed by different unions will feel that, as a result of the election of the directors to the board, they are adequately represented? Or will they feel they have lost out? This could present the secretary of the company with a task as great as if not greater than that of seeking to establish proper relationship under the present system with his workers and to obviate industrial strikes in the firm. The preparation for elections among a complex of unions could lead to a difficult situation. It might have been better if the Bill provided that somebody else remote from the company would be the person to take on what could be the onerous duties of returning officer. It is a situation I can foresee as creating a certain amount of strife that would not be to the benefit of better relations between the workers themselves and between the workers and the firm.

Let us say that two directors have been elected to the board of CIE from among the workers and they participated in board meetings. There are thousands of employees in different places throughout the country. To what extent will it improve the industrial relations in the State corporations? To what extent will it contribute to better relations between workers and management that these two members have been fortunate in securing election to the board for which they will be paid directors' fees for the three years they will be members? The extent to which it will improve relations will depend on the communication lines that are established between them as representatives of the workers on the board and the workers themselves throughout the country.

To what extent will they be in a position to convey to their fellow workers who have elected them as board members how things are being done, how losses are accumulating, the extent to which that corporation will have to go to the Exchequer for a subvention to make up the deficit at the end of the year? To what extent will they be able to encourage the workers to make a better effort to eliminate the deficit? To what extent will they be able to pinpoint the weaknesses that lead to the inefficiency that causes a deficit to be there, or to what extent will they contribute generally to the welfare of the whole corporation that will create that mutual agreement and partnership which will lead to the success of the corporation as a whole? If this success can be achieved, then this experiment in worker democracy will be well worth while.

It is difficult to visualise that ideal situation developing from the effort we are engaging in here. As I said at the outset, this is one of the forms that worker democracy can take, but to what extent it can succeed is difficult to see. It has this definite disadvantage, that directors on the State board will not have the same incentive to co-operate with the board as they might have with a private board. The private company is established by one or more people who invest a certain amount of money, register a company and proceed to a particular operation —for example, a manufacturing operation. In a manufacturing operation particular skills are required in relation to the raw material, and special marketing skills in order to sell the goods. Of course the indispensable link between the raw material and the marketing of the goods is the quality control to produce a quality that is in standard and price capable of competing with what the other firm is producing. These are the ingredients which tend to create success for a company and give those who invest their money a reasonable return.

We are asking the workers to take a greater interest in what the boss is doing, how his investment is being handled. We propose doing it in this workers' democracy system by having them elect a few members to the board. Will these members succeed in getting other workers to appreciate the need for absolute co-operation and understanding in regard to the whole conduct of the company leading to its general success? To what extent will they take an interest in raw materials, efficient methods of manufacture and marketing? These are the important things which the board must always watch. The chief executive will report from time to time on where he finds difficulty and where he is meeting success. The task of the new directors is gigantic and if it can succeed in producing wealth and eliminating industrial strife and improve the lot of the employer and employee through mutual understanding, then it is an excellent and highly commendable undertaking and this is a very important piece of legislation.

This is only one of the many ways in which workers' democracy may be expressed. I think it is the least effective of all ways. It is perhaps the easiest to implement but could have the least desirable effects so far as our concept of workers' democracy is concerned. Our concept may be different from that of other people. Some may see it as a means for workers to promote their own interests, improve their incomes and conditions. We see it as a means of mutual understanding between employers and employees leading to greater output, more efficiency and more wealth for the nation and a more contented society without which real progress cannot be made.

Deputy O'Brien referred to our failure to produce anything like this in our time; that is a common practice when you speak on the other side of the House. There was no great demand for it. It is an open secret that if you have real success in workers' democracy the need for trade unionism is vastly diminished. A successful workers' democracy could get on without any trade union and it is quite possible that may be why there was never any great pressure applied to bring about a workers' democracy except by those who considered it to be a system by which the workers took over complete control and told managers to step aside. That is not our conception of workers' democracy; ours is one of mutual respect and understanding and co-operation and complete harmony between the social partners. This system is well worth while and its progress will be worth watching. It will have to be monitored and very quickly it will become evident whether it is having the desired effect which I think would be the elimination or minimising of industrial strife. It would be too much to expect that putting a couple of lads on the board would eliminate industrial strife but if it can in some way diminish the industrial strife we have been accustomed to, it will have a measure of success. If they are to have real mutual understanding of problems between the social partners this measure of worker participation is not sufficient. I do not think it would make the boys on the floor happy to know that two of them may go upstairs and sit on the board. We would need something more.

