Unfair Dismissals (Amendment) Bill, 1993 [Seanad]: Report and Final Stages.

Mr. Rabbitte

I move amendment No. 1:

In page 3, between lines 14 and 15, to insert the following:

"2. —Where a respondent to a claim for redress under the Unfair Dismissals Acts disputes that the claimant was an employee of the respondent, it shall be conclusive proof that the claimant was an employee of the respondent if it is shown to the satisfaction of the Tribunal that the respondent was responsible at law for deduction of the tax and social insurance contributions of the claimant.".

It is shameful we have so little time that I am anxious not to take up too much time with this amendment, though I consider it important. I would like to think we would get to the amendment regarding dismissal for pregnancy-related reasons, which is the major defect in this Bill. It is important that we get around to that.

In a nutshell, this amendment relates to the fact that the Act defines a contract of employment as a contract of service, and where there is a dispute about the contract the onus is on the claimant to establish his status under the Bill. Having regard to the fact that there has been great fragmentation of the workforce, this is a factor that is coming more and more into play. I would like to hear the Minister's response.

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

Section 1 of the Unfair Dismissals Act, 1977, contains definitions of what for the purposes of the Act are to be meant by "contract of employment", "employee" and "employer". In cases of dispute these are matters for the tribunal to decide.

On Committee Stage, Deputy Rabbitte referred to being aware of contracts being devised expressly for the purposes of circumventing the terms of the Unfair Dismissals Act. In this context I would draw the Deputy's attention to the provisions of section 13 of the Unfair Dismissals Act, 1977. That section expressly provides that a provision in an agreement — whether a contract of employment or not — shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with, any provision of the Act. Accordingly, any contract including as an express condition that the terms of the Unfair Dismissals Act do not apply will simply not work as that provision will, in point of fact, be null and void.

In regard to contracts for services, to which the Deputy referred, it is not intended that this Bill would extend to persons engaged under such contracts the protection of unfair dismissals legislation. For the purpose of labour protection legislation generally, eligibility of persons depends on their employment status. The scope of such legislation generally extends to persons who are engaged under a contract of service or apprenticeship and who otherwise fulfil the eligibility requirements of the legislation concerned.

As a rule, persons engaged under a contract for services would fall outside the scope of labour protection legislation. In cases of dispute or doubt, determination as to whether any individual falls within the scope of labour protection legislation would be a matter for the relevant adjudicative authority, for example, rights commissioner, tribunal or the courts. In this connection the nature of the contract between the parties would be a central consideration.

Deputy Rabbitte's amendment could, as was pointed out by Deputy McDowell on Committee Stage, have the undesired effect of including within the scope of the Act groups of persons whom the Deputy would not intend — for example, directors of limited liability companies — or could confuse the employment relationship which exists with other employees, for instance, teachers.

The extension of the scope of the legislation to include contracts for services would involve a fundamental change in the purpose of labour protection legislation, a change which is not envisaged among the purposes of this Bill. Therefore, I do not intend to accept this amendment.

Mr. Rabbitte

I would be willing to countenance the appalling vista of directors coming under the provisions of this Act if I thought it would give protection to the tens of thousands of workers who find themselves excluded for the reasons I have explained. I do not accept that section 13 of the old Act gives this protection. There is a grey area. I adduced some of the authorities the last day. Mary Redmond has written extensively on this subject. I referred to the remarks of Lord Wedderburn. There is an issue here, but because of the importance of what I mentioned earlier I am not pressing it.

Miss Flaherty

I had a related amendment tabled which was dealt with on Committee Stage. There is an issue of concern to employees here and the way I proposed to deal with it would not have involved associated difficulties. It would have been simply a matter for the Department of Social Welfare to adjudicate on. I hope we will have a chance of coming back to this matter at some stage in the future.

Amendment, by leave, withdrawn.

Mr. Rabbitte

I move amendment No. 2:

In page 4, between lines 18 and 19, to insert the following:

"(a) the substitution of `nine months" for `one year's' in paragraph (a) of subsection (1),".

On the last occasion the Minister made the not unreasonable point that whether the required period to be eligible for the protection of the Act is nine months or 12 months, it can be obviated by an employer who is so minded. In other words, if the threshold were nine months, contracts could be formulated to last eight months and so on. I accept that is a weakness in what I am seeking to do.

