Employees (Provision of Information and Consultation) Bill 2005 [Seanad]: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

My colleague the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, presented the background and context to this Bill on Tuesday. He summarised its contents up to and including section 20. I will resume the summary, beginning with section 21.

A new section 21 was introduced on Committee Stage in the Seanad. The section transposes an optional provision of another EU Council directive, Directive 2001/23/EC, which provides that in a transfer of undertaking, the transferor must notify the transferee of all the rights and obligations arising from a contract of employment existing on the date of transfer which will be transferred to the transferee. If a transferee is required by a rights commissioner or the Employment Appeals Tribunal to pay compensation to an employee because of a failure of the transferor to provide the necessary information, the transferee has a right of action in a court of competent jurisdiction to recover some or all of the amount paid in compensation. There were another three optional provisions which have not been agreed with the social partners and which I was not in a position to introduce. However, I welcome the inclusion of the new section 21, which has been agreed.

Section 22 is a standard provision dealing with the Short Title of the Bill. It also provides that the Bill shall come into operation on such day or days as the Minister may appoint by order or orders.

The Employees (Provision of Information and Consultation) Bill 2005 seeks, as it must, to transpose fully the EU directive on information and consultation into Irish law. As I mentioned, in framing this legislation there was extensive consultation with the representatives of the business community and the representatives of employees. There was some delay in transposing the legislation because there were very complex issues involved and it proved very difficult to reach consensus on them. However, on the plus side, the additional time has resulted in a far more balanced Bill. The debate in the Seanad has also informed the text of the Bill. A number of amendments were accepted in the Seanad and I made some technical amendments.

The legislation represents a balanced approach within the requirements of the directive. The provision of information and consultation of employees is good practice. The Bill ensures workers will have a right to information and consultation in regard to their companies. The approval of the workforce is key to ensuring that both negotiated and pre-existing agreements reflect the concerns and meet the needs of both sides. Employees' representatives are given stronger protections and rights of redress in this Bill than in any other employment rights or industrial relations Bill to date.

The Government approach to the Bill has been to facilitate a co-operative and positive approach by individual companies and their employees in meeting the objectives of the directive. This approach has resulted in a Bill which recognises the voluntarist tradition in Irish industrial relations and which will assist companies and their employees in establishing effective and efficient information and consultation arrangements.

This Bill is without doubt a welcome addition to our employment rights and industrial relations legislation and represents an important opportunity to foster and deepen customised partnership-style approaches to anticipating and managing change. The Bill affords the opportunity to meet the challenge of embedding partnership at enterprise level and making it a reality for workers and employers.

As I said on Second Stage in the Seanad, I look forward to hearing the contributions of Members on all sides of the House. I will continue to approach the Bill in an open-minded fashion. It is true that the debate in the Seanad, on all Stages, had a significant impact. I accepted some amendments to which I might have been less open at the commencement of the debate. I commend the Bill to the House.

I apologise for the absence of my colleague Deputy Hogan, who cannot be present today. He sent a message stating I might deputise for him and time will tell whether I have been capable of doing so.

There is no abler man.

I assure the House I will do my utmost.

I welcome the introduction of this Bill for a number of reasons. It relates to a number of issues on which I and other Members of the House have had occasion to comment in recent years. It transposes into Irish law an EU directive and has a number of technical provisions that need to be re-examined in respect of companies of different sizes. This applies in my constituency as well as in others.

The concept of consultation in industrial relations is very important, from the points of view of both the employer and employee. One of the saddest cases on which we have had to reflect in this House was that of An Post. In a recent dispute involving the company, there was virtually no consultation, no establishment of contact and no information given to employees other than that they should take or leave the package on offer. Another example, from my constituency, concerns the closure of Magna Donnelly and the consequent relocation of 400 employees to various locations throughout the world. The point the employees made repeatedly concerned the lack of consultation and prior knowledge, and the fact that they received no indication the closure was likely to happen when revision took place within the company and when there was a reconstitution of objectives over the preceding years.

We need to consider carefully the damage done by the lack of consultation to the trust that needs to exist between employers and employees. I am not so certain the Bill will emphasise and create an adequate basis for the kind of consultation required in the workplace. Financial circumstances within a particular company may change from day to day and it is therefore necessary for employers to engage with employees at a much earlier stage regarding issues that could affect the future of both. The trust and confidence that can develop through consultation are beneficial not only to the firms concerned but also to the national economy and, consequently, all citizens.

I presume the legislation applies to pension entitlements, which concern a great number of employees. We have encountered circumstances in which people who were due to retire, or who had retired, suddenly found their pension entitlements were not as they had anticipated. The degree to which dialogue was established with their employers was questionable. Had adequate dialogue been established, there would not have been any surprises. It would have been quite possible to identify the pitfalls and snags and eliminate them at an early stage, thus removing them from the arena as a source of irritation and undue hardship to those pensioners with a grievance and, in some cases, as a source of industrial action.

The Bill provides for circumstances in which a firm is sold, transferred, merged with another or subsumed into another corporation. Very often, one of the major concerns of employees relates to their entitlements when their firm is taken over by a bigger concern. In most cases, employers go out of their way to ensure their potential employees' rights are guaranteed, but not in all cases. Some very sizeable corporations are notorious for ignoring the fundamentals in this regard. A certain dispute comes to mind but I do not want to exacerbate it by referring to it.

