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

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

Fine Gael welcomes the Bill but is at a loss as to why it took so long to come before the House. I know the Minister of State will probably have a plausible explanation for it taking so long to become part of legislation.

The Bill is a transposition of an EU directive into Irish law and the deadline for submissions from interested parties dates back to September 2003. The original target date for enactment of this law was March 2005, and now we are in December. I am aware that drawing up legislation is a complicated affair and can take some time, but it has taken a very long time to enact this legislation. From time to time we are at the mercy of the European Union with regard to the implementation of EU directives. The publication of the legislative agenda has shown just how light is the Government schedule. The delay in getting this Bill into the House is a timely reminder of just how much remains to be done.

It has always made good business sense to keep employees fully informed about what is going on in a company. Any manager knows that to keep morale and productivity high, he or she must make everyone feel like a stakeholder, a fully paid up member of the team. I fundamentally believe in the worker shareholding agenda. I recall John Bruton as Minister for Finance in the 1980s introducing tax incentives to ensure that workers would take shareholdings, for their personal benefit, in particular companies. This was the germination of the stakeholder agenda which ensured that workers were part and parcel of a particular company's affairs. In the past few years we have seen in the public sector, in the context of privatisation of those companies, that 14.9% of some of the companies privatised have been assigned to workers and that the dividend for workers from those decisions has been enormous.

We cannot in a civilised society view a firm's labour force as anything other than an integral part of the decision-making process. Workers are not just a resource to be turned on and off as conditions permit but a vital component in any management team. The provision of information to them is a vital component in any management strategy.

Under the Bill, employers will have to provide information and consultation on issues such as the probable development of a firm's activities, the structure and future of 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. Employers must begin negotiations to set up information and consultation procedures once 10% of employees make such a request. The Labour Court will be able to investigate disputes about the operation of these agreements. Employers could face fines of up to €30,000 for breaches of the proposed legislation. Those are significant penalties.

This Bill is part of a suite of worker rights legislation. It is worth reminding the country that those on the far left who oppose the European project are being deceitful when they say that the EU is anything but a social project because it has been a leading force in giving better working conditions for Irish employees and forcing national parliaments, including the Irish Parliament, to bring about better working conditions for our workers. It is interesting to note that in the context of the Irish Ferries dispute, it was the absence of agreement and support from the Government with regard to the maritime directive, the manning directive, that led in some part towards the dispute we now see. If Ireland and other countries had supported the conditions that were inherently important for workers in EU states with regard to that manning directive, that would have made a significant difference in the resolution of the dispute between Irish Ferries and workers.

Employers should also be generally satisfied with this Bill. It strikes a fair balance between employers and employees in sharing information. As I said, employees must be part and parcel of the entire management team to have forward-looking and constructive company practice. I share the Minister's belief that the Bill does not tie the hands of business and is sufficiently flexible. For example, employers have the option under the Bill of putting in place agreements before a date to be prescribed following enactment of the Bill, known as pre-existing agreements, which can be tailor-made to suit the culture and circumstances of their company.

In a press statement of 19 September, IBEC stated that any measures that make Irish business less able to adapt to changing global markets will undermine competitiveness and put jobs at risk. It said that companies that already have successful information and consultation procedures should be supported and allowed to continue without change. I agree and hope that when the legislation is enacted they will see that our competitiveness will not be undermined by this legislation. By the time Committee Stage is concluded, I do not believe it will. There are many Government actions and decisions that have hurt business, and that is not down to lack of employee consultation but because stealth taxes and charges imposed by the Government gave birth to"rip-off Ireland".

During Question Time in the House today the Minister chose to ignore the fact that we have not got the necessary resources to back up the Competition Authority and investigate, in the interests of the consumer, the anti-competitive practices and cartel agreements, official or unofficial. This Bill has nothing to do with that but it is required to ensure that everyone is in the loop.

The Bill specifically precludes companies employing fewer than 50 employees. That is important and there are sound reasons for it. Small firms have a particular need to be protected from over-regulation and their distinctive competitive disadvantage means the Government must endeavour to protect them at all costs, not least because they tend to be indigenous. We must ensure that those who work in small firms are not treated as inferior to those who work in large companies. Just because an employer has only 45 staff, for example, does not mean his or her workers should be treated with less than the respect and dignity afforded to those who work for large corporations such as Microsoft and Coca Cola. I am interested to hear the Minister's views on how we can ensure that the provision of information is extended to everyone, notwithstanding that the legislation stipulates a requirement in respect of employers with more than 50 staff.