The Minister when replying may wish to refer to the effects of what she proposes in amendment No. 4. That amendment might address more comprehensively the problem I am seeking to cover here. The problem to which I refer is that of people not having the protection of the Act because they may not have the requisite service. Work procedures have been deliberately constructed so that this is the case. The Minister's amendment No. 4 seems to go some way towards addressing this problem.

Mrs. O'Rourke

We are dealing with Deputy Rabbitte's amendment No. 2.

Mr. Rabbitte

Yes.

Mrs. O'Rourke

The points I put forward on Tuesday remain the points at issue. No matter what cut-off period is decided in respect of the number of months some employers will circumvent the legislation in place. Such employers would work ahead of whatever time limit was set in this regard. Deputy Rabbitte has admitted that this is the position. I have no new argument or point to put forward on amendment No. 2. I reiterate what I said the other day. There is a provision in the 1977 Act to which I referred the other day. That provision allows the Minister of the day to change by order the length of the service requirement. It is not necessary for a change in relation to service requirement to be dealt with in the Dáil; it can be dealt with by ministerial order. If during the course of my time in this job it seems the provision in regard to this matter should be changed, it can be changed.

Mr. Rabbitte

The average probation period for employees is three months; in some cases it may be six months. I cannot see why someone must clock up 12 months' service before getting the protection of the Unfair Dismissals Act. I have noted the Minister's comments and I am not pressing the amendment.

Amendment, by leave, withdrawn.

Mr. Rabbitte

I move amendment No. 3:

In page 4, between lines 24 and 25, to insert the following:

"(b) in paragraph (a) of subsection (2), by the insertion after `fixed term' of the following:

`save where the Tribunal decides that the purpose of the contract was to circumvent the terms of this Act,', and".

This is an important amendment. I am not sure if I have properly constructed it. It is designed to deal with a phenomenon that is now widespread. Employers now take professional advice in regard to contracts and deliberately design contracts to ensure that the requisite 12 months' service is not clocked up by employees, who nonetheless remain in their employment or are re-engaged immediately after a break of service. In other words, 11 month contracts are widely used so that the protection of the Act is not afforded to the employees. Re-engaging people in employment after a period of one week, three weeks or a month is a widespread phenomenon. Notwithstanding the exemptions in that section of the Principal Act, where the purpose of a contract is manifestly to provide the employer with an avoidance of liability under the Act, this amendment seeks to provide that the tribunal should have power in that case to decide, — even though the claimant may not have 12 months' service — that they are entitled to redress under the Act. Where the contract is manifestly for the proposed of avoiding protection of the Act being afforded to the employee, the tribunal can decide that seized of the facts and circumstances and notwithstanding the 12 months threshold requirement, an employee appealing to the tribunal is entitled to be heard and to an adjudication and, if that is successful, to an award. The employee is entitled to that if the employer is considered to have deliberately constructed the contract so as to remove protection that the employee could otherwise reasonably have expected.

Mr. M. McDowell

Regarding this amendment, I would prefer the Minister's amendment No. 4. It was inspired by myself. I am glad the Minister is in a less waspish mood today.

Mrs. O'Rourke

That is a sexist remark. The Deputy is some wasp.

Miss Flaherty

It is an asexual word.

Mr. M. McDowell

The advantage of the Minister's proposal is that it applies in dimissal cases where contracts are not involved. Presumably it would also apply to the rights commissioner and the court, to which this amendment No. 3 would not apply. In view of the fact that we are labouring under the shadow of the guillotine and that the Minister is an eminently suitable person to act as Madame Lafarge in relation to the guillotine——

Mrs. O'Rourke

I cannot knit.

Mr. M. McDowell

The Minister can stitch very well; she can needle very well too. I do not mean to be sexist. I support the proposed amendment.

Miss Flaherty

Credit must be given to Deputy McDowell for pointing out what would have been a very substantial loophole in the legislation. This Minister's amendment achieves what Deputy Rabbitte is seeking to do in his amendment. It is a welcome improvement. Many employees will be grateful for this provision. The re-employment of staff may be a major area of abuse. It would have been a major oversight if this matter had not been spotted. I commend Deputy McDowell and welcome the Minister's response.

