Hours of Work Bill, 1984 [Seanad]: Second Stage.

Minister of State at the Department of Labour (Mr. G. Birmingham)

I move: "That the Bill be now read a Second Time".

The high level of unemployment and particularly the high level of unemployment among our young people continues to be the single most important problem facing us at this time. It is a problem which bears down on the community as a whole without divide as between urban or rural or between the young and the not so young. All are affected in some way by this slow moving cloud which has been hanging over this country and many others since the recession commenced. This is a problem which will not go away unless we work hard at it in order to remove it. There is not just one solution. The causes of unemployment are varied and complex and therefore a number of initiatives on a number of fronts will be necessary, firstly, to alleviate the problem and, secondly, to remove it.

While many measures are under way, aimed at creating and maintaining employment as part of the Government's overall strategy, we must also address ourselves to the question of how the available jobs might be shared among those seeking employment. Measures such as early retirement, job-sharing and temporary work have been suggested at both national and international level but, it seems that the most promising movement lies in the area of reducing normal working hours and limiting overtime working. This is an area of work sharing which has been under consideration for some time at EEC level; indeed, a draft Council Recommendation on the reduction of working time and limiting overtime working is currently in the course of preparation.

The Bill before the House represents one such initiative. It is not a panacea. It is but a step which I consider will take us in the right direction. In my Second Stage speech in the Seanad, I referred to a study of overtime working which had been carried out by University College, Galway, in 1979-80. The purpose of the study was to establish if, by reducing overtime, extra employment could be created. The study concluded that extra jobs could follow a reduction in overtime working. It is estimated that if 20 per cent of the overtime worked were replaced by extra employment, as many as 12,000 jobs could be created in the non-agricultural sector. Since this study took place, the recession has deepened, but a 1982 study — also undertaken by University College, Galway — confirmed that, despite the recession, specific cases still existed across industries where there was scope for increased employment on the basis of reduced overtime.

Unfortunately there is little statistical information available to us on the level of overtime being worked at present, but it is highly likely that a significant amount of overtime is still being worked in some areas. Such overtime should, especially in the present economic climate, be converted into extra jobs, where possible. This is particularly so in the case of continuous excessive overtime. The persistent and systematic working of overtime in some undertakings cannot be justified in a situation where many remain idle. The Bill before the House affords us an opportunity to determine our attitude to this question.

The Bill applies to all workers except for those in firms primarily engaged in the transport of persons or goods, those in essential services, fishermen, residential caretakers and close relatives. The Conditions of Employment Acts, which were enacted in the thirties, applied only to industrial, shop and hotel workers. They fixed the maximum normal working week at 48 hours for industrial and shop workers and 56 hours for hotel workers. Conditions have fortunately changed since then and the maximum normal working week — normally established by collective agreements between employers and workers — is now generally 40 hours. The Hours of Work Bill also establishes the normal working week at a maximum of 40 hours.

I mentioned that there are some categories of workers to whom the Bill does not apply. These exceptions are listed in section 2 of the Bill. However, should it become necessary to include a class or classes of workers who do not at present come within the scope of the Bill, the Minister may, having consulted with representatives of workers and employers, make an order under this section, bringing them within the Bill's provisions. Such an order would require the approval of both Houses of the Oireachtas.

Section 4 and section 5 are the main provision of the Bill. Section 4 fixes the normal working week at a maximum of 40 hours or, where weekly hours vary, at an average of 40 hours. It has been suggested that 40 hours is too high, and that the working week should be reduced to a maximum of 35 hours, or a figure between 35 and 40 hours. If we were to reduce working hours to that figure, difficulties could be created for some employers by adversely affecting the efficient operation of their businesses or, perhaps, adding to their operating costs. Such a step could put our industry at a disadvantage in relation to our EEC and other international competitors. The statutory normal working week in most western European countries is 40 hours or more, with the exception of France, where it is 39 hours. In fact, a survey of ILO member states published this year shows that almost all the countries surveyed had a statutory normal working week of at least 40 hours. I would like to point out, however, that there is nothing in this Bill which would prevent employers and workers from negotiating shorter working hours. The Bill lays down maximum working hours; it does not set out to fix minimum working hours.

Section 5 limits the amount of overtime that can be worked at a maximum of 40 hours in any period of four consecutive weeks, or 100 hours in any period of 12 consecutive weeks. Both section 4 and section 5 allow for the averaging of normal hours and overtime, ensuring that the Bill is sufficiently flexible to take account of areas where particular difficulties might occur, for example, in industries which are subject to seasonal fluctuations in their activities. Additional flexibility is provided by section 3 and section 6. Section 3 enables the Minister to exclude, by order, any class or classes of workers, from the provisions of the Bill. Before making such an order, he will be obliged to consult representatives of employers and workers. It will also require the approval of both Houses of the Oireachtas. Regulations permitting the working of additional overtime by a class or classes of workers are provided for in section 6. Before making such regulations, the Minister will be required to consult representatives of employers and workers. This section also enables the Minister to issue permits permitting individual firms to exceed the overtime limits where there is a significant decrease in the number of workers employed and available for work in the firm or a significant increase in the volume of work required to be done.

Workers and employers may, under section 11, negotiate and give effect to arrangements for time-off in lieu of payment for overtime. This provision will introduce flexibility into the area of compensation for overtime working. The Bill does not specify any particular rates of payment for overtime. I consider that this matter is best left for negotiation between employers and employees under our system of free collective bargaining. The provisions in the Conditions of Employment Acts governing payment for overtime working will, however, still apply in relation to industrial, shop and hotel workers. Overtime rates provided for in Employment Regulation Orders and in Registered Employment Agreements made under the Industrial Relations Acts will also continue to apply.

Few, I believe, will disagree with the need for section 8. This section is aimed at discouraging "double employment". It restricts the working hours of a person who has more than one employment to the maximum working hours allowed in respect of one employment. Many people have expressed the opinion that the holding of more than one job should not be permitted when unemployment is at such a high level. However, I believe that the approach towards the restriction of "double jobbing" adopted in this Bill represents the best way to deal with this problem.

Agreements can be made under the Protection of Young Persons (Employment) Act, 1977, to vary the maximum weekly hours permitted for young persons. The Act does not however, set limits, in such cases, to weekly working hours. Section 7 of the Bill provides that any such agreements will not permit the employment of a young person in excess of 50 hours a week.

The Conditions of Employment Act, 1936, contains a provision which gives the Minister for Labour power to prohibit the employment of female workers on particular industrial work or to fix the proportion of female workers employed on such work. I consider this provision to be discriminatory and it is repealed by section 12 of the Bill.

The enforcement of the Bill will be carried out by inspectors of the Department of Labour. Section 9 provides the necessary powers for the inspectors to do this. The remaining sections of the Bill are standard provisions relating to necessary definitions, penalties for offences, regulations for the keeping of records by employers, commencement order and the Short Title of the Bill.

One of the objectives of this measure as set out in its long title is to facilitate the expansion of employment in the economy. I am confident that, with the co-operation of all concerned, this objective will be achieved. I commend the Bill to the House.

Mr. Calleary

I am sorry the Minister's contribution is so subdued. He seems to be uneasy in his estimation of what the Bill will achieve, and this is in stark contrast to his earlier optimism about 10,000 to 12,000 new jobs being created. He now refers to the UCG report of 1979-80 which would, it was estimated, produce 12,000 jobs if only 20 per cent of the overtime worked was replaced by extra employment. In his speech the Minister said:

Unfortunately there is little statistical information available to us on the level of overtime being worked at present...

It would appear as if the UCG study was able to come up with information some years ago and, though it is out of date, surely it would give the Minister the ability to make a reasonable estimate of how much extra employment this Bill would create.

In the Seanad debate, as reported at column 1021 of the Official Report for 9 May last, the Minister said that it would be unrealistic to assume there would be extra employment even when the recession is over — that employment would not automatically increase. I believe the Bill will make some contribution to the creation of additional employment but it is a far cry from the euphoria of 10,000 to 12,000 extra jobs.

The Bill gives little hope to the thousands of boys and girls who will soon sit examinations to look to future employment opportunities. They want a positive policy to provide opportunities for them to work. The long-playing record which we have been hearing for years about budget deficits being the true cause of the problem has been finally smashed by the Minister of State today, but particularly in his Seanad contribution.

However, on the basis that something is better than nothing, I give a qualified but lukewarm approval to the Bill, which is in sharp contrast to the euphoria we have been hearing of for years. The Bill will create limited employment which will be welcomed by all.

The Minister and everybody in the country are agreed that unemployment is the greatest single evil in the State. It is a festering sore, a cancer which, if not treated urgently, can prove to be the death knell of democracy as we know it. There is very little in this Bill to suggest that the Government realise that. We can only hope that urgent consideration will be given to the formulation of positive policies to get rid of this evil.

I welcome the statement that the Minister has taken the opportunity to repeal section 16 of the Conditions of Employment Act and therefore to abolish prohibition of females from certain employments. It was discriminatory and I congratulate the Minister on this move.