Before the summer recess, my party's deputy spokesperson on enterprise, trade and employment, Deputy Pat Breen, met a number of individuals on my behalf who have formed a support group for victims of workplace bullying. These people have lost their livelihoods and have had to endure severe financial, emotional, psychological and medical hardship as a result of how they were treated by their employers and colleagues. They told Deputy Breen that one of the key ways in which they were mistreated was the withholding of information and the deliberate attempt by their tormentors to keep them in the dark, out of the decision-making process and without the necessary information to do their jobs. What is the Minister of State's views on how we can use legislation such as this to place a legal obligation on employers to ensure nobody can become the victim of an information black hole? It is a tool often used by those seeking to rid themselves of persons they view as more competent, talented and worthy of a particular employment than themselves.

The discussion of this Bill comes against the backdrop of the Irish Ferries dispute. That the management flatly refuses to recognise the legitimacy of the Labour Court's recommendations is very disappointing. Now that it seems clear Irish Ferries is operating within the law in reflagging theMV Normandy under the flag of the Bahamas, I urge the Minister to lead the way in convincing our European partners to change EU law in this area to protect workers. I note that the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Gallagher, has signalled the necessary U-turn in respect of the Government’s policy on the manning directive which I mentioned earlier. This directive was opposed by the Government in 2004 and that mistake is now acknowledged. The Minister of State, Deputy Gallagher, is working hard to undo the damage done on the occasion of the meeting of transport Ministers. I hope he is successful and that it will make a contribution to the Irish Ferries dispute, which has serious consequences for the economy, particularly in regard to exports, employees’ working standards and the future of the partnership process.

The Bill is opportune in the context of that dispute and I hope we will see it enacted as soon as possible. As spokesman for Fine Gael, my party welcomes the Bill. I am sure we will table some amendments on Committee Stage, however, and I look forward to the ensuing discussions with the Minister. The legislation must be enacted speedily in the context of employers and employees having the fullest possible information available to them. This will ensure we have a strong and thriving enterprise sector and an enterprising economy.

I too welcome this Bill, which has taken so long to come before the House. I understand the final date for submissions was September 2003 and the intended date for enactment was March 2005. Prior to that, it took about five years to prepare the corresponding EU directive. The Bill comes at the end of a long process. It will provide for the implementation of EU Directive 2002/14 EC and its transposition into Irish law.

We regularly complain about EU legislation but it has not all been bad. In terms of workers' rights and women's rights, for example, much useful legislation has come from Europe. The purpose of this directive is to establish a framework for informing and consulting employees. Information is the key issue. It is important to keep people in the loop because it gives them a sense of ownership. Happier workers are more productive. The directive establishes a right to new minimum standards for workforce communication and involvement in a company's operation.

The basic case for these new standards is fair play for people at work. It is simply not acceptable for employees to be informed by the media that they are to lose their jobs. We have often seen photographs or footage of shocked workers who are told on a Monday morning that their jobs will be gone the following Friday. In such cases, families often find themselves in the tragic situation where a husband and wife, for example, work for the same employer. Such couples may have taken out a mortgage on the basis of the jobs they believed were secure and arranged their lifestyle around a particular standard of living. To be told all that will be taken away in a matter of days is difficult. If there were an obligation that workers must be put on notice and given some information, they might forego the large mortgage or expensive holiday. Statutory redundancy is no substitute for a good weekly wage. Large-scale job losses are generally accompanied by the establishment of a task force to find replacement jobs. To some extent, however, this is merely a way of making the bitter pill a little easier to swallow.

The Bill seems to be very much oriented to the business sector and private companies. However, there is great need for these types of provisions in the public sector. I have encountered cases in the health service, for example, where people are kept in the dark about the services to be provided in different areas. This leads to great cynicism about services and lack of trust between workers and management. Public service workers must also be kept in the loop. The lack of emphasis in this regard may be because the public service is supposed to have processes in place that are in keeping with the essence of the EU directive and the Bill, but I do not agree that is the case. In many elements of the public service, the buzz is to have workers involved in partnerships. That is supposed to facilitate communication, but it is simply not working and is another issue that must be examined.

The general thrust of the Bill seems to be directed towards small and medium sized enterprises. In recent years, local authorities have devised strategic plans in which communications with employers is a major contributory factor in the improvement of performance and productivity in local authorities. A major contributor to the high performing workplace is a climate of mutual trust, confidence and respect. This can only be developed where there is regular and honest communication. There is no doubt that some private sector companies do not have a good record in terms of honest communication. This legislation will help to create an environment where successes can be acknowledged and difficult decisions taken with constructive input from all those affected. If workers are kept informed, it will be found that most have common sense and will bite the bullet when difficult decisions must be made. This legislation can be of benefit in this regard if correctly utilised.