A wise manager in private enterprise would call his workers together and formulate his own worker participation system, telling them: "We are all in this together. The more profit I make the more money you will get consistent with our ability to have a sound reserve and to be able to expand and employ more people and produce efficiently and generally earn real success." Some employers involve their workers to that extent. It is not unknown in small firms particularly that when an employee has been employed for a number of years and reaches the stage when he can be regarded as indispensable he is given shares and made a director. I know many such cases and the wise board or employer will do this. The same applies to all workers—not those who came in yesterday. Under this Bill a period of three years' employment is fixed. I would have that requirement because by that time a worker will know whether within the concern there is or there is not a career for him. If he has made up his mind that he can look forward to security and to the fulfilment of his capabilities and have job satisfaction in what he is doing, having a thorough knowledge of and feeling himself to be part of the concern for which he works, he is then well qualified to be included in any scheme of worker participation designed to succeed and bring the desirable effects envisaged.

One might say we over emphasise the importance of this legislation but I do not think so. It gives expression to something that, under the general term of workers' democracy, has been discussed for years in many different ways and about which many people have different views. Very often it was just something to flog at a labour conference in general terms as the ideal solution to all the ills of the workers. When you got down to basic considerations—I had to examine it in my time —you found 20 different types of worker participation suggested to you, each advocate emphasising that his was the ideal one. This is one system, the least effective one, but it is worth trying. If it has any measure of success in getting us out of the morass into which we have plunged, then it is worth trying.

Mr. Callanan

I have been preaching workers' democracy all my life. I have tried to operate the idea on boards of co-operatives but I have not been successful. Deputy Brennan is correct in that it is important to find the best system. To have a few boys on the board who might get cocky when they get into the board room is not a workers' democracy. One-third participation has been suggested for the State companies and that is all right. I am worried about the method of election and the differences between the various trade unions involved in a company. I refer to the CIE board. If you are only going to elect a third of the members, their election may cause friction among the workers in such a company as CIE.

Deputy Brennan referred to the operation of a workers' democracy by private individuals. I know quite a number of private firms that have a workers' democracy and profit sharing. I remember the case of a man who has a lot of machinery. I asked him if he worried about his business when he had to leave it for any length of time. He said he did not worry because it was in the interest of his workers to run the business during his absence. He said: "We do the job together. We estimate the job and decide the amount of profit we must have to keep the business going." No matter where that man is his workers know all about the business and what they must do to make a profit. If the job is completed before the estimated time, the profit is shared between the men and the boss. That is a perfect system. I have been trying to have this kind of profit sharing system implemented by the co-operatives. If the workers' representatives do not show the balance sheet of the company to the workers, they will put the system back years.

I wish this Bill well, Sir, because it is an experiment. There are various ways to have an industrial democracy. As Deputy Brennan says, the easiest way is to elect two or three workers to the board of directors. A man who worked in an institution which was run by a county council told me that after every local election the officials would hold a meeting to consider the characters of the newly-elected members. The important point is that these men should genuinely represent the workers. When I tried to introduce such a system to the co-operative movement, the trade unions opposed it. They said it was their job to extract as much as they could for their workers. This attitude is responsible for the chaotic condition of the country. I remember the workers of Irish Ropes working for three days without pay because their company had financial difficulties. I have great faith in Irish workers and have always stood by them. If the man on the floor knew that his company was not going well, he would put everything he had into it. What has been happening is that the worker has not been aware of how the company is run. More worker participation in the running of companies would eliminate strikes. If this system works, there is the danger that trade unions will not be able to play as great a part in our society as they have in the past. The trade unions played a vital part in getting justice for the workers. I am a great admirer of Larkin and Connolly. One of the things I admired about the late Jim Larkin is that he was big enough to condemn a strike in Tuam. During this strike in Tuam a large quantity of beet was left on the roadside to rot. That is the type of man I like; he puts his country and industry first and looks after his own business after that. Anybody who does otherwise is not a good citizen.