I wonder why he chose ten hours of overtime to be permitted. Does he consider 16 hours a minimum rather than a maximum number of hours to be worked in a week? What would the position be if a worker was asked under section 4(2) (a) whether he or she wanted to work ten hours in one day and to do 70 hours the next week? This would give an average of 40 hours a week, as the Minister said, and would raise the problem for many employers and workers of whether 30 hours in the second week would be subject to overtime rates. Would he clarify the position of whether officers in local authorities or the Civil Service who might have other employments will be asked to resign from the local authorities or Civil Service or from their second jobs? If they resign, will they be eligible for the normal benefits that apply to their posts? Will the Minister clarify the position of the majority of local authority firemen, many of whom are in full-time employment? As the legislation now stands, they will not be eligible to work with a local authority as firemen. I do not have to point out to the Minister that these men have built up during the years vast experience and expertise. Their position should be seriously considered in the interest of public safety. I ask him to consider placing part-time firemen in the categories mentioned in section 2 and to do this on Committee Stage rather than by order later on.

This Bill, above all other Bills, will work only if there is full co-operation between employers and unions. While the principle and the theory are impressive and welcome, the implementation of that principle in the hard and sometimes cruel market place will be most difficult. In a number of industries, notably those most vulnerable to imports from the cheap labour market areas of the world, substantial overtime is necessary if workers are to get a reasonable weekly wage. A succession of taxes on employment means it is practicable and more attractive for employers to give overtime to their existing workforce rather than to recruit additional people. The Minister knows the unions will seek to prevent any decrease in the standard of living of their members who, over the years, have seen overtime as an integral part of their earnings and, in many cases, essential to allow them to fulfil their many commitments with regard to mortgages, educational fees that are increasing constantly and the many other expenses they must meet every day.

There is considerable disquiet with regard to this Bill. Perhaps some of it is fear of the unknown, of what will happen when the Bill becomes law, but significantly it is a disquiet that is shared by the unions and the employers. The list of amendments tabled by Senator Kirwan in the Seanad emphasise the disquiet of the ICTU with regard to this legislation.

Employers also, particularly small employers, are at their wits' end struggling with VAT inspectors, PAYE inspectors, PRSI inspectors, with filling in many forms and coping with safety measures. Now they will have to cope with yet another inspector. They will have to open their books to another person.

Has the Minister any thoughts with regard to how many inspectors will be necessary? Where will they be based and what will be their powers? Under section 9(2)(3), can they search a private residence at night? How does the Minister interpret the word "reasonable" as used in section 9? Subsection (1) states:

An inspector may for the purposes of this Act do all or any of the following things:

(a) subject to the provisions of this section, enter at all reasonable times any premises or place where he has reasonable grounds for supposing that any worker to whom this Act applies is employed in work,...

(d) Require any person whom he has reasonable cause to believe...

What might appear reasonable to the inspector could be something entirely different to a householder if the inspector sees fit to call at what he might consider a reasonable time at night.

There is disquiet among the unions and the employers about this Bill and this is shared by members of the public. The Minister should have further discussions with interested parties because a law that cannot be implemented, that may lead to confrontation and that has not got the full co-operation of the unions and employers, is a bad law. There should be further consideration of the various views expressed to obtain a consensus as far as possible with regard to this contentious and sensitive situation.

As indicated in the Bill, fines of up to £600 in the case of a worker and £1,100 in the case of an employer could be commonplace if the Minister does not reconsider the matter. Section 2 lists exemptions. The hotel industry relies heavily on functions and that industry will be severely restrained and affected by the provisions of this Bill. I do not have to tell the Minister or the House of the dire straits of the hotel industry at the moment. If he insists on going through with the Bill, will he consider, in conjunction with this measure, the introduction of legislation to enable employers, particularly in sensitive and vulnerable service industries, to take on part-time workers for a specified period? They may have the right to do that already but nevertheless many employers are unhappy about taking on additional people in case they may have to keep them on after the specified period.

The work ethic will be further diminished by this Bill. When a worker is punished under the law of the land for working long hours, one must start to doubt the exhortations of the Government spokesmen to the Irish people to work harder to produce more. Workers have been subjected to a torrent of advice and they have been admonished for seeking additional wages. They have been told their only chance of getting a greater slice of the national cake is to increase the size of the cake. Now they are told they will not be allowed to work the hours necessary to create that larger cake. How can any Government while removing certain discriminations in the Bill against women now discriminate against children? While adult workers are confined to a maximum of 100 hours overtime for 12 consecutive weeks the Minister permits children to work for 50 hours. Their conditions should be the same as those of adults.

While I can appreciate the motive behind the Bill I earnestly ask the Minister to think again on certain aspects. In the light of the reservations expressed in the Seanad, by employers, by the Irish Congress of Trade Unions, by me, and which I am sure will be repeated here, the Minister should consult with various organisations, unions and employers and change it as a result of those consultations. The result will be a much better Bill with more consensus which in an area as sensitive as this will mean better law and a wider acceptance of the Bill.

Mr. Yates

In my approach to this Bill I am mindful of a number of things but before I detail them I would like to preface my remarks by saying that the caution with which I welcome the Bill and the points I put forward should not be misconstrued as opposition to the policies put forward by the Department of Labour to deal with the major problem of unemployment. I know that the Minister of State has done valiant work in this area, the enterprise allowance scheme is a notable example of a major innovation in the creation of employment and is the type of positive thinking we require.

Unemployment brings about social justification for many things which we would otherwise not see but we should not go overboard in this regard. We know there are many changes in Europe in relation to work sharing and the length of the working week. However, I hope to give details as to why Ireland is not in an identical situation and to pinpoint in specific sectors like small businesses — in which I have a special interest — and in agriculture how this legislation could be counterproductive, the net effect of which would bring about a greater burden, as previous employment legislation has done, and will have the opposite effect to employment creation. The intentions behind the Bill are fine but the outcome in terms of operating this law will perhaps be quite different. I understand that the origins of the Bill are the national understanding in 1980 and that for some time there have been numerous attempts to share the existing workload. It could be argued that the amendments in the Bill to the 1938 and 1936 Conditions of Work Acts relating to the industrial, hotel, retail and shopkeeping areas basically standardise and give statutory effect to what is already agreed work practices in operation in certain sectors.

I have seen the UCG study in 1979, 1980 and 1982 but I accept that the Bill goes further than that. We should review certain aspects of the Bill. One would have to be sceptical of the UCG study because of the word "if" and I have doubt as to its practical application. We can take many different points of view with regard to the principle of work sharing. From a philosophical point of view it is a gross interference in a person's individual right to work and also gross interference in free market activity. I suppose it could be argued that this is socially justified, but we must realise that there are many young couples who have inordinate expense such as mortgages which they might not have later on in life and they have to do overtime to survive. Moreover, I question the approach to the provision in relation to double employment. This is in a way a question of "Do as I say and not as I do" because many Members of this House hold down more than one job. It does not only apply to politicians but to many other categories. We must realise that for various reasons people must do this. I realise that the Bill does not outlaw double jobbing; it just gives the same hours of work criteria to the cumulative effect of double employment. Worksharing must be treated with extreme caution and the major reservation I have in that regard is its effect on competitiveness. It is cheaper for an employer to get skilled employees to work longer hours than it is to recruit extra people.

I know of a company which have a wages and salary bill of £14 million and they employ 1,000 people. They have told me that this Bill will have a very negative effect on their work practice because there are extra costs in PRSI and administration. The administrative manager is in extreme difficulty because this company are fighting off cheaper imports from Third World countries. This legislation and EEC legislation does not affect Third World countries, but I will deal with that later. There are limits to what this company can pay in wages and, even if they lose a share of the market, they cannot pay more. Their only option is to demand. The implementation of work sharing has the opposite and counterproductive effect to what was intended. I am probably in a minority in holding this view because many people prefer to take the opposite view but our primary concern must be employment creation. If people who are in the business of creating jobs and sustaining employment say that this will have a restrictive effect their views should be taken into consideration.

I will give another example of the way similar legislation in the non-employment area has had a similar effect to what I believe this legislation will have. This was in relation to the tacograph. At the time it was thought that the tacograph would create more jobs because of the eight hour restriction on driving. In one company it had the effect of reducing the staff by 11 lorry drivers. In principle worksharing is socially justifiable but its operation in commercial practices could have a counterproductive effect.

If we are to encourage employment creation measures — and I notice the Minister makes reference to this — I would have much more interest in and enthusiasm for job sharing where the hours, wages and taxation are split, thereby meeting the dual need of extra numbers employed without any extra cost to the employer. There are people more suited to part-time work. This whole area is one of a carrot and stick approach, this Bill having the stick approach only. Job-sharing, carrying the necessary attractions, would be the right way of distributing the existing workload given that we have extreme numbers of people unemployed.

Another area to be considered is that of early retirement. I understand that if the retirement age was reduced from 65 to 60 it would automatically create a minimum of approximately 10,000 jobs, admittedly on a once-off basis. I know there would be a cost on the pension side but that would be a worthy way of applying the carrot approach in the creation of jobs for young people. In relation to work-sharing, in principle in times of deep recession and high unemployment it is justifiable to introduce practices that interfere with individual freedoms, with commercial practices, but we should not go as far as doing anything which would hinder our competitive position. Because of the costs of energy in industry and our peripheral geographic location there is no doubt that we have a non-competitive base to start with.

If we are to be positive about the creation of jobs then it must be realised that the single greatest reason there is not more employment is something quite specific which has been documented. In the work of the Joint Committee on Small Businesses there were a number of individuals who told us that they could create 20 to 40 jobs in the morning if conditions were right. Time and time again the one factor pinpointed was the employers' share of PRSI. In that respect employers perceive correctly that they get nothing, no return, except in the event of non-payment of redundancy sums, whereas the employee is socially insured and does receive some perceivable benefit. Basically it constitutes a tax on employment. Indeed, it will have been seen that there is a change of thinking in Europe in this respect, as illustrated by Mr. Nigel Lawson's most recent budget in the United Kingdom. Tax relief should be related to the creation of employment and we should not interfere with anything which would erode our competitiveness.