Mrs. O'Rourke

I am overcome by all this niceness. Deputy Rabbitte's amendment No. 3 sparked off issues relating to amendment No. 4. Deputy Rabbitte's amendment provides for amending section 2 (2) (a) of the 1977 Act. That paragraph refers only to such fixed term contracts as were made before 16 September 1976 and would not have much practical application now. However, that might be just a drafting slip. I am sympathetic to Deputy Rabbitte's idea. Last Tuesday I said I would consider this matter again. The central thrust of the arguments put forward by Deputies MacDowell, Rabbitte and Flaherty has struck a chord with me. We have all encountered cases in our constituencies of people having been let go on contracts. Abuses are being perpetrated in this way.

It is my view that Deputy Rabbitte's amendment is addressed by section 3 of the Bill. The section amends section 2 (2) of the 1977 Act by inserting a proviso excluding from that subsection coverage by the Act of certain fixed terms and fixed purpose contracts of employment. The proviso will allow a rights commissioner, the Employment Appeals Tribunal and the Circuit Court to examine any second or subsequent fixed term of fixed purpose contract of employment and to take a view as to whether the fixed nature of the contract was wholly or partly for or connected with that. Accordingly, the amendment proposed by Deputy Rabbitte is not necessary in this context. Amendment No. 4 aims at tackling a similar evasion type problem in regard to ordinary contracts of employment, that is, not fixed term contracts.

Mr. Rabbitte

That is one of the benefits of having expert Senior Counsel advise on hand——

Mrs. O'Rourke

At no cost.

Mr. M. McDowell

It is some cost to the taxpayer.

Mr. Rabbitte

——that one can make an evaluation between the merits of the Minister's amendment and mine. If the expert advice is that the Minister's amendment is more comprehensive or safer, I am happy to withdraw my amendment. I do not think it is correct that my amendment relates to the position obtaining before the 16th day of September 1976. That is in section 2 (a) of the previous Act.

Mrs. O'Rourke

It is section 2 (a) (a).

Mr. Rabbitte

It is a mistake because it refers to paragraph (b). It refers to a contract of employment for a fixed term in paragraph (b) and not paragraph (a). It is entirely appropriate to give credit to Deputy McDowell for suggesting the remedy but I will not concede that he spotted the loophole. I spotted the loophole and only because, as the Minister said, people frequently ask me whether they have a remedy under the Act. They do not because the contract puts them outside its scope.

Mr. M. McDowell

I graciously concede that point.

Amendment, by leave, withdrawn.

Mrs. O'Rourke

I move amendment No. 4:

In page 5, between lines 33 and 34, to insert the following:

"(c) the insertion of the following subsection after subsection (4):

`(5) Notwithstanding subsection (4) of this section, the dismissal (not being a dismissal referred to in the proviso (inserted by the Unfair Dismissals (Amendment) Act, 1993) to subsection (2) of this section) of an employee followed by his re-employment by the same employer not later than 26 weeks after the dismissal shall not operate to break the continuity of service of the employee with the employer if the dismissal was wholly or partly for or was connected with the purpose of the avoidance of liability under this Act.'.".

The purpose of this amendment is to provide that a rights commissioner or the Employment Appeals Tribunal should have the discretion to consider whether the dismissal of an employee by an employer, followed by the re-employment of the employee within 26 weeks of the dismissal, was used for the purpose of avoiding obligations under unfair dismissals legislation and where it is so decided it shall not operate to break the continuity of service of the employee.

This amendment will provide a remedy for certain employees who find themselves in a situation where their employer persistently breaks their service by dismissal after 11 or 11½ months of successive contracts so as to prevent them gaining the 12 months service necessary to qualify for protection under the Unfair Dismissals Act. When this legislation is passed, it will be possible for such cases to be brough before a rights commissioner or the Employment Appeals Tribunal.

The fact that this problem was highlighted indicates the value of a Committee Stage debate and the expertise — which I freely admit — of Members with a constituency and professional background who have a receptive ear. My attention was engaged because the point raised brought to mind immediately cases I have dealt with. Deputy Cullen was unable to be present due to business commitments but he was ably represented by Deputy McDowell. We had a heated debate in his absence and this amendment is the result of those exchanges. Some think that Bills when introduced are perfect and do not need to be amended but we should be always prepared to consider amendments. That is not to say that I will accept more amendments. The exchanges, while noisy, were very useful.