Naturally, employees wish to get adequate financial compensation for their work and proper conditions in which to perform it. However, their views must be recognised and taken into account in the running of a business. Management and owners would do well to take on board the untapped knowledge that exists among employees. Workers who are included are happier and will offer employers good ideas. Nothing gives a worker a greater sense of pride than the knowledge that his or her idea is used and that he or she is respected as an individual.

There is a growing realism in employees' perception of the ongoing challenges facing the organisations for which they work. They recognise that the state of employer-employee relations has an impact on the success of the organisation and are, in the main, prepared to play their part. It is vital that employees are part of mature relationships with employers and that there is a supportive culture rather than a blame culture that can impede progress and innovation. There is no point in management pointing fingers at workers orvice versa. That will achieve nothing. The realisation is growing that a culture of constructive consultation is good for both.

Good information and consultation processes will encourage a sense of belonging and commitment to an organisation. Such a system can contribute to much improved performance in the workplace. There is already a good deal of information sharing and consultation in some companies and that should be left untouched. Such companies already see the value of the type of process we are trying to introduce into legislation. I do not believe it will affect in a negative way any of the good practices which already exist. The legislation will not cut across existing good practice or impose rigid arrangements on many businesses.

The thrust of the legislation appears to be to give the right to information and consultation to those who want it and, in so doing, to support good existing practice. It is obvious that the level and genuineness of consultation will be important. The more trusting the relationship between an employer and his or her employees, the more likely it is that employees will take on board new responsibilities and help to address the problems of companies. Other benefits which will accrue from the provision of information and consultation will include improvements in employee contributions, such as increased productivity and greater involvement in solving problems and generating new ideas. Direct forms of information and communication include team briefings, newsletters, notice boards and the Intranet.

While consultation mechanisms normally vary, consultation and negotiation generally take place with representatives of recognised trade unions. If consultation is not firmly based on dialogue, it will be a one-way process and might lead to resentment and a lack of engagement. The biggest obstacle to the development of meaningful dialogue is when both parties enter discussions with entrenched positions and without any interest in reaching agreement. How often have we heard that parties have been locked in Labour Court talks for many months, whereas an official is running between a group sitting in one room at the court and another group sitting in a different room? While that is an extreme example, it beggars belief that such behaviour can be described as dialogue or a form of talks. People should see such behaviour for what it is, which is the opposite of good or useful practice. A great deal of the Labour Court's time is spent dealing with groups which are not engaging in dialogue.

I am grateful for the opportunity to speak on the Employees (Provision of Information and Consultation) Bill 2005. My colleague, Deputy Eamon Ryan, who is the Green Party spokesman on enterprise, trade and employment, has outlined the party's general support for the Bill as it relates to the implementation of the EU directive, with the proviso that we are concerned that it has taken so long to advance the process of enactment of the directive. We are also concerned that the directive is being implemented in a narrow way, which means that an opportunity to advance Irish labour law could be lost. If there is ever a time when we need to show Irish labour law in the most positive light possible, this is it.

Deputy Hogan outlined the positive nature of some labour law that has emerged from EU directives in the past. I do not disagree with him in that regard, although I would probably take issue with his implication about those who have opposed various EU directives. The nature of the European Union has changed since Ireland became a member state in 1973. As the EU was largely protectionist in its economic inclinations at that time, its labour protection and equal opportunity legislation was geared to protect people as well as — perhaps I am mistaken — the economy.

We have since moved to another extreme in the EU's thinking, as it seems to be in favour of unrestrictedlaissez-faire free market economics. If we examine the Commission’s most recent directives — I refer to labour directives, particularly the services directive — we will have concerns about how they value the role of workers within the economic process. Deputy Hogan also referred to the role of the Government in the most recent debate in this regard. Unfortunately, the Government has been philosophically inclined to support the prevailing view. It specifically opposed the mariners directive, which would have given employment rights to people who engage in their trade on the open seas, in international waters. The Government has taken a far from proactive position on this matter at EU level. It has helped to scupper the attempts to put in place positive legislation in that area.

