I move: "That the Bill be now read a Second Time."
The Organisation of Working Time Bill brings our laws on worker protection into the 21st century. It simplifies and updates labour law dating back to the 1930s. The world of work has changed out of all recognition since the 1930s and I am sure Deputies will agree it is time to review and modernise a body of law dating back 60 years.
The Bill places concerns for workers health and safety at the heart of how work is organised. It gives workers across the economy a legal right to minimum daily and weekly rest and to adequate rest breaks during the working day. It extends from three to four weeks the present legal right to paid holidays, phased in over three years to 1999. Next year workers will be entitled to 16 days holidays, in 1988 they will be entitled to 18 days and in 1999 and thereafter to 20 days per annum. Holiday rights for part-time and casual workers are being improved and, for the first time, our law will specify that employers must have regard to balancing family needs with work requirements in the timing of annual leave.
The new Bill tackles the vexed issues of Sunday work and zero hour contracts, issues at the heart of the recent industrial disputes in Dunnes Stores. Employers will be legally required to give reasonable advance notice of working hours to enable workers to make family and social arrangements. There are currently 137 pages of legislation, more than seven Acts, together with hundreds of regulations, licences and orders governing working time. This Bill will replace those with modernised and flexible legislation.
The need for ministerial approval every time there is a change in shift patterns is an example of outdated law which will be abolished when this Bill is enacted. I am also simplifying the procedures for resolving disputes under labour law. There is great flexibility in the Bill to accommodate different shift patterns, overtime and work arrangements. In general, the Bill's standard provisions on rest breaks and shift patterns can be varied once appropriate compensatory rest is offered. Agreed working arrangements which are working well can be accommodated within this flexible framework.
The European Union is not just about economic and monetary union. It is also about establishing common standards and basic rights for Europe's citizens. The Bill gives effect to the EU Directive on Working Time which will apply in all member states and was recently reaffirmed by the European Court as based on the principle of promoting the health and safety of workers. Shared principles and common policies are the foundation stone of the European Union ideal. Ireland has benefited greatly from membership of the European Union and, in turn, we are proud to subscribe to the principles of social solidarity which underpin the Union. Fundamental to those principles is a core set of minimum rights, a minimum decency standard for workers.
The majority of Irish employers already meet these minimum standards. When they carefully examine the small print of this Bill, they will know they have little to worry about in terms of this legislation. The skill, quality and commitment of our workforce are our key competitive resource. As good employers recognise, that commitment and those skills are best mobilised in a working environment that offers good working conditions, adequate breaks and an overriding concern for the health and safety of workers. Excessive working hours, or working long hours without a break, can damage the health of workers and tired workers can put their safety, or that of their colleagues, at risk. Excessive working hours have been linked to accidents in the workplace, to stress, and health and family problems. A study carried out in California has shown that working more than 48 hours a week can double the risk of coronary heart disease.
I have found that the greatest commitment to health and safety in the workplace comes from our largest and most successful companies. Far from undermining competitiveness they recognise that investment in health and safety planning for their workers is a key part of their business startegy. Large multinational companies are keen to promote health and safety values and do not have a difficulty with this legislation. They have more difficulty with the whinging of certain representatives who imply there is a poor business environment here when they believe there is an excellent one.
There is a great deal of misunderstanding about the provisions dealing with the 48 hour working week. I want to put the record straight in this regard. I have built into the legislation a substantial degree of flexibility about how this rule will be applied. Examples of this flexibility are that hours can be averaged over four, six or 12 months, fully providing for seasonal work or a rush of overtime to meet a particular order, and that hours are calculated net of lunch breaks, coffee breaks, etc.
It is worth recalling that the present limit on weekly working hours in industry is 53 hours a week. Since this was set in the 1930s, average working hours have fallen by five hours a week, from 44 hours to 39 hours a week. The working hours limit is now being reduced accordingly by five hours. I do not think this is excessive 60 years later.