I am not biased against trade unions —I am very much in favour of them —but some of the trade unions are not in favour of worker participation because they feel they will not be as important in the situation as they are at present. The demand for worker participation has not been widespread because most workers were only interested in collecting their weekly pay and did not want to know anything about the running of a company. Such an attitude will have to stop. Everybody will have to put their shoulder to the wheel in an effort to get the country moving, and that will be a tough job. I have every confidence in Irish workers and I believe that if they are given the authority to look into the affairs of State companies they will not be found wanting.

We must ensure that our workers are informed about everything that is happening. If that does not happen, the idea of worker participation will not succeed. I would not like to see this idea failing. It is up to us all to convince the workers of the importance of worker participation. I am worried about elections to such boards because there is a lot of rivalry among unions and if the wrong men are elected there will be a lot of bitterness. The rivalry among the unions is as bad as party politics. I cannot suggest the best system for electing members to these boards but I believe that, if it was left to the workers to elect their representatives, it would be better. Such representatives would have to be members of a union but an election on the basis I have suggested would be truly democratic. I am closely associated with many workers and I will do all in my power to get this measure to work. The Minister would need to be careful about it. If the men elected to the boards are not the right type of men for the job, we will not get the answer to industrial unrest. I hope this Bill is the answer to this unrest.

Mr. C. Murphy

Seven State companies are listed in the Bill, Aer Lingus, Bord na Móna, B & I, the Irish Sugar Company, CIE, ESB and Nítrigin Éireann. These companies have been in existence for some time and it is only right that workers should have representation on those boards now. I should like to ask the Minister if he considered adding An Bord Gáis to that list. That company has just been formed and workers should have been allowed to participate in its infancy and future growth. The central purpose of the Bill is to enable elections to be held to the seven State enterprises. Employees can be selected from the work force for appointment to the board. I should like further expression of views as to how people can be nominated. I would like to see a group of workers being given the opportunity of forming a nominating body so that they can put forward the name of a person they feel would have the ability and talent to represent them.

We are all interested in seeing that the best representatives of the workers and those who will be most beneficial to the development of the company are elected to the boards. We want this to happen so that the companies will continue to thrive to the mutual benefit of all our people. It is a wonderful opportunity for talented workers to be afforded the opportunity to develop their talents in a wider sphere. This would be good for the workers. It is possible that the ideas of such workers would help the company to advance. A better understanding and harmony in these companies would bring about a reduction in the number of work days lost due to industrial unrest, and that would be very welcome. Perhaps the workers will be able to come forward with some idea which would do away with the alleged abuses of certificates of illness. The coming together of workers to join with people nominated from other sectors must lead to closer harmony and a better understanding in this regard.

I hope this will be successful and that there will not be any apathy among workers, many of whom have been vocal about the need for participation in the running of the company in which they are employed. Many require more than employment; they want involvement. If worker participation on the boards will lead to more involvement of such people, it will be a good thing. Any interaction of ideas or exchange of views emanating from the various sectors of a plant must be good and beneficial. Thrashed out in a proper light and with proper understanding, and with everybody having as their target the advancement of the company, it would be an extremely good thing. I hope that these will be some of the prime ideas people will keep in mind.

I share the concern expressed by Deputy Callanan that the wrong people might become members of boards by default, because they are the most vocal or because of a sense of apathy by most people. Therefore I ask the Minister to consider the idea of nominating bodies. Elections are good things and the wider the choice for the work force involved the better. Is it envisaged that an election might take place in a trade union hall? Is it envisaged that it will take place on the floor of the plant? Will it be a postal vote? What is in the Minister's mind?

I have spoken to many people involved and a number of concerned workers said that after their days' work ended they get involved in their other interests and many might find it difficult to come back to a specific location to vote. They hope that ballot boxes will be readily available at strategic points in each company premises. Why does the Minister not add An Bord Gáis to the list? I hope this Bill will lead to future prosperity for our companies.

