I move: "That the Bill be now read a Second Time."
This Bill is concerned with an amendment to the Truck Acts of 1831 to 1896, which were designed to protect the manual workers to whom they apply from abuses in connection with the payment of wages; towards that end, they provide three basic forms of protection, against payment in kind; against interference with the worker's freedom to dispose of his wages as he thinks fit; and, against unreasonable or unfair deductions from wages.
Deputies may have heard of the "Tommy-shop", often owned by the employer, which was a well-known feature of truck practice in the 19th century. It frequently happened that the worker had to buy goods there at a higher price than he would have paid elsewhere—the effect being much the same as if he had been underpaid by the employer.
While any return to the conditions in which it became necessary to enact the Truck Acts is not foreseen, it could be premature to abandon all the statutory protection which they afford workers. As regards enforcement in the field of truck legislation, the work of the factory inspectorate—here as in Britain—has in practice been limited to the investigation of cases which came to the notice of inspectors during their visits to factories, or to which their attention is called by way of complaint.
Most complaints have been concerned with illegal deductions from wages. Approximately ten such complaints have been received since the Department of Labour was set up. No prosecutions were necessary, as the employers concerned rectified the situation once their legal obligations were pointed out to them by the inspectors. Deputies might be tempted to think that ten complaints in slightly over as many years is a comparatively small number. Nevertheless, the fact that in this day and age valid complaints are made goes to show that one should be slow to contend that the Truck Acts are no longer necessary.
This Bill, then, does not set out to repeal the Truck Acts. Its central purpose is to amend that legislation in order to legalise the payment of manual workers' wages by cheque or other payment instrument, where both employers and workers concerned are agreeable. The present prohibition on the payment of wages by cheque to certain categories of workers arose unintentionally: while section 1 of the Truck Act, 1831, required manual workers' wages to be paid in the current coin of the realm, section 8 of that Act made it lawful to pay wages, with the worker's consent, in legal tender notes or by bearer cheque drawn on a bank which was within 15 miles of the place of employment and which was licensed to issue bank notes. The latter restriction has had the accidental effect of making payment by cheque illegal, since section 60 of the Currency Act, 1927, removed the banks' powers to issue bank notes.
The payment of wages otherwise than in cash is provided for in Article 3.2 of the ILO Protection of Wages Convention (No. 95), 1949, which reads as follows:
The competent authority may permit or prescribe the payment of wages by cheque or postal order or money order, in cases in which payment in this manner is customary or necessary because of special circumstances, or where collective agreements or arbitration awards so provide, or where not so provided with the consent of the worker concerned.
This provision was supported by the employers' and workers' delegates at the 1949 ILO Conference. From the time the principle was enunciated in the convention to the present initiative to have the legal position regularised here, there has been, one must admit, a long period of gestation. Indeed, before ever the Department of Labour was established some Deputies may be aware that the question of an appropriate amendment to the Truck Acts received preliminary consideration by a committee representative of the Federated Union of Employers and the Irish Congress of Trade Unions, which was set up by the Minister for Industry and Commerce in 1959.
When the committee was reconstituted in 1964, it made recommendations—along the lines of the provisions of the present Bill—which were accepted by the then Minister for Industry and Commerce. However, in the intervening years preparation and enactment of the body of other protective legislation, now on the Statute Book, took precedence over amending the Truck Acts.
I should like to mention some of the main provisions of the Bill. Under section 2, the provisions of the Bill—with the exception of sections 5 and 8 (4), to which I shall be referring later—are applied to employees covered by the Truck Acts or by the Hosiery Manufacture (Wages) Act, 1874. As was the case with the workers encompassed by the Truck Acts, the Hosiery Manufacture (Wages) Act was aimed at protecting hosiery workers, by curbing abuses in connection with the payment of wages in kind and with deductions from wages. It is, therefore, considered as legislation related to those Acts.
Section 3 enables the employer and employee—or some other person acting on the employee's behalf—to sign an agreement specifying the method by which wages are to be paid. The method will be chosen from among the list of payment instruments contained in the section. This list, which follows generally on the provisions of section 26 (6) of the Central Bank Act, 1971, includes: cheques; bank drafts; promissory notes or other documents or, for example, a credit transfer issued by a customer for the purpose of enabling a person to obtain payment from the customer's bank account; payable orders and other documents issued by a public officer for the purpose of enabling a person to obtain payment from a Government Minister; as well as cheques and other documents drawn on Trustee Savings Banks.
Following consultation with the Minister for Finance, the Minister for Labour may, by regulations, make additions to the list. In this way provision is made for flexibility with regard to the possible future establishment of new kinds of financial institutions or instruments. From the point of view of individual employers and employees involved, local circumstances will probably be the most important factor in determining the appropriate method of payment.
There is no unique formula, capable of being applied to all firms—hence the wide variety of payment instruments from which a choice can be made. But, whatever the choice, I cannot stress too highly the importance of adequate prior preparation and consultation.