It is so sad, at this time in our economic development, that basic requirements are not met in respect of consultation, the establishment of dialogue and trust, and willingness to recognise the rights and entitlements of those who have worked all their lives on behalf of a firm. Employees ought to have their rights transferred with them to a new employer even if the new employer regards this as a burden. If one buys a corporation or takes over a firm, responsibilities in this regard come with it. One must accept it warts and all and assume one's responsibilities regarding employees' entitlements. For that reason, there should be no apology on anybody's part in regard to having the entitlements transferred with the employee to protect the employee.

The definition of agency workers is an important issue which has given cause for concern in the past. We must determine whether the agency or the firm with which the agency worker is employed is the body with which the consultation should take place. The Bill proposes that the agency is the employer. I disagree. The employer with which the employee is directly employed should have the major responsibility.

There are many agency workers in Ireland at present, particularly in nursing and the medical sector. It has been suggested that they are not always fairly treated. They come from many countries to work here, including from as far away as the Philippines. They are paid a salary by the employer but an amount is also deducted by the agency. This was originally intended to reduce administration in the health services but, while it is possible it makes employers more effective, I am not sure this is the case. This important area must be carefully considered. My colleague, Deputy Hogan, will have numerous exchanges with the Minister of State, Deputy Killeen, on how this situation can be improved.

There is ample scope for the improvement and strengthening of regulations. The dialogue proposed in the legislation should take place not only with the agency but also with the firm to which the agency has referred the employee. Otherwise, the dialogue would only be with the agency, which is of no benefit. The unfortunate employee may not be willing to tell the agency of the true circumstances of the employment or,vice versa, the agency may not treat the employee well but the employee may be fearful of telling the direct employer of the true situation, with the resulting consequences.

Given the large number of non-national employees now in the country, some for periods of up to 12 years, it is particularly incumbent on us, as a nation and having regard to our history, to ensure that every possible action is taken to ensure that the rights and entitlements of immigrants are guaranteed and safeguarded. Not to do this would be a sad reflection on our society in the way that some current events are a sad reflection. I am sure every Member has a relative who in the past had to pick up a suitcase and go abroad to eke out an existence. My parents did so. We were not sufficiently privileged to be able to stand aloof from the mass emigration that affected large parts of the country, including Dublin city. When we think about entitlements, rights and dialogue, we should put our experiences to good use in protecting the rights and entitlements of others who are less fortunate than us.

Reference was made in the Seanad to the specified number of employees required within a non-unionised firm before the triggering mechanism would kick in to enable dialogue to be established. This will arise again in proposed amendments. There is concern among IBEC representatives and potential employees that the number of employees suggested for a large firm should be reconsidered with a view to identifying the optimum number rather than having too small a number disrupting the organisation and the flow of employment for others. At the same time, we must ensure that the number is representative of the views consistent among employees of the firm so that they would have the entitlement to use the opportunity to proceed.

As we know from past events, it is important to address the issues raised by an individual regardless of whether he or she is right. An individual should have some forum in which he or she can raise concerns with his or her peers in the first instance. From that starting point, it should be possible to establish the relevant number within a firm who can legitimately initiate the dialogue envisaged under the Bill. The importance of this, as noted in the Seanad, is that it ensures that the employees involved are sufficiently representative of their peers while at the same time ensuring that an individual or a few people have the opportunity to raise an issue with their peers in the first instance and then, it is to be hoped, progress the issue further and proceed to agreement.

The Bill is increasingly necessary because we live in rapidly changing times. We hear daily of mergers and takeovers and these will happen more often in the future than in the past. Telephone services in Ireland were nationally controlled some years ago but were privatised and have been subject to one takeover after another since then, and will be subject to more. I am not sure that these practices are beneficial to the consumer, employees or employers. As the world of modern economics accelerates, the need for the shareholder to achieve a dividend at regular intervals may be seen as more important than the need for fair play and the provision of a service to consumers.

Union houses have operated effectively for many years. It is important from an employer's perspective that a union or representative group is in place with which the employer can negotiate and engage. Otherwise, a group would have to be appointed within a non-union firm, a matter which is also provided for in the Bill. I hope the Bill will work effectively and satisfactorily. I realise there is an ongoing debate whether all employment should be unionised. All employment organisations must contain groups which represent employees and employers or a potentially dangerous situation could develop involving regular hiccups which could result in loss of revenue, employment or productivity.

I do not want to proceed further as I know other Members want to participate in the debate. The framework for the Bill in general is positive. There is considerable room for improvement, however, and I hope there will be an opportunity for this. I do not know what timescale the Minister of State has in mind, but my colleagues will be anxious to know whether ample time will be made available.

There will be ample time.

That is fine. When finalising the drafting of amendments, it would be helpful to use our experience in the House over recent years to build a template against which the various abrasive edges that have caused problems in the past may be picked off with a view to ensuring we do not repeat our mistakes in the future.

That is all I wish to say. I hope the Bill does the job it was intended to do. Legislation has often been introduced in the past from all sides of the House on foot of great debate, inspiration and aspiration. How often we have been saddened to see that it does not rise to meet the great expectations expressed in the beginning. I hope that does not apply in this case. It is an area that is becoming increasingly important because of the sensitivities that exist within a rapidly changing workforce. I hope that this will at least be a positive step in the right direction.

I welcome the Minister of State, Deputy Killeen, and his colleague, the Minister of State, Deputy Michael Ahern, who introduced Second Stage two days ago in his absence.