I do not believe that in this day and age workers should be asked to work excessive hours to earn a decent wage. However, the overriding principle of this Bill is that workers' health and safety must come first. One cannot opt out of wearing a hard that on a building site. There can be no voluntary opt-out where basic health and safety are involved.
The Organisation of Working Time Bill implements the main provisions of the EU Directive on Working Time 93/104 adopted three years ago by the Community, which will have effect in all member states, including the UK. Other provisions of the directive will be implemented by regulations under the 1989 Health, Safety and Welfare at Work Act. The directive's legal base in Community law has been reaffirmed as a measure to improve workers' safety and health.
The Bill goes beyond just implementing the directive. We are taking the opportunity to address a number of problems that have emerged in recent times, first, the issue of pay for working on Sunday — I am delighted that Deputy Tom Kitt has submitted his own Bill in this regard. Second, zero hour contracts are being outlawed, which is a very important and progressive move. Third, holiday rights are being extended to categories of part-time and atypical workers previously excluded from these entitlements. Fourth, there will be simplified procedures for claiming entitlements under the Act in case of dispute. Fifth, we are addressing a loophole that has emerged where a company is wrongly named in a labour law claim to the Employment Appeals Tribunal. Claims will now not be out of time if the company is inadvertently wrongly named.
Another important feature is the Bill will apply generally to all employees in the public and private sector alike. Historically, public sector employees were excluded from the scope of labour law.
The overall effect will be to greatly simplify and clarify the rights and obligations of employers and workers. The Bill represents an updated and modern approach to conditions of employment. It will update the basic entitlements of workers to adequate rest during the working week, rest breaks while at work, maximum hours of work and holidays, bringing these into line with the terms of the EU Directive on Working Time.
The Bill repeals seven Acts regarding conditions of employment applicable to various sectors and replaces them with generally applicable legislation. The Acts to be repealed are the Conditions of Employment Acts, 1936 and 1944; the Shops (Conditions of Employment) Acts, 1938 and 1942; the Night Work (Bakeries) Acts, 1936 and 1981 and the Holidays (Employees) Act, 1973. The Bill also repeals section 4 of the Worker Protection (Regular Part-Time Employees) Act, 1991. The practical effect of this is that employers and employees can now refer to one consolidated Act instead of seven Acts or 137 pages of primary legislation and hundreds of regulations, orders and licences. We are always being asked to simplify red tape and regulations, which is what I am doing in this Bill.
Over the past number of years the number of people working on Sunday has been rising steadily. While seven day working has always been a feature of certain industries and services, for example, the bar trade, the increase appears to be due to extended operating time for industry and an increase in Sunday opening hours for shops.
The most practical way of recognising the special character of Sunday is to provide that some additional payment must be made to employees required to work on Sunday. This is the approach adopted in the Bill. Most employees who work on a Sunday already have a premium built into their rate of pay to cover Sunday working and I think it is generally accepted that Sunday working should command a premium. In the various employment regulation orders the premium varies across sectors but the principle is generally well established. The Bill proposes to set this principle down in law. This measure has, at the same time, the effect of recognising the special nature of Sunday as a traditional day of rest while permitting Sunday work which has become commonplace in a large range of employment sectors.
Recent labour force survey figures show a dramatic increase in the number of people at work, with a greater participation rate in the labour force of women than ever before. Part of this increase is made up of part-time employment and other atypical work. I recognise the needs of business for flexibility and that many employers require working patterns which are no longer based on our traditional view of regular working hours or the full-time job. I am also very conscious there is a demand from some workers for part-time and a typical work to match their own personal circumstances, and this appears to be the case for many women who take up such employment. I spent many years as an atypical worker.
However, the trend towards greater flexibility in the workplace has led to the development of some disturbing practices. Of particular concern is the development of the practice known as the "zero hours" contract. This practice, whereby the employee must make himself or herself available throughout the week for work that may not materialise, is perhaps the most demeaning. It has all the hallmarks of the old hiring fair practice, and shows no regard for the worker who may be called upon to work at a moment's notice or, worse still, remain on standby without being offered any work. Workers must be able to plan ahead for their working hours, their family and child care arrangements, their social life and their income.
