I wish to share my time with Deputy Cyprian Brady.
Industrial Relations (Amendment) Bill 2009 [Seanad]: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
Is that agreed? Agreed.
I welcome the opportunity to speak on the Bill. It is timely that we also discuss the broader issue of industrial relations and wage-setting mechanisms in the context of it being almost 100 years since the Britain and Ireland trade boards were established to give legal certainty to committees in the context of the setting wages and conditions. It was primarily in areas where wages and conditions were poor at the time in the context of organisation around unions being able to exert pressure to achieve proper pay and conditions for lower-paid workers. It is time, 100 years later, that we discuss this particular matter. The review of the transitional agreement, Towards 2016, looked specifically at the issue of employment regulation orders, EROs, and REAs on foot of decisions. A commitment was made to the effect that they would be strengthened, so that the EROs would have the status of legal certainty. I welcome the provision in the Bill which deals with that area.
At national level, social partnership is going through a very difficult period. The Government had to act unilaterally because it could not get agreement in the context of the burgeoning deficit, which is very regrettable. It is regrettable that we could not reach a consensual arrangement whereby there would be agreement on how to deal with these challenging times. Nobody is under any illusion. It would be very difficult for union leaders and representatives to recommend pay reductions and carry the day with their members at national level. However, this is happening at local level all the time, whereby employers, unions and employee representatives discuss in an organised fashion how pay, terms and conditions are arrived at. In very difficult circumstances such talks may lead to a reduction in pay and changes in working conditions. It may be due to a challenging period in a certain sector or in the context of a certain type of business. This is happening continually.
I regret, in the context of this debate, that the proposed inability to pay clause has been so controversial. It is not a substantial part of this Bill, and neither is it reinventing the wheel. It has been availed of for many years in the context of industrial relations and discussions around pay, where the inability to pay hardship clause has been used. I am no supporter of the race to the bottom and believe in proper terms and conditions and a just reward for labour, as I believe every Member of this House does. Equally, as Minister of State with responsibility for trade and commerce, when I travel abroad I am aware that competitiveness is the key to sustaining exports, which itself is the key to sustaining employment. If a sector of an economy or indeed the entire economy is going through a difficult period because of a global economic downturn or in the context of the financial credit crisis which has fed into the broader economy, there is a lack of credit and a drying up of demand internationally, exports fall and jobs are lost. That is a very real problem for individuals and society. However, it is not credible for people to assert there will never be a time when a wage reduction will not have a benefit in the context of retaining jobs. If we are to be honest, sometimes that is inevitable.
Some commentators say a reduction in wages will have a detrimental impact on employment and the economy. If that economic philosophy is to be adopted, if we want to improve things, then we should pay ourselves a great deal more. That simply is not a credible argument. Both the tourism and the retail sectors have gone through very difficult and challenging times. Employers, unions and employee representatives in these sectors, however, were able to come up with pay and conditions rationally that reflected the industrial reality at those times for a number of reasons. It was quite obvious that the tourism, catering and retailing sectors were going through challenging times. To preserve these sectors and, more importantly, job opportunities, it was agreed that deferrals in pay and changes in work practices were needed. I see this as a very mature way of doing business, with both sides recognising the difficulties individual companies face, or particular sectors or even the broader economy.
It puzzles me that if this can happen at factory floor or sectoral level, why can it not be done at national level? Again, wearing my trade hat, when I go abroad I find there is significant interest in how Ireland came from where it was in the mid-1980s to where it was in 2007, and indeed where it can get to again. We said that social partnership was always one of the key ingredients when explaining Ireland's success. Now that we are in more challenging and difficult times, it is disappointing that we cannot use the social partnership model to reconfigure the economy, make it more competitive and efficient, achieve changes in work practices and restore the edge it so badly needs. Even though there has been a drop in unit labour costs, there are other areas of the economy that cause difficulties in terms of Ireland being competitive. Competitiveness is not some grandiose word, but, in fact, equals jobs, and that is extremely important for people to understand.
