Industrial Relations (Amendment) Bill 2009 [Seanad]: Second Stage.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary)

I move: "That the Bill be now read a Second Time."

I am pleased to introduce the Industrial Relations (Amendment) Bill 2009 for the consideration of the Dáil and I wish to acknowledge the input of the Members of Seanad Éireann who discussed this Bill in the autumn session.

The main purpose of the Bill is to strengthen the existing system for the making of both employment regulation orders and registered employment agreements and to provide for their continued effective operation. In the context of the Towards 2016 review and transitional agreement, the Government and the social partners had agreed to the implementation of a series of measures on aspects of employment rights and compliance. These included, in particular, the introduction of legislation to strengthen the arrangements for the making of the employment regulation orders and registered employment agreements that have been features of our legal system for over 60 years and to provide for their continued effective operation. I am pleased to say that, notwithstanding the current difficulties regarding national level social dialogue, this commitment is being met within the framework of this Bill.

The joint labour committee, JLC, and registered employment agreement, REA, systems have been the subject of a number of recent legal challenges that have come before the High Court. As well as raising issues specific to particular EROs or REAs, these challenges also related to the constitutional propriety of the legislative provisions under which they were made. This Bill will provide for a number of amendments to the existing legislative framework surrounding the JLC and REA systems, including improved procedures, and clear principles and policies to be taken into account by JLCs when formulating proposals for EROs. The Bill also provides that EROs and REAs will be given legal effect in future by ministerial order and that a perceived gap in the scope of parliamentary supervision will be filled by providing for Oireachtas scrutiny of these instruments.

Joint labour committees are independent bodies composed of representatives of employers and workers in a particular sector with a chairman who is appointed by the Minister. There are currently 13 JLCs in existence. The committees meet periodically to discuss and agree rates of pay and conditions of employment to apply to workers in a particular sector. JLCs operate in areas where collective bargaining is not well established and wages tend to be low, for example, in the hospitality sector, hairdressing, retail groceries and contract cleaning.

I am conscious of the difficulties that many firms operating in sectors covered by EROs are experiencing. I appreciate that these issues, along with the impact of strengthened arrangements for inspection and enforcement, have also been of concern to Members of this House. These difficulties have been to the fore throughout a series of meetings that I have had, since I took office as Minister of State in this Department, where I have met with the representatives of employer organisations and of those employed in these sectors, and I am aware that Deputy Penrose facilitated a meeting of the joint committee on these issues before Christmas.

In my view the parties represented on a JLC are best placed to address the impact of the economic crisis on employment levels and the viability of services in their sectors. They are the ones who must discuss and reflect on the new realities in the context of the downturn in the economy.

At national level the social partners co-operated in recent years in developing a range of improvements designed to modernise the JLC system as envisaged under previous social partnership agreements. These reforms have facilitated the amalgamation and abolition by agreement of a number of JLCs, the strengthening of their operational arrangements through the standardisation of the content of EROs and have facilitated a closer alignment of the variation of EROs with the cycle of adjustments of the national minimum wage.

I am pleased to say that the representatives who comprise the membership of particular JLCs have also demonstrated this shared capacity for co-operation. This is reflected in the agreements reached on the adjustment of the Sunday premium rate from double time to time plus one third that have already taken effect in hotels and catering establishments over recent months. That same realism has informed the successful efforts made by both sides within the agriculture and retail sectors to reach agreement on the deferral of increases in minimum rates that otherwise would have fallen due.

The recent adjustments to the minimum pay and conditions in these key sectors were all jointly agreed between the employers' and workers' representatives within the respective joint labour committees. In each instance, a consensus position supporting modifications to the statutory pay and conditions was reflected in the proposals presented by the committee to the Labour Court. The submission of these proposals followed a process of open consultation in which any member of the public could make representations to the joint labour committees concerning their published proposals. While the Labour Court considers these proposals and may refer them back to the committee for further consideration, it has no power to impose provisions that are at variance with those submitted to it by a joint labour committee. The significant variations in existing rates that were recently secured by agreement between the employers' and workers' representatives on the catering and retail joint labour committees were all arrived at by consensus and without any need to rely on the exercise of a casting vote by the independent chairman appointed to facilitate the work of these committees.

It is exactly 100 years since bodies empowered to set minimum wages were first established in Britain and Ireland under the Trade Boards Act 1909. As part of the major reform of the Irish industrial relations pioneered by the late Seán Lemass in 1946, these bodies were given the new title of joint labour committees and their competence was expanded beyond the fixing of minimum wages only so as to cover the regulation of conditions of employment as well. Seán Lemass decided to amend the powers of the original trade boards and to transfer the supervisory and order making functions that had been exercised by the then Minister for Industry and Commerce in the years after the foundation of the State to the new, independent Labour Court. Under the provisions of the 1946 Act, when a JLC agrees terms and conditions, it makes proposals to the Labour Court on foot of which the court can make employment regulation orders, ERO.

I am proposing a change that will restore the position whereby the Minister makes the order giving effect to these proposals. At the same time, I am proposing to strengthen the manner in which the functions delegated to JLCs are supervised by the Labour Court and to ensure that the statute sets out a clear set of procedures and principles within which the delegated functions are to be discharged. I am also proposing that the standard legislative provision dealing with the laying of statutory instruments before the Oireachtas will apply henceforth to these orders.

The Irish system of registered employment agreements has been in force since 1946 and reflects the European tradition of labour law support for autonomous collective bargaining. In most other EU countries similar provisions apply in employment law facilitating the general enforceability of certain collective agreements, either through legislation or other administrative measures.

Collective agreements can be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it registers that agreement. The effect of this is to make the provisions of the agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not a party to the agreement.

In line with the arrangements I have already mentioned in the case of employment regulations orders, I am proposing an amendment that will ensure that henceforth such orders confirming the terms of a new or varied agreement will be made by the Minister rather than simply under the authority of the Labour Court.

The Bill also provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990. Access to the dispute settling agencies — Labour Relations Commission, Labour Court and Rights Commissioner Service — is governed by the definition of "worker" in section 23. At present, vocational education committee, VEC, officers do not have access to these agencies, as they are specifically excluded from the definition of "worker". Up to now these officers have been served by a scheme of conciliation and arbitration, but now they wish to be able to access the dispute settling agencies available to workers generally. This amendment would allow officers of vocational education committees, VECs, other than teachers access to the dispute settling agencies. Teachers in VECs would continue to be served by a scheme of conciliation and arbitration. I intend also to follow the evolving best practice in parliamentary procedure with regard to the use of delegated powers by deleting the provision that had enabled the Government to amend the definition of worker simply by order. This will ensure future changes in the definition of worker will be made only by means of primary legislation. To avoid any doubt in this regard, a ministerial order of 1998, giving local authority staff access to the dispute settling agencies, is also being confirmed by a proposed amendment of the statute.

During the debate in the Seanad, the Bill received a general welcome and most contributions emphasised the need to maintain protection for the most vulnerable workers and to ensure that the existing mechanisms for making sure employment regulation orders, EROs, and registered employment agreements, REAs, are operating effectively and are generally fit for purpose. It was acknowledged that the Bill is part of a suite of measures intended to strengthen and uphold the protection of the rights of employees and to secure greatly increased public confidence in the system of compliance. The proposed arrangements for Oireachtas scrutiny of both EROs and REAs were also generally welcomed.

The Government's intention to introduce an inability to pay provision that could be adapted to the specific context of EROs and REAs respectively was also welcomed by most contributors to the debate in the Seanad as a means of introducing some flexibility into the existing mechanisms, while also helping to shore up such mechanisms against the risk of legal challenge.

Deputies may recall that I had originally outlined my intentions in this regard when I addressed the McGill Summer School last year, at the time of publication of the Bill. Subsequently, the issue has been pursued through direct discussions and in subsequent exchanges with the main employer and trade union organisations. It was also aired in general terms during the debate in the Seanad.

Inability to pay mechanisms, or "hardship clauses" as they are known in the context of sectoral collective agreements on the European continent, are not new developments. When I spoke on this topic last year, I suggested that it might be timely to consider bringing the joint labour committee and registered employment agreements systems into line with the procedures already established under the National Minimum Wage Act 2000. These procedures allow individual employers to submit inability to pay claims to the Labour Court for adjudication. Similarly, successive national pay agreements have included inability to pay clauses, enabling firms experiencing difficult economic conditions to plead inability to pay the centrally agreed terms and to seek to have a dispute over the matter resolved through formal procedures.