The Bill is welcome in that it gives an opportunity to debate the important issues encompassed by it. Its aim, as the Minister of State said in his opening statement, is to transpose into Irish law an EU directive of the year 2002. It is both long overdue and disappointing in its scope and content. Ireland models itself on an economy built on partnership. That is the image we present across the world to the effect that there is co-operation within the economy between its pillars — workers, employers, the agricultural sector and the social pillar — which work together in an environment of mutual support and respect to everybody's gain. That is the model we have presented, certainly to the new developing countries and the new EU member states, as the recipe for economic progress. It is a model that is now under severe attack.

The debates in this House over several weeks regarding Irish Ferries indicate the most pointed and savage underscoring of the attack on the whole concept of social partnership. A maverick company such as Irish Ferries is seen by others as a trojan horse to undermine social partnership and, to borrow the phrase of the Taoiseach's, to engage in a race to the bottom. A view was expressed that because this maverick behaviour was confined to the maritime sector, it was difficult to deal with because it was happening offshore, so to speak, and outside the scope and remit of Irish domestic law. This refers to a labour law regime that has been built up, particularly since our membership of the European Economic Community in the 1970s. Its most important pillars were put in place by a dynamic Minister for Labour, Deputy Michael O'Leary, during the 1970s who bedded down many of the fundamental rights that have been expanded in the following decades. That corpus of labour law is now under attack and not alone in the maritime sector.

Incidentally, I reject any notion that we cannot deal with the maritime sector. The Labour Party has this week produced a Bill requiring those companies who wish to reflag vessels to do so in jurisdictions with which they have real connections and not simply pick a country just to avail of a labour law or funding regime that is entirely inappropriate and undermines the employment regime that has been built up in Ireland over decades. There are mechanisms to deal with such situations and I hope that the rhetoric we have heard from Government, not least from the Taoiseach, will transpose itself into firm action. If this maverick company is allowed to get away with it, we will not have a maritime sector with an Irish employee within a few months. There certainly will be knock-on consequences for the rest of the economy as well.

How will it knock on to the rest of the economy? It has already been brought to my attention that EU citizens have every right and entitlement to work in Ireland but many are being employed on a minimum wage and are willing to work overtime at a flat rate. That is causing major difficulties and much resentment within a labour force that has agreed negotiated wage rates for particular jobs and an expectation that work carried out after the standard 39-hour week will be remunerated at an enhanced level of pay.

If these issues are not dealt with upfront and clearly, we are going to attract incipient racism. The murmurs exist already to the effect that it is not an issue of employers exploiting employees but rather non-nationals somehow undermining wage rates and the terms and conditions of employment of Irish workers. It is a serious juncture and the Minister of State with responsibility for labour affairs, has a critical role to play in addressing this issue directly, robustly and immediately.

This is not the appropriate time to deal with this matter as I only have half an hour to speak specifically on this piece of legislation, but I hope there will be a further and fuller debate on these matters. The type of society we have in this country will be defined very shortly by this if we do not deal with these issues robustly and clearly to preserve in legislation the terms and conditions that workers have won over the years. It should be ensured that those who work in the economy from other EU member states and beyond where work permits have been allocated do so in line with the terms, conditions and rates negotiated and receive the premium payments agreed with the trade unions.

It is of great concern that the terms of the Employment Permits Bill, which we will deal with separately in due course, unfortunately mentions only a requirement to pay the minimum wage. There is almost an indication that non-nationals working in this economy should be paid the minimum rate only. It is an issue that we must come to grips with and that the Government, if it really believes in the ideal of social partnership and wants to vindicate and defend the rights of workers and the gains made by the trade union movement over the years, will have to act upon with some alacrity. I fear, however, the rhetoric we have heard from the Taoiseach and others is merely that and that a liberalising Progressive Democrats mentality lies at the heart of the Government.

This directive provides a unique opportunity to bed down real partnership. The basic principle of the legislation is to establish a general framework setting out minimum requirements for the right to information and, equally importantly, the right to consultation of employees. Ireland has an unenviable record of being the last of the 25 member states of the Union to legislate for this directive. This comes as no surprise to me from a Government that sees itself as being closer to Boston than Berlin. At least significant sections of the Government do, although I am not sure of the position of the Minister of State present in this regard.

His heart lies in Boston.

His proximity to Shannon may give him that view. That shorthand phrase means they are closer to the concept where workers' rights are not as well regarded. The jury is out on the view of this Minister of State and I welcome his involvement in the debate. When we deal with the minutiae of this and of the Work Permits Bill on Committee Stage, we will find out where he stands.

The deadline for transposing this important workers' rights directive into law passed on 23 March 2005. Uniquely among all the member states, we have failed in our obligation to do that because the Government attached no great urgency to it. When the Bill was published, I described it as unwanted and unloved by the Government. Its publication was accompanied by none of the usual fanfare that we associate with the publication of significant legislation. Why was that the case? After all the time it has taken for the Government to publish domestic legislation, all we have is a minimalist and grudging adoption into Irish law of the 2002 directive. Unfortunately, the Government has taken the opportunity to weaken and to emasculate the ground breaking innovative provisions of the directive. The Government has watered down the directive as much as possible and I can give a few examples of this. It is availing of the option to phase in the directive over three years so that it will be well into 2008 before the legislation comes into effect in workplaces with 50 or more employees. Workers in smaller enterprises may never receive the full benefits of this legislation. The Government is attempting to avoid worker representation as a statutory right, by providing for so-called direct information and consultation. What does that mean? Does the information consist of mail shots and e-mails? Is that the sort of consultation that will be used as a substitute for real dialogue and negotiation between employees' representatives and management? This is an American solution to a European situation and it is inappropriate.