With regard to the exemption of certain classes of workers by ministerial order, one area that should be exempted is agriculture because that sector is unique in the form of employment it provides. The 40-hour, five day week — 9 to 5 p.m. or whatever — is not as mandatory or as common in agriculture as in other sectors and there is no doubt that seasonal factors come into it also. For example, there are times of the year when cows are calving, silage is being cut, at harvest times and so on, all unique to agriculture. The Minister might well contend that because of the average clause in the Bill, under which the ten hours per week or the 40 hours overtime per month can be averaged over the whole year, one can overcome that problem. There is no point in saying to a cow: "This is Sunday, you cannot calve today". Neither is there any point in saying to sheep: "You cannot break into the barley today because it is Saturday". The agricultural sector is not amenable to these provisions, nor is the 40-hour week applicable. It must be remembered also that low paid workers are more common in the agricultural sector, with many people earning only approximately £80 per week. For various reasons there are many farmers not paying the full minimum agricultural wage, basically because they cannot afford to. Therefore this area should be exempted or at least given further consideration.

Another area of difficulty — and this arises from my experience in the Joint Committee on Small Businesses — relating to all employment legislation is the policing of the legislation. I understand that under the provisions of this Bill the penalty for an employer on a first offence is £500, with a subsequent fine of £50 a day, and that for the employee it is £100 on a first offence and £10 per day subsequently. I understand also that the Department of Labour are to provide the inspectorate. In that Joint Oireachtas Committee we were told, through submissions, that a succession of employment legislation — the Maternity Protection Act, the Unfair Dismissals Act, the Redundancy Payments Act, all had the net effect of encouraging people to operate outside the law because there was a disproportionate burden imposed on small companies who did not have the flexibility to cope with those problems. I have said publicly that the evolution of employment legislation has been one-sided and unbalanced throughout the period of office of successive Governments. To give one brief example, the Maternity Protection Act provisions have meant that we have been told in our committee that people have demurred from employing women where they might have done so otherwise because of the constraints imposed on them under that Act.

Given the difficulties experienced in these recessionary times what is required is flexibility not restriction. I know that under the provisions of the 1936 Act the retail sector is covered already with regard to conditions of employment, that there is a fruit and vegetable inspector, an NPC inspector, a health inspector, a planning officer, a fire officer, employment legislation officers — a whole series of people who give the impression, correctly or otherwise, that they are anti-employer, anti-self-employed people. Employers find it very difficult to conform to such legislation. Therefore inadequate policing of the provisions and lack of consultation mean that the net benefit of this type of legislation is to the black economy. People will say: "I will pay cash to my employee. I will operate outside the law and to hell with the Act." That is what will happen and, mark my words, they will get away with it. I have seen it contended that anything from 3 per cent to 9 per cent of our GNP is operated through the black economy. Legislation such as this is the genesis of the black economy because people are afraid of its provisions, they do not understand and they endeavour to avoid it. They will take cash in the hand, they will pay out cash to their employees and it will be the "nixer" type of employment which will reap the net gain.

In terms of legitimate employment within the EEC I am aware that there is a standardisation of the 40-hour week, the only exception of which I am aware being the French who have a 39-hour week. I am aware also of the many reports of the International Labour Organisation and of the draft Council recommendation of the EEC itself. Running through all of these is the experience of other countries, where they have been cutting back on the working week, where the progressive trend appears to be that one works less, and there was mention of this fact in the Minister's introductory remarks. But what has not been mentioned — and this is my fear in relation to operating European conditions in Ireland — is that time and again negotiations for a reduced working week have been on the basis of a pay deal, on the basis of a cut in pay or a minimal increase in pay. There is no mention of that in the provisions of this Bill. Therefore, I would be afraid that we would get the worst of all worlds, that we would have a restriction on the working week with no corresponding improvement in our competitiveness by making it part of an overall pay deal.

There is no central national understanding or pay agreement on which to negotiate such things because we are on a plant by plant operation. I agree with the Minister of State that this is the best approach because of the practical differences on the ground between different companies and work practices. My difficulty is that the presentation of this legislation is not in the same environment as it is being presented in other EEC countries where there has been a trade off between a reduced working week and a reduction in pay — which seems unbelievable in this country — or a minimal increase.

In terms of competitiveness the biggest threat to jobs through import substitution is not necessarily from our traditional competitors such as the UK, France and Germany. The biggest threat is from the developing Third World and places such as Hong Kong, Korea and Taiwan where there is no legislation such as this. Over a period of ten years they will decimate our work practices because they are uncompetitive. I am not saying we should reverse the trends which have arisen over the years, but we must be mindful of the real world and how jobs are sustained. That can only be done by sustainable, competitive and profitable production.

That is most of what I wanted to say about this Bill. I would not like it to be construed as suggesting I am totally opposed to the Bill. The intentions behind the Bill are fine, but there will have to be a review of all employment legislation. I understand that the unfair dismissals legislation is being reviewed by the Department of Labour because what was intended in it has had a counterproductive effect on employment creation. It may well be that this type of legislation will not stimulate employment. If you start to make macro-economic or systematic conclusions about what UCG puts on paper, that is a recipe for something which will work in theory but will not work in practice.

I fully support the efforts being made by the Minister of State and his Department to create employment, most notably the enterprise allowance scheme and other innovations which are on the way. I hope the positive Bills he initiates will not have the opposite effect to what is intended and that in future there will be a carrot and stick approach to this. My plea would be for flexible legislation. I hope legislation which is restrictive will be accompanied by tax relief for such things as employers' PRSI contributions.

If the Department of Labour are seeking ways to create employment in the First Report of the Joint Oireachtas Committee on Small Businesses we outlined a completely new approach, namely, a jobs tax credit whereby for every new employee taken on there would be a credit against the employer's tax liabilities, PRSI, VAT and corporation tax of £400 in the first year and £250 in the second year. Measures like that will win the support of the people who have to put their money where their mouth is and invest to create the jobs. Those are the types of sustainable jobs we need in this economy. I hope my comments will be taken up and examined on Committee Stage to see what can be done to overcome my fears.

Mr. O'Kennedy

I have just come from a meeting of the Committee on Public Expenditure of which Deputy Yates is a member. Our main preoccupation there is to ensure that we do not build up a bureaucracy which will cost more and have a negative impact in terms of the cost to the private sector. That has been a concern of ours for some time. I am very glad I got here in time to hear what Deputy Yates had to say. I find myself almost entirely in agreement with him, apart from when he said he did not want to be seen as being totally opposed to the Bill. He gave a list of the most cogent arguments why this Bill should not be before us. I understand the position of any Government backbencher. He has to qualify his very reasoned analysis from his practical experience of the small industries who met his committee. He had to give some words of consolation and assurance of support for what the Minister is proposing.

Our spokesman, Deputy Calleary, dealt with the Bill in a precise and detailed way. I intend to take a broader outlook and in a sense to use a wide-angled lens in dealing with this whole matter. I should like to state a few facts. The number of jobs in manufacturing industry here is about the equivalent of what it was in 1966 before the great drive for employment and investment in manufacturing industry. All of our problems are not attributable to a population bulge. Very many of our problems are attributable directly to the hostile environment which has been created in the past two years by a Government hell bent on imposing taxation wherever they can and on whomsoever they can to bridge a current deficit which we now see to have been a vain exercise.

I want to touch on a few of the consequences of that reality and develop further some of the matters mentioned by Deputy Yates. Let us take the PRSI contributions. This year income tax has grown to about £2,000 million, the equivalent of total taxation about four or five years ago. It will startle the House to learn that PRSI contributions are almost of the amount at something over £960 million or £970 million. That is what PRSI contributions represent as we address ourselves to this topic of employment creation through shorter working hours or a curtailment of overtime.

I have full respect for academics, but without consulting any academics, or any advisers in the public service, and without trying to reach a compromise between policies where compromise is not possible, as Deputy Yates said — although I do not suppose he wants to be supported too strongly by me — we all know the real disincentives to employment are such measures as a 1 per cent income levy which is meant to be for youth employment but which we see as only building up a bureaucracy, a 1 per cent income levy which is for nothing except to raise revenue, and PRSI contributions which have increased substantially.

In addition to the increase in the PRSI contribution there is the fact that this Government reduced the tax-free allowances on the PRSI contributions from £312 two years ago to £286 last year. This year they insist on maintaining the same. We did not have many people to listen to our arguments on the Finance Bill over two weeks. I recall one Deputy from Fine Gael and no Deputy from the Labour Party. We had a full House for the votes. All the Deputies over there voted against restoring the tax allowance on the PRSI contribution to what it was two years ago, apart from trying to adjust upwards in terms of inflation. Let that be recorded. They all voted against any allowances in terms of the tax bands. They all voted against any adjustment of the 1 per cent levy. It is the hostile tax climate here, the highest rate of taxation, direct or indirect, in Europe, that is killing employment. The evidence issued today — I brought it up in the House six months ago — is that money that could be used for investment here is flying out of the country in a way that makes a mockery of the fiscal rectitude boasts of a Government who claimed they were getting their budgetary aggregates right. I will reserve the detail of that until Thursday when I believe a special debate will be held.