The Bill, which is very welcome, will introduce some measures which are badly needed. There is a concern that the Bill seems to have been introduced in isolation, despite the lateness of its presentation. Given that other lacunae exist in employment legislation, I wonder why steps are not being taken to assist whistleblowers. People will trust information on the quality of a workplace or a commercial institution if they know the quality of the work being done is of the highest possible standard. We are introducing legislation that will ensure that people in most enterprises of a particular size are given information they can act upon to make their enterprises better. It is unfortunate that the Government has chosen not to legislate to allay the general concern about the action that might be taken against employees who expose illegal activity.

The concerns about the narrow implementation of the Bill relate to the fact that the Government has chosen to stagger the approach being taken in respect of companies with between 50 and 150 employees. The new regulations will not apply to enterprises with fewer than 50 employees. The definition of a small or medium sized enterprise is more appropriate in Ireland than it would be in some parts of Europe. Some SMEs in Germany have up to 15,000 employees, whereas most SMEs in Ireland employ fewer than 50 employees. While I accept Deputy Hogan's point about the need to avoid over-regulation — we should not over-burden SMEs through over-regulation — there is a need to introduce an appropriate culture in businesses of a smaller size. If we do not have a legislative instrument to do that, it is incumbent on the Government to say how it proposes to introduce the values to which the EU directive and the Bill aspire in enterprises of fewer than 50 employees.

Many larger enterprises in Ireland are not indigenous to this country. They are the companies whose foreign direct investment we have been fortunate enough to attract to Ireland. Many people have the impression that many such companies are operating here with the proviso that they can do so without the involvement of trade unions. While we are obliged, morally and otherwise, to introduce this directive into our legislation, I would be interested to know the degree to which the Government has consulted enterprises which do not operate in this culture. I refer to companies which do not go out of their way to discourage the existence of labour representation. I hope the introduction of this legislation does not conflict with that, but I suspect that it might. The Government needs to state how that difficulty might be overcome in any ministerial order it uses to introduce the Bill in various workplaces.

The need for all-embracing labour relations is especially pertinent in the present times. Public representatives of the various political parties need to send out a clear message that workers are most valued in all this country's economic enterprises. I fear that a debate is being engineered by those who do not share such values, but instead think that workers are expendable, are there to be used and are units of production. Regardless of whether we have legislation that informs workers of what is going on in the businesses in which they work and of how it is hoped to change and improve such businesses into the future, workers are less secure than ever before in the current employment context. There may be less interest in that at a time of high labour mobility and economic success, but that might not always be the case. Economic cycles occur and we have been more fortunate than most in our history in that this economic cycle has been longer and deeper in a positive sense than others. Despite this, a time may come when the expectation to be employed in an enterprise which guarantees future employment and properly values the individual contribution to the workings of an economic enterprise may no longer exist. If that becomes lost, it will be our collective loss as a society.

I thank the Deputies who contributed to the debate. I am grateful in being facilitated in completing the debate tonight to ensure that the committee can deal with the matter during what is euphemistically referred to as the Christmas recess, which is a time when committees do an enormous amount of their work. I hope that we will be back for Report Stage in the Dáil early in the new year.

All sides have acknowledged that the Bill will make an enormous contribution. Virtually all Deputies who spoke referred to the late transposition, as I did in my opening speech. I used the intervening time for consultation, although not as successfully as I would have liked. Parties with opposing views continue to hold those views. However, I believe the Bill is greatly improved for the time and effort that went into the consultation process.

In transposing the directive we faced a choice between applying the legislation to undertakings with at least 50 employees or establishments with at least 20 employees. A number of Deputies questioned this matter. One of the reasons we decided to go with undertakings with at least 50 employees was that the majority of submissions received on foot of the consultation paper favoured the undertakings route. There were also some other advantages, which I am sure we will thrash out on Committee Stage, regarding establishments that frequently have fewer than 20 employers but may have several employees in their undertakings throughout the country.

Deputies Perry and Boyle sought clarification on the definition of a small and medium enterprise, SME. Under EU rules, an SME is defined as an enterprise which employs fewer than 250 persons and which has an annual turnover not exceeding €50 million and-or an annual balance sheet not exceeding €43 million. This is quite different from what we understand to be an SME in this country in many respects.

Deputy Hogan referred to the bullying element when a deficit of information exists. It would have been very difficult to address the entire complex bullying issue in the context of this legislation. However, as I explained earlier on Question Time, we intend to do so in the context of legislative proposals I hope to put to Government. Deputy Connolly questioned the involvement of the public sector, a matter with which we will deal in considerable detail on Committee Stage. We dealt with the matter in the Seanad and I will give further explanation on Committee Stage.

