I call on Deputy Caoimhghín Ó Caoláin to resume. He has 18 minutes left in this slot.
Industrial Relations (Amendment) Bill 2009 [Seanad]: Second Stage (Resumed).
Since I began my contribution on this Bill, I challenged the Taoiseach, Deputy Brian Cowen, during Leaders' Questions last week to rule out cuts to the statutory minimum wage. It was alarming that the Taoiseach failed to rule out such an attack on the lowest paid workers in our society. That is something that every political opinion, the wider public and in particular the trade union movement should note carefully. Instead, the Taoiseach attempted to justify the decision to exempt top civil servants from the full effects of pay cuts while lower paid public servants are punished. Last night the Government parties — I emphasise with all their Deputies in attendance — confirmed their support for the higher paid civil servants when they voted down the Private Members' motion that sought to address the inequity of the Government's approach.
Following the savage budget cuts to wages, social welfare and public services, there were immediate calls from some representatives of business interests for a reduction in the minimum wage. This is exactly as trade unionists, Sinn Féin and others predicted, namely, that an attack on the wages of lower paid public service workers would lead to similar attacks on workers in the private sector. Now the Taoiseach has refused to rule out a further attack on the least well off.
The Taoiseach also defended the Government's intention to table amendments to the Bill before the House, on Committee Stage, to allow employers to apply to the Labour Court for exemptions from the requirements of employment regulation orders, EROs, and registered employment agreements, REAs. For decades these orders and agreements have protected workers from exploitation and ensured there are agreed minimum rates of pay in industries across the economy. If these amendments are forced through, then we shall see pay rates across the economy driven down to the minimum wage level and below.
It will see the statutory minimum wage rate being slashed by the Government. If that happens, the Government will go on to reduce social welfare rates further, using the argument that they are a disincentive to work — an argument we have heard used, all too sadly, in the past. Government policy is also encouraging profitable companies to lay off workers unnecessarily, as for example in Rye Valley Foods in County Monaghan, or to impose unacceptable working conditions, as in Kingspan in County Cavan, both of which are in my constituency. A reversal of pay cuts for lower paid public servants must be put on the table if there is to be any hope of a resumption of social partnership negotiations. We need to see social partnership coming back, but only with the full realisation by Government and employers that the lower paid public servants must have those cuts reversed.
In the talks before the budget the public service unions were prepared to agree sweeping changes in work practices that would have had major implications for workers in the health sector in particular. This was thrown away by the Government, which is clearly determined to drive forward with a low pay policy in the public and private sectors regardless of the consequences. It is claimed by some that the minimum wage and agreements on overtime for Sundays are responsible for the recession in certain sectors. However, if one examines wages in certain sectors, such as hospitality, one finds not only are they low in comparison to others, but also that they have not risen to the same extent as other sectors. One reason for this has been the falling off in the level of union organisation but another, without doubt, is the fact that a significant number of employers found means to circumvent legislation on wages and were able to employ people on rates and for working periods which made a mockery of the legislation. It is also a fact that the prices charged for accommodation, food and drink rose far quicker than wages and this ensured good returns were earned for their management teams and owners.
It is not accurate, therefore, to claim that allegedly high wages are at fault for the subsequent falling off in business, nor should such a model be used to justify cutting wages and undermining work conditions as a means of stimulating economic growth. It is important not only that employers are obliged to comply with current agreements, but that a climate does not develop whereby a generalised claim of an inability to pay is used to justify agreements on wages that penalise workers. Unfortunately, experience informs us, and we see it again in several current disputes, that employers are able to ignore agreements and court orders and because of their relative strength, they are able to enforce cuts or ignore those agreements on the threat of closures or mass lay-offs. In that situation, workers are left with no option but to use their own strength and we are left in a situation of conflict in which the existing mechanisms are seen to be ineffective. However, the more employers flout those mechanisms and existing agreements, the less workers can be expected to have any real faith in the procedures. It is, therefore, crucial that when they are breached, the orders are enforced. Otherwise, measures such as those proposed here are powerless and ineffective.
This is the concern expressed by the trade union movement, which has pointed out that the good parts of this legislation are called into question by the current Government's attitude towards the trade unions and this was evidenced by the manner in which the Government, at the behest of the employers and a string of right-wing commentators, introduced the cuts in wages for public service workers.