Workers must opt into the system of information and consultation by signing up, in writing, at least 10% of the workforce, rather than automatically including the provision as a right. This is very problematic. In companies such as Ryanair, members were threatened with being fired if they joined a union. How likely is it in those circumstances that a critical mass of 10% of a company's workers signs up and triggers those rights? The Minister of State has a duty to ensure that it happens as of right. Protection against victimisation for asserting rights is weak in the Minister of State's proposals. On Committee Stage, we will have a chance to deal with the specifics of this and I hope he will listen to some of the proposals submitted by the Opposition for strengthening the protection against victimisation. The standard rules for the employees' forum provide for only two meetings per annum with the employer. That hardly represents a permanent, on-going process of consultation and information envisaged by the 2002 directive. The Labour Party will fight to strengthen this legislation on Committee Stage.

A literal reading of the directive might lead some to the view that machinery could bead-hoc, that is, information and consultation would take place only as particular issues arose, rather than as part of a process of partnership and dialogue. A more positive view is that the establishment of a permanent process of consultation and information is implicit in the provisions of the directive. A permanent machinery could be established, such as a form of the works councils. This model is tried and practised in continental Europe and it is the norm in German manufacturing. A two tier system exists, with management and a board of directors on one tier, along with the next tier that is an on-going dialogue between the partners in a company. These partners, consisting of workers’ representatives and management, evaluate the needs of the company and the future of the company. It is not the old fashioned Victorian model of employer, manager and worker, whereby the worker receives instructions on occasions and is told what to do. We want to give workers in our dynamic economy a stake in their own undertakings. That is the central core of the proposals in the original directive and it has not been grasped by the Government. It had a legal obligation since last March to transpose this into Irish law, but it felt like a burden.

The response of IBEC has been very begrudging. IBEC did not see the directive as part of the next generation of the partnership that worked so well for Ireland. It could give people a stake in the company, a pride in the company, as well as a shared ownership in the company, so that they are not stunned by shock announcements, as is all too often the lot of workers in Ireland. Without warning, a company announces a particular set of difficulties that could well have been avoided had the workers been involved. If the workers had been alerted to the difficulties, they could have negotiated arrangements and got themselves out of those difficulties. That mind-set underscores the mind-set of the framers of this directive and I hoped it would have been robustly transposed into the legislation before us. There is a compelling case for partnership in information and a proper structured consultation process.

This legislation is a wasted opportunity, although I may be convinced by the Minister of State's willingness to engage with the Opposition on Committee Stage and accept amendments. It wastes an opportunity that would not only be good for workers, but would be good for business and ultimately, for the Irish economy. Choices must be made about the future direction of Ireland's economic model. The Taoiseach talked about the concept of partnership and his role in framing it, but the Government now needs to act and to spell out its view of the future direction of the Irish economy. I agree with the view put forward by Mr. Keith Sisson of the industrial relations research unit of Warwick University in a paper that he produced in 2002 when this directive was being framed. The paper was entitled, "The information and consultation directive: unnecessary ‘regulation' or an opportunity to promote partnership?". In an extremely interesting, well-thought out and well-researched paper, he put forward a clear set of presentations, making a compelling case for the most structured, formalised and far-reaching sharing of information and consultation possible between partners in every enterprise. At individual level he states:

Both the dignity of the individual and the opportunity for personal development are involved — work, after all, is one of the biggest single influences on people's life experience. In ACAS's words [ACAS is a British agency] "whatever the size or type of organisation, people need to talk to each other; they need to exchange views and ideas, issue and receive instructions, discuss problems and consider developments".

Hence, this is good for the individual. He summarises the business case as follows:

Having to explain their positions, take criticism and admit errors is something that few managers find easy; a right to representation also changes the power relationship with employees. Yet the considerable benefits of having effective information and consultation arrangements far outweigh any disadvantages. Having to explain policies to employees obliges managers to allow time for a fuller consultation of the proposals than would otherwise be the case, helping to ensure that the wrong decisions are not rushed into. Moreover, effective information and consultation is a critical tool in obtain the input of employees — the scrutinising of proposals by employees can lead to alternative and better decisions. Typically, their knowledge and experience of the details of operations on the ground, the problems and pitfalls and how they might be dealt with, is often far superior to that of management. These details, after all, are their job.

Hence, there is a business case for consultation and provision of information. Mr. Sisson also puts forward a case for the good of information consultation for society in general. He states:

The UK Government also stands to benefit a great deal from effective information and consultation arrangements, with the prospects of achieving several of its key policy objectives being considerably enhanced. For example, such arrangements could go a long way towards reducing the soaring costs of the employment tribunal system — remedying the lack of adequate workplace procedures for handling disciplinary cases, which is one of the biggest reasons behind the resort to litigation. Similarly, it might be expected that such arrangements would give a much-needed boost to improving the UK's training record and achieving a better work-life balance, both of which the Government has committed itself to.

These are all commitments to which our Government could sign up and which could give our society a boost. Hence, there is a compelling case to embrace this wholeheartedly. It is surprising that the employers' approach to it, as represented by IBEC, has been relatively grudging and that the Government's response in framing this proposed legislation is considerably weaker than it might have been. The information and consultation directive is one which benefits all sectors of the economy and all individual players within it.

Clearly, Members will require some considerable time to address the specifics of the Bill on Committee Stage. The Minister of State has indicated that he has been open to accommodating suggestions from the Opposition and elsewhere. I have read the Seanad debate in some detail and have noted that not all the suggestions came from Opposition Members. If one considers the Minister of State's Second Stage contribution in this House, he described most of the amendments that he accepted as minor and, unfortunately, that has been the case. When this House gets into the nitty-gritty details of the legislation on Committee Stage, I hope the Minister of State will have an open mind in respect of the Opposition's suggestions.