Mr. Moore

Any legislation which involves more people in decision making must have a good influence in the industrial sector. In his speech the Minister said that "the company is no longer regarded as the exclusive property of the shareholders". If that is a criticism of shareholders, we are starting off on the wrong foot. What we should be seeking to provide in our industrial relationships is a partnership—the shareholder has his partners and the man on the factory floor has his partners.

We should try to encourage this sense of partnership which will bring about better industrial relations—I like to call them human relations in industry. Today things change so rapidly on the commercial and industrial scenes that we have to be very careful when legislating and take into account various aspects of our society. Through the constitution of the companies we will provide the best people for the board, whether it be an executive of the firm or a man or woman working on the factory floor.

Efforts were made by the previous Government to give worker participation on particular boards. I remember one case where they appointed a very worthy man to the State board. Politically, he was diametrically opposed to the last Government, but to my mind he was one of the finest men in the country. Because of a great deal of ignorant criticism he was forced to resign from the board. When I saw the person who criticised that man taking his place on the board of the public concern, I felt very aggrieved that such a noble figure should be sacrificed to petty interests. The argument put forward was that he had become part of the establishment—as if we were not all part of the establishment one way or the other.

I hope that when discussing this legislation we will have the sense to ensure that whatever is good in the Bill will be adopted and if there are any parts which will not lead to a happier and more effective industrial scene, we should drop them. I will go into these points in more detail at a later stage. I do not know if I welcome this Bill fully, but I welcome it as a gesture, as a step on the road towards better all-round relations and as a more effective structure of worker management.

This is a small country and we do not have very many capitalists. We cannot afford not to have an efficient management structure. We are beginning to get some rewards for the aid we have given over the years to organisations like the IMI. The Minister is introducing this Bill at a time when, I hope, any person he appoints to a State board will not be driven to resign because of ignorant criticism as happened to the man I mentioned.

Minister for Labour (Mr. M. O'Leary)

The reception for the Second Stage of this Bill has varied between what Deputy Fitzgerald would refer to as a kind of window-dressing and the Opposition Members who appreciate the relatively new area upon which we are entering with this legislation. The debate reflects to some extent a confusion as to what is envisaged by the term "worker participation". It is a confusion not confined to this country. We have seen it reflected in the debate elsewhere on the same subject.

Deputy Brennan seems to confuse it to some extent with a kind of worker democracy when he talks about profit sharing and so on and, drawing on his experience as a Minister, he talked about the many schools of thought in the area of worker democracy. We should clarify our minds about what is intended here. The Bill is not intended as a first instalment on the road to worker democracy. It is seen as fundamentally solid progress towards the rescue and development of worker participation from the realms of theory into the realms of practice. We must avoid the risk of underestimating the direction to be charted. This is a very significant statutory step on the road to full worker participation.

The point was made that it seems to be a very long time since an undertaking was given by this Government to legislate in this area. Directly after the 1973 election I established a special unit in my Department to survey the entire area. There was a great deal of surveying to be done because we had no previous work to go on. No significant work had been done in this area. There had been attendance at seminars and discussions but we had very little reliable information on which to proceed. The first thing to do therefore was to set up a unit which would examine the whole area and see what should be done. This special unit on worker participation was established and work proceeded. A survey had to be carried out. Data and statistics had to be collected with a view to selecting the most appropriate group for designation in this first piece of legislation. We had to eliminate certain companies and include others. We had to set out the criteria on which we would proceed. There was the question of geographic dispersal. There was the question of the range of activities to be included with a bias towards those companies which had a manufacturing base.

When that preliminary work was done we published our proposals in June, 1975. This was just two years after we took office, and it is ironic to note that the proposals were criticised then as being hasty and ill-prepared. They were the subject of a good deal of discussion with trade unions and management in the State and semi-State sector.

It is worth remembering here that every Bill emanating from my Department has of necessity to be the product of consultation with both employers and trade unions. This takes many months of discussion, mulling over the different points, limiting areas of disagreement and preserving areas of agreement. Even after the most exhaustive scrutiny of the whole area and the selection of the industries we were really only at the start of our work of consultation, and anyone who understands the complexity of this area must realise that we proceeded with all possible speed.