Government spokespersons continue to refer to the virtues of social partnership but their actions indicate this is only a convenient slogan to be trundled out when it suits them and, obviously, the same applies to public and private sector employers. The manner in which the Government treated the public service unions before Christmas and the refusal of several employers to abide by Labour Court rulings indicate this Government and the employers are intent on using the recession to force workers to accept pay cuts and poorer conditions of employment. This point should be repeated time and again. I challenge the Government to refute that both it and employers are intent on and are using the current recession to force workers to accept pay cuts. The Government should have paid heed to the repeated march and cry of the people outside the gates of this institution during the closing months of 2009. Workers will not accept those pay cuts or poorer conditions of employment.
There is also a danger the provisions in this Bill will be emasculated in the same way as the Labour Court by employers simply ignoring things they do not like. That would be further encouraged if they are allowed claim an inability to pay as a means of opting out of agreements on wages. It suited many employers to abide by agreements during the boom because often workers were tied to increases that did not fully reflect the vast profits being made in many sectors of the economy. Now that those days have gone, the vestiges of social partnership are seen by those same employers as a barrier to their driving down wages and undermining conditions.
This is especially evident in what are already low wage sectors of the economy, where employers have launched an onslaught on the minimum wage. It was okay for workers in the hotel and catering sectors to live on lower than average wages while businesses boomed and consumers were charged among the highest rates in the world for food, drink and accommodation. Such workers were faced with price rises well in excess of any increase in their income. Any myth that lower paid workers benefited greatly, if at all, from the boom years is baseless. To add insult to injury, attempts are now being made to force such workers into a situation whereby they will have to work for less than the minimum wage.
All too sadly, this is the real background to the Bill. The proposals are positive, which I acknowledge, and this has been indicated by the Opposition during the course of contributions on the legislation from the outset. However, right-wing political and economic factions have indicated in their respective commentaries that the proposals will not be worth the paper on which they are written if the Government continues to ride rough-shod over workers and their trade union representatives. It is of great importance that the Government does not allow this legislation to be emasculated during its course through these Houses over the coming weeks. We wish to see the proposed measures included, carried through and upheld. Any amendments considered by the Government would only feed the furious appetite of employers and right-wing economists and amount to turning its back on the hard-won rights of generations of Irish workers and their working conditions. That would be an absolute betrayal. I urge the Government to hold to the Bill as presented and not to take on board or present amendments that would allow opt-out on the part of those who seek only to have the minimum wage absolutely undermined.
I welcome the opportunity of speaking on the Industrial Relations (Amendment) Bill. I have sat here for the past while listening to the Sinn Féin representative, Deputy Caoimhghín Ó Caoláin. I disagree with one or two aspects of his remarks and I will deal with these later in the course of my contribution. I agree with the amendments proposed as a result of discussions in the Seanad. Perhaps the Deputy did not intend it — I give him the benefit of the doubt — but essentially what he began here was a veiled attack on the Labour Court. Perhaps it was not his intention, but it is what he did and what he put on the record of the House. He said he was opposed to the amendments allowing employers to claim inability to pay. He said they would create a mechanism for the Government to reduce pay rates. It is the Labour Court that will decide on these matters. By saying the Government will get its way when an employer makes a claim, the Deputy is essentially saying, although perhaps inadvertently, that the Labour Court is a puppet of the Government. Nothing could be further from the truth. I defend the integrity and impartiality of the Labour Court.
The gist of what Deputy Ó Caoláin was saying about amendments on the inability to pay is that, once an employer lodges a claim, he, the Government and right-wing economists will get their way. The Deputy has obviously lost confidence in the Labour Court's ability to assess the facts, adjudicate on them, seek all the relevant financial information and make an impartial judgment. I have confidence in the ability of the Labour Court to adjudicate on these matters. What Deputy Ó Caoláin is saying is almost like saying that one who makes an application for planning permission is guaranteed to receive it.
I look forward to the Labour Court adjudicating fairly on cases. Where it does not accept the statements by employers regarding inability to pay, I hope it will adjudicate impartially and ensure pay rates are not reduced at the request of the employer.
I have seen cases of hardship or inability to pay and regarded them as requests to retain the ability to employ somebody rather than requests to let an employee go if rates cannot be met. There will be a hard choice to make. An employer may say he cannot afford to pay at the full, official rate and would like to retain a staff member in employment. The employee may want to be retained in employment. If both are agreeable, the Labour Court may agree, in some cases, to a reduced rate. I consider employers' claims as claims to be allowed the ability to pay and employ people rather than to let people go. This could happen if an employer either wanted to pay at the full rate or not at all. The legislation addresses this.