We must look at it from the employer's point of view as to the burden which all of these new regulations, procedures, penalties and supervisions impose on him or her. What is happening is that the capacity of the State to send out more supervisors, more instructors and inspectors seems to be limited but the capacity of the person in business in a small way to cope with the inspectors, supervisors and instructors is not unlimited. The Bill seems to add more supervision, more penalties, more inquiries and more regulations. Are we not prepared to acknowledge that? If we are not we should take the choice and go all the way and say that if we want to have State control a State economy, let us go all the way with The Workers' Party and the socialist economies — I do not mean those in Western Europe but those further afield — and have a totally State-controlled big brother economy where big brother can say all the time that his way is the way things should be done.

Mr. Prendergast

That is not the answer to the problem. There is hidden unemployment in the socialist countries. We would have no unemployment if we had an army of one million people.

Mr. O'Kennedy

If we do not do that we should recognise that the motor of growth in a free enterprise economy is the climate and conditions created for investment, reward for effort and, above all else, for incentive for work either of the employer or employee.

Mr. De Rossa

And permission to export £500 million.

Mr. O'Kennedy

I agree entirely with the Deputy. I will deal with that £500 million later. When we raised questions about that £500 million at the beginning of the year we were told we were dreaming but now it has been proved that somebody else was dreaming. I will reserve further comment on that to later.

I should like to deal with the impact of this from the workers' point of view. At this time there is another important meeting going on in this city, the annual conference of the Irish Transport and General Workers Union. What is the focus at that meeting? Are there any motions about reducing overtime? I do not believe there are. I do not believe any representative at that meeting will be calling for a reduction of overtime to provide more jobs. I do not have the full details of the agenda but from what I know it is not suggested. That meeting is considering the levels of taxation, unemployment and the impact the high levels of taxation is having on growing unemployment. That group represents the workers in the trade union structure.

We are aware of the views of employers in regard to this. That being so, I wonder where the practical push for this type of legislation is coming from. I have a suspicion as to why it is before the House. I acknowledge the commitment of the Minister of State in the House in terms of hard work and having an open mind on all issues. I doubt if he would bring in this given the scope of the authority he would wish to have. The Minister's introductory passage dealt with the major preoccupation at the moment, the high level of unemployment, particularly among our young people. He said that it continues to be the single most important problem facing us at this time. The Minister went on to indicate that this would demand a whole range of actions and policies — we are still waiting for them. We have been told that next September, two years after the Government took office, we may have a plan. However, the Minister told us that there is not just one solution — there never is — and the causes of unemployment are varied and complex. He told us that a number of initiatives on a number of fronts will be necessary, firstly, to alleviate the problem and, secondly, to remove it. It is into that jigsaw that this little piece of legislation we are discussing is meant to fit. This will be presented to the unemployed and the workers as an initiative to cope with the problem of unemployment. I reject out of hand that this represents anything like an initiative to deal with those crushing problems.

For reasons that have been presented already in the House, if not pushed to a hard conclusion by Deputy Yates, it is clear that this will probably have, unfortunately, the other effect. In the course of the speech the Minister made the point that the Council of Ministers of the EEC are now considering a draft regulation. From my experience in the EEC I am aware that it will take a considerable time to adopt such a regulation because of the variety of conditions that exist in member states. What are we doing in the mean-time? We are deciding to go ahead and introduce restrictions on overtime working that will not apply by law, EEC or otherwise, in the countries to whom we export or in the countries with whom we compete in the EEC. Are we aware of the disability we can impose on ourselves by introducing regulations of a kind that have not yet been adopted, and are not likely to be adopted for some time within the EEC?

I should like to deal with what Deputy Yates said and what the Minister for Labour said in the course of an interview this week. He said that certain provisions in relation to unfair dismissals and guarantee of employment in worker legislation are now proving to be a disincentive against employment. It was the former leader of the Minister's party, Deputy Michael O'Leary, now of the Fine Gael Party, who introduced that legislation to keep us ahead of what was happening in the EEC. Now we find an awareness coming through that what may seem to be fine in theory, worth while, justifiable, equitable and so on, can in practice have quite the opposite effect. The same can be said for the legislation under debate. We cannot introduce legislation as if we were dealing with robots, as if every employer or employee affected by this will respond immediately as if they were robots or puppets on a string. Deputy Yates referred to the one growth area in our economy, the black economy. One of the reasons it exists is that we have introduced a series of regulations, restrictions either through the Revenue Commissioners or the Department of Labour, of a kind that have ensured that those with an agile and fertile brain for escaping from these supervisory powers can do so in the black economy.

We have seen evidence of another black object which has been confirmed absolutely, the black hole through which most of potential investment funds are being sucked out because of the hostile tax climate. Therefore, we are going to ensure that we will have other regulations and restrictions which, as Deputy Yates said, will strengthen the black economy but will do nothing to encourage investment, encourage the entrepreneur, reward the worker or do other than punish those who will now suddenly be amenable to the law for what was up to this moment regarded as being not only acceptable but commendable, namely, working as much as they could to provide independence for themselves and their families. The penalty is there. The work ethic which hitherto has been promoted is now by law for the categories covered here to be confined to 40 hours a week and no more. Those covered by this Bill will be amenable presumably to a criminal charge if they exceed that.

Are we seriously aware of what this little initiative, if I may so call it, is now about to achieve? It will achieve a total change in our work ethic when we want to promote a new spirit of drive, commitment and common purpose. That is why I say that this kind of legislation, brought in as a small, insignificant piece to deal with the whole jigsaw of unemployment, is looking backward not forward. We are reacting again, giving an impression of action, of initiative, when the whole range of options for investment and promotion of activity are being ignored. There is no central plan for the generation of employment in any of the areas we are talking about, the service sector included. In this year of 1984 we have exactly the same number employed in manufacturing industry as we had in 1966. Therefore, we are ensuring that those employed in manufacturing industry, particularly young couples, married men — or women — who want to work harder and for longer hours to support their families, in the early stages particularly, will be penalised if they go outside the scope of this Bill. The employers who will offer them that opportunity or incentive will be penalised also. I find that unacceptable and contrary to the direction we should be giving now.

Yes, a UCG study was produced. With all due respect to objective economic studies from UCG or elsewhere — they are very useful — the compilers would not suggest themselves that they were ever charged with introducing legislation. They would not themselves suggest that part of their role or function is to measure the impact of a piece of legislation on the overall climate for investment. No one action in iteslf will solve any problem, but a signpost pointing back to a cul-de-sac instead of pointing consistently forward with other signposts will cause problems and people who might now contemplate investing from outside this country — I suspect they are a diminishing number — will become aware incidentally that another restrictive piece of legislation has just been passed by Dáil Éireann. They might not be so encouraged by that, particularly if they come from basically free enterprise societies such as the US, Japan, the Netherlands and West Germany, the first two in particular, who are the main promoters of external investment here. Has anyone considered the effect this will have on them if they find that for one reason or another a good man or woman working a certain period could be effectively more productive working another ten hours in a week — on overtime of course — but under our law that is now absolutely unacceptable and they may be punished for providing that opportunity? Have we really considered the effect of this? Have we consulted people on the ground or are we listening all the time to the people who are not? I am not saying this with any undue — I hope — criticism of public servants. They are there to advise a Government to have a concept as to how their legislation will be implemented, but surely we are not going to ignore the experience of those who create employment or who sometimes reduce the level of employment because of the problems they face. Are we to ignore them and take the view from public servants who, in fairness, I suspect did not dream this up but had to come up with some idea on the basis that parties who could not find a common purpose wanted to show some degree, albeit of very little consequence, of initiative?

As I have said, an idea such as this is a signpost pointing backwards. We need to get all the signposts pointing in the same direction. In this sense we could create a new industry in signposts. If everything the Government say and do points in the same consistent direction to encourage investment, work, employment, effort by employees and cohesion, then we will begin to generate the kind of climate that was generated here previously in a short time after a deep recession that we experienced in the fifties.

Another important aspect of this is that this Bill applies to certain categories of employees. Already we have seen the reaction of the workers to whom it applies. It is divisive. What have many of those who are covered or will be affected by this legislation said already? I have had telephone calls about it from people who resent the fact that we here — some of us at least — as they see it, are double-jobbing now. We are approaching the stage where before one is qualified to be a Member of the Oireachtas one should not by definition have any other qualification, ability or job. Those of us — I suppose nearly all of us — who have had the opportunity or privilege of being educated, trained or equipped for other jobs should now almost be excluded from membership here or should drop our qualifications as soon as we come in here. That is a reaction, very understandable, from people who say: "Yes, but you have your farm, business or profession and you are a Member of the Dáil and I am told that I am being confined". It is causing division already among those who see themselves as being the only people to whom this restriction applies. I sympathise with them in that reaction because a Bill that tinkers with one element and limits the scope and opportunity for a limited number of people will cause a reaction. At this point we need more than ever a degree of cohesion in our society between town and country, between employer and employee, between people outside and those of us who live in this little incestuous environment in Leinster House, talking to ourselves, believing that we are the world and that we determine the conditions of the world. Fortunately, the world out there is much bigger and we need to encourage cohesion in our country at this moment, not division, and I am afraid that this legislation is going in the direction of causing division.

If the Minister in the House at the moment is not aware — I suspect he is — of the situation, let me bring some facts to his attention. There has been a fall in consumption at a dramatic rate here in the last two years across a whole range of activities. We argued this in the course of the debate on the Finance Bill, which some people say is rather boring because we go into details. Nevertheless, we must do it. In the course of those very lengthy debates, section by section, detail by detail, we demonstrated that there was a fall-off in consumption in, for example, beer 20 per cent, petrol of the same order, products of the electrical and allied trades of the same order also and a drop in the clothing industry of considerable importance. Why? Because of the disparity between our tax levels and those applying particularly at the other side of the Border. We are losing jobs. Ask any trader in the electrical business in this city.