It is stated continually that if one strengthens workers' rights, one is somehow placing a burden of red tape on industry or small employers. While a case can be made that this is sometimes true, it cannot be made in this instance. The requirements for consultation and information constitute a win-win situation for all parties in the partnership of the workplace. As I have stated, if information is shared in an open way and criticism received to and from both employers and workers, if there is open dialogue as to how the enterprise is faring, whether its stakeholders are pulling their weight and what must be done, inevitably this will lead to a better solution for all.

Interestingly, some contributions in the Seanad from employers such as Senators White and Quinn, who have long experience of being employers, lauded the notion of dialogue on a structured, open and consistent basis as one of the key elements to a successful enterprise. Their sensible comments should be heeded in that respect.

An opportunity still exists to fashion this Bill into a new pillar of partnership, in order to signal the direction which the House intends the economy to take to all the players in the labour market. We are at an important juncture within our industrial relations framework, with what some describe as full employment, although employment black spots still exist. Moreover, an enormous new workforce of eager migrant workers is available. Members must ensure and this House must make clear that workplace gains achieved through the trade union movement and through decades of negotiation will be protected in the future. I refer to gains in respect of health and safety, hours of work, fair and proper remuneration, negotiated sectoral deals within various sectors of the economy and premium rates for overtime employment. This legislation will become one element in framing the type and shape of labour market desired by Members and, ultimately, in forging the type and shape of economy and society that we will leave to the next generation.

We want both our economy and its stakeholders to prosper without any element of exploitation. For that to happen, as legislators, Members have a clear and unanswerable responsibility to frame the strongest, most robust and best legislation possible.

I wish to share time with Deputies Healy and Eamon Ryan.

Is that agreed? Agreed.

This Bill transposes into law the provisions of the European Union directive on the establishment of a general framework for informing and consulting employees within the European Community. While the Government had committed itself to transposing this directive by March 2005, delays in transposing directives are nothing new. The greater concern in respect of the transposition of this directive into legislation is that it is not faithful to the spirit of that directive. In essence, that is at the core of my concerns.

Speaking in the House at the beginning of this debate, the Minister of State spoke of the extensive consultation which took place in respect of this legislation with the social partners, including the unions and employers' representatives. While he did not state whose views impacted most strongly upon the Government in drafting the legislation, this is easily discernible. The influence of the employers, or perhaps more accurately the anti-union employers who oppose any form of collective action by workers, is clear throughout the text. The Bill reflects the antagonism of American multinational corporations in particular towards dealing with workers as a collective body.

Before addressing the detail of the Bill, I place on record Sinn Féin's demand that a stand-alone Department of labour affairs be established to decouple labour affairs from enterprise, as there is a conflict of between the two areas. There is also increasing evidence that some civil servants in the Department of Enterprise, Trade and Employment are hostile to proposals to improve workers' rights. A good example of this conflict arises from the treatment of freelance workers by the Competition Authority, which comes under the Department's aegis. The Department refuses to change the definition of employee to address the plight of this group of workers and prevent them from being targeted by the Competition Authority. This is a clear illustration of the conflict which can arise from having labour affairs subsumed into a Department whose primary focus is on enterprise.

Workers' representatives have expressed serious concern and disappointment regarding this legislation. The Irish Congress of Trade Unions, for example, has described it as "untenable in its current form" on the basis that the Government has adopted a minimalist approach to the information and consultation directive, namely, that advocated by employers. Trade unions have pointed out that the Bill in its current form will do nothing to aid workplace consultation or representation.

Although the Minister spoke of the partnership process, no commitment to real partnership is evident in the legislation. It appears odd to speak of partnership at a time when the displacement of workers through outsourcing and recruitment of underpaid migrant labour is developing into a prominent feature of the labour market and companies such as Irish Ferries and Doyle Concrete, to name but two, are tearing up recommendations issued by the Labour Court. The fact legislation is required to oblige employers to inform and consult their workers on matters of relevance to them is indicative of the failure of employers to embrace the supposed spirit of partnership. It is also a vivid illustration of the fact that social partnership, as implemented in this State, has not sought or achieved any real change in employer attitudes towards workers and trade unions. Despite years of workers making major sacrifices in terms of delivering industrial peace, many employers still maintain an inherent hostility to unions and collective negotiations.

It is Sinn Féin's position that workers must have the right to form and join trade unions, negotiate contracts of employment and picket and withhold their labour and that employers must recognise trade unions. If the Government and others were genuinely committed to having workers and employers work together, they would support the position that trade union recognition is necessary. Nothing in this Bill obliges companies to deal with trade unions. We need legislation to require companies to recognise organised labour. In non-unionised workplaces this legislation, as currently formulated, will have no impact. It should provide for collective consultation only.

The Minister of State, Deputy Michael Ahern, pointed out that the directive "leaves considerable discretion to member states in setting out national procedures". While this may be the case, serious questions are being asked and I am sure legal opinion will be sought on the basis of the real concern that the legislation is not true to the spirit of the directive. Given that issues regarding the process of selecting the employee representative were raised with the Minister of State on Committee Stage in the Seanad, he should be well aware of concerns that the legislation as framed would allow the employer undue influence on the selection of the employee representative. This is an undemocratic provision which would seriously hinder the effectiveness of the legislation. The Bill should not permit the appointment of a representative and the procedure should be confined to selection by an electoral process.