I wish to provide this same flexibility and responsiveness within our sectoral-level wage setting mechanisms and to ensure that the necessary procedures and safeguards are in place to protect the rights of the workers affected. The use of inability to pay or hardship clauses is already a feature of sectoral collective agreements within several continental European countries. As in the case of the evolution of the provisions under national agreements in Ireland, inability to pay clauses in these continental collective agreements may be triggered only by a real and measurable crisis of the firm and they include procedures for a third party adjudication on the firm's financial situation. It makes no sense to dismiss such inability to pay mechanisms as symptomatic of a retrograde race to the bottom. On the contrary, they are a response to the situation of employers in temporary difficulty and incorporate built-in safeguards to ensure the interests of employees are sufficiently protected. I intend to have the proposed measure ready for consideration by the House when we take the Bill on Committee Stage and I look forward to the input of the House on this measure this evening and tomorrow.

I outline to the House the general provisions. Section 1 provides for the Short Title, citation, construction and commencement provisions of the Bill. Section 2 provides for the definitions associated with the Bill. Section 3 provides for a new definition of a registered employment agreement to differentiate those made before the commencement of this legislation, that is, registered by the Labour Court and those made afterwards, that is, those registered agreements that have been confirmed by ministerial order.

Section 4 provides for the confirmation by order of a registered employment agreement by the Minister. Following receipt of a copy of an agreement, the Minister shall make an order confirming the terms of the agreement. The standard legislative provision dealing with the laying of the order before the Oireachtas by the Minister will apply. Section 4 also provides that the introduction of the new procedure will not detract from the validity of an existing REA made before the commencement of the Act.

Sections 5 and 6 provide for the same procedure as under section 4 in respect of an order to vary an agreement or to cancel an agreement respectively. Section 7 provides for a new definition of an employment regulation order to differentiate those made before the commencement of the legislation. Section 8 provides for the principles and policies to which a joint labour committee, JLC, must have regard when formulating proposals to submit to the Labour Court for employment regulation orders. In this context, a JLC must have regard to the legitimate interests of the workers, the legitimate interests of the employers, the prevailing economic circumstances, the prevailing employment circumstances of the workers, the prevailing commercial circumstances of the employers and the terms of any national agreement relating to pay and conditions for the time being in force.

Section 8 also provides that where an employment regulation order has been in force for less than six months, a joint labour committee may submit proposals for revoking or amending the order where it is satisfied that the order contains an error, or where exceptional circumstances exist that warrant the revocation or amendment. Section 9 provides for the making of an ERO by the Minister. Following adoption of a proposal for an ERO by the Labour Court, the proposals will be forwarded to the Minister who shall make an order giving effect to the proposals. The standard legislative provision dealing with the laying of the order before the Oireachtas by the Minister will apply. Section 9 also provides that the introduction of the new procedure will not detract from the validity of an existing ERO made before the commencement of the legislation.

Section 10 provides for the amendment of the definition of a worker under section 23 of the Industrial Relations Act 1990 to allow officers of VECs, other than teachers, access to the dispute settling agencies. Section 10 also provides for the deletion of sections 23(2), 23(5) and 23(6) of the 1990 Act. Section 23(5) provides that the Government may by order amend the definition of a worker in section 23(1) and may by order revoke or amend any such order. Section 23(6) deals with the laying of such orders before the Houses of the Oireachtas. The effect of these amendments is to remove the power to make changes in the definition of worker by ministerial order and to ensure, in line with the decision in the case of Mulcreevy v. the Minister for the Environment, Heritage and Local Government, that future changes in the definition of a worker will be made by primary legislation. The Industrial Relations Act of 1990 (Definition of “Worker”) Order of 1998, S.I. No. 264 of 1998, amended the definition of a worker in section 23(1) of the Industrial Relations Act 1990 to give officers of local authorities, including health boards, access to the Labour Relations Commission, the Labour Court and Rights Commissioners. Since it is considered unsafe to rely on changes made to statute by secondary legislation, it is now proposed to make the amendment in primary legislation. The definition of a local authority contained in section 23(2) of the 1990 Act should be deleted as a consequence.

Section 11 provides for improved procedures to be followed when formulating proposals for an ERO. The current legislation merely requires that, when proposals for the making of an ERO are being forwarded to the Labour Court, the JLC chairman must submit a report to the court on the circumstances surrounding their adoption by the JLC. The Bill provides that, in future, the chairman of the JLC shall forward to the Labour Court copies of all written submissions and any other documentation considered by the JLC in formulating its proposals, in addition to a report on the circumstances surrounding their adoption. The Labour Court will examine the material forwarded to it in considering the JLC's proposals and may hold a hearing where there are objections to the proposals.

Section 12 provides that the term of office of a chairman of a JLC shall not exceed five years and shall cease to hold office on attaining the age of 65 years. An existing JLC chairman shall hold office for no longer than three years following the enactment of the legislation. Section 13 provides for consequential amendments to the Employment Permits Act 2006 and the Organisation of Working Time Act 1997.

I wish to highlight several matters in respect of which I intend to bring forward particular amendments on Committee Stage. In addition to proceeding with legislative proposals to strengthen the existing JLC system and the operation of REAs as outlined in the Bill, I propose to introduce amendments to provide for a mechanism to enable employers to seek a temporary exemption from the strict application of EROs and REAs under certain conditions. This should go some way towards balancing the current demands of both trade unions and employers by continuing to modernise and streamline the JLC system and to strengthen the legal status of REAs, while also alleviating the pressures that employers in these sectors currently experience under both systems as a consequence of the absence of a mechanism for processing claims for "inability to pay". In the course of the debate in the Seanad, I gave an assurance that the proposed provision would not be a carte blanche for derogation from the minimum wages and conditions prescribed in employment regulation orders. The appropriate safeguards and procedures will be put in place to protect the rights of the workers affected.

Second, I propose to introduce a further amendment to give the Labour Court the power to decide any questions arising as to the interpretation of the provisions of an employment regulation order or registered employment agreement or the application of such instruments to any particular person or business. This new provision will subsume some existing provisions of the Industrial Relations Acts, with coverage extended to enable the Labour Court to provide for the first time an authoritative interpretation of the scope of employment regulation orders. The purpose of this provision will be to secure clarity as to the entitlements of the employees concerned under employment regulation orders and registered employment agreements. Such orders and agreements affect significant numbers of employees and a lack of clarity about the entitlements of employees and the responsibility of their employers can pose problems for businesses, employee representatives and the authorities. The Labour Court has the necessary expertise to provide the required clarity.

Third, concerns have been raised that workers who have retired from employment can find themselves excluded from access to the employment rights redress machinery in respect of matters that arose while they were in employment. When this matter was raised on Committee Stage in the Seanad, I indicated that I was sympathetic to the view that the requirements of good employment practice would dictate that retired people should have a facility whereby grievances arising from their former employment relationship might be examined on their merits. I have, accordingly, raised this matter with the Attorney General and I am exploring how such a proposal might best be facilitated. In my view it is only reasonable that there should be some practical limitation on the scope for bringing claims relating to past events or understandings in the form of a time limit on the bringing of such claims. I am hopeful that we can find a satisfactory solution to this problem in the course of the Bill's passage through the Dáil, and I look forward to the input of Deputies on the issue.

The overall purpose of this Bill, together with the Employment Law Compliance Bill, which has completed Second Stage in the Dáil and is awaiting further consideration on Committee Stage, is to secure greatly increased public confidence in the system of compliance and to strengthen and uphold the established employment rights bodies against legal challenge. With this Bill, the Government is continuing to meet its commitment to advance a range of employment rights measures and to update our industrial relations legislative code to ensure the responsiveness of our industrial relations machinery to changes in the labour market, and to the immediate challenges facing the economy.

I thank Members for their patience with the industrial relations alphabet that governs Bills such as this. I commend the Bill to the House.

Acting Chairman (Deputy Charlie O’Connor)

Deputy Varadkar has 30 minutes.

Deputy Leo Varadkar

I am not sure if that is enough time but I will do my best. I have a great deal to say about this Bill. Perhaps the Chair will advise me when I reach 29 minutes.