We are so often behind what happens in Britain in this area of industrial relations that I am glad to report that on this occasion we are ahead, because the Bullock Committee are still sitting and there are no proposals for legislation in Britain as yet. It is a small point but it is something of which I am modestly proud. We are, in fact, ahead of a government at work in this area long before we started. That is the background to this Bill.

The point was made that we should have made provision for the training of those who would become worker directors. The present position is not one for complete satisfaction but it is worth noting that the Exchequer contribution towards education in this area has quadrupled over the past three years. We have a long way to go, but there has been this marked improvement in State support of trade union education. I believe the trade be given in future but, generally speaking, assistance has been given at a quite satisfactory level.

I suppose it is irrelevant. I accept that the Opposition were inhibited in their reaction to the Bill by this discussion document on worker participation in industry, issued in August 1975. As yet, there appears to be no final Fianna Fáil policy statement on this matter. What we got from them was a six-page document, including the introduction, setting out a proposal to survey the whole area. However, the only concrete proposal in it is that advocating the establishment of works councils or joint consultative committees.

I do not know if the architects of that document were aware that this ground had been covered the previous year by a subcommittee of the Employer/Labour Conference whose discussion documents was published in January, 1974. Perhaps inadvertently, Deputy Fitzgerald today gave the impression that the Employer/Labour Conference document owed its origin to Fianna Fáil work in this area. Their policy document was published considerably later. The Employer/Labour Conference document was endorsed by the annual delegate conference of the Irish Congress of Trade Unions in July, 1976.

On the type of mechanism we should seek to have in operation below board level, I have made it clear that I would welcome the development of works councils below boardroom level and it is interesting to note that the companies we have selected for legislative treatment here already have such councils. Aer Lingus have a works council and additional appropriate structures are under consideration there; in Bord na Móna we have conciliation councils at each works; in B & I we have a works council; we have plant works committees in each of the sugar company plants; we have joint local committees in CIE. We do not have any operating in NET. There is a great variety of numbers and operations in the various bodies working at local and national level in each of the companies involved here.

This legislation will in no way prevent further development of the joint councils at present in operation and if it is judged appropriate by management and unions in these companies that we should have legislation on these matters, I will not discourage it in the least. Indeed, I will welcome it. As much as possible should be done to encourage local committees to operate in each of these companies. However, at this point I believe it would be preferable that we should not legislate at this stage for the support structures because there is now too great a variety and insufficient agreement on how we should proceed in a legislative manner in these areas.

Participation in structures below board level should be allowed to evolve in a flexible and pragmatic way with the agreement of those directly concerned and as they develop they should be suited to the needs of each enterprise. I emphasise that the proposals we have put forward in this Bill have been supported by both sides in the enterprises in which this legislation will operate, that is, the unions and managements in the seven boards involved. They all support, as a result of the consultations we have had with them, the proposals included in this measure.

A question was asked as to why the legislation has been confined to seven companies. The survey unit we established spent nearly two years examining the whole area as fully as possible before we published our proposals for legislation a year ago. They were concerned to ensure that whatever selection of companies we made should be easily monitored and that when the legislation has been passed the unit in my Department will continue to monitor progress on the application of these provisions, how they operate in practice in the different companies. We hope to learn from our experience. To the greatest extent possible, we have tried to minimise the possibility of error in the implementation of the provisions, but as with any theory, once transformed into practice there is quite an amount we can further learn from its operation. We wanted to ensure that the number of companies this monitoring unit would examine would be a manageable group. We believe we have achieved this in the Bill.

Some companies not included were mentioned here, such as RTE, Irish Steel, Irish Shipping. My answer is that we wished to select companies that have a manufacturing base. We wished to have a manageable group of companies. Those companies mentioned during the debate, based on our experience of the operation of the Bill in the companies selected, I would hope may be included in the next batch of companies to which this legislation could be extended.