It is essential the legislation does not allow employers to cherry-pick employee representatives on the basis of who they believe they can control. Sinn Féin will seek to delete the definition of what constitutes an appointment. Section 1 states:

"appointed" means, in the absence of an election, appointed by employees, or appointed by the employer on a basis agreed with employees;

This definition is unacceptable and I challenge the Minister to reveal the extent to which he was lobbied by business representatives to have it included. Did the American Chamber of Commerce, for example, lobby for this provision which effectively allows employers to control the entire process of information and consultation?

Serious concerns have also been raised regarding section 7 and amendments have been sought to ensure employees in an undertaking which meets the employee thresholds, as defined by section 4, have an automatic right to information and consultation and that the employer would be required to enter into negotiations on arrangements for information and consultation. This provision will be important if the Bill is to make any real difference to workers. A range of other issues of concern arise from the legislation but time constraints prevent me from addressing them now. I look forward to discussing them on Committee Stage.

I welcome the opportunity to say a few words on the Bill. As Deputies have noted, its purpose is to transpose an EU directive into Irish law and, as usual, we are late in doing so. Having read the text of the legislation and followed its passage through the Seanad, it is clear the Government has opted to do the bare minimum in fulfilling its obligation to transpose the directive. It is a pity it did not take the opportunity to expand the scope of the legislation to address various other areas which are currently creating serious difficulties for workers here and across the European Union.

The services directive forms the backdrop to the legislation and the current industrial relations climate in Ireland and elsewhere in the European Union. As Deputies are aware, the directive was first proposed and later withdrawn for review. The motivation behind it is to allow wages and conditions to be undermined in the member states. If implemented in its current form, the directive would, for instance, allow employers established in eastern European member states to operate in Ireland on the basis of wages and conditions pertaining in their country of origin. EU Commissioners, including the former Minister for Finance, Mr. McCreevy, have expressed support for the directive. In expressing his outright support for it recently, Mr. McCreevy demonstrated he is opposed to basic and fundamental conditions of employment for workers in EU member states. He publicly supported such a situation in Sweden, where a Latvian company wanted to employ people on the basis of Latvian pay and conditions. When he was taken to task on that, he spoke in the European Parliament to say that he certainly did not apologise and that he supported that view. Unfortunately, we see that in this country too. The situation with Irish Ferries has brought this to a head. IBEC supports Irish Ferries in its attempt to sack 543 Irish workers and employ foreign nationals at ridiculous rates. In recent days, it has been supported by the Irish Exporters' Association. The Department of Enterprise, Trade and Employment also supported that recently when it allowed exactly the same situation to arise on the French route with theMV Normandy. It subsidised redundancies on that route to the tune of €5 million.

This situation goes to the very heart of Irish society. It simply must be stopped, since if it is not, it will destroy the wages and conditions that have been fought for and won over many years here. It may well also cause this country to become a hotbed of racism because of such action by Irish Ferries and the fact that non-national workers are employed here in most cases on the minimum wage but not under the same conditions of employment as Irish workers. Effectively, non-national workers are being used and abused by employers, and that will lead to the perception that they are taking the jobs of Irish workers. We do not want that to arise in future. If allowed to develop, it would certainly allow scope for the worst type of racism to rear its ugly head.

In that regard, the threshold of 50 employees for enterprises and companies to come within the ambit of this Bill is far too high. I do not see why someone working in a company with fewer than 50 employees is not entitled to the same information and so on as someone employed by a larger company. The vast majority of non-national employees and workers from other European Union countries work in enterprises with less than 50 staff. The terms of this Bill, as far as I can see, will not apply to them at all. The opportunity should have been taken to ensure through the Bill a legal right to trade union recognition. There is no doubt that it is very important, and even more so nowadays in the context of the services directive and the way that some companies, such as Irish Ferries, want to undermine the trade union movement and Irish workers, effectively destroying the core values that we have built up.

The opportunity presented by this legislation should have been taken to deal with flags of convenience. I know the Taoiseach has told us that he does not believe that anything can legally be done on the issue, but that is not the case, since, if the political will were there, a way would be found to ensure that they were outlawed. I note the Bill introduced by the Labour Party this week in that regard. If the political will were there, the Government, together with Irish representatives at EU level, could make such flags of convenience illegal. That which is proposed at Irish Ferries would then be completely unlawful. There is no doubt that what we have seen there will destroy the social and economic conditions and values of Irish workers and the Irish people if allowed to continue.

It has also been suggested that there is a background to this legislation of American multinationals' preference for not dealing with organised labour. There is no doubt that many such companies will deal only with the individual worker and not with organised trade unions or staff associations. However, there are American multinationals here that have no difficulty dealing with trade unions. I commend Merck, Sharpe and Dohme (Ireland) Limited, which has had a plant at Ballydine near Carrick-on-Suir in my constituency for almost 30 years and always dealt with the trades unions. There is an excellent relationship between management, unions and workforce on that site.

There is no reason to believe that, with the requisite will, management of such multinationals could not co-operate, recognise and talk to organised labour by way of the Irish trade union movement. That is one of the reasons I believe the legal right to trade union recognition should be embodied in this Bill. I do not believe, for instance, that American multinational companies who, to date, have refused to deal with organised labour or trade unions, will co-operate with this Bill either, unless they are forced to do so. There should be an automatic right for workers to access the information dealt with in this Bill, and that process should be ongoing. It would be better if it were dealt with through the organised trade union movement here in the shape of ICTU and its affiliates.

While I welcome the legislation as far as it goes, there are other areas that should be dealt with as I have outlined, and it is a pity that an opportunity to do so has been lost. I hope some of those issues might be addressed on Committee Stage.