The Bill deals principally with the procedures used to enact employment regulation orders, EROs, and registered employment agreements, REAs, into law and make them legally binding. There are some miscellaneous provisions in the Bill which give HSE workers, local authority staff and non-teaching staff of VECs access to the rights commissioner, Labour Relations Commission, LRC, and the Labour Court. I have no objection to that aspect of the Bill and do not propose to comment on it in detail. I welcome the fact that the Minister has given an indication that he might accept the amendment proposed by Senator Ryan in the Seanad relating to retired and former workers. I would support that amendment and hope the advice from the Attorney General is favourable in that regard.

Providing for HSE workers, local authority staff and non-teaching VEC staff to have access to rights commissioners shows how disjointed and disorganised our entire labour rights system is. It is an alphabet jungle. I do not understand why some workers can go to a rights commissioner and others cannot. If one was setting up this system from scratch, one would have just one body to enforce labour law, although it might be necessary to have separate entities for the equality aspects. That same body would deal with workers' complaints. Above that one would establish some type of quasi-judicial system which would hear appeals. This Bill does not change the fact that some people can access the rights commissioner service and others cannot. Teaching staff in VECs still cannot access that service. One might say that the unions do not want them to, but that does not matter. Why should there be different laws for the same people?

In our system we have the office of the Minister of State with responsibility for labour in the Department of Enterprise, Trade and Employment and the National Employment Rights Authority which enforces the EROs, REAs and the minimum wage. We have the rights commissioner service, which is part of the Labour Relations Commission and which hears complaints relating to fixed term issues, working time issues, unfair dismissal, minimum wage, payment of wages and transfer of undertakings. We then have the LRC, which has a slightly different job, and the Labour Court, which has a different job again. Its job is sometimes judicial and sometimes not. Sometimes it gives determinations and at other times it gives advisories. It also runs the JLC system. On top of that there is the National Implementation Body, which has various roles, and an Employment Appeals Tribunal, which has another set of roles. One can take unfair dismissal and redundancy cases to the tribunal, if one has not taken them to one of the other bodies already.

The entire system needs to be cleaned up, and I know the Minister long enough to believe that he probably agrees with me. I hope that as Minister of State with responsibility for labour he will clean up that alphabet jungle. I will not even mention the Equality Tribunal. The system is confusing for workers and exposes employers, often unfairly, to multiple claims. Deputy Fahey has drawn attention to the extent of claim shopping by people. The entire area requires a total overhaul and the miscellaneous amendments in this Bill demonstrate that. The Bill might be extending the rights commissioner service to some workers but it is still barred to others. There are some recommendations on this issue in the McCarthy report but I do not agree with them. However, the issue must be addressed and this Bill is a lost opportunity to do so. I will come back to this on another occasion.

I will now focus on issues relating to employment regulation orders and registered employment agreements. It is interesting that the constitutionality of the current system was first questioned by Mr. Justice Henchy in 1979, the year I was born. I believe the Minister is only a little older than me. This issue has been floating around for a long time; it has taken 30 years to bring this legislation to the Oireachtas. Of course, it follows a case taken by the Irish Hotels Federation and an ongoing case in the courts involving the Quick Service Food Alliance. It should not be a surprise to anybody that what has been happening for the last 30, or even 50, years with employment regulation orders and registered employment agreements has been unconstitutional and therefore unlawful, although I do not know why it has taken so long to introduce legislation to clear up the matter. However, this Bill does not do that. Unfortunately, it is a reaction to the cases now before the courts. It is also minimalist, and a lost opportunity to overhaul the system.

The JLC, ERO and REA system needs to be totally overhauled. It is laden with anomalies, inconsistencies and absurdities. Take the example of the hotel employment regulation order. I am aware that the two JLCs have been merged. That aside, the employment regulation order for the hotel sector applies to County Dublin but not to Dublin city, for example, it applies to a hotel in Fingal in my constituency or to a hotel in the airport but it does not apply to a hotel in Tallaght. The Acting Chairman will note that I have mentioned Tallaght in this debate. It does not apply to a hotel in town, a hotel in Killiney and a hotel in Dundrum, if it is in the old borough of Dún Laoghaire. This order does not apply to Dublin city, the old borough of Dún Laoghaire or the city of Cork but it does apply to County Cork, County Kerry and County Dublin. That is ridiculous, and it should be addressed in the Bill.

If one examines contract cleaning for example, the order applies differently in Dublin city than in Dublin county. In fact, Dublin county does not exist any more, in legal terms, except for the purposes of the Labour Court and the VEC. That does not make any sense either because I live in Dublin and know that contract cleaners go to different parts of the greater Dublin area all the time. It is absurd that a different set of employment regulation orders applies to cleaners when they are in Blanchardstown as opposed to Chapelizod, which is in the city but is only three miles away. I am not sure if it applies to where they do the work or where their workplace is based. It is a very bizarre system.

If one looks at catering, there is something similar. There is one set of catering rules for Dublin city and Dún Laoghaire; for the rest of the county, including Fingal and south Dublin there is a different set. For hairdressing, there is one set of rules for Cork city. There is also a different set for Dublin, Dún Laoghaire and Bray, but in the rest of the country there is no hairdressing employment regulation order at all. For example, one set of rules applies in Bray, which are the same as apply in Killiney, but they do not apply in Arklow. I do not understand that; it is absurd. If it took the Government 30 years to write this Bill, it could have done a better job and included some measures to deal with those issues.

If the Minister of State does not know what hairdressing is, in this Schedule "hairdressing" includes the following operations performed on hair growing on the head, face or neck of a male or female person, that is to say, lathering, shaving, cutting, singeing, shampooing, waving, setting, dressing, tinting, dyeing, bleaching or similar operations — I am not sure what similar operations are.

Acting Chairman

I am glad I was here for that.

Deputy Leo Varadkar

When it comes to hairdressing it is even more complicated because the minimum rate which a hairdresser gets is €0.06 an hour more if he or she is cutting a woman's hair than if he or she is cutting a man's hair, but if he or she cuts unisex hair he or she is paid the male rate. I do not know what unisex hair is or whether there has to be a particular balance in terms of how many men or women one sees in a salon or barbershop, but that is the law. The Minister of States wants such a law to be made by this House. Whatever about the Labour Court making stupid laws, I hope this House does not make a law like that.

As I said, it only applies in some parts of the country and not in others. It gets even stranger. There is also the retail and grocery employment regulation order which applies to the retail, grocery and allied trades. What is retail? It does not include a lamp shop or a clothes shop. It only includes shops where food is sold, but not all types of food. If the only food one sells is bread or confectionery made only from bread, then the order does not apply. If one sells beef it does not count. If one is a beef butcher, one is not covered by the regulation, unless one sells pressed beef. If one does not sell beef but sells pork, fish and venison it does not apply. After 30 years the Government might have come up with a Bill which might address something like that. It applies to tobacconists, cigar, cigarette and cigarillo sellers, snuff sellers and sellers of smokers' requisites, but not to independent off-licences.

Needless to say, there are some strange regional variations and some very strange rules as to where it does apply. In the case of Butlers Cafe it did not apply when it was selling chocolate because apparently that is not food, but when it had chairs to allow people to attend the cafe it then became a cafe and fell under the catering order. It does not apply to pubs which do not sell food but it does apply to pubs which do sell food, unless it is a sandwich which one eats at the bar, in which case it does not apply.

There are similar issues regarding petrol stations. If it starts serving food and allows people to sit down it becomes a catering establishment, and that also applies to people who only sell petrol. There are other examples. There are different rates for tailors and dressmakers compared to shirtmakers. I will not talk about the butcher, the baker and the candlestick maker because the butcher and baker do not come under this system unless they sell beef — I do not know where the candlestick maker falls but I do not think he or she is involved.

The system does not deal just with minimum pay rates. There has been a focus on pay rates in this matter, which is not the issue at all. By and large the minimum rates are not much above the existing minimum wage with, perhaps, the exception of the security industry. They apply to various areas involving terms and conditions, which is where things get quite complicated. It is not clear to me — the Minister of State might explain this at some point — if the ability to pay clause will apply to the minimum rates or if it will also apply to premium pay, overtime and the fact one can only work every second Sunday after St. Swithin's Day and before Christmas Day. Those aspects of the EROs and REAs are what really cause the problems, with the exception of some employers who do not want to pay their workers anything at all — I have no sympathy with them. I am interested in knowing whether the inability to pay clause or the hardship clause, as the Minister of State is now calling it, will apply to that.