Further south traders are also experiencing this fall-off. This underlines the loss of jobs in this sector. The fall-off in consumption leads to a fall-off in tax revenue. This is an area in which the point of diminishing returns has been reached. A Government who focus only on extra taxation to maintain tax buoyancy are bound to be defeated in their purpose because of the consequences of fewer in employment having to pay a greater level of taxation to meet what seems to be the voracious public expenditure appetite of this State. We do not need either the department of economics of any university or Public Service advice to underline that. There is a fall-off in investment. The level of GNP in terms of investment is, at about 22 per cent, the lowest for about 14 years. We may ask to what this situation is attributable. Presumably investment for employment is something we wish to encourage, but when our words are pointing in one direction and our actions in another one realises what the genesis of the problem of unemployment is.

Although it may be up to two years before we have figures from the CSO in regard to emigration, I submit that our unemployment figures would be considerably higher but for the numbers who are emigrating. When the figures emerge eventually from the CSO we will find that in 1984 young people are leaving here to find prospects elsewhere. Many of these young people are ill-equipped for the new way of life that faces them. They are out of work and can no longer cope. There is the general pre-occupation about young people being at risk, engaging in drugs and so on. The whole theme is one of young people with problems rather than of young people with potential. To find evidence of the numbers who are emigrating one need only go into any village or town. I am sure people are leaving the cities too, but they are usually more anonymous. Many of the Irish societies in Britain could tell the Minister of the growing numbers of young people who have gone there to seek work for which in many cases they are ill-prepared. Despite this situation we are dealing with legislation to penalise those who work more than 40 hours per week with the exception of certain sectors.

In relation to promoting employment for young people, it has been demonstrated by those whose track record has been proven, a record that we would do well to study and emulate, that the best guarantee for the future so far as young people are concerned is to provide them with the necessary educational skills, technical ability, confidence and ambition to generate sometimes their own jobs but in conditions in which we would know that a properly-educated workforce, as distinct from a trained workforce, was available. I emphasise a properly educated workforce. Recently on radio I heard a very distinguished professor in this area express in a rather pithy way what I have been trying to express in the past 18 months. He put it very well when he said that you educate the human to use his or her imagination, to be capable of meeting the opportunities and challenges of life, but that you train an animal for one job. The Government have got it wrong by training for a particular job and ignoring the potential of education. Last year the Minister for Finance took the step of cancelling oral examinations in modern languages. Whatever about the short-sightedness of the decision of the Minister for Finance, I doubt if the Minister for Education would have favoured such a change.

Acting Chairman (Mr. McGinley)

Perhaps the Deputy would confine himself to the Bill before the House.

Mr. O'Kennedy

I am talking about employment. This House must be relevant and it will not be rendered irrelevant by a little tinkering of this nature. Perhaps I do not commend myself to the officials of this House but I am prepared to be guided by you as distinct from being guided by the response of the officials. We are the representatives of the people and we are the ones who must answer to the people as to how we discharge our responsibilities. Surely we would do better to equip our young people to promote market outlets for employment by reason of their being fluent in modern languages, by being aware of the market conditions in the countries to which we sell and by being aware of the habits of life in those countries. If we are to create jobs by way of exports we must know about the countries to which we are exporting. In what must have been the most short-sighted decision ever taken, the Minister for Education was forced to cancel oral examinations in modern languages. In fairness, however, in view of the reaction to that decision a review of the situation has been forced on the Government this year.

To take the practical implications of what the Government are doing as distinct from the general situation, what are we to say to the young married man who works an extra five to ten hours per week in order to provide for his family but who is not in a position, as would have been the case previously, to benefit from a relatively appropriate tax allowance against the cost of providing a home for himself and his family because the tax allowance in respect of mortgages has been reduced.

Mr. Dowling

Is the Deputy talking of homes of up to £30,000 or £40,000 in value?

Mr. O'Kennedy

A house of that value would not necessarily be a very big house.

Mr. Dowling

There is full tax rebate in such cases.

Mr. O'Kennedy

Is Deputy Dowling suggesting that people who live in such houses are wealthy by reason of the homes they have? If he looks up tax-free allowances in respect of mortgages he will realise that what I am saying is right. However, we can deal with that at a later stage though it was dealt with during the course of the Finance Act. We should be encouraging young people, particularly young married people, to provide homes for themselves. If they undertake extra work they are penalised. As Deputy Yates said they will find another way in the black economy. Nothing will be registered or recorded. The Minister for Finance will be the loser. More money will go down the black hole. That will be a consequence of this Bill.

I agree with Deputy Yates when he said that we should use legislation whether on PRSI or income tax to encourage the generation of employment. We on this side have argued that there could be a reducing level of employer PRSI contribution for extra jobs created. Instead the employer will find that if he gives extra work to good, skilled men who can produce a product for which there is a market that he has to get a licence. We will have a big inspectorate dealing with licences and people will make representations to us asking if we can get them a licence. There will be new employment in the public service. Who will create jobs? Is it those in the Department of the Public Service or those who produce? We will ask people to get licences to work. That is laughable. That is what we are bringing in.

I have heard employers say that they need a separate section in their enterprises to cope with the help they get from State agencies. These agencies advise and assist them. Look at the allocations we provide for them through the Department of Labour. The people who are out there sweating and worrying are those who will now find that in addition to coping with agencies which help them they will have to cope with another one. There will be more forms to be filled in. Are we serious?

I am a member of the Committee on Public Expenditure and I thought we were reaching some conclusions in terms of curtailing the growth of bureaucracy. Instead this legislation will expand it. In deference to those in the Department of the Public Service with whom I was privileged to serve, we have the best personnel and we should be privileged to have them. We are curtailing them with this kind of approach. We will ensure that their contributions will be negative, restrictive and supervisory. We are entering into a new era.

The Minister for Finance spoke about competitiveness being the sole basis for employment generation. I agree that is more important than what we are discussing now. However, the Minister who said that has ensured that by the imposition of high tax rates and PRSI it is next to impossible for our industries and services to be competitive. If we want to achieve growth in employment the area we must look to is the services sector. Some services such as nurses, doctors, para-medical staff, ambulance personnel, workers wholly or mainly employed as residential caretakers and people primarily engaged in transport of persons or goods or an undertaking which is primarily engaged in ancillary services or facilities necessary for the transport of persons or goods have been excluded. I do not know why these should be picked out more so than others. What will we tell the hotel industry? If we are lucky enough to get a positive response from President Reagan's visit when the 40-hour clock strikes, bang, out. I will not go into the extremes of how ridiculous it will be. Are we not trying to encourage people to work?

The Minister has a dual responsibility. I wish him well. In discharging that responsibility I hope he will be more conscious of educating for permanent employment rather than training for a particular job that it may go. Educating and preparing through added value skills is the guarantee of permanent employment in other countries. Japan and Switzerland are witnesses to that. They have added value skills to maximise employment on all fronts. Product development marketing and research technique is the basis for the future but it is not so with us. For us it is more important to bring in legislation of this kind. We are killing competitiveness.

There is scope for voluntary retirement and work-sharing. I agree with Deputy Yates on that. It could be expensive. Will the Minister not consider having consultations with the unions? Some nurses and teachers, both male and female, have suggested to me that they would be quite happy to work for half the hours for half the pay in certain circumstances. That could be pursued. I would not be in favour of introducing regulations to insist that it happen. These people were relatively young, married couples who had children. Early retirement is voluntary and I would support it. This Bill represents a stick which will ensure that those who want to work harder will not be allowed to do so unless by permit. It introduces a new concept and is exactly opposite to what is required.

Mr. Prendergast

I am amused by the reservations expressed by Deputy O'Kennedy about the Bill. Listening to him I was intrigued by his lack of knowledge of the situation in factories and workshops. With the deepest respect for Deputy O'Kennedy, whom I admire very much as a person, let me say that when I hear people speaking against legislation the intention and the spirit of which is good in itself, I ask them to look at it a little deeper. In the early decades of the last century Lord Londonderry, speaking before a commission of the House of Lords on conditions of employment in this country and in Britain, on behalf of the mine owners of Scotland and Wales, defended the practice of bringing children under the age of five years down the mines of the grounds that if the employers did not get them at that age they could not develop the stoops on their backs which were necessary for the type of work they had to do. Keir Hardie, who founded the Labour Party in Britain, said that until he died he would never forget the fear that assailed him when in the underground passages of the mines his lantern blew out. He was ten years of age.

Deputy O'Kennedy had the temerity to refer to the shortcomings of the legislation introduced by the 1973-77 Coalition Government.

Mr. O'Kennedy

I was quoting the Minister.

Mr. Prendergast

But the Deputy was making political capital out of what the Minister admitted honestly. Ní thig leis an gobadán an dá thrá a fhreastal.

Mr. O'Kennedy

Ní raibh mise ag freastal——

There is wholesale abuse of the 1936 Conditions of Employment Act. In some factories machinery is left unguarded but when they hear the Department's inspector is coming, there is a rush to cover the machinery before he arrives. I ask the Minister to ensure that it is legally obligatory on inspectors to give the trade unions a report of their findings where an employer had not fulfilled the regulations. I am speaking particularly of threats to safety and health. We have plenty of experience of such happenings for instance where because of an emission of fuels due to lack of protection workers are suffering and in some cases have to be taken to hospital. Employers should be far more vigilant.