Changing patterns in the organisation of work and the need for flexibility on the part of the employer clearly place new pressures on employees. However, greater demands for flexibility on the part of the employer must be accompanied by certain protections for the employee. For this reason we propose a twofold measure in this legislation, first, to ban zero hour contracts and, secondly, to require employers to give advance notice of working hours to their employees. Under these new measures employees will not only be entitled to advance information on their rostered hours but also to be paid for a minimum number of the hours for which they are required to be available.
The zero hour contract concept is somewhat different from casual work. It refers to the situation where employees are required to be on call on a constant basis, such as was the case in Dunnes Stores. There has been a wide welcome by industry for this change.
The legislation will also improve holiday entitlements by raising the statutory minimum from three weeks to four on a phased basis over the next three years. The three week entitlement dates from 1973 and has been surpassed by means of collective agreements for the great majority of employees since then. Our latest information is that about 80 per cent of workers currently get four weeks holidays.
We are also using the opportunity to improve the holiday entitlements of part-time workers and those on very short contracts. We are extending the right to holidays to all employees regardless of hours worked, and the principle that holidays are earned against time worked will apply to all. With growing participation by part-time employees in the workforce, we want to see basic rights such as holiday pay extended to all employees. The participation rate for part-time employees has risen from 8.5 per cent to 13.8 per cent in the past eight years and it is important to extend this provision to them. For example, somebody who works four hours on a Monday for one employer, four hours on a Tuesday for another employer and four hours on a Wednesday for a third employer will earn holiday entitlements for all the hours they work.
We are also changing our approach to the enforcement of these new statutory rights and propose to give an expanded role to the Labour Court which will act as the arbitration body for the purposes of this new legislation. The Labour Court and the Rights Commissioner Service provide a cost effective, speedy service in which I am confident that any problems or disputes arising in this legislation can be quickly resolved. Under the enforcement provisions an employee or a trade union will be permitted to take his or her case to a rights commissioner, and on appeal to the Labour Court, without resorting to formal legal proceedings. Working time issues such as disputes over rest times have traditionally been dealt with by the Labour Court and a reservoir of expertise has been built up in dealing with these issues. This replaces provisions whereby holiday disputes must go before the ordinary courts, as the Labour Court is more appropriate for such disputes. On Committee Stage we will look at a procedure whereby a holiday case can be bundled in with a series of cases going before the Employment Appeals Tribunal, for example, in the interests of simplifying enforcement for workers.
In this Bill we are also leaving substantial space for the social partners and employer and employee representatives at local level to utilise the significant flexibility permitted by the directive to negotiate working time arrangements which accommodate the interests of both employer and employee. Alternative rest and working times may be agreed at local or sectoral level and the terms of such agreements will be binding under the legislation. Through this measure we are responding to and encouraging the move towards genuine partnership at local level. The Bill gives employers scope to organise working hours to accommodate production demands and it sets out new standards and norms of protection for workers. Competitive pressures and the adoption of new systems of work have given rise to new working patterns. The organisation of work is facing rapid change at every level. We recognise this and are responding to these changes in this Bill, which is an extremely flexible instrument.
This legislation will apply to all employees, with certain exceptions including doctors in training, sea fishing and other work at sea and the transport sector. Work is under way in Brussels on appropriate directives to cover those sectors and that is the reason they are not included at this stage under this legislation. The transport sector will be exempted by regulation to provide for a more comprehensive description of the types of transport employees which are to be excluded. Under that provision workers with transport duties, irrespective of whether they work for a transport company, would be exempted. The Bill also exempts employees who determine the duration of their working time. Separate sector specific directives are being discussed in Brussels for the exempted categories. I understand that the Commission will publish a White Paper on the manner in which those categories will be regulated early next year.