It also applies to other issues such as representation. Some EROs give workers the right to be represented by their union, as they should be allowed to do, and is the case for that covering agricultural workers. Others do not say anything about representation. The case of electricians is the most bizarre. I appreciate it is an REA and not an ERO, but the REA for electricians requires that they must be members of the TEU and that the employer must collect their dues. It is one thing to prevent people from being a member of a union but it is another to say they cannot work unless they are a member. That issue needs to be addressed in this Bill.

Some EROs and REAs give people the right to compassionate pay, others do not. Some allow sick pay, others do not. In the case of sick pay in the retail sector, one has to give notice of an hour and a half, but in hairdressing one has to give notice before noon. Some deal with breaks, others do not. Some ensure that workers have pensions, others do not. Some deal with the issue of premium pay. For example, the retail sector gives anything between time and a third and time and a half but hotels give only time and a third.

Others deal with working times. For example, the hotel regulations prevent anyone from working more than 12 hours in one day even though he or she may wish to. Many of us have done it. It might suit one to work a 14 hour day one day and nothing the next day, but that is illegal. This Bill does not change that. It also requires that hotel workers get every second Sunday off during the off season. It might suit somebody to be a hotel worker who only works Sundays and does so during the off season, yet we are saying that should be a crime in this State. I do not see why we would ever want to enforce a system like that. Others deal with annual leave and facilities. For example, the security ERO requires that the employer provide access to a canteen, stove or the means of heating food, which is a very good thing but I am not sure if employers who do not provide it should be prosecuted. However, they should be under the existing law.

After 30 years of court cases and a period of time in which the Government could have addressed this issue we should not be discussing a minimalist Bill which will just about get the Government around some court cases which are currently taking place. There should be a total overhaul of the ERO and REA system. If it did not happen 30 years ago it should at least have happened in 1997 when the National Minimum Wage Act was passed. Let us not have people in five years time saying a Bill went through the Dáil five years ago and it did not deal with it. Why do we not deal with this Bill now?

If I had been asked a question on EROs and REAs two years ago I would have had a different opinion. I probably would have said JLCs should be abolished, there should be no system and we should just have a national minimum wage and various other protections, and leave it at that. I no longer take that view because, with the exception of REAs which, by and large, cover very well-paid workers, the EROs cover workers who are generally poor, uneducated and unorganised, and many of whom are foreign nationals. There is a necessity to have a supplementary means of protection for such workers to ensure they are not exploited, as they would be if we reduced them to the bare minimum rights allowable by law.

The system does not work and needs to be radically overhauled. First of all, it should be genuinely representative. With all due respect to the officials who sit on JLCs, they are officials, and very often they are union officials who represent workers who are not unionised and who were not elected by them. There are officials from the employer organisations who have never run a hotel or restaurant in their lives but who are just officials. JLCs should be properly representative.

The chairman should not have voting rights. I appreciate the Minister of State's statement that he has made the point that on many occasions in recent times the chairman's casting vote was not used, but there is a dynamic in all of this. This is not my view, rather, it is that of the people who have researched this area, namely, O'Sullivan et al. There is a perception that many of the chairmen tend to favour one side rather than the other and that, of course, changes behaviour because people will not push their case if they think the chairman will come down against them. If one had an independent chairman who was a conciliator, rather than a judge, one would have genuine agreements rather than ones that are imposed, sometimes because one side fears the potential bias of a chairman.

We should require that the chairman be professional and qualified. That is not provided for in the legislation. Essentially it is an appointment that is in the Minister's gift. That should not be the case. There should be criteria requiring that they have some qualifications, possibly a former rights commissioner, but that is not in the legislation. They should have a national application. As I mentioned earlier I do not understand why they apply to some parts of the country and not to others, sometimes to parts of counties and not to others. I think they should be limited in their remit. In some cases they cover areas that should not be legally enforced. It may be well to say that things should be done by agreement but making it legally mandatory that somebody has certain things in their toolbox should not be the law.

This legislation should be amended to define more tightly the areas to which an ERO or an REA may or may not apply. All of this should form part of an overall modernisation of our labour law. We should have a consolidated employment law Bill which would be much easier to compile than the consolidated company law Bill. The Minister of State can take as long as he wishes to do that so far as I am concerned. The employment law Bill could be done quite quickly. That consolidated Bill should enhance the existing body of rights that are currently applied to all employees. For example, everyone should have sick pay; everyone should have access to a pension; everyone should have some form of break system. Arguably, everyone should receive some form of premium pay on Sundays. New legislation should be introduced to provide those rights that are currently enjoyed by some people, covered by EROs but not others, to everyone. We need to consolidate all those different structures to which I have referred, the alphabet of agencies rather than the alphabet of orders and agreements as there are too many of them. It is not in anyone's interest, other than the people who are on them, to have so many. There should be major consolidation in that area. The Minister of State is probably looking at the UK model as an example of how to do it more efficiently. Above all, we need to fit this into a new social contract, one that says to everyone in society that they will have access to health insurance and to a defined benefit pension. That is the kind of reform, if one goes back to 1946, that after 64 years, we should be introducing today.

In regard to the inability to pay clause, I support it but I have concerns about it. As I mentioned, it is not clear whether it will apply just to rates or to all those other aspects such as premium pay, overtime, how many Sundays one can work in a row, whether one has to be a member of a union whether one wishes or not. I would like to know if the inability to pay clause or the hardship clause will apply to those issues as well as to the minimum rates. I am concerned that the Labour Court will find itself inundated by cafes, restaurants, hotels who will come to it with their books stating they are making a loss and cannot afford to pay. That would put the Labour Court in a position where it would have to grant them a hardship clause which will then create an unfair competitive disadvantage for those who are just getting by or turning a small profit. In many ways that has the potential to undermine the whole system. Perhaps it is the intention of the Government that this vision is a Trojan horse through which it will bring down the whole system but it will do it by stealth. If that is the Government's intention why not withdraw this Bill, start again and address not just this one issue that is before the House because of what is going on in the courts but all the issues I have mentioned in my contribution and overhaul these industrial relations Acts? I think we have some time at least to do that.

Deputy Willie Penrose

I am glad to have the opportunity on behalf of the Labour Party to contribute to the debate on the Industrial Relations (Amendment) Bill 2009. While we broadly welcome the thrust of some of the legislation we have grave concerns, some of which I will articulate on behalf of our party. What one would expect is that we would examine this legislation very carefully. We must have support on a number of issues regarding the imposition of a constitutional floor. In asserting the primacy of the Oireachtas there is too much delegation of powers taking place. Such power is being hived off to everyone except the Oireachtas. Deputy Varadkar is correct in saying that in 1979 Mr. Justice Henchy referred to this in a court case. It is mind boggling that it has taken in excess of 30 years for this to take place.

The Bill makes provision for the promotion of a harmonious environment from the industrial relations viewpoint that prevails between workers and their employees and amends and extends the Industrial Relations Acts 1946 to 2004 and makes amendments to the Employment Permits Act 2006 and the Organisation of Working Time Act 1997. As the Minister and Deputy Varadkar have said the Bill is one of a number of such legislative proposals that has its origin in the context of the Towards 2016 review and the transitional arrangements covered in the period 2008-9 which come into being as a result of arrangements between the Government and the social partners which dealt with issues pertaining to employment rights and compliance chapters of their agreements. The Bill also focuses on the need to strengthen the arrangement for the making of the employment regulation orders and the registered employment agreements that has been a familiar part of the industrial landscape for more than six decades.

In recent times a number of cases taken at High Court level have sought to challenge the constitutional standing of the legislative provisions which underpin the legal framework for the making of EROs and REAs. It is incumbent on us to avail of this opportunity to update and modernise the procedures, principles and policies which joint labour committees must have regard to in formulating these legislative tools and which are extremely important for sectors where wages were clearly low. I am glad to hear Deputy Varadkar say this. I salute him even though, two years ago, he started off with the opposite view; such an admission is a sign of a good politician. My own view has not changed. As a member of a party which can stretch its lineage back to 1913, we should never cede, without a fight, some of those rights which were hard won on the backs of those great workers in 1913. I salute the then Taoiseach, Seán Lemass, for the work he did in 1966. One can applaud what he did. There is the issue of dismantling the low paid wage structure, whether the minimum wage of €8.65 or the JLCs, the EROs or whatever, the people who are already poorly paid by definition. This was put in place to insure against expectation, to put in place a floor for people who worked hard by the sweat of their brow, often in labour intensive areas. One has to be vigilant. Putting in place the inability to pay clause, the exemption clause or whatever, could be the start of a slippery slope, against which I caution. Indeed, the party of which I am a member wants to caution the Government against embarking on this area.