The 1936 Truck Act is a combination of Acts brought in during the last century. A subsection of that Act expressly forbids employers to stop or deduct money from a worker's wages in respect of goods damaged or lost during his employment. That is still being contravened by employers. Under the law an employer cannot stop money from a worker's wages because goods belonging to the employer are damaged or lost during the hours of work. Workers do not know that, and they are still being penalised. This is one area where the Department's inspectors could be more vigilant.

I have a mixed reaction to this Bill. I welcome the spirit and the intention as outlined by the Minister, namely, that it would have a good social impact, but I am completely at odds with the Minister in his optimism that it will achieve the stated aims. Not for one minute do I think it will create significant employment. I would like to see that quantified. Before the Minister puts this Bill through both Houses, I ask him to have in-depth discussion with the trade union movement about the implications of this legislation. In this Bill I see a reference to a limitation of ten hours per week. That must refer to the Labour Court ad hoc ruling on the determination of the number of hours worked. This point arose because a young boy or girl in a factory might be anxious to play football and to them two hour's overtime would be excessive because they wanted to play a match, but, on the other hand, a company might need 20 hours worked to get out an order and they might say that that was not excessive. The Labour Court gave an ad hoc ruling of ten hours in that situation. I imagine the Bill is based on that.

The Minister says that section 5 limits the amount of overtime that can be worked to a maximum of 40 hours in any period of four consecutive weeks. Does that mean that if I do not work overtime during the first three weeks I can be legally obliged to work 40 hours overtime in the fourth week? That point needs to be given some attention and I am sure the trade union movement will have much more to say about this. The Minister very coyly declines to determine what the minimum rates of overtime should be and says that under section 11 workers and employers may negotiate and give effect to arrangements for time off in lieu of payment for overtime. In my view, the Minister should state specifically in order to protect workers, that where there is such an agreement with an employer, time off in lieu may be taken in respect of overtime and that the overtime shall be at the enhanced rate. For example, if the minimum rate of overtime is time and a half for the first four hours, anybody opting to take the four hours should get six hours off instead of four. That has been contravened, very often, in some cases legally. There are some categories of Government employees — one which readily comes to mind is that of VEC caretakers — who are paid a flat rate for overtime. This is grossly unfair and archaic. Minimum rates of overtime should be laid down by the Minister in order to protect workers. I would not leave it to the tender mercies of employers to do this, especially with workers who are so foolish and shortsighted as not to become members of a trade union or are nervous of joining a trade union movement, and leave themselves open to exploitation.

May I use this opportunity, as we are dealing with legislation, to reassure low paid, badly educated workers especially in catering establishments and in other types of work whose employers traffic on their fears, telling them that if they join a trade union they will be dismissed? In this country one cannot be dismissed for joining a trade union. I cannot stress that too often and hope that the newspapers will pick that up. It is enshrined in the Constitution and is the first major exemption under the Unfair Dismissals Act, 1977. It and pregnancy are the two main exemptions.

I appeal to the Minister to have the deepest consultation with the trade union movement. I was amused by Deputy O'Kennedy's contribution. He is a man who knows as much, apparently, about the internal workings of factories and the lives of workers as a pig does about a bank holiday. It is obvious from the tone of some of his remarks. I am saying that in the gentlest possible way.

The intention of the Bill is good but unless it rests on the will and co-operation of the trade union movement it will be totally counterproductive. I was speaking about the exploitation of women workers and cleaners. It is surprising to what degree that also applies to married clerical workers who want to earn some extra money. Some of the national newspapers are not above criticism in this regard. They are deliberately splitting the working weeks and asking women to work for 18 hours a week. These workers tell me that they got no minimum notice, do not qualify for holidays and are being made redundant. I had to tell them, regrettably, that they did not qualify under all those Acts. I ask the Minister to examine that position in particular again in the context of hours of working.

May I remind the members of Deputy O'Kennedy's distinguished legal profession that members of that profession were named the biggest defaulters by the Labour Court in several successive years for not implementing the terms of the national pay norms.

I do not have much sympathy with non-trade union people who ask me if they are entitled to a national wage agreement or whatever it is. I point out that one cannot enforce such on an employer unless one is a member of a trade union. Women workers whose parents bothered to have them properly educated and given a commercial training work on a one to one basis for employers and are being unscrupulously exploited, not qualifying for the minimum legal amount of holidays, pay movements or whatever. I ask the Minister to have regard to my comments as a practising trade union official. These are the areas of gross exploitation of workers. The Minister, in conjunction with this Bill, might far more effectively look at these areas to which I have referred.

I have the deepest reservations about what this Bill will achieve in terms of creating extra jobs. I welcome the limitation on hours from a social point of view, but from an economic point of view will extra employment be created? I urge the Minister to have the fullest consultation with the trade union movement before this Bill is passed in the Dáil.

Mr. Daly

Deputy Prendergast is critical of us on this side of the House about our unawareness of some of the problems at present facing industry, the trade unions and people in general. Listening to Deputy Prendergast's contribution, it was difficult to determine whether the Deputy was for or against the legislation. I do not particularly disagree with this legislation but he probably feels, as I do, that this is middle of the road legislation. It probably will not be very useful. In line with what other speakers have said in previous debates, it seems more concerned with improving working conditions for people in employment rather than doing what the Bill sets out to do — facilitating the expansion of employment in the economy.

The strategy being talked about here and running through the Minister's speech was spoken about in the eighties and discussed at length over the past ten or 12 years. It was one of improving working conditions of employment, rather than dealing with what the Minister says is the major problem of the high level of unemployment, especially among young people. This legislation will do very little, if indeed anything, to resolve the very serious national unemployment crisis. I urge Deputies not to confuse the improvement — and there is a need to for such improvement — in working conditions for employees generally with the important need to find solutions now to deal with this major crisis.

I take exception to the fact that the Government are using this legislation as a smokescreen or a cover-up in an attempt to show this as major legislation which will deal with the unemployment crisis in our economy. That is not the position. The Minister in discussion on this legislation both in the Seanad and here has acknowledged that fact. He said the most promise lay in the area of work sharing, early retirement and temporary work schemes. If this is the most promising movement that the Government can come up with now to deal with the present grave situation I am very disappointed. I would have expected a far more forthright attempt by the Minister who has the energy to tackle and deal with these problems. We need to see a better indication of a more energetic approach in his Department than we see here. The Bill is a middle of the road one which will not create any worth-while job opportunities. It will not provide the type of jobs mentioned in the UCG survey which has been selectively used to bring forward a figure of 12,000 new jobs that could be created in the non-agricultural sector by the curtailment of overtime. This study indicated that management looked at overtime as a necessary device for flexibility in industry. When that study was done they were unwilling to do away with approximately 60 per cent of the overtime done. A second study by UCG was less optimistic than that one. The full study should be put before us so that we can see clearly what the study said. The Minister acknowledges that we do not have the type of information which would enable us to have any worthwhile policies to deal with this situation.

This Bill is to deal with a particular issue which we are not very fully aware of. I question the usefulness of the Bill. The latest survey figures available to us indicate that the average number of hours worked now is about 42½ hours per week. In practice very few people work more than 40 hours per week. I would like to get a message across to the general public that in introducing this Bill the Government are bringing forward a major piece of legislation which, they say, will create 12,000 more jobs fairly soon. But this is really clouding the issue and trying to pretend that some action is being taken to deal with our economical crisis.

A lot has been said about our competitive position and how important it is to keep it. I am worried that a Bill like this may trigger off claims for loss of earnings which will add to our problems. Senator Hillery has pointed out that there were indications some years ago that the highest levels of overtime in Britain occurred in the lowest paid industries. It is likely that the same applies here. If that is the situation we are really asking the lowest paid workers to face the burden of curtailment of overtime. This will put their income situation at a disadvantage and it may very well lead to increased claims being made for loss of earnings from overtime. This will add to the difficulties the Government will have in the future in negotiating reasonable wage rates.

There is a possibility that the rigid enforcement of this Bill will cause a curtailment of jobs rather than provide job opportunities. I do not disagree with the Bill but I am rather cautious about its usefulness. We need economic investment and we need policy measures. We need to see the new economic plan, about which there has been a lot of talk. We need to see the new industrial strategy, the new industrial policy, which we hope will determine the future development of industrial strategy over the next ten to 20 years. We need to see investment in forestry, fisheries, tourism and agriculture. We need to see infrastructural development in roads, telephones, sanitary services and communications. We want to see a genuine effort made at import substitution which will ensure that we use our own resources for the benefit of our people. These are the type of important measures we need to see the Government bringing forward rather than the introduction of this Bill which has been looked at for quite a long lime. People genuinely feel that this Bill will not be any great advantage to us.

Developments are taking place, as the Minister acknowledges, in the European Community which may well mean that the Bill will be out of date before it is implemented. We know there is a campaign in Germany to reduce the working week to 35 hours. Are we to see initiatives taken at Community level in the next few years which will tackle that area on a Community basis, regularising and harmonising hours of work and conditions throughout the Community? Are we likely to be in the situation in a few years' time, when the detailed discussion taking place in the Community is finalised, that the Bill we are discussing today will be out of date and that we may well have to introduce another Bill to deal with a changing situation in Europe? We are likely to see changes here because of the dynamic changes taking place in the new technological advancement throughout the European Community and the world. In the pattern we see developing in relation to working conditions over the next 25 years we will see almost a revolution taking place when this whole area will be looked at in more detail and a European initiative will be taken with which we will have to comply. We will see desirable changes which will be beneficial to people in jobs and to economies in the next few years.