Deputy Brennan asked about the secretary of a company being returning officer. The Bill allows outsiders to be appointed, in section 7 (1) (b). Deputy Brennan was concerned that we were confining it to secretaries of companies. Other arrangements can be made under the Bill. Concern was expressed that workers' representatives on boards would be remote from workers, once elected. A point was made that they should have the responsibility to communicate with the workers. In general, the very vital task of communicating with workers is a responsibility of the entire board, not just the workers' representatives. It would be unfair to give the entire burden of communication to the worker-directors. That is a job that must be carried out whether there are worker representatives or not. On the point that they might become estranged from the workers, it must be remembered that they will be part-time and that in between board meetings they will be continuing their ordinary jobs on the factory floor, at desks or wherever they may be engaged in the enterprise. We are not removing them from the areas in which they normally work.

In between their board meetings they will continue their ordinary jobs on the factory floor, at desk or wherever else they work in the enterprise. We are not removing them from the area they work in but are simply giving them the opportunity of becoming worker directors with the support of their fellow workers.

Deputy O'Brien referred to balance of power at board level. It must be understood that we are here arranging for worker directors to be elected to the board but it will be for the appropriate Minister to decide how a fair balance can be struck between the different interest groups and the rest of the nominations to the State boards. Obviously, the activities of any State board are concerned with more than the workers. I believe they have a big say, should certainly be consulted and should certainly be represented to the level we have mentioned of one-third. I also believe that consumer interests have a right to be represented on State boards and other interests, such as agricultural interests. They all have a right to be represented on the boards of these companies. It will be for the appropriate Minister to maintain whatever balance he believes necessary in the national interest as regards other appointments to the State boards.

Deputy Murphy asked why we did not include An Bord Gáis. It would be inappropriate that a relatively new company should be brought into a scheme such as this. One of the criteria we felt was necessary before we selected a particular company was that there was a well established negotiation position established between organised workers and management. That is still not be the position in An Bord Gáis.

Queries were raised about polling day arrangements. I intend to bring forward amendments on Committee Stage to provide for postal ballots because this was mentioned in connection with polling day arrangements, and to facilitate overseas employees in companies such as Aer Lingus. Those travelling abroad on any kind of work should be involved and should be entitled to vote.

A question was raised by Deputy Fitzgerald in relation to the preliminary poll about the danger of a crank group of 15 per cent, being able to call for a preliminary poll. He saw the danger that an unrepresentative group could prevent the greater majority getting the opportunities envisaged in this Bill. I am not anxious to suggest to any employee who would be affected by this legislation that once both Houses of the Oireachtas have passed it that it is then a matter of imposing it in each particular firm. I am anxious to ensure that in each firm there will be a double check, that if there was some opposition to the idea of it being implemented in the firm it would not be my intention that we should implement it in those circumstances. In fact, in a climate where it had less than enthusiastic support there would not be any point of continuing it. That is why I include the figure of 15 per cent as a check group to give them this initial right of consultation, give them the initial right to call for this preliminary poll.

It cannot be denied that if a group represented 15 per cent of the potential electorate, that that is a sizeable number of employees. It must be remembered for their intentions to be carried through the small groups would require the support of a significant body of workers to frustrate the operations of the Bill. That is the reason why I have put this requirement into the legislation.

A point was raised about ensuring Dublin and provincial representation on the boards. It is fair to say that issues such as this are being discussed by the unions concerned. My impression is that they are making informal arrangements to avoid the eventuality mentioned. It would be too inflexible in practice if we were to include such criteria in the actual electoral procedure. It has been necessary in the Bill to give certain requirements in regard to the election, polling day arrangements, returning officers, the criteria used in elections, the method of voting and so on but we can go too far in that direction and stifle any initiative which would make for easier acceptance of this legislation.

A question was raised as to whether the big unions have an advantage over the small unions. In a sense I suppose they have. The unions are nominating bodies. Somebody asked the question: "Is not what we are really after here the best people for these nominations?" That is the problem in all elections. It is also a problem in the context of worker participation. People have a right to be wrong and the wrong people are often elected. It is true that the numerically stronger unions would appear to have an advantage but it must not be forgotten that under section 11 (5) a union may endorse a candidate unlikely though it might be in practice, of another union. My opinion is that whatever the limitations of nomination bodies at firm level the fact is that only the candidates who enjoy support, which we hope would be based on the respect of their peers at work, would be successful, whatever the size of the union which would originally nominate them.