I note the recent Government discussions in respect of the work to rule being embarked on by the workers who feel strongly about the recent impositions in respect of pension levies, wages cuts and so, particularly in the public service. I caution the Government not to engage in infantile responses and not to threaten the stoppage of union contributions at source. We do not want a reversal to 1913 tactics. The sweat of the labourer won hard battles. Union contributions are important. Trade unions have been subject to much adverse criticism recently. Is the Minister of State trying to tell me that had they not been in place over the past 15 or 20 years there would not have been widespread and untramelled exploitation? Is the Minister of State trying to tell me the unions did not make a very positive contribution to the growth and recovery of this economy since the mid-1980s? Let nobody tell me they did not. It is easy to lie at this point but we will not join that chorus.

What I am worried about — Deputy Varadkar referred to it in a very important way — is that if we tackle the minimum pay issue, the JLCs and the EROs it is clear this will have implication for social welfare payment. People talk about poverty traps and every other kind of situation. That is the point. People are struggling to survive and to make ends meet on their low pay and the present social welfare rates. Are we to depress that floor further and leave those people virtually impoverished? Neither I nor my Labour Party colleagues will join the chorus or be part of the drive to lower wages to close to unsustainable levels.

I watched with interest the "Frontline" programme on which people outlined their views very clearly. Some articulated the view that the minimum wage had to be driven down. If, for example, the wages of a person aged 65, and close to the exit door, is driven down it would save 65 cents per hour, or €5.20 per day. I know what goes on in business. It is difficult and I appreciate the context. Competitiveness is difficult. However, if things are that close we will start a vicious cycle because that money is paid out by people who hope to get a return from it. According to the circular theory of money, it will return to their tills. If that is taken away we will have further deflation.

I appreciate there must be some flexibility. As Deputy Varadkar said, perhaps people might agree to work on Sundays, or if there is an obstacle to that taking place, it might be removed. I would be extremely concerned, as would my party, to join in this mad rush to try to dismantle the wage structure, particularly at minimum wage level and at the JLC or ERO levels.

The system of employment regulation orders and registered employment agreements has been in force since 1946 and most EU countries have this type of system. It is peculiar that in Britain the TUC is currently working with the Labour Party to have a similar system put in place. The purpose of bringing in the legislation is to secure the operation of a system from attack, not to undermine it. That is a very strong view as held by the Labour Party. We must not undermine the system, we must protect it. The relevance of these agreements is even more pronounced in today's financial crisis. Their terms and conditions are automatically applicable to, and can be enforced against, contractors and service providers based outside the State but operating here. As such these instruments ensure against unfair cross-Border competition, to which Deputy Varadkar alluded. Without these agreements, what we will have is a free for all in which decent employers will be undermined. That, of course, is what less than compliant employers would try to achieve. The Minister of State, Deputy Calleary, is a person in whom I have a great deal of faith and he would understand that well.

Engaging in a wage competition, particularly a cross-Border one, would be devastating. On the surface it might sound like a good strategy for an individual employer to seek competitive advantage by cutting workers' wages but soon every employer would join in, all workers would have lower wages and be unable to afford to buy anything. It is a zero sum game. That is clear. With a handful of honourable exceptions, if that were to start it would become a cascade and every employer would have to join. If we learned nothing else in the recent crisis we learned that the market will always act for short-term gain at the expense of long-term sustainability. My party wants to make that point very strongly.

I shall refer to exemptions and the inability to pay clause and wish to refer to features of the Bill. The Bill focuses on the need to strengthen the arrangement for making EROs and the registered employment agreements, REAs. That is very important. One notes that the Bill provides that the EROs and REAs will be given legal effect in future by way of ministerial order. These instruments will be now subject to Oireachtas scrutiny. In my view, they should be subject to input and amendment as proposed on the floor of the Dáil, giving the House an effective form of oversight. Input is vital to widen the democratic underpinning of the process.

It is worth noting that the JLCs are made up of representative employers and workers from particular sectors, with a chairperson appointed by the Minister. There are 13 JLCs which meet and are required to discuss and agree the rates and conditions of employment to apply to workers in the different sectors. They predated the concept of collective bargaining by some decades and therefore play an important role in putting in place a wages floor in certain sectors of the economy where wages tend to be lower than in others. As the Minister of State pointed out, these are generally in the hospitality and retail sectors, contract cleaning and hairdressing. I was enthused to learn from Deputy Varadkar the various strands in hairdressing. I have a sister in law who is a hairdresser so it will be her weekend task to explain some of these points to me.

As the Minister of State noted, there have been complaints by some firms operating certain EROs. They signified they are experiencing difficulties in particular sectors. One would hope the representative employers and employees who are participants on a JLC will take cognisance of any issues troubling that particular sector, especially at this time; that they will address and reflect upon these issues and the importance of employment maintaining reasonable wage rates which reflect the reality of the current economic environment. That is the kind of consensus arrangement I would like to see. I believe it has been achieved.

There has been useful and very positive engagement of late in this regard, especially last autumn with the agreement reached at JLC level that dealt with the hotel and catering areas. It specifically adjusted the premium rate payable from double the rate to one and one-third the rate. That was very important in the area in question. I know the Minister of State took this on board. He heard about it when he was a member of the Joint Committee on Enterprise, Trade and Employment and I was glad he consulted the Minister of State, Deputy Kelleher. This pragmatism and reflection of the new realities was likewise reflected in the agricultural and retail sectors late last year — in November and December — which facilitated the deferral of increases in minimum rates that would have been due in each of the sectors. This proves there is no need to put in place a statutory exemption or inability to pay process. The system is in place, is and has been extremely responsive and has shown itself to be so. All it needs to work is for people to point out they are not able to pay and then work within the system. Trade unions are well aware of this and have stated to the joint committee that they are very cognisant of the significant downturn and the difficulties presented. They want to play a positive role in sustaining and retaining employment.

Regarding the JLCs established in 1946, I want to pay tribute to the then Minister, Seán Lemass, subsequently Taoiseach, who ensured their competence expanded beyond the fixing of minimum rate levels to allow them also to deal with the regulation of conditions of employment. Likewise in 1946 the Labour Court assumed functions previously exercised by the Minister for Industry and Commerce. Therefore, when a JLC reached agreement on terms and conditions relevant to a particular sector it made proposals to the Labour Court which then made employment regulations orders.

Mr. Justice Henchy referred to this in 1979, alluding to the position of the 1946 Act. He basically established that this was constitutionally suspect, as it were. He was important in asserting the primacy of the Oireachtas and I salute that. It is very important that the Oireachtas is the decision-making body in respect of legislation, both primary and secondary. The position that existed patently was legally suspect as evidenced when one examines the constitutional jurisprudence of similar delegations when they were challenged. One notes that the Minister for Enterprise, Trade and Employment is reassuming the power whereby he or she will make the relevant order on foot of the agreed proposals received from the JLCs through the Labour Court. Under the legislative proposals we are debating, the Labour Court will have a more focused and supervisory role in regard to the functions delegated to the JLCs.

The laying of a statutory instrument before the Houses of the Oireachtas is of paramount importance. I have argued at every opportunity the importance of a statutory instrument coming before the Oireachtas in order for Members to have the opportunity to debate it, as they should. I call for a debate to be held on every statutory instrument laid before the House, if only for 15 or 20 minutes. This could happen in committee. A statutory instrument might be laid before the Oireachtas and then formally transferred to a committee for debate. That is important because it will allow Members to have an input.

There is no point referring to European legislation, etc. We have brought forward domestic legislation and people have sometimes known less about it than they did about the original European directives which gave rise to its introduction. That is because they did not have the opportunity to participate and make positive suggestions with regard to improvements which might be made.

REAs have been in force since 1946. They are the outcome of a process of collective bargaining, which culminates in an agreement that can be presented to the Labour Court. If satisfied with the contents and thrust of the proposals made in an REA, the court will duly register them. This has the consequence of making an agreement legally enforceable in respect of the class, type or group of workers to which it applies. Of course, an REA applies to everyone in a particular sector, irrespective of whether a worker or employer is party to it. This gives rise to difficulties and may make these agreements subject to challenge in the future. As a result of the far-reaching consequences of these agreements, the Minister is again assuming authority to make or vary agreements rather than allowing the Labour Court to act.