I welcome the chance to speak on Second Stage of the Employees (Provision of Information and Consultation) Bill 2005, and commend the Minister both on bringing it forward and on the manner in which he has done so. I know it is late, and that it is easy for the Opposition once again to portray Ireland as terrible. We are one of the last two countries in the European Union to bring this directive into effect. That is not a mortal sin in this case compared to some of the other delays that occurred but it is important in terms of one aspect, not because of the European regulations but for our own management of businesses here. I refer to companies that may have been looking to introduce something like this or perhaps our unions or workers looking for it. The inability to proceed in that regard because of the absence of legislation is something we regret. It is unfortunate we were not the first out of the traps, not because it concerns European regulations but because it is the right way to proceed.

My sense of why it is the right way to proceed was confirmed recently in an article in a science magazine which concerned getting an estimate on something that is difficult to judge or assess. Science is increasingly showing that if a large group of people, even those who may not necessarily have an expertise in a particular subject, were asked to give the weight of an object, for example, or to respond on something about which they might not have specific knowledge, there is an interesting scientific phenomenon that if the responses are aggregated, by some strange law that scientists do not yet understand, that process uncannily leads to a close to correct assessment of what the weight is or whatever factor is being sought.

There is something such as collective consciousness which we are wise to listen and adhere to, and I believe that works in companies to the company's benefit. If companies are informing their workforce they are opening up the nature of the business and the discussions within the business as wide as possible to hear views from the postal worker or office post boy, a position I held myself at one time in a business, to the chief executive. Widespread access to knowledge information in terms of what the business is doing is an empowering action for business. As a former employer I embrace this legislation because it will be progressive and good for Irish business.

To expand on the example, we operate here in a Chamber of 166 Members and we know that on the occasions when we work well, and it does not often work here, and when there is proper debate with people listening to each other, it benefits the work we do when we critically analyse, comment and suggest to each other how things should work. We know, therefore, that this access to information is the right way to go.

I have a concern in that regard that the Government, in the implementation of the directive, is not going far enough and embracing the legislation in that sense. While I commend the Minister on the consultation process he outlined in his contribution, the manner of the debate in the Seanad and the amendments that arose from that debate, I have a slight concern about much of the legislation we are bringing through the House, which relates to the partnership process. While we may be engaging in a process where there is open consultation, the real decision making will be done, as the Minister of State appeared to imply in his speech, in a series of bilateral meetings that will occur with two of the main players in the process, ICTU and IBEC. While I have nothing but admiration for both those organisations and the people working in them, drafting legislation on the basis of a negotiating deal between IBEC and ICTU is not the right way to proceed. I am not sure it leads to the best legislation or process. In other legislation an incredibly cautious approach was taken because one side or the other did not want the current system changed or any radical change. I was not party to the negotiations but I fear that may have been the case here because the cautious, narrow way in which the Minister of State is implementing the directive is probably due to a cautious narrow approach on the part of those two agencies, particularly IBEC in this case, whose whole purpose is often maintenance of thestatus quo. That is probably what their members were happy with but it is not necessarily looking to the future in terms of developments and new businesses. That is a concern of mine.

A particular concern I have about the Bill is the inability of an employee to have a right to engage in this process in terms of open consultation and access to information. The provision whereby 10% of employees collectively must request to enter such a process is a mistake. I would prefer employees to have the right to opt in to start this process. If the Minister were to heed what those of us on this side of the House are saying about the benefit of collective discussion and open access to information, he would strengthen the provisions in this case and allow for greater access. That is a better interpretation of the directive and one that would benefit Irish employees.

I disagree with Deputy Morgan who spoke earlier about the need for the separation of labour and enterprise. Good enterprise favours proper labour policy and proper labour policy benefits proper enterprise policy. I do not see it as a case of converging interests and needs. They are in some cases but a strengthening of the Bill in that regard would be to the benefit of all sides.

I have been unable to check this in the European directive but will the Minister of State confirm, perhaps at the end of the Second Stage debate, whether we could set a threshold of fewer than 50 employees of a company? What we define in this country as a small company is often very different to what it would be in Germany, France, America and other very large jurisdictions. As a former employer with less than ten full-time employees, I did not consider that a small company. Once we got beyond one or two employees I felt we were developing into a reasonably sized business. There may be a case, and I am interested to hear the Minister's answer, to apply it to employees in this country because a company with over 25 employees is a reasonably sized company. Why should we not look to offer the same benefits and opportunities to companies of that size as we would to a company with 50 or more employees?

I regret the cautious approach in terms of implementing the Bill. There appears to be a staggered approach in terms of the provisions for companies with up to 150 employees which will come into effect immediately. The provisions for companies with fewer than 100 employees will come into effect later and it will be as late as March 2008 for companies with 50 to 100 employees. I do not understand the reason for the slow implementation of this process. I would prefer to see it apply to companies of different sizes.

I support the nature and content of the Bill but the Minister should consider being more ambitious. I imagine he will hear from Members on all sides of this House that this is not a measure we should be concerned or cautious about. It will be a positive development for Irish businesses and in implementing it, I ask the Minister of State to go further than he did in his contribution and provide for some of the changes I have outlined for the good of Irish employees but also for the good of Irish business.