Sometimes we hear simplistic arguments about business people, or political parties perhaps, who just want to cut wages. It has nothing to do with cutting wages, but rather ensuring that we have a competitive economy. That includes many areas such as competition in energy and other sectors right across the board and involves issues such as relaxing regulations that may be causing difficulties, greater flexibility in work practices and so on. Obviously, as a major cost in any business, wages are also an issue. At a seminar in November 2008 I mentioned that wages must reflect reality, and many people took this as advocating a race to the bottom proposal. If a business is going well, the rewards should be dispersed and shared with those who created them, namely, the workers in the particular area. Equally, if a sector is under significant pressure, there is no point putting our heads in the sand and believing we can continue to pay the same rates as always, because this will mean fewer people can work in that sector.
Honesty should be brought back into the debate. If consensus can be achieved at factory floor level, then I am quite sure there can be maturity at national level among the wise heads that have negotiated national agreements over many years to ensure that this can happen at this level also. I understand, however, the political consequences for union representatives at national level of the fact that the civil and public service pay bill is not sustainable and that pay decreases are a prerequisite to ensuring that the economy recovers. It is not popular to proclaim that people will have to make a contribution to their pensions, but it is realistic. This is something we will have to do continually in the years ahead to ensure that there is a sustainable pension system and a workable budget so we can provide services and social welfare payments, as well as health and educational aspects of services, to the public.
When we enter into debates, we must be very conscious of the need to be honest with ourselves. I am particularly aware of this when I hear statements about taking from the public sector and giving to the banks. That is a very catchy phrase, but it is far from what any government wants to do or is doing. If we had never had a banking crisis, we would still have a structural budget deficit that has to be tackled, regardless of what happens in the banking world. The situation has been exacerbated because of that, but we would still have had to deal with the particular structural deficit inherently embedded in the current financial system.
When referring to pay, we should make our comments in the context of reality and what it means for people if some say there should never be a pay reduction. In effect, this would mean there is a good chance people may lose their jobs. If a company has a monthly wage bill of €100,000 and if events conspire to prevent it making that payment over a short duration, there are two alternatives — either the wages go down or people are laid off. That is a choice that people regularly make at factory floor level. By and large, following mature discussions, they will come to a consensual arrangement. Having discussed this matter in factories and other businesses with those concerned, I know that more often than not employees will take a wage reduction rather than keep the same rates of remuneration and let their colleagues go. That is a mature and fair way of ensuring that we retain as many people in employment as possible.
I welcome the Bill before the House. The debate about inability to pay is not about a race to the bottom, it is about ensuring that in difficult times we can be responsive and reflect the realities out there. Equally, in good times the opposite can be the case.
I thank the Minister of State, Deputy Kelleher, for sharing his time with me. I am delighted to contribute to the debate on this Bill. I congratulate the Minister of State, Deputy Calleary, on dealing with this complicated area which has been on the boil for quite some time. Up and down the country individuals and businesses are affected daily by various regulations and rulings. This legislation will be welcomed by all sides as it clarifies exactly where workers and employers stand.
The main purpose of the Bill is to strengthen the already strong, existing system for making employment regulation orders and registered employment agreements, as agreed by the Government and the social partners. In the context of the Towards 2016 review, the Government and social partners agreed to the implementation of a series of measures in the areas of employment rights and compliance. These included the introduction of legislation to strengthen arrangements for the making of employment regulation orders and registered employment agreements.
As we have seen in recent years, EROs and REAs have had a major influence and impact on various business sectors, but particularly in service industries. In the restaurant trade we have seen the difference in rates in Dublin and just outside the county boundary. In the electrical sector, electricians and small employers were greatly affected by such agreements and orders.
The social partnership process has served this country remarkably well since its introduction in 1987. It has played a vital role in our economic and social development over that period, during which we enjoyed remarkable economic growth and improved living standards as a direct result of the partnership between Government and various pillars. The seven social partnership agreements which were negotiated in that time, helped to provide stability and the means by which society in general has progressed, not just in terms of remuneration but also regarding wider social policy advancements that have been made on the basis of the social partnership framework. It has been an excellent success in that respect and has brought many improvements to working people's lives for many years. Many of the advances — including greater take-home pay, better terms and conditions of employment, better and more widely available opportunities for working families and their children in education provision and in all other respects — have been as a direct result of a commitment by the social partners to that process.