Section 23 of the Industrial Relations Act 1990 contains a definition with regard to what constitutes a "worker". This is being amended in the Bill before the House, which allows workers other than teachers to have access to the Labour Relations Commission, the Labour Court and the rights commissioner. That widens the definition to which I refer and it is only, as Deputy Varadkar stated, achieving what should have been done in the past. Henceforth, it will only be possible to change the definition further by means of primary legislation. That is both important and correct. It will get rid of the anachronism which permitted amendments and definitional changes to be affected simply by order.

I recall that when I was a law student I was often bamboozled by the plethora of mechanisms that were available in respect of obtaining resolutions to disputes of various kinds and also by the archaic and arcane language that was used in legislation. It is time we consolidated or codified the law as it relates to employment. Such law is an absolute nightmare for a practitioner but for a student it is doubly so. It would be to the benefit of everyone — students, practitioners, employers and employees — if the law was consolidated.

The Minister of State proposes the introduction of the inability to pay mechanism in order to put in place a counterbalance to existing statutory wage fixing procedures. During one of his first public outings — I seem to recall it was on home territory at the MacGill summer school — the Minister of State made a foray into the realm of industrial relations and promised this amendment to take cognisance of the serious difficulties employers have indicated they are experiencing under REAs and EROs.

I accept that difficulties exist but it appears to be one-way traffic in this regard. I do not live in an ivory tower and I am aware that such difficulties — which were outlined to the committee of which I am Chairman — can arise. However, there does not appear to have been any trade union input into the legislation. During his contribution, the Minister of State undermined his own arguments when he illustrated vividly, clearly and concisely how consensus and agreement came about in respect of particular sectors and when he indicated that certain employers were not obliged to pay the required amounts laid down under the terms of EROs, in particular.

The inability to pay amendment provides that an employer can apply to the Labour Court for an exemption from the requirements of an ERO or REA in line with section 41 of the National Minimum Wage Act. As I understand it, trade unions have not been involved in any discussions in respect of this matter and they would not be happy with any proposal to agree the inability to pay exemption. The unions are concerned with regard to the proposal and believe it to be misguided in its conception. They note that allowing exemptions will encourage and reward unfair cost competition because companies will tender — even in respect of public procurement — on the basis of those exemptions. This will have the effect of increasing every company's inability to pay because if a company factors into its tender the full rate relating to an REA or ERO, it will be placed at a disadvantage when compared to a company which has an exemption. I refer in this regard to security, catering and cleaning companies in particular.

This is a matter of grave importance. I acknowledge that the Minister of State is trying to deal with a problem at one end of the scale. However — and I do not intend to be a smart aleck in saying this — in doing so he may create a major imbalance at the other end. Ultimately, this could lead to huge problems arising. While he is trying to save jobs at one end, he may create a cascade of unemployment at the other.

The safeguard that an employer will only be granted an exemption once can be avoided by recasting a company and thus easily disguising repeat applications for exemptions. This is a matter of concern, particularly in view of the position relating to contracting and subcontracting practices and the "phoenix" syndrome — which was discussed by members of the Joint Committee on Enterprise, Trade and Employment and Mr. Paul Appleby, the Director of Corporate Enforcement last week — that apply in respect of the construction sector.

The likely method to be proposed in respect of establishing an inability to pay will be that the Labour Court must be satisfied that an employer is unable to pay and would be likely to lay off workers or terminate their contracts. As a result, it will be much easier for contractors in poorer EU member states to establish an inability to pay and this could give rise to unfair and inappropriate cross-border competition. A great deal of consideration must be given to this aspect of the matter.

Any safeguards which might be put in place would be a sham and could be easily avoided. If the proposal is to provide that the majority of workers will be obliged to agree to the exemption, it will offer little protection in employments where there is no trade union representation. What will happen in such circumstances? It is easy to imagine the type of pressure that could be exerted on workers to agree to their employers being given exemptions. For example, in a firm with 20 employees, 12 may be in agreement with seeking an exemption while the other eight may not. What will happen then? The answer is that those who oppose the exemption would still be obliged to agree with its being sought or else they could become isolated.

The Minister may or may not include a limit on the amount below that contained in an ERO or REA which the Labour Court will exempt an employer from paying or providing. There are particular concerns with regard to how reductions or outright exemptions will interact with pension obligations and other entitlements set down in agreements. What will inform an inability to pay exemption application? What will such an application cover? Will it be premium rates, overtime rates or other rates?

It is worth making the point that REAs are collective agreements for the purposes of international law and, as such, are protected by International Labour Organisation, ILO, conventions. Governments must refrain from undercutting or undermining the activity of workers joining together to pursue the common goals of negotiating conditions and terms of employment. The ILO has found that interventions by the legislative and administrative authorities which have the effect of annulling or modifying the content of freely concluded collective agreement, including wage clauses, are contrary to the principles of voluntary collective bargaining. It would be better if the Government promoted collective bargaining — as it is required to do by the ILO — rather than undermining it.

As already stated, there has been negative commentary in respect of trade unions only looking after themselves, etc. However, I am of the view that they are correct to highlight the issues to which I refer. Under the agreements in question, all workers — even those who are afraid to join trade unions — benefit. That is why employers are sometimes so opposed to them.

There are many elements which must be taken into account in respect of this matter. I am aware, for example, of the principles that will come into play in respect of section 8 and of which JLCs will be obliged to have cognisance. I applaud the developments that are proposed in this regard because it is about time that transparency was introduced. It is good that these principles are being outlined in statutory form. Everyone's cards will be on the table in the future and this will make matters so much easier. I congratulate the Minister of State on what is being done in this regard.

I have a number of concerns in respect of the legislation. However, one of these has been laid to rest as a result of the judgment in the case of Mulcreevy v. the Minister for the Environment, Heritage and Local Government, which states that all future changes in the definition of “worker” will, as I previously pointed out, have to be made by means of primary legislation.

Section 11 sets out the improved procedures to be followed when formulating proposals for an ERO. Henceforth, the chairman of a JLC shall forward to the Labour Court, in addition to a report on the circumstances surrounding the adoption of such proposals, copies of all written submissions and all or any other documentation considered by that JLC in formulating its proposals. In the future, the Labour Court will be obliged to consider the material forwarded to it when it is considering JLC proposals and may hold hearings at which objections to such proposals may be raised. That is an important development.

Section 12 indicates that the term of office of the chairman shall be five years and that he or she shall be obliged to retire at 65. That is as it should be.

It should always be remembered that EROs and REAs are enshrined in domestic law and that our laws governing the application of the minimum wage are in accordance with the principles of the Lisbon treaty. These agreements are basic and fundamental employment standards under the relevant EU directive. They are therefore directly applicable to and are capable of being enforced against contractors outside the State. It is important that we do not now take a step that would undermine the basis of what has been achieved and which was very important in terms of what was set out in the Charter of Fundamental Rights in the Lisbon treaty.

Why is there a differentiation in the applicability of JLCs across the country in determining the appropriate redress in a particular sector so that the same rate in that sector would apply in Mayo, Westmeath and Cork as applies in Dublin? This is one of the great mysteries. Everything that adds complexity gives an opportunity for it to be undermined or attacked. The more we simplify matters such as this the more progress will be made and the more acceptable it will be. While I know the Minister of State has much work to do, I urge him to review the matter sometime. As Deputy Varadkar said, this might have been an opportunity to adopt a uniform mechanism across the country. Arguments have been made over the years that it costs more to live in a city. From my knowledge of people coming up from my area, I can understand where that comes from. It is a matter that needs to be reviewed.

I believe some 67 registered employment agreements, REAs, are maintained by the Labour Court. I would love to know how many of these have ever been examined or reviewed in the past five or six years. We know that the JLCs predated the introduction of the National Minimum Wage Act 2000. I would like to see a survey of the JLC rates that govern EROs and compare and contrast them with the current minimum wage of €8.65. That would be an interesting exercise. The vast majority of them are slightly above 60 cent and may be €1 at most.

I referred to Article 27 of the Charter of Fundamental Rights in the Lisbon treaty which enshrined the right to collective bargaining. I would be very wary and cautious about taking any steps that would undermine that provision.