We need to take initiatives in relation to industrial development. The Government have no plans in relation to any area one wishes to talk about. I deal specifically with forestry and fisheries, but the Government have no coherent plan to deal with those major industries which are now in the doldrums. We need to look at small industries and to recognise that there will be fairly substantial development in small industrial projects in the next few years. Over two-thirds of new jobs created in places like the US during the past ten years have been in small industrial projects. If we are talking about initiatives which will help to deal with our unemployment crisis these are the areas we need to see the Government paying attention to. There is an urgent need to press ahead with essential legislation and, above all, with the economic planning which is so necessary if we are to give the economy the required boost and attempt to solve the worsening unemployment problem.

Deputy O'Kennedy spoke about the importance of our taxation system. I know this is probably expanding the debate.

It has been estimated that there will be massive changes in the area of technology and this will bring more pressure for legislation designed to improve leisure time. In this Bill the Government are only scratching the surface and they are not dealing with the problem.

Deputy Prendergast referred to the exploitation of women in industry. Perhaps the Minister of State would tell us what effect this legislation will have on such women. Statistics show that women account for about 30 per cent of workers in industry and their average weekly earnings are about 60 per cent of male earnings. Will this legislation help to change that? Will it widen the gap still further between the earnings of men and women?

I agree with much of what Deputy Yates said but I would take issue with him regarding the statement that the maternity legislation introduced during my term of office is having an adverse impact on employment creation. That legislation was desirable and essential and we deplore recent attempts by the Minister for Social Welfare to curtail payments under the legislation. We all know what happened regarding discrimination against women in industry. Any attempt by the Government to interfere in any way with the maternity legislation would be a backward step which would be resisted. Women in the workforce are a fact of life and we will not solve our unemployment problems by taking work from one person and giving it to another. Our problems can be solved only if we make the proper planning decisions and implement proper economic policies.

This is middle-of-the-road legislation and I do not believe there can be any such solutions to our unemployment problems. The Government are not dealing with these problems effectively. People who walk in the middle of the road are invariably knocked down.

Mr. Dowling

The Minister is concerned, as we all are, about the growing level of unemployment. The background to this Bill may be an attempt to secure jobs for the unemployed, but I am of the opinion that this further addition to social bureaucracy in relation to the rights of employers and workers will do very little to secure any further employment. It may have the opposite effect. It is clearly stated that this Bill is not a panacea.

Much political support can be generated during election campaigns by matters relating to employment. I would remind the Opposition that they built their 1977 manifesto on an attempt to create full employment. I do not believe the policies of any one Government from one year to the next can bring about any significant change in these developments. Fianna Fáil must take some blame, perhaps a greater share than this side of the House, in that regard. They would like to achieve a certain kudos from the fact that the Government find themselves in an appalling position in trying to counter the growing level of unemployment. However, I hope the Minister will give some hope for optimism later.

We can look at the problems in other countries. The growing use of technology would appear to ensure that fewer and fewer people will be at work. Certainly, the machine that stops at 5 o'clock or some other time is not a protection for workers. Apparently it is far easier and better for investment to instal machinery to do jobs more efficiently than workers. There is an increase in this kind of thinking. I am not suggesting it is right, if we are to make any improvement in the employment position.

Deputy Yates referred to the black economy. I do not think an honest attempt has been made to tackle it. I have seen the growing influx of goods from Northern Ireland. They are on sale in every small and large town in the country. Many of those responsible for bringing those goods in, without any revenue to the State, are drawing unemployment assistance.

I am mainly concerned with sections 2 and 3 which deal with the types of workers affected and with exemptions from the provisions of the Bill. Deputy Yates spoke about this and I should like to repeat the fears he expressed, particularly in regard to farming. Fishermen are to be exempt, and one can respect the reasons for exempting doctors and nurses in whose hands lives may depend. The same can be said for the Defence Forces and the Garda Síochána and certain other State employees. However, on farms the lives of animals may be at risk and I do not think that is any less important, so I suggest that the Minister must consider the extension of the exemptions to farming for the reasons set out by Deputy Yates, which I support. This applies to certain times of the year when crops are being saved. It applies to the dairying industry in which people are employed to look after herds and who will therefore exceed the statutory number of hours. There is the problem of the care of animals which may transmit disease and so on. On Committee Stage I hope the Minister will introduce an amendment to extend the exemptions.

The number of hours laid down in section 4 is good thinking. There should not be a free-for-all. Workers are greedy in this respect and so are some employers. I do not apologise to the Opposition for the reforming legislation introduced by the Coalition from 1973 to 1977. I have seen workers with families having to depend on social welfare benefits. Even today the level of pay-related benefits does not go anywhere near the amount necessary to maintain families, particularly those who have invested in houses and the acquisition of other amenities. Any benefits workers get in this respect must be regarded as part of the cost of production. However, the PRSI system has affected small employers particularly. Many of them have said to me that they could employ up to ten people if it were not for the high level of the employer's contribution. This needs examination and updating and Deputies who have spoken and who have had experience of working in small firms have had this brought home to them.

Is there a possibility that there will ever be full employment? I do not think so — I think it is a myth — but I should like to think we can come somewhere near it.

Deputy De Rossa will speak next, followed by Deputy Durkan and Deputy Barrett.

Mr. De Rossa

This Bill would be welcome if it was going to do what the Minister claimed for it in his opening speech or if it contributed substantially to our social legislation. A number of sections are worth-while but one of the main sections, that relating to a working week of 40 hours, is no improvement on established practices.

In introducing the Bill the Minister claimed it was one element in the Government's proposals to reduce unemployment and to share existing employment more equally among those available for work. The Minister quoted a 1980 report to show that as many as 12,000 jobs could be created in the non-agricultural sector. He quoted the Study of Overtime Working In Ireland report which was produced jointly by the European Commission and the Department of Labour. However, he did not quote one significant paragraph on the same page. The report stated:

A majority of firms surveyed see no scope for creating extra employment from overtime hours. However, on the basis of responses from firms it is estimated that about 12,000 jobs would be possible from reductions in overtime. An annual limit of 150 hours overtime would have the greatest employment impact but output would also be affected in many firms.

The report continued:

Introducing double rates for overtime working would have given rise to some increase in employment but labour costs would also have risen in many firms. Such a step does not seem appropriate in reducing overtime.

My reason for quoting this statement from the report is to balance what the Minister is claiming, namely, that it is possible, even given the recession, to create a significant number of jobs by reducing overtime. There is no evidence whatever that any significant amount of overtime is being worked at the moment. The 1980 report referred to overtime of 150 hours per year while this Bill will allow overtime to be worked for up to 100 hours for 12 consecutive weeks. On a simple calculation that would allow overtime in the region of 400 hours per year while the 1980 report states that overtime would have to be restricted to 150 hours per year to have the results claimed by the Minister. Even on the basis of claiming that if a certain number of overtime hours are not worked this would be converted automatically to jobs does not stand up when one considers what was stated in the 1980 report.

The Minister is introducing this Bill as part of the Government's job creation programme. If the Minister for Labour, Deputy Quinn, had introduced the Bill he might have taken a different line, although judging from recent statements he has made about job creation I am not at all certain he would have taken a socialist position on job creation. The fact is that sustainable, long-term jobs will not be created simply by sharing the few jobs that exist at the moment. Anyone who looks at the situation realistically will agree that the only possible basis for future long-term job creation is an increase in the productive capacity of this island and our ability to export and to win markets abroad.

There is an inherent contradiction in the arguments put forward by the Government in the past 12 or 18 months with regard to wage restraint and their introduction of a Bill relating to overtime. When one takes the findings of the 1980 report, what the Government are proposing is more likely to increase production costs than to reduce them. There seems to be a lack of coherence in the approach to the question of job creation. I do not accept the Minister's argument that there can be any job creation arising from this Bill. That is not to say that proposals to reduce overtime are not welcome because, in the vast majority of cases people work overtime because they need the money as their basic income is so low, despite the fact that 60 per cent of what they earn is taken back in PRSI and PAYE. The 40p they are left with out of every pound they earn is so essential that it is necessary for them to work overtime. I would be far happier if the Minister also brought in a Bill for a minimum wage to ensure that everybody was paid a decent wage for the work they do.

The Minister referred to double jobbing and the last speaker said that there are a number of Deputies who also have other jobs in private enterprise of one kind or another and this Bill does not affect them in any way. There is also a gap in the Bill which does not prevent a person from being employed by a company, either private or semi-State, and at the same time be self-employed. It is common for various professional people and tradesmen who are employed full-time to also take on jobs in their spare time, and there is no restriction on that in the Bill. It is the people at the bottom end of the employment market, the unskilled worker, who will be affected most by this restriction on working overtime because they do not have special skills to sell in the black economy.

The question of making the 40 hours the statutory working limit for each week is something of a "con" trick in that the Minister is talking about providing additional employment by reducing working hours. It has been the common practice for most people to work 40 hours or less per week. The 1980 report which the Department of Labour and the European Commission carried out indicated that many workers in the clerical and managerial areas work less than 41) hours per week. Apart from the question of creating additional jobs there is no social advantage in fixing the maximum at 40 hours when the whole impetus in Europe and the demands of the trade unions here is for a 35 hour week. This is not as a sleight of hand to share out what work is available, because nowadays it is regarded that no person should have to work more than 35 hours per week and that their income should be adequate to enable them and their families to have a decent home and to have recrealion available.