All the pillars represented, including trade unions, farming, business organisations and the voluntary sector, have contributed over the years to providing a stable environment. Everyone accepts that we are in a different economic situation now, however, so every effort must be made on all sides so that the process and structures that were put in place will be used fully to ensure we can compete domestically and internationally. It is crucial that we go back to that position. Of course it involves compromises and having to work out shared objectives, but at the end of the day there is no doubt that social partnership has proven itself to be a good way in which to organise interests in the wider society.
It is true that we have had difficulties securing agreements in recent times, but we must remain committed to the approach and objectives agreed with all the partners in Towards 2016. We have a solid history of fair employment law. In the 1980s and 1990s, we were one of the leaders in Europe in introducing such laws here. Our workers are some of the best supported and protected in Europe. When one considers the raft of legislation that is being amended by this Bill, dating from 1946 to 2004, it shows how long we have been working on putting these structures in place. It is essential to get it right and this legislation's safeguards will ensure that workers are protected and that employers are given every opportunity to comply with all the requirements. In addition, particular timeframes and employers' circumstances will be taken into account. The Bill will thus ensure fair and equal treatment for everybody involved.
In publishing the Bill, the Minister said it may be timely to consider bringing the joint labour committee and registered employment agreement systems into line with procedures already established under the National Minimum Wage Act 2000. That allows individual employers to submit inability to pay claims to the Labour Court for adjudication. This reform of the minimum wage legislation may be timely, given the severe economic challenges employers face today. Ultimately, as the Tánaiste has said, this is about saving jobs. If this measure assists in that process it needs to be considered.
Minimum rates of pay and other conditions of employment for workers in certain sectors are set down in employment regulation orders. These orders are based on proposals negotiated and drawn up by the relevant joint labour committees. These committees are independent bodies, composed of equal numbers of employers' and workers' representatives under an independent chairperson. That system has proven to be successful, although there have been glitches. The Bill will ensure, however, that where an error is made or where circumstances change rapidly — which has happened in recent times — we are able to deal with it. In that way, nobody will suffer discrimination or be taken advantage of.
Ireland has a strong system. Workers from Italy, Germany and elsewhere in Europe come here in the knowledge that they will be better protected than they would be in their own countries. Hardship or inability to pay clauses are in place in other EU countries, including Austria, Belgium, France, Germany, Spain and Italy. They have been introduced to help firms in crisis situations to respond, through temporary measures, to adverse labour market conditions and pressures to regain competitiveness. The Minister of State has also signalled his intention to bring forward amendments on Committee Stage. We must ensure that the legislation enables people to create and stay in jobs and that they get a fair wage for a fair day's work. Anything that helps achieve this must be welcomed.
I welcome the Minister of State, Deputy Dara Calleary, to the House. I am delighted he is here, hopefully for the duration of the debate.
The stated primary function of the Bill is to promote harmonious relations between workers and employers. However, in light of the current industrial unrest, it will have an uphill struggle, particularly with regard to the proposed amendment by the Minister of State to introduce an inability to pay clause in favour of employers. Since the Bill was debated in the Seanad in September 2009, we have gone through the pain of the December budget and the cutbacks it brought in its wake, which impacted severely on low and middle income earners across the country. Hardly a day goes by without a protest outside the gates of Dáil Éireann. That unrest will continue for the duration of this Government. People are very angry and know, as this side of the House knows, that the Government has no mandate for its outrageous policy and actions over the past two and a half years, since the former Minister for Finance, Deputy Cowen, took over as Taoiseach.
From the moment the Government took office in 1997 — we have had a Fianna Fáil-led Government for 20 of the past 22 years — the democratic process has been under fire and the voice of the electorate has been ignored. The Government got no mandate to carry out the attack it is making on the livelihoods of ordinary decent people. The country is on its knees, as we know from speaking to constituents and talking to councillors, business people and employees. This is thanks to the actions of a spendthrift Government that in the years of plenty wasted our resources. I do not want to list the projects on which the Government squandered and wasted money over the years. These are well documented in the House and in national and local media throughout the country. What price democracy when the leader of this free country can impose on the people sanctions which were not in the programme for Government prior to the last election. Fianna Fáil, the so called republican party, has failed to look after the people it purports to represent. In the run up to elections over the years, I have always heard it said that the republican party was always on the side of the worker. This sounds shallow under the current regime.