Deputy Boyle referred to the danger of the services directive and what he sees as an EU move away from the protection of employees. I do not find this to be the case when attending Council meetings, one of which I will attend the day after tomorrow. In general the EU has made a very positive contribution to the quality of Irish labour law. He questioned the whistleblower provisions. Anybody who has looked closely at this Bill will agree that the protections for employees in the context of the Bill are extraordinarily strong, perhaps the strongest provisions made in legislation heretofore. The Government's view in this regard is that we should take a sectoral approach, which is what we have done in this Bill and in the health and safety legislation in which the Deputies opposite were involved. We intend to do the same across a range of sectors.

Deputy Boyle also stated that, in general, foreign direct investment, FDI, companies do not recognise trade unions. I refer Deputies to the considerable amendments made to section 6 of the Bill since it was first published. Many of these amendments deal with trade union concerns in this regard.

The transposition of the directive for the information and consultation of employees as provided in the Bill achieves the best possible balance. We should recognise that strongly opposing views exist. I was very impressed by the quality of contributions in this House and in the Seanad which showed a considerable level of information in the intention of the directive. We have tried to transpose it allowing as much leeway as possible for the strong and successful voluntarist tradition that exists in the country to inform the culture which will underpin information and consultation under the Bill.

Deputies Ryan and Boyle had questions about the phase-in application, which is provided for in Article 10 of the directive. It seems to sit very comfortably with our traditional voluntarist approach. A number of Deputies, including Deputies Howlin, Boyle, Healy and Ryan, considered our approach to be minimalist. I would strongly contend that we have struck a particularly good balance allowing the maximum flexibility to both employers and employees to have a system that best suits their own circumstances. If we had attempted to take a one-size-fits-all approach, we would have done enormous damage and would not have adhered to the intent of the directive. It certainly would not have made a positive contribution to Irish labour law in this regard.

A number of Deputies also raised the issue of trade union recognition. We need to recognise this is a fundamentally different issue from the intention of the information and consultation directive. If a case for addressing the issue exists, it is not in the context of this legislation. It would be entirely inappropriate to use the background of this directive to deal with that issue.

Deputies also asked about the trigger mechanism, on which strongly opposing views exist. The directive refers to the right of employees to be informed and consulted about certain matters affecting them. As such, employees can choose whether to exercise this right. The choice is left to each member state to decide how to trigger this right or whether to provide that it automatically applies. The opt-in trigger mechanism provided for in the Bill ensures that a minimum number support such an arrangement being put in place while avoiding an unnecessary burden on enterprises where the employee demand for such arrangement does not exist. This point was made strongly and lucidly by Deputy Hogan and others and we need to take it into account. Having a minimum number and a maximum number for the trigger mechanism would strike a very good middle ground. It is not just employees who can initiate negotiations. The Bill provides that the employer can also do so.

Deputy Durkan referred to agency workers. As was the case in the Seanad, this will be a central element of the debate on Committee Stage. Ultimately it comes down to whether the employee is on a contract of service or a contract for service with the employer as to whether the agency or the principal employer has the obligations under information and consultation. It is important that this is provided in undertakings of a particular size. I am entirely satisfied that the approach we have taken in the Bill provides that people with agencies have the same rights as others depending on the size of the company at the particular time.

This directive dates from 1997 when the Renault assembly plant in Vilvoorde in Belgium closed and the manner in which the decision was announced. Deputies on all sides pointed to enormous advantages that accrue when enterprises have a good level of information and consultation. During the Seanad debate I felt that people were reading into the intent of the legislation something that goes considerably beyond what was intended. Ultimately this is about information and consultation alone. It provides for a very positive workplace ethos if both employers and employees adopt the principles in the manner for which we have provided. We have tried to give people maximum flexibility. In some circumstances it suits individual employees to have information supplied directly to them. In some enterprises this already happens to an extraordinarily high standard and very effectively. In other cases this does not happen and in some of those cases it is clearly open to individual workers or groups of workers to seek that a representational system be introduced as is provided for in the legislation.

The legislation provides for very strong penalties in the event that an employer fails to provide information and consultation. Equally importantly and in groundbreaking terms we have provided for a number of protections for employees going far beyond what is provided for in other legislation. I hope the Bill can be progressed through Committee Stage during the recess and that we will be back in this Chamber for Report Stage. I assure Deputies that I approach this legislation with an open mind. I said that in the Seanad. I accepted a number of amendments in that House having been persuaded during the debate, especially on Report Stage.

Question put and agreed to.