This Bill comes to us from Europe and is part of a suite of workers' rights legislation. As we can see from the guidelines regarding Irish Ferries, workers' rights must be enforced and constantly updated. We need to be able to deal with new issues as they arise and while we have solid protection measures in place for employees, there will always be a minority of employers who will try to find a way around issues such as the minimum wage. We must be vigilant and protect against such practices. We must lead the way on this issue and support workers of all nationalities as best we can by ensuring they enjoy the benefits of the minimum wage and the protections afforded by trade union membership. The greatest investment any company makes is in its employees. Successful companies work in partnership with their employees in a spirit of transparency and collective thinking.

Irish Ferries re-flagged one of its ships, theMV Normandy, at the start of this year. That ship now sails under the flag of the Bahamas. This action was part of an effort to avail of low-cost contract staff. The company received a heavy subsidy from the State when redundancies were made in the past and this seems to have been the go-ahead for what is now taking place. The majority of staff on the MV Normandy is from Eastern Europe. It is unacceptable that workers’ rights should be exploited in this way. Many members of the staff at Irish Ferries have been with the company for decades while the employees from Eastern Europe have far shorter tenures. The former are free to apply for voluntary redundancy under the terms offered but the issue is the management shift in the company from a permanent to a casual staff. Through its actions, Irish Ferries can reduce its wage costs by 50% in pursuit of the bottom line of profitability.

It is the case, however, that Irish Ferries worked within the law in the actions it took. I urge the Minister to lead the way in fighting against this type of behaviour. I am not sure what he can do because we operate in a system of free trade. It is important, however, that for any similar company with its head office in the State, there should be a law to deal decisively with issues such as security of tenure for workers. As an island nation, we are dependent on sea and air transport. It is critically important that we promote business in terms of the level of imports and exports. The responsibility is with the Minister to ensure there is transparency and that there is information on the number of staff on the payroll of such companies and the benefits they receive. We must work with our European partners to stop companies operating in EU seas when involved in these practices. EU law must be changed to protect workers and there is no reason that Ireland cannot lead the way in this fight.

Overall, the Bill is to be welcomed. Its provisions will emphasise the Government's role in protecting jobs. The high-cost economy which is influenced by stealth taxes and the stacked up costs affecting every business, impacts strongly on our competitiveness. The high cost of fixed charges is one of the reasons that many companies will utilise an option within the law to cut costs in regard to employees. The workforce is the backbone of the economy and we must ensure employees enjoy the respect and support they need.

Under the Bill, employers must provide information and consultation on issues they could previously have kept private from their employees. Such issues include the probable development of a firm's activities, the structure of future employment in the business and any decisions likely to lead to major changes in work organisation or contracts. The Bill also obliges employers to provide enough information to enable worker representatives to make adequate preparations for consultation. Good business is all about consultation with staff and such an approach makes good economic sense.

I also welcome the inclusion of penalties in the legislation, according to which employers will face fines of up to €30,000 for breaches of the law. As is the case with all Bills, the legislation is pointless if it does not contain penalties that will deter employers from not adhering to it. It is, however, unfortunate that the Bill does not legislate for companies that employ less than 50 people. This is a major mistake because the backbone of our successful economy consists of small companies which employ less than ten people. The definition of a small or medium enterprise in Ireland is considerably different to what is understood in other European states. A company with 50 employees might be considered very small elsewhere in Europe but constitutes a sizeable enterprise here. The Minister of State might respond in regard to the definition of an SME.

That the legislation does not apply for companies with less then 50 employees represents a major cop-out. In every town and county, companies mostly employ less than 50 people. There is no doubt that small firms have a particular need to be protected from over-regulation. They are the backbone of many communities which do not enjoy investment from large corporations. The Government must endeavour to protect them at all costs because they have driven the economy. We must ensure, however, that workers in small firms are not treated as inferior to their counterparts in large companies. People should not be treated with less respect or afforded fewer rights simply because their employer has fewer staff than a major multinational. It is a question of equality of access and services.

Another major fault of the legislation, which represents a transposition of an EU directive into Irish law, is the amount of time it took to come before the House. The process of consultation began three years ago and the deadline for submissions from interested parties was September 2003. The original target date for the enactment was March 2005 but it is now November. While I am not in favour of legislation being rushed through, neither do I support a situation where legislation takes three years to come before the House. It is far too long, particularly in the context of employee protection. When a need becomes apparent for legislation, we must endeavour to work quickly to fill the gap.

Notwithstanding these concerns, I support the Bill. It is very much needed to enshrine employees' rights. I am sure my colleagues will put down amendments on Committee Stage. I seek assurance from the Ministers that we will see action on the issues of Irish Ferries and the re-flagging of ships. Ireland must take a lead on this issue. We have witnessed first-hand that re-flagging of ships is wrong and should not be allowed. We must now meet our European partners to discuss in depth the issue, which will have a significant impact. It cannot be put on the back burner and must be addressed as a matter of urgency.

The protection of employees is vital to the growth of the economy, which has been facilitated in large part by small firms in every village and town. Small acorns have grown into a large oak. The tourism sector, in particular, comprising hotels, restaurants and the providers of other critical services, has been driven by small companies whose employees work passionately, often seven days a week. It is important that eastern European staff in the catering sector should enjoy the protection of the minimum wage and the other benefits enjoyed by Irish workers. It is vital that they receive the benefits of this legislation. They are here to make a living and the new law in regard to work permits will facilitate them.

It was reported in the newspapers during the week that up to 150,000 people from eastern Europe are working in Ireland. It is important that they are welcomed. They play a critical role in the growth of the economy and I have no doubt they will add considerably to Ireland's status as a tourist destination. The growth in our economy owes much to the services sector and we must ensure it continues to thrive. Small companies will continue to prosper as the backbone of the successful economy.

Debate adjourned.