An elderly lady said to me the other night at a funeral in Ballinamuck that she had voted Fianna Fáil all her life, but that rural Ireland now regarded the Taoiseach as a dictator akin to Stalin and that she would never vote Fianna Fáil again. This is tough talk from a former diehard Fianna Fáil supporter in my county. I know her feelings are replicated in every area and district where Fianna Fáil was strong throughout the country.
The proposed exemption from wage agreements, which will see low-paid workers being asked to accept wage cuts as their bosses claim an inability to pay, is a cutback that relates directly to this debate. There was great mileage made by some in the lead-up to the Lisbon treaty referendum with regard to the adverse impact of a "Yes" vote on the minimum wage. This was categorically denied by the Government, which said that Lisbon had nothing to do with our ability to determine our own minimum wage. That was correct, but the Government had and it has exercised its power by eliminating a safeguard for low-paid workers. This is a case where what is sauce for the goose will not be sauce for the gander. It is proposed that hard pressed employers will be able to apply for an exemption from wage agreements. They will need the consent of the majority of workers before they can reduce the hourly rate. However with a gun to their heads, in terms of retaining a job, employees will be forced to comply.
I was interested to hear the Minister of State say this is a temporary measure. This is hard to believe. It is far more likely that the Government is conforming to its norm and this is an introduction of a reduced minimum wage by stealth. We heard all this before from a former Longford-Westmeath Deputy — who later became Taoiseach — former Deputy Albert Reynolds, when he said the arrangement for Government with the Progressive Democrats was a temporary arrangement. We are still living with a relic of that arrangement in the Department of Health and Children, namely, Deputy Mary Harney. We know all about the crisis she has created in the health services. Nobody has a good word to say about her or her actions over the past number of years as Minister for Health and Children.
Any reduction in the minimum wage by stealth would be scandalous. The current minimum wage has been hard fought for and while there is some validity in the reduction of the double time rate for weekend work to time and a third, I would not like to see the minimum wage come under attack. This Bill forces lower and middle income workers to work until they drop and to hand over their earnings to the Exchequer to bail out dodgy builders and developers, many of whom were strong supporters of the Fianna Fáil organisation in the past. Certain sectors, such as the retail, catering and construction sectors are, to an extent, outside the National Minimum Wage Act 2000, but they must comply with employment regulation orders, EROs, and registered employment agreements, REAs, which often stipulate hourly rates in excess of the national minimum wage. It goes without saying that in the current economic crisis the EROs and REAs should come under scrutiny in a fair manner.
The Irish Congress of Trade Unions has accused the Government of working to drive down wages across all sectors. This is not beyond the realms of possibility given the assault on the public sector which has bled it dry. There is huge anger among the public sector and a go-slow is in operation. We as politicians are very much aware of that as it now takes longer to get a response to telephone calls to various Departments and local authorities throughout the country. Politicians on all sides have complained about this go-slow. This is not good for the country.
While the Government is attempting to differentiate between the ability to pay clause and a potential reduction in the minimum wage, any move towards such a reduction would be another attack on the lowest paid and the most vulnerable. While the inability to pay clause is not actually contained in the Bill, the Minister indicated last September that such a clause was being considered and would be introduced as a Government amendment on Committee Stage. It seems the consideration stage is now past and the Minster firmly intends it to be part of the Bill. While one could definitely argue that this clause is a safeguard that will help to retain people in employment, I am strongly convinced that it could be open to abuse and could be part of the downward spiral towards a reduction in the minimum wage. As I have said before, in the past the Government has been adept at introducing stealth taxes. It seems every time we have gone on holiday or been in recess, the Government has introduced a significant number of stealth taxes.
With regard to the general provisions of the Bill, the Minister has ignored an opportunity to introduce uniform measures regarding the operation of the joint labour committees. Their role in protecting the most vulnerable workers in the economy should be upheld and unified, particularly as many of these workers are not in trade unions.
This Bill has failed to correct the anomalies that exist under the current joint labour committee system, which stems from the introduction of trade boards in 1909. These boards were replaced by joint labour committees in 1946. This Bill provided an ideal opportunity for the Government to ensure the uniform treatment of workers and employers across the country but it failed to do this. The Minister of State, Deputy Calleary, should note this.
