Desmond J. O'Malley
Question:31 Mr. O'Malley asked the Minister for Enterprise and Employment if he will make a statement on the impact of EU labour market regulations on the level of employment and unemployment in Ireland. [2914/97]
Written Answers. - EU Labour Legislation.
I believe that both the extent of the changes required in our law to implement EU labour legislation and their impact on business have been greatly exaggerated. In most cases, these impose minimum standards which are already being exceeded by good employers. Indeed, the success of our economy in recent years provides the proof that progressive labour legislation does not, in fact, frighten off investors but instead complements job creation.
Another year of strong economic growth was recorded in 1996. GNP growth at 6 per cent was well above the EU average of 1.75 per cent. Total employment increased by 45,000 over the year to April according to the 1996 labour force survey. New first-time job creation in IDA Ireland and Forbairt backed companies reached 20,700 in 1996 — the second year in a row of record growth. Perhaps the most encouraging aspect of this strong growth has been that it has been achieved without widespread inflationary pressures. Inflation in 1996 averaged only 1.6 per cent compared to the EU average of 2.5 per cent. It seems unlikely that progress of this order would have been possible if our labour legislation had as negative an impact on job growth as is alleged by some.
Indeed, labour law has an important role to play in promoting labour market stability and minimising conflict. Much of the international literature over the last decade has stressed the economic benefits of employment security and long-term employment relationships in terms of co-operative labour relations, greater internal flexibility, acceptance of technological change, cumulative skills and greater incentive for investment in human resources. Labour law has an input in respect of each of these factors in the labour market. Employees who enjoy good working conditions are more likely to be productive and willing to embrace change.
Thus, instead of fearing changes in social policy, I believe that Irish employers should seek to avail themselves of the opportunities such changes present in the form of a stable, well trained highly motivated workforce. Modern business is a shared enterprise involving the fullest commitment of both management and workers. Commitment on the part of workers is best earned, in my view, in an environment where basic employment rights are protected and respected.
I believe further that the consensus on economic and social policy issues which we have in this country could not have been achieved without the existence of basic social standards. This consensus approach has been a major contributor to Ireland's economic success. That consensus is backed up by a well balanced body of labour legislation which, together with measures designed to stimulate employment, provides an appropriate framework for the purpose of achieving an efficient and competitive business environment.
The Government is very much aware of the global competitive pressures to which Irish industry and business are increasingly exposed and is consequently seeking to ensure that developments in EU social policy are fully evaluated in the context of the national economic priorities of job creation and maintenance. The major legislative programme at EU level under the social action programme is largely complete. In dealing with our obligations to implement existing EU social legislation and in negotiations regarding new EU social policy initiatives, my Department always seeks to adopt a very flexible approach and to consult as widely as possible with the social partners and other relevant interests so as to minimise any undue impact of EU proposals on Irish industry.
Over the past 25 years, Ireland has developed a balanced package of labour laws which set out basic social standards. That process is now virtually complete, and it is anticipated that the emphasis for the foreseeable future will be on consolidating, simplifying, and improving existing provisions rather than major new initiatives. Legislation now before this House will repeal, simplify and update labour laws from the 1930s.