Obviously, it would be desirable to cater in the Bill for circumstances where either the employer or employee, for whatever reason, wished to end an agreement about the type of payment instrument used. Section 3, therefore, provides that an agreement can be revoked in either of two ways: first, by mutual consent; and, secondly, by either party, once the specified period of written notice, which must be not less than four weeks, is given to the other party concerned.
I might also mention that existing arrangements between the employer and employee, involving any of the payment instruments referred to in this section, will if necessary, be deemed to be an agreement signed in accordance with the section and can be terminated in the same way as such an agreement. This provision will regularise the use of any payment instrument which may have been used in the past in contravention of the Truck Acts arising from the operation of the Currency Act, 1927.
Section 7 is a protective measure designed to ensure the employee's freedom from pressure or coercion where the method of payment of his wages is concerned. Towards this end, any term or condition of an agreement will be null and void if it requires a person either to sign a document agreeing to the use of a payment instrument listed in section 3, or not to terminate the use of any such instrument where it is already being used to pay wages to the employee involved.
Section 4 acknowledges the fact that, where an employee is required to work at a place other than his usual place of employment, or is absent from work by reason of illness, on leave or with the consent of his employer, he may prefer to be paid in cash. If so, he has to notify his employer in writing to that effect; otherwise, the employer will be entitled to pay him his wages by way of any of the payment instruments mentioned in section 3. The written notification to the employer about the requirement to be paid in cash will supersede any agreement that may have been signed in accordance with section 3.
Deductions are treated in the Bill in three places: first, under section 6, if the employer and employee sign an agreement about the payment of wages otherwise than in cash, the employer will be prohibited from making any deduction from any wages of the employee by reason only of the fact the wages are no longer being paid in cash but by one of the payment instruments referred to in section 3.
Secondly, the main provision about deductions, which is to be found in section 5: it is the only section in the Bill which embraces all employees, both manual and non-manual. It obliges the employer, where he makes a deduction from the employee's pay, to give the employee a written statement indicating the gross amount of the salary of wages payable and the nature and amount of the deduction or deductions. As this amounts to what will be, in effect the preparation of itemised pay statements for all employees, it is only fair that employers should be given some time in which to prepare themselves for it. The intention is, therefore, that section 5 be brought into operation by ministerial order in about a year's time.
Finally, section 8 (4) will permit the employer to make deductions from wages, to which the employee in question gives his consent, notwithstanding the terms of any statute referred to in the Bill. The purpose of this provision, which will have retrospective as well as future effect, is to resolve a certain difficulty which arose in relation to the Truck Acts and related legislation. I could elaborate further on it on Committee Stage if Deputies wished, but for the moment I will outline it briefly as follows.
The general effect of the Truck Acts is that no deductions, other than those required or permitted by statute, can lawfully be made from the wages of any worker to whom the Acts apply. Thus, many deductions, such as, for example, the recovery of overpayments of wages, or contributions to pension schemes, which might appear desirable both to employers and workers cannot lawfully be made even on a consensual basis because of the Acts. However, once this Bill has been enacted, section 8 (4) will ensure that that situation no longer obtains.
The Payment of Wages Bill, 1979, is an enabling measure. It is designed to suit people's convenience on both sides of industry. There is no element of compulsion contained in it; indeed, quite the reverse, as I have shown. It would be neither practicable nor desirable to make non-cash payment compulsory. Movement away from payment in cash will be essentially an evolutionary process, which can best be effected with the goodwill and co-operation of all concerned—employers, employees, trade unions and the various financial institutions.
The removal of the restriction on cheque payment is not a radical alteration of the law. It merely brings the present situation into line with the original intention of the Legislature and restores the pre-1927 position. However, it does end the differential in law in this matter between manual and non-manual employees, and should help to bring the payment of wages more into conformity with modern conditions.
It would be my hope that the Bill could have certain beneficial consequences from the point of view of security of payroll moneys. The House will be well aware of the spate of armed robberies which we have been experiencing, a number of which involved payrolls. Payroll cash is a tempting target for criminals. If employers and employees were to avail themselves of the right, under the Bill, to have wages paid otherwise than in cash, that should help to make it possible to narrow the range of targets for prospective armed robberies.
The legal situation at present, which I outlined earlier, has required the dispersal of considerable sums of money to various firms throughout the country for the purpose of paying wages. The necessity to do this has meant that those intent on armed robbery have been able, on a significant number of occasions, to pick and choose their target from a wide selection of large payrolls. You will appreciate the difficulty in providing security for all such targets.
I trust that this Bill could be a step in the right direction towards reducing the incidence of large cash consignments. It will provide the framework for employers and employees, if they wish, to move away from the system of payment in cash, thereby easing the security problems involved in the transport of large sums of money.
I now commend the Bill to the House and urge Deputies to give it a speedy passage.