In addition, we also propose to exempt the Defence Forces and the Garda. I am satisfied that in normal circumstances the Defence Forces and the Garda have sufficient protection built into their rostering and holiday arrangements. However, due to the nature of the service provided by those two categories, and in accordance with the exemption permitted in the framework directive, it would be impractical to apply the terms of the directive to their work. In accordance with the directive, the Bill also gives an enabling power to exempt employees in the civil protection services where the nature of the work inevitably conflicts with the directive.
I am also incorporating additional flexibilities for certain sectors recognised as having such a need. They include industries subject to seasonality or a foreseable surge of productivity and cover agriculture, public utilities, the media, security industry and industries which cannot be interrupted on technical grounds. Those sectors, listed on pages 42 and 43 of the Bill, can avail of a six month averaging period for the 48 hour week. In addition, exemptions from the provisions regarding daily rest, rest periods at work, weekly rest and night work may be made by means of ministerial regulation in those sectors. In effect, all the derogations permitted under Article 17 of the directive have been provided for in the Bill.
There has been a good deal of misunderstanding about the 48 hour rule provision and I want to explain carefully what is involved. First, the limit is an average 48 hour week. Workers will still be free to work more than 48 hours in any given week, for example, at busy times of the year, provided their average hours calculated over the reference period do not go over the 48 hour figure. Employers will be able to arrange overtime to meet a seasonal rush of business or to meet a particular order. The 48 hour limit can be averaged over four, six or 12 months, which will offer flexibility to seasonal businesses and those working annualised hours.
The generally applicable reference period is four months. That is increased to six months in a wide range of sectors and circumstances and may be as high as 12 months under the terms of a collective agreement. Accordingly, the limit in the Bill allows for a significant amount of regular overtime, it is some 23 per cent higher than the standard 39 hour week agreed to by the social partners under theProgramme for Competitiveness and Work, and certainly allows considerable scope through the averaging arrangements to deal with seasonal or other peaks in demand.
The generous nature of the limit is evident from the fact that so few people will be affected by it. The Labour Force Survey indicates that only 6 per cent of employees regularly work longer than 48 hours per week. As many of those belong to the exempted categories, the number affected will be significantly below that figure. It is difficult to see how a measure which impacts so marginally on the workforce could possibly have the dire consequences predicted by some interests. There is some special pleading and scaremongering in regard to this aspect of the Bill.
I have taken full advantage of the flexibility under the directive to allow a six month averaging period in the designated sectors and other seasonal or continous process sectors. Averaging over 12 months is available to any firm which concludes a registered collective agreement with the workforce. Collective agreements in unionised companies will have to be negotiated through the normal negotiation mechanism, the trade union. Under the Bill individuals can be free to work 48 hours a week right around the year, equivalent to working six eight hour days every week throughout the year.
Second, the calculation of the 48 hours will be based on net working hours, time spent working not including work breaks such as lunch or tea breaks. A person who works for 48 hours per week probably spends in the region of 55 hours in the workplace when work breaks are taken into account. Such an employee could spend 11 hours per day over a five day week or about 9.5 hours per day over a six day week in a workplace without breaching the limit. Accordingly, the limit allows for quite a long working week. In many cases that may mean workers who work a gross 55 hour week may work under 48 hours net. Those arrangements will cater for the vast majority of existing overtime arrangements, where overtime is worked to cope with normal fluctuations in the workload. I reject suggestions that there is not sufficient flexibility in the Bill to meet competitive challenges, seasonal orders or a rush of business. There is a great deal of flexibility built into the Bill and if people read the small print, they will realise that is the case.
It is also important to point out the limit on weekly working time is not importing any new principle into Irish labour law. Limits have applied to working time for 60 years in a wide range of sectors including industry, construction, public utilities, retailing, hotels and the licensed trade. For example, in industry and construction working time is currently limited, under legislation dating back to the 1930s, to an average of 53 hours per week over any 12 month period.
The new legislation will change this position in two respects. First, the limits will apply to a wider range of sectors and, second, current limits are being reduced. The reduction in the 53 hour limit to 48 hours must be viewed in the context of the general reduction in working hours since the limits currently applicable were set in the 1930s. The standard working week in industry in the 1930s was 44 hours, it is now 39 hours. The reduction in the limit mirrors very closely the general reduction in working hours.