The Minister is taking the power to enable firms to work in excess of the limits laid down in the Bill without any reference to the workers' representatives in these firms. I ask the Minister to look at that to ensure that where a firm has applied for permission to work outside the hours established by the Bill that it would only be given in cases where there is full agreement from the representatives of the workforce in a particular firm.

I have already referred to the 40 hour week. If the Minister was serious about creating additional jobs, setting it at 40 hours will not have the desired effect and perhaps he should consider setting it at 35 hours.

The section removing the restrictions on women workers is welcome and is long overdue. I am not happy with the section which exempts close relatives from the terms of this Bill. It is not unusual to have close relatives working for their parents, brothers or sisters on an employer-employee basis and paying PRSI and PAYE. Some of the worst exploitation takes place in family owned firms and on farms where sons and daughters are employed for a pittance and in some cases work a six day week. I strongly urge that close relatives should not be excluded from the terms of the Bill where they are listed as employees and paying social insurance and so on.

As I said, overtime is worked by employees because of the need for money to make ends meet. There is, of course, the other side of the coin that in the vast majority of cases, as pointed out in the study in 1980, most firms indicated that overtime was necessary because of their production schedules or processes. Indeed, 80 per cent of the firms surveyed stated that it would not be possible to implement their processes without resorting to overtime.

The exclusions set out in the Bill are fairly extensive. For example, members of the Defence Forces, the Garda Síochána or the prison service, fishermen, doctors, nurses, paramedical staff and ambulance personnel, residential caretakers, workers employed in the common home, close relatives, transport undertakings or the provision of ancillary services and facilities necessary for the transport of persons or goods. There are other people who are also exempt although not specifically mentioned in the Bill, that is people who are employed by a company and work for themselves outside company hours. These are not covered by the Bill nor are Members of either House of the Oireachtas. There is the extraordinary situation in which there is at present a sort of media tit for tat going on between Fianna Fáil and Fine Gael about who is most honourable in regard to the dual mandate in Europe while all three parties — Fianna Fáil, Fine Gael and Labour — voted against an amendment to the European Elections Bill in this House which would have precluded the dual mandate.

While I am sure the Minister did not intend it, the fact that a Bill is introduced in this House which appears to legislate for Joe Soap in the street restricting him in certain ways from earning money in order to make ends meet and at the same time excluding ourselves from coverage of its provisions, either specifically in terms of the Bill or by not referring to the fact at all, leads to a further growth in the cynicism already evident among the ordinary voter. There have been a number of incidents in this Dáil in recent times which have led to a growth of that cynicism. Some other speaker on the Fine Gael benches mentioned the increase in Dail salaries last year at a time when demands were emerging, practically one a day, from the Government side for everybody else to tighten their belts. The most sophisticated arguments can be advanced about how justified or otherwise was that increase but the plain fact is that to the public it seemed contradictory and to be saying that there is one law for the rich and another for the poor. So long as this or any other Government continue along those lines then the degree of cynicism among the electorate will grow.

I would urge the Minister to drop the charade that this Bill will in any way improve present employment levels and ask him to amend it, ensuring that it will constitute socially progressive legislation. One of the most important elements in that regard would be to fix the hours of work at 35 per week rather than 40 per week. If the Minister is really serious about socially progressive legislation then he should also introduce a Bill setting a minimum income for all workers.

Mr. Durkan

The objectives of the Bill are laudable in view of the large number of people at present unemployed. It must be said also that there is no way — and here I am expressing a personal opinion — that this Bill or its provisions would reduce the number of people unemployed. I shall endeavour to set out the reasons for so saying. We should be more positive in our attempts to reduce the large numbers at present on the unemployment register through incentives in another area rather than by the introduction of legislation determining the amount of overtime somebody will be allowed earn. For instance, the provisions of the Bill will militate against those people who have already committed themselves to various financial undertakings in the last couple of years and who may have committed themselves on the basis of projected overtime. For instance, take the one-income family who heretofore may well have committed themselves to certain financial obligations on the basis of projected overtime and on which they are entirely dependent to meet such commitments. If this Bill were to be enacted they would find themselves in a situation in which two-income families would have a distinct advantage because the limitation on overtime would not have the same traumatic effect on the two-income families.

The provisions of the Bill will militate against families generally. In the case of large families nearly always they are dependent on a single breadwinner. If we set out to create a disincentive, to legislate to limit the amount of overtime that that breadwinner can earn in a year, then we are adopting a very negative way of resolving the most serious problem with which we are confronted at present. There are a number of other ways available to us if we want to discourage those who abuse the overtime system. For example, it can be done by way of taxation, although those disincentives exist already by way of taxation. If we endeavour deliberately to pass a law limiting the right of any individual to work beyond a specified time then we are creating a problem, a situation in which we should not become involved at all, because in so doing we are becoming involved in a huge bureaucracy. I seldom agree with what Deputy O'Kennedy has to say but on this occasion I would have to agree with him. There is no sense whatsoever in creating a bureaucracy which would be detrimental to the interests of both the employed and unemployed by virtue of the fact that no extra jobs would be created in any event. I believe the provisions of the Bill would militate against those people anxious to work, who perhaps have overtime available to them and who, by virtue of this Bill, will be debarred from so doing.

To legislate in a manner which would discourage people from using their initiative or the time available to them for productive purposes is wrong. From the point of view of the farming community — and a number of other speakers have referred to the possible effect of this Bill on the agricultural sector — I would emphasise that one cannot legislate in a way which will take account of all possible circumstances arising in the course of a year in the agricultural sector because it can vary from day to day, week to week or year to year. The provisions of this Bill would bind people involved in agriculture to unnecessary restrictions, which would be detrimental to productivity and to initiative which is all important. We must be very careful not to stymie those very important characteristics.

The objectives set out in the Bill could be achieved by way of taxation and the structures to do so are already there. There are a number of other ways, for instance, early retirement and temporary work about which I have spoken in the House on many occasions. Far more could be done in that way to achieve a reduction in the number of people unemployed than by introducing this legislation. I do not want to be too critical because I know the Minister of State has his heart in the right place in introducing the Bill. We are all acutely aware of the crying need to resolve the unemployment problem. We should all address ourselves to this problem in whatever way possible.

While this is one way around the problem, it is not the ideal way. From the point of view of employers or prospective employers, in order to achieve the same output or the same man-hours in a particular sector, it would be possible after the passing of this Bill for an employer to employ more people. On the face of it that is good and seems quite positive, but it would involve the firm in greater overheads. Instead of paying a few extra hours overtime, the firm would be forced to employ more individuals. That solves one problem, but it creates a problem because increased PRSI and PAYE overheads are incurred. This is the biggest single issue employers are raising at present as a disincentive to giving jobs to people who need them.

So far as we can, we should avoid creating disincentives. Anything that increases the overheads of employers is a distinct disincentive, and we can well do without it. In the present economic climate it is difficult enough to encourage employers to take on extra people. In the past there were incentives such as write-offs for tax purposes against plant and machinery. If we pass this Bill as it stands, we will create even greater disincentives for employers who are proposing to employ people.

I mentioned the possibility of temporary employment even in the public service. All kinds of economic arguments can be put forward to the effect that it would involve the State in capital expenditure which is not desirable. The whole question of temporary employment in the public and private sectors should be examined with a view to attempting to resolve our unemployment problem. If we could find a simplified system for those who wish to obtain temporary employment we would make a far greater impact on the number of unemployed than we can make by passing this Bill.

I understand that another speaker wishes to contribute to the debate. Suffice it to say that I fully understand the reasons for the introduction of this Bill. I do not accept that it will resolve the problem at all. I have reservations about any legislation which would attempt to curtail the right of people to work if there is work for them, and particularly if somebody is willing to offer them work.

Mr. Barrett

(Dublin North-West): I welcome this opportunity to make a brief contribution on this Bill which will affect the low paid worker more than any other person in employment. Deputy Durkan said this Bill, if passed, will not reduce the number of people in employment. That may be quite true, but it will reduce the take home pay of the low paid worker. To me that is more important than anything else because of the increase every day in the cost of living. Are the people who drafted this Bill, and civil servants in general, aware that many workers are taking home anything between £60, £70 and £80 a week. In some cases overtime is included in that. If this Bill is passed, what about the young couple who are purchasing a house? How will they pay their mortgage? The Bill is very much against the low paid worker.

There will be a limitation on the number of hours a low paid worker will work and a very strict limitation on overtime. Any reduction in the working hours of a low paid worker means a reduction in the take home wages of that worker. For the low paid worker in most jobs overtime is essential particularly when the basic rate is very low. The low paid worker will be very much affected if overtime is limited. If the Bill provided that it would affect workers on a certain basic rate only, that would be better, but no matter what your basic rate is this Bill will affect you. The basic rate is not taken into consideration. I am very much aware of how this will affect the low paid worker because, before I became a Member of this House, I was a low paid worker myself. I know what I am talking about.

I agree with Deputy Yates who said that the Bill will have the opposite effect to the effect it is meant to have. It will not create employment. I cannot see how it could. Many people employed in low paid jobs will discover that they would be far better off on the dole. If there is a limit on overtime and the hours a low paid worker works, he will have no option but to give up his job and revert to the dole. I am quite sure of that. Many people who work overtime have no desire whatsoever to work overtime. Nobody wants to work any longer than 40 hours.

Debate adjourned.

Dáil Éireann debate - Tuesday, 29 May 1984

Hours of Work Bill, 1984 [Seanad]: Second Stage.

Acting Chairman

Dáil Éireann debate -
Tuesday, 29 May 1984