Why does the Minister wish to preside over a system that fails to provide uniformity for workers? When the national minimum wage was introduced, the joint labour committee system remained unchanged, despite the national minimum wage commission's recommendation in 1998 that an assessment of the joint labour committees take place in light of the introduction of a national minimum wage. The Minister of State, Deputy Calleary, has taken his eye off the ball and has missed a valuable opportunity. This does not surprise me because the Government has failed to do a single thing right since it took office. Its record is one of failure, betrayal and let-downs for the ordinary people.
The lack of credit, as referred to by the Minister of State, Deputy Billy Kelleher, was caused by the lack of confidence in the Government. The Government crashed the economy, ruining many lives and businesses and resulting in job losses. Listening to Fianna Fáil and Green Party Deputies, one notes they still act as if they were not to blame. The truth is that the people of this country have no confidence in the Government. It is a bit rich of the Minister of State, Deputy Kelleher, to give a lecture on honesty in the Chamber this evening. The Government has not been honest with the people who gave it the mandate to continue in office after the general election of 2007. The ordinary people will not take lectures about honesty from Fianna Fáil or the Green Party.
The Government has no judgment, vision, leadership or ideas to create new jobs. Very few jobs have been created in the past two years under its aegis. All it has to offer is more of the same, including more cop-outs and, worst of all, more denials of responsibility. People are fed up and the Government has no mandate to continue in office. This has been proven in the past 20 or 25 opinion polls. People have lost faith in the Government. It is in the third-degree category as far as they are concerned. Given its talk of republicanism, it should listen to the voice of the people and get out of office as quickly as possible.
In the past three years, under Fianna Fáil and the Green Party, we have seen a huge loss of confidence in the economy and a dramatic fall in employment. In County Westmeath over the past 12 months, the unemployment rate rose by approximately 37.5%. More than 10,000 people are unemployed in the county, which was always considered to be reasonably prosperous. Similar circumstances obtain in County Longford. The unemployment has been caused by the very bad decisions of Fianna Fáil, the former Progressive Democrats and the Green Party.
Over the years, the Government has targeted the wrong people. Last year in its budget, it targeted the elderly by doing away with the medical card for people over 70. There was a very angry protest, which we all witnessed, outside the House. Fair play to the elderly, they got their way and obtained some concessions.
Students are protesting outside the House today. They are very angry over how they have been treated by the Government. They are totally fed up and feel rejected by it. Since Christmas I have provided 37 references to young people I know in Longford-Westmeath with a view to assisting them to seek a livelihood farther afield. Some are heading to Canada and others have headed to Australia. There is an onus on the State to provide jobs for the people it educates. It is unfair on the parents and relatives of the emigrants that the latter have been forced to leave the country in which they were born and bred to seek a livelihood elsewhere.
We boasted for years about our strong economy and the Celtic tiger running around the country. It has been brought to its knees by the activities of the Government. How can we trust it to enact this and other legislation in a fair manner? I advise the Minister of State, Deputy Calleary, to consider asking the Taoiseach and Ministers to go to the Phoenix Park to dissolve the Government. It has no mandate whatsoever to continue in office. That is the cry of the ordinary people. They are very angry and it is time for the Government to consider its position and get out of office. It has lost the trust and confidence of the people. In the name of God, now is the time to go.
This legislation is part of a package agreed with the trade union movement to strengthen the protections for workers, particularly those on low incomes, through the employment regulation orders and the registered employment agreements. As such, it can be welcomed, particularly at a time when a number of employers have ignored Labour Court recommendations on pay, leading in some instances to industrial disputes. These are particularly frustrating for workers employed in companies claiming inability to pay but which continue to make substantial profits. There are several recent examples of this, including the dispute involving the workers at Boots. Another example pertains to a case that arose in my constituency in recent weeks.
There is even less cause for excuse on the part of Ulster Bank, which is withholding an already agreed payment as part of its attempt to enforce unilateral effective cuts in annual pay and pension entitlements. Given that almost the entire future of the economy and of people's livelihoods has been placed on the likely success of measures to save the banking sector after its self-inflicted disaster, the actions of Ulster Bank are particularly inexcusable. It is important, therefore, particularly in the current climate, that employers not be able to impose wage cuts, often under the threat of closure or mass redundancy, without being subject to legislation put in place regarding the minimum wage and the overall protection of wage rates and conditions.
Debate adjourned.