The point was raised in relation to the question of polling and detail that there are too many details left at the mercy of the returning officer. Questions have been raised about some of the duties given to him in the Bill. I have already indicated that certain criteria must be laid down in regard to elections because if we are to have the power to spell out in detail the regulations to be made by me about the conduct of elections in the seven companies, we require spelling out in detail up to a certain point. That is necessary if I am to have the right in regulations to spell out details, after consultation with the unions and agreements between unions and management. We wish to ensure, as far as possible, uniformity in all of the companies in which elections will take place. This poses certain difficulties, as Deputies will realise.

A question was asked on section 11 as to whether we are excluding middle management. I should like to emphasise that staff associations are included but also that it is a fact that up to 90 per cent of employees in all of the seven companies selected are organised in trade unions up to and including management level. It is not unconstitutional to confine the nominations to trade unions. That is on the best legal advice available. As Deputies know, lawyers often differ about interpretations of the Constitution.

Deputy Brennan referred to State-sponsored bodies and made the point that it was not perhaps the most appropriate area for the introduction of this legislation since the bodies concerned are totally different from the private sector. The seven State bodies designated are all of a commercial nature and are closer to the private sector than perhaps the Deputy would allow. We chose them with this commercial base so that private industry may learn from their success or lack of it and so that we may have, after some years of operation, systems of worker participation in the State sector which can be voluntarily borrowed in the private sector. We may also, hopefully, look forward to the development of these below-board mechanisms which support participation structures such as works councils. One could look forward after a few years to the development in the State sector of a functioning board participation, by elected workers complemented by a works council operation which would include workers lower down, and therefore one could see almost a fully functioning worker participation system that could be easily borrowed by private industry. I do not think, therefore, that the industries we have chosen make it difficult for private industry to emulate them.

I regard this Bill as one of the most significant pieces of legislation to be sponsored by me. It joins other legislation that I have introduced or will be introducing shortly the overall objective of which is to improve the entire climate of human relations in the industrial sector. Deputies ask if it will diminish the possibility of industrial disputes in those companies. That is not the major objective in this legislation but I believe that will be a very beneficial side consequence of the introduction of this legislation. This is a first step formally to recognise the legitimate aspirations of workers and enterprisers to participate in the making of decisions which vitally affect them, and it derives its primary importance in that it is the first statutory expression in this House of that area of worker participation which we have been talking about for so long. I have from the beginning rejected the idea of bringing into operation in this country the two-tier board system that we see operated in other countries. Our traditions will best be served by concentrating first at the unitary board level, since our companies are organised on that principle. It is important that we should begin with that system in mind. It is my opinion the area in which we can proceed with greatest rapidity.

As Deputies have criticised the delay they will appreciate the delay that would be attendant on a different approach. If I had selected the entire area of private industry and State industry, as does the Opposition discussion document, and come forward with ambitious proposals for the entire area of companies in this country I would have been faced with the problem that our general company legislation would have to be amended. This would mean that the Minister for Industry and Commerce and the business community could say to me with great justice: "How can you amend Irish company law when in fact the European Community is commencing debate in this area and is formulating one uniform European company law?" It is obvious that any other approach than the one I have selected would have lead to interminable delay and would have given no assurance of any progress being registered and would have left us back where we were for the last ten years—continual discussion with no actual working models that we could learn from.

I have covered all of the main points that have been raised during the discussion but no doubt on Committee Stage we will return to points that Deputies have raised. The passage of this legislation will not automatically see the provisions of the Bill being applied in the seven companies selected. Further consultation with the organisations representing the employees and with the management of those companies will be necessary. I assure the House if it appears superficially that there has been delay in the production of this legislation, that no legislation in the area of the Department of Labour affecting employers and unions is successful unless it is the product of genuine consultation with all concerned. The provisions of this Bill have been the subject of the most detailed consultation with those who would benefit from it. It is endorsed by both sides in the State enterprises concerned and I hope that this House will give the Bill a speedy passage.

Question put and agreed to.

Dáil Éireann debate - Tuesday, 26 Oct 1976

Worker Participation (State Enterprises) Bill, 1976: Second Stage.

Dáil Éireann debate -
Tuesday, 26 Oct 1976