Article 18 of the directive gives member states the option of allowing an individual worker to opt out of the maximum working week of 48 hours by means of agreement with his or her employer. The provision was included in the directive at the request of the UK to reflect the particular industrial relations environment in Britain. To my knowledge the opt out clause will not be availed of by any of the other member states where it is widely regarded as incompatible with a partnership approach to industrial relations and I share that view. Partnership has served us well over the last decade and we are currently engaged in attempting to negotiate a new agreement. It would be wholly inconsistent with that general approach to include that opt out clause in the legislation.
It is important to stress that the 48 hour limit is a health and safety measure. It would be unprecedented to allow an individual employee to opt out of a health and safety requirement. The risks associated with working long hours have been established and it is legitimate for the State to seek in law to eliminate those risks which carry costs in human terms and to the economy and the Exchequer. Health and safety legislation is never optional. Employees are not permitted to decide for themselves whether to wear protective clothing or to handle heavy loads. It is the duty of the employer to ensure they comply and the duty of the State to enforce the law. It would be a retrograde step if we were to import the concept of voluntary acceptance of risk into our health and safety law.
We must query whether the opt-out clause, if it were provided for in the legislation, would, in practice, be voluntary. Individual employees could be put under severe pressure by their employers and by fellow employees. Employees are often interdependent in their work — increasingly people work in teams — and refusal by some to avail of the opt-out clause may, in practice, prevent others from working beyond the limit. In such circumstances the availability of the opt-out clause would be a continuing source of dispute and tension and it would be naive to believe conditions exist for genuinely free choices to be made. I am concerned about workers who are unorganised or who have limited bargaining power being forced to "agree" to opt out of rules for their health and safety agreed across Europe. We should not lightly open the door to a system that would replace collective bargaining and social partnership which has served this country well with individual negotiation of working conditions or individualised contracts rather than the going rate for the job.
The employment aspect must also be considered. As a country with 180,000 people out of work, we need to look very critically at arrangements where some people work excessive hours while others are not being offered work. The sole purpose of including provision for the opt-out clause in the Bill would be to allow for extremely high levels of overtime to be worked on an ongoing basis. For example, we would be legislating for two people to do three jobs. Employment is the top priority of this Government and it would be wholly inconsistent with that commitment to include, what is in effect, an anti-employment measure in the legislation.
For all these reasons the opt-out is not included in the Bill. While the impact of the 48 hour rule will be very limited, some people will certainly be affected. However, Governments must make choices on the basis of the broad national interest and I urge the House to accept that the Government's decision in this case is the right one in that context.
I now turn to the detailed provisions of the Bill. Section 1 provides for the Short Title and for the commencement of the Bill. Section 2 is an interpretation section and defines the terms used in the Bill.
Section 3 exempts members of the Garda Síochána and the Defence Forces, persons engaged in work at sea, doctors in training, family members who are employees and persons who determine the duration of their own working time. This section also empowers the Minister to exempt from any provision of the Bill by regulation employees involved in transport activities or in the civil protection services where application of the Bill would be such as to undermine the efficiency of the service concerned.
Section 4 exempts from the daily and weekly rest provisions, set out in Part II, an employee each time he or she changes shift and an employee whose work involves periods of work spread out over the day. The section empowers the Minister to make regulations regarding split shift workers. It also allows the Minister, on condition that compensatory rest is provided, to exempt by regulations specified sectors set out in Article 17 (2) of the directive from provisions of the Bill regarding daily and weekly rest, rest intervals at work, night working and information on working hours. The Minister must consult the employers and employees likely to be affected by the proposals before making such regulations. In addition, the section provides that a collective agreement approved by the Labour Court, registered employment agreement or an employment regulation order may exempt affected employers and employees from compliance with the sections of the Bill, set out in Part II, which deal with daily and weekly rest and rest intervals, provided that the employees benefit from compensatory rest.