Deputy Varadkar mentioned the separate JLCs in the catering sector, one for the greater Dublin area and one for elsewhere. I know they are to be merged. However, last Sunday in the course of a wide-ranging review the Taoiseach indicated that labour unit costs had reduced by 7%. I am sure I heard him rightly. That is the prediction and it is important for competitiveness for the small and medium-sized industries whose cause we have always supported. Many small businesses and shops providing two or three jobs are vital to those areas. Two or three jobs in a small rural village is like a factory employing 30, 40 or 50 people; they represent the lifeblood of those areas. Keeping people in those areas is vital and ensures the viability and sustainability of the churches, schools, the football, soccer, rugby and hockey teams, and all the things that go to sustain rural infrastructure.

Given that there has already been a significant reduction, which is very important for international competitiveness, the country needs to get back exporting. We have had the Forfás report which the Minister of State has studied. We are now going the right way. We need to ask whether this is a race to the bottom. Will it be a zero-sum gain with all the pain carried by workers who have very little more to give and have given much already? It must be recognised that they paid a pivotal and constructive role in economic recovery from 1987 onwards. Many of them are still playing a constructive role in that they are paying whatever is left of their wages in exorbitant mortgages they secured to pay the outlandish prices for houses. Having done that we are now asking them to consider taking off another 50 cent, 60 cent or €1 per hour. This is an area in which we must tread very warily.

Deputy Mary Alexandra White

I wish to share my time with Deputy Mattie McGrath.

Acting Chairman (Deputy Michael P. Kitt)

Is that agreed? Agreed.

Deputy Mary Alexandra White

I welcome this Bill, which represents an important and quite speedy resolution of issues regarding registered employment agreements and employment regulation orders, and the High Court. It is better for the Government to pre-empt any possible challenges to the work and remit of the High Court rather than face the possibility of the system being jeopardised in a sudden manner.

Other speakers have spoken about the two mechanisms with which this Bill is concerned, the employment regulation orders, EROs, and registered employment agreements, REAs. They remain very important in our overall industrial relations landscape although they are somewhat anachronistic. In 1909 Winston Churchill said "where... you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad employer is undercut by the worst". They are important mechanisms for those in the services sector, particularly those on low pay and many who are without union representation. The joint labour committees, for example, are important in providing a forum in which employers and worker representatives can hammer out difficulties of worker conditions in a way that prevents a race to the bottom but also takes account of the difficulties in particular sectors. The hotel sector is a good case in point. That sector saw a dramatic loss in business owing to the global downturn, but had very specific rates of pay for people working on Sundays and bank holidays.

They are also important because many of the non-Irish workers in our labour market are in the services sector. The impact of REAs and EROs is such that it can help prevent our foreign nationals from being exploited by employers here. The work of NERA in enforcing the conditions laid down by these mechanisms is vital. I commend NERA, which is based in my constituency, and Ger Deering its director on its ongoing work to protect people in employment.

The main proposals in the Bill are necessary and welcome, particularly the sections dealing with ways to strengthen the legitimacy of REAs and EROs through Oireachtas supervision. Specification of the principles and policies that must be considered by the JLCs in regard to their work is also welcome, as is the proposal for the process of JLC consideration of all submissions, which should ensure that the Labour Court takes all objections and points into consideration before approving any JLC recommendations.

During the Bill's passage through the Oireachtas the Minister of State might consider amending the age limit at which chairpersons of JLCs must retire. The legislation proposes that the independent chairperson will cease to hold office at 65 years of age. There is no reason a chair should not continue until the age of 70. As a society we are trying to avoid ageism. I know the county is facing aging demographics. If someone is fit and well why should 70 not be the cut-off point? The Minister for Finance recently stated that he envisages the retirement age being increased. As many people now work until 70, the age limit could be re-examined.

I also welcome the proposal to ensure any amendment to the definition of worker is not the sole preserve of the Minister. Amendments to the definition should be done through primary legislation.

I shall conclude by reiterating a point I made in the debate in this House on the Employment Law and Compliance Bill about the need for a wider reform of the State's architecture for dealing with workers' avenues for redress. We have the Labour Court, NERA, the Rights Commissioner, the Health and Safety Authority, the Employment Appeals Tribunal, the Equality Authority as well as the various Departments. At a time when Government is looking to streamline and do its business in a lean, mean way, an important step would be a meaningful review of these processes to see if a simpler avenue for appeal and redress can be found for workers. I welcome and support this Bill and look forward to watching it wend its way through the House. I commend it to the House this evening.

Deputy Mattie McGrath

I, too, am delighted to have the opportunity to speak to this Bill. I compliment the Tánaiste and the Minister of State, Deputy Calleary, on their work with the Bill to date. The new Minister of State has been only a short time in the job, but he has read himself into the position well and is making an impact as he facilitates all sides of the debate.

The Industrial Relations (Amendment) Bill 2009 is part of a suite of measures, one of which, the Employment Law Compliance Act, is in place. The proposed inability to pay clause has garnered more headlines than any of the Bill's other provision. It has been widely misrepresented and misread. Contrary to popular belief, inability to pay clauses are not new. They already exist, as instanced by the National Minimum Wage Act 2000, and have always featured in national pay agreements. However, they have never been invoked.

The mechanism is now being considered as regards joint labour committees, JLCs, and registered employment agreements, REAs, in response to difficulties in certain sectors. We are well aware of such difficulties in the past 18 months. They have arisen as regards the various working directives and orders for the city of Dublin, Dún Laoghaire and the rest of the country. That clearly was unfair and something of an anomaly for people in business. It was very difficult for them to understand why this should be so. Again, I compliment all concerned, including the Minister of State, in having that anomaly sorted out.

To depart somewhat from the Bill, there are many other areas that affect business, which is the spice of life. We have to promote and support our businesses as best we can in all areas in addition to the legislation before us. Costs, such as electricity, rates charged by county councils, fuel bills, water charges both in and outside business, present major impediments and are forcing people out of business. Wages are only a small part of the overall picture. Health and safety aspects are another consideration.

Another major issue is the unfair dismissals claims being taken against many companies by the "newcomers" from abroad who played an important role in many Irish businesses, not least in the rural economy, in horticulture, construction and catering. These sectors would not have survived in the Celtic tiger interlude without the services provided by these people. However, in too many cases, there have been claims of unfair dismissal and this is a major burden for businesses, large or small. Then there is the whole area of bank charges.

We saw the serious action last week of the air traffic controllers. Serious legislation is needed to prohibit and prevent small groups like this from causing such havoc. Mechanisms and channels are in place to negotiate all such grievances but no group should have the power to literally bring the country to a standstill. Ireland is an island enormously dependent on its airports in particular, as well as its sea ports. Some 20,000 people were inconvenienced and this is not acceptable in these modern times. I appeal to the Government to bring forward legislation to deal with this type of situation.

The purpose of the Bill is to protect the most vulnerable workers in particular, by ensuring that existing mechanisms for making employment regulation orders, EROs, and REAs are fit for purpose and operate effectively. This is particularly important, given the current economic climate. The JLC and REA systems have been the subject of a number of legal challenges recently, which have gone to the High Court. The Bill will strengthen them and make them more effective. It will provide for a number of amendments to the existing legislative framework surrounding the JLC and REA systems, including improved procedures and clear principles and policies to be taken into account by JLCs when formulating proposals for the EROs. It also provides that EROs and REAs in future will be given legal effect by ministerial order and that the perceived gap in the scope for parliamentary supervision will be filled by providing for Oireachtas scrutiny of these instruments.

I welcome the recent co-operation within JLCs which has facilitated reform, for example, the agreement reached on the adjustment of the Sunday premium rate, from double time to time and a third, that has already taken effect in hotels and catering establishments in recent times. This is a very positive and realistic approach. The Bill changes the definition of a worker to allow the offices of the VECs to access the dispute settling agencies — other than teachers. It provides for improved procedures to be followed when formulating proposals for EROs.

Unlike my rural colleague, Deputy White, I admire the work of NERA and I welcome its decentralisation to the south-east. However, I have many issues with its behaviour in the current economic climate. All workers must be protected, whether they are vulnerable or otherwise, but we cannot crucify employers, and that is happening in certain cases. I have had a meeting with Mr. Ger Deering and his senior officials and none of them was ever self-employed. I would suggest that all such officials, especially those engaged in visiting businesses and companies, should have some understanding of the other side of the story. It is not all one way traffic. They come with their high-powered cars and they are intimidating to businesses, small enterprises especially, arriving in the dead of night in some cases, to restaurants looking for the books when people are busy. These officials will have to be reined in and I believe NERA's entire raison d’être must be questioned and changed.