Miss Flaherty

It is odd that the Minister has decided on 26 weeks when there is a shorter period for the fixed term contracts.

Amendment agreed to.

An Leas-Cheann Comhairle

Amendment No. 5 is in the name of Deputy Flaherty. Amendment No. 7 is an alternative and I suggest that amendments Nos. 5 and 7 be taken together.

Miss Flaherty

I move amendment No. 5:

In page 6, between lines 32 and 33, to insert the following:

"(eeee) the pregnancy of the employee or any matter connected therewith,',".

These issues were discussed extensively on Committee Stage when we indicated our dissatisfaction that the Minister was unwilling to include such a provision in the Bill. While it is against the law to dismiss a woman for any condition associated with a pregnancy, many ways are being found around this. Women are being dismissed as a result of conditions relating to pregnancy. The Minister said she would rather postpone a decision on this issue for a further 18 months until the EC Directive is introduced and becomes the responsibility of the Minister for Equality and Law Reform. This Bill will require amendment at that time. The Bill should be amended now and this protection given to women immediately.

Mr. M. McDowell

I support Deputy Flaherty's amendment.

Mr. Rabbitte

I do not mind whether amendment No. 5 or my amendment No. 7 is accepted by the Minister. However, it is important that the Minister who has, quite courageously on occasions, displayed her feminist credentials, does not shelter behind any imminent legislation from the Minister for Equality and Law Reform or, indeed, delay the protection of women now merely because a directive is anticipated from the European Community in 1994. I hope the Minister's benign approach continues for the duration of the debate on this amendment at least.

Mrs. O'Rourke

We are not awaiting a directive from Europe, it has been passed.

Mr. Rabbitte

We await its implementation.

Mrs. O'Rourke

The European amendment has been accepted by us and legislation to take account of it is in the course of preparation.

While it is the role of the Opposition to put forward their point of view on any issue it is my duty also to express my view. We have embraced wholeheartedly the Social Charter on which discussions are taking place. One of my predecessors — Deputy Cowen or Deputy Bertie Ahern — were in office when the directive on pregnancy was accepted. Last month in Brussels we spent a long day and a night discussing the 48 hour week. The intentions of this country — supported by all Members — towards the Social Charter are clear and no one can say that any one party is more thorough about this issue than another.

Legislation will be required to implement the terms of the EC Directive as outlined in the Programme for Government. It is hoped to introduce the legislation by October 1994 and it will go beyond the amendments tabled by the Deputies. The 1977 Act caters for women deemed to have been dismissed due to their pregnancy. If a woman was dismissed in such circumstances the three remedies open to the Employment Appeals Tribunal are reinstatement, re-engagement or payment of compensation.

This issue was not raised strongly either on Second or Committee Stage but there was a long debate in the Seanad on why so many employees here were awarded monetary compensation by the tribunal. It did not rule in favour of reinstatement or re-engagement. It was felt that this had something to do with the size of the towns and villages where people worked and the difficulty people would have getting on with others if they were reinstated.

That should not be the case but it was. I do not know if the fault is due to our personalities, not being able to cross the bridges. I do not know the ratio of monetary compensation awards to reinstatement or re-engagement but there were monetary compensation awards. Most of the compensation involved the payment of two years salary but those cases are rare.

The directive proposes, for example, that the woman should retain her job. There will be, by law, the need for a risk assessment when a woman indicates she is pregnant and requests, because of her pregnancy, particular care in her job. It is correct that she should and where a risk assessment reveals a possible danger to the health or safety of a pregnant woman, that woman must be transferred to alternative duties. If the firm has no alternative duty for the woman, special maternity leave, to be paid for by the employer and-or the State, will be granted, under that directive. It is strongly in favour of the interests of women that we do not proceed in a piecemeal fashion in very important legislation for women, dealing with very important safeguards for women's well-being and health as well as for their jobs.

Miss Flaherty

I wish to press this amendment because, in the intervening 18 months, women may simply dream of these protections, they are totally unprotected and may be sacked.