Section 5 exempts employers from compliance with the working time provisions of the Bill, without prejudice to the employees' entitlement to compensatory rest, in exceptional or emergency circumstances which could not have been avoided or are due to unusual or unforeseeable circumstance beyond the employer's control. Section 6 provides that if an employee is not entitled to the minimum rest provisions set out in the Bill by reason of ministerial regulation or an approved collective agreement, including a registered employment agreement or an employment regulation order, the employer must ensure that the employee has available to him or her equivalent compensatory rest. If, for objective reasons, it is not possible for an employer to ensure that the employee avails of the minimum rest to which he or she is entitled, the employee is then entitled to appropriate compensation which may not be of monetary or material benefit, but may take the form of provision of a benefit which improves the physical conditions under which the employee works or the amenities or services available to the employee while at work.
Section 7 is a standard provision which empowers the Minister to make regulations concerning aspects of the Bill and also to amend or revoke any such order, with the exception of a commencement order. Regulations or orders must be laid before each House of the Oireachtas. Section 8 empowers the Minister to appoint inspectors for the purposes of the Act and sets out the powers of such inspectors while section 9 repeals certain conditions of employment, night work, such as bakeries, and holidays enactments.
Section 10 is a standard section dealing with the expenses incurred in the administration of the Act. Section 11 provides for an entitlement by an employee to a minimum rest period of 11 consecutive hours in each 24 hour period. Section 12 provides for an entitlement by employees to a rest break while at work of 15 minutes in a period of four and a half hours' work and 30 minutes, which may include the preceding 15 minutes, in a period of six hours' work. Breaks at the end of the working day do not satisfy these requirements.
Section 13 provides for an entitlement by everyone to a weekly rest period of 24 hours which must be in addition to the daily rest period of 11 hours. This may be granted over a 14 day period. In the event of technical or other objectively justified circumstances, the employer may decide that the weekly rest is not preceded by the daily rest entitlement of 11 hours. Unless otherwise specified in an employee's contract of employment the weekly rest period shall include a Sunday. If the employee must work on a Sunday he or she will be entitled to another day off during the week.
Section 14 provides that an employee required to work on Sunday shall be entitled to a premium payment for this work which may consist of a payment or time off in lieu or a combination of both. If the employee does not already receive a Sunday premium he or she shall be entitled to the appropriate premium payable to a comparable employee in a collective agreement in force in a similar industry or sector in accordance with the arrangements set out in this section.
Section 15 provides that an employer shall not permit an employee to work for more than 48 hours averaged over a four month period. A six month averaging period is permissible in the sectors set out in Article 17 (2) of the directive such as agriculture, tourism and electricity production. This section also allows for the averaging period to be extended to a maximum of 12 months by collective agreement. The averaging period shall not include absences from work due to statutory annual leave, sick leave or maternity or adoptive leave.
Section 16 defines "night time", "night work", "night worker" and "special category night worker". It provides that where a night worker is not a special category night worker, the employer must ensure that the employee does not work more than an average of eight hours per night — 48 hours per week — averaged over a two month period. The section provides that employers and employees may enter into a collective agreement, which must be approved by the Labour Court, which may extend the period over which the nightworking is averaged. This section provides that where a night worker is categorised as a special category night worker, following a risk assessment of the hazardous nature of the work, there shall be an absolute limit of eight hours night work per 24 hour period.
Section 17 provides that an employee shall be entitled to be notified in advance of the hours which the employer will require the employee to work. Where unforeseeable circumstances justify a change in the notified times, an employer may alter the starting or finishing times.
Section 18 effectively bans zero hour contracts. In broad terms the section provides that, in the event of an employer failing to require an employee to work at least 25 per cent of the time the employee is required by his or her contract of employment to be available to work for the employer, the employee will be entitled to payment for 25 per cent less of the contract hours or 15 hours per week, whichever is less. The section is modelled on the settlement provisions of the Labour Court in the Dunnes Stores dispute with regard to zero hour contracts.