I would seek to make it relevant to today's economic realities. While we must protect workers' rights we must also try to protect the rights of the self-employed, the business people who are the shapers and movers trying to stimulate the economy. If anything is to lead us out of the present morass, they will, but not while they have all these shackles on their backs. NERA is one shackle too much. I have spoken to the Minister of State about this on numerous occasions. I am not criticising any individuals in NERA but rather its whole policy in the present economic climate. I should prefer to see it as an employment-support agency, helping business, and showing better balance. Its officials come in, literally touting for business. I asked Mr. Deering whether they give their business cards to every employee and he said they did, where possible. I believe that is touting for business and asking for trouble. It is tantamount to politicians going around interfering in different businesses, offering their cards and inviting employees to give them a call if the boss is not treating them right.

The fundamental structure of NERA has to change. I have been a small business employer since 1982 and I understand the situation from that perspective. There has to be balance and I honestly believe we are going to have to examine that whole set-up and the costs associated with it. I believe there are four or five regional offices, and that is something the economy cannot afford. It is flamboyant, with the headquarters in Carlow. This is a relatively new institution. I do not believe it is even underpinned statutorily, since legislation is still going through the Oireachtas in this regard. It has to be reined in. We cannot afford it, there are too many staff and they have too little to do because the businesses they are visiting are disappearing just like the snow in recent weeks. I have mentioned many of the reasons, but basically the costs of doing business are too high.

If we do not take action, the NERA will not have a role to play because there will be very few, if any, businesses to call to, especially small to medium-sized enterprises. We know the footfall has diminished in terms of the purchasing power of ordinary consumers. We accept that and we are trying to drive down costs, while NERA and other bodies such as those responsible for health and safety legislation are driving them upwards. The situation is totally over the top and I make no apologies for saying this. The approach is not measured and the people charged with administering those issues on behalf of NERA should have an understanding of how difficult it is to create even one job, and to grow that into ten or 50, especially in the present economic downturn. Even before the recession it was difficult to maintain profitability. Ultimately, there must be profits if businesses are to survive and reinvest in further and continued employment. They must have some understanding of what it is like to have sleepless nights about paying wages, rates, ESB bills, the Revenue and water charges. We have lost the run of ourselves and people cannot afford such costs. In addition, the banks are treating many of their customers outrageously over charges. Meanwhile, the Revenue Commissioners go to court as fast as lightning and pass the matter on to sheriffs. I have likened the behaviour of these people to the activities of the Black and Tans in the past. A recent television programme exposed the carefree and flamboyant attitude of a sheriff, asking whether there was anything worth taking in a house. It is outrageous. We are giving these powers too easily and there is too much money, commission and perks involved for these people. The legislation is outdated and must be changed. We must examine the matter holistically and treat our workers properly if we are to get back to a viable position of economic growth. I accept that we have come a long way in that respect, but there will always be cases of abuse concerning workers, which is unacceptable. We must also have balance, however, in supporting employers and other business drivers.

I commend the Bill to the House.

Deputy Damien English

I am grateful for the chance to say a few words on this Bill. Although time is limited, I wish to deal with a couple of aspects that should be discussed as part of employment legislation. I accept that the inability to pay element is being introduced as an amendment, but it is a pity that the Minister is not here to discuss the matter. I understand the Minister is under pressure to increase the minimum wage, but it is a dodgy road to go down and will lead to a clamour of businesses arriving at the Labour Court with their accounts. They are under immense pressure and in certain sectors businesses will be competing with each other in the same town. How will they win their inability to pay cases at the Labour Court? Why will one case succeed, while another will not? The situation will be murky and while I am sure it is all above board, it is a complicated area due to the nature of the businesses involved. I hope it does not come down purely to profit. Many businesses can survive but they will need some help. There are many other costs that we can reduce for them, apart from an inability to pay the minimum wage or some agreements which are not much more than the minimum wage.

The Department should also consider the inability of certain businesses to pay rents. The law needs to be changed in that respect to allow for inability to pay rental agreements that have already been signed. It is crazy for landlords to demand rents from people who cannot pay them. A 10% or 20% reduction will not be enough. They will need 50% reductions because rent levels are mad in places.

In certain situations we will have landlords who have some of their businesses in NAMA, while on the other hand they are forcing their tenants to pay exorbitant rents. Four or five businesses in my own town have been threatened that they will be pursued for their homes if they do not honour rental agreements. The landlords in question are delighted to jump into NAMA, but they are not showing any leniency to their commercial tenants. The Minister should examine the question of tenants' inability to pay. It is an important issue, but it is relative. If we can drive down the cost of doing business in other sectors, we will not have to touch the minimum wage. If businesses can survive due to a reduction in rent and rates, they will not have to plead inability to pay the minimum wage. Many of the high costs of doing business are Government-regulated, including water charges, council rates, insurance and energy. I accept that energy costs have come down a bit, but we are still above the European average so they are too high. Irish banking charges are among the highest in Europe. The Minister of State sat at the committee meeting where we heard about this. Now that the Government owns a fair stake of the banks, maybe something can be done in that regard. However, the Government probably has an incentive to raise banking charges because it can make a profit from them. Nonetheless, we should examine the matter.

It is a shame that the whole debate on the survival of businesses is coming down to the minimum wage. That is wrong. The Minister of State should not say that anybody on the minimum wage is being paid too much. On 40 hours a week, one would be lucky to bring home €330, or €300 for a 35-hour week. Many workers have to pay for a car, clothes and other costs associated with having a job. Some people would be better off on social welfare. On its discussions with businesses, the Government should avoid being drawn into a debate on the minimum wage. It should clarify the situation soon because that is not where the problem lies. I am pro-business. Some business groups are not afraid of the minimum wage but of the argument that the next pay level must be the minimum wage plus. Therefore, the minimum would be the bottom line and everyone else is demanding more than that. That is probably why some people want the minimum wage reduced — so that they can bring other wages down, but that is unfair to people on the minimum wage who work in industries covered by such agreements.

The Minister of State is right to say that in some sectors those earning the minimum wage may not have a strong voice or a good educational background and are not unionised. They do need extra help and protection, and not just in respect of pay. We always discuss the pay element, but many such people are not always treated that well. The legislation looks good on paper, but there can be abuse in rosters and shift systems. Such workers can be abused in other ways, too, because people think they can take advantage of them, which is unfair. We have a duty to watch that, not just to the letter of the law but by applying some common sense. The previous speaker referred to representatives of various agencies, of which there are many, popping into such places to ask simple questions. It is not about reading up on legal books, but just about watching what is going on because we are all aware that some people are not treated well at work.

Various agreements cause difficulties and some stupid cases have arisen whereby geography or a particular type of business can dictate an agreement. New legislation is required to make all the necessary changes. That would be a chance to have a good debate on employment legislation. Businesses need such legislation because they are swamped with red tape and it can be a major hassle to understand regulations. Some businesses make mistakes and end up being punished badly. Proper legislation would help to clarify their rights as well as changing stupid legislative provisions. As a country that no longer has full employment, we should re-examine maternity and parental leave arrangements. I raised this matter a few years ago with the Minister of State, Deputy Fahey, but he was not prepared to change things outside pay agreements, which are now in question. It is time that Ministers started making decisions. Now is the time to do something for children by examining what is done in other countries, such as France and Sweden, where families have better entitlements. It could be time to reverse some of Charlie McCreevy's stunts on tax, which do not help families. There is a chance to have more job sharing, both in the public and private sectors, for the benefit of children who missed out in the Celtic tiger era when everyone was rushing around. We will see the consequences of that in years to come. Now is the time to re-examine the matter through a proper discussion on employment laws, the minimum wage and wages generally. The piecemeal Bill before us deals only with a small sector, so it is time for an all-encompassing Bill to deal with employment legislation generally. A solid debate is required to ascertain where we are going over the next five or six years. The employment market has changed utterly in the past two years, so we need to take a good look at all the relevant agreements. We need to tackle wage agreements, but not the minimum wage. There is plenty of work to do and the Minister of State is willing to engage in such matters by making the right decisions. I note that the Bill restores some powers to the Minister in order to take action in this regard. I welcome that because we are meant to have a say and take decisions here. We should not leave everything to bodies outside this House because people are fed up with that. They want more decisions to be made here.

Debate adjourned.

Dáil Éireann debate - Tuesday, 26 Jan 2010

Industrial Relations (Amendment) Bill 2009 [Seanad]: Second Stage.

Dáil Éireann debate -
Tuesday, 26 Jan 2010