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. The Bill also provides for the amendment of the definition of "worker" under the Industrial Relations Act 1990. It is a complicated area and many Members have used words interchangeably and are still a little confused about joint labour committees, employment regulation orders, joint industrial councils, registered employment agreements and what flows from what.
Section 3 provides for a new definition of "registered employment agreement" to differentiate between those made before the commencement of the original Act, that is, those registered by the Labour Court, and those made after the commencement of the Act, which will be 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 will apply.
Many Members have spoken at length about the joint labour committees. I am sure the Minister has the figures pertaining to those covered by these committees. There may be 200,000 to 400,000 but I am not quite sure. The number is substantial. Those covered comprise a small, but important, minority of the Irish workforce. I would not like anyone to believe the issues about which we are talking have widespread application in the workplace and affect the majority of the 1.9 million or 2 million in employment. Approximately 20% of the workforce will be affected. Many of those concerned are not well organised and do need protection.
Section 7 provides for a new definition of "employment regulation order" to differentiate between those made before the commencement of the Industrial Relations Act 1946 and those made after the commencement of the Act.
Section 8 provides for the principles and policies to which joint labour committees must have regard when formulating proposals to submit to the Labour Court for employment regulation orders. A joint labour committee must have regard to the legitimate interests of the workers and employers, the prevailing economic circumstances. Only in a fools' paradise would one believe we do not have to take account of the current economic circumstances. Regard must also be had to the employment circumstances of the workers and the prevailing commercial circumstances of the employers.
Last year or some time before that, most Deputies received many representations on joint labour committees. I have a major problem with them and do not know if it is being addressed in this legislation. Neither side at joint labour committees was representative of the people it was supposed to represent. Many employers, especially in the catering area, contacted various Deputies after a visit from the National Employment Rights Authority and stated they were shocked to hear there was such an entity as a joint labour committee. I refer to businesses that might have been set up in the past ten or 15 years. Nobody from the employers' side who purported to represent the businesses on the committee ever made contact with them. The businesses were not even aware there was such a representative.
I question the setting up of structures that we do not audit on occasion to verify that those coming to the table have received a mandate from those whom they are supposed to represent. This has been causing a big problem. I find severe fault with the employers' representatives on the committees. Irrespective of the branch of IBEC they were from, they were not fulfilling the role they were expected to fulfil at the negotiating table, which role should have involved their consulting their members. They could not have done so because practically no member covered by some of the joint labour committees was even aware of the committees' existence or of the identity of their local representative. Shame on the employers in that regard.
I have a firm view on those on the other side of the negotiating table and am equally critical of them. I am pointing out the deficiencies of the past that I would like to see corrected. Members have already referred to trade union membership. There are approximately 1.9 million people in the Irish workforce, approximately 300,000 of whom are public servants, all of whom are in trade unions. In the private sector, there are approximately 1.6 million employed. The total union membership is in the order of 600,000, which means there are 300,000 union members in the private sector. It is quite clear, therefore, that the trade union movement represents significantly fewer than 20% of the workforce. I am critical of the trade union representatives on the joint labour committees because, by definition, they do not represent over 80% of workers. Many of the people employed in the various industries about which we are talking in respect of the joint industrial council are not unionised in the first instance.
On the basis of these statistics, one must consider the legitimacy of the bargaining mandate on both the employer and employee sides. This is one reason there were difficulties over recent years. People who were removed from the coalface were representing the employer side on the ground, including employers in small restaurants, hotels and pubs producing food. Similarly, the spokespeople on the employee side were not representative of those actually working in those establishments. This is probably why some of the agreements got out of hand, contained a few anomalies and were not representative of either side.
One of the big anomalies I discovered was that, where an employer wanted to employ an individual, a student, for example, at the weekend, the previous agreement stipulated a premium rate should be paid on Sundays. That was accepted across the board. The rate was reduced recently in the catering sector to make it more competitive.
This matter does not merely relate to employers and employees. The public is also involved. The service to the public was reduced because employers closed establishments which sell food on Sundays because they were not prepared to pay the excessive rates set down under previous agreements. In circumstances where owners paid these rates and passed on the cost to their customers, the price of Sunday lunch was excessive for some families and they were obliged to stop going to the establishments in question. Business decreased as a result and some people lost their jobs.
Excessive rates of pay were agreed in the past I am not referring to the minimum wage in this regard. I may be in a minority on this side of the House but I am of the view that the minimum wage should be sacrosanct. The minimum wage is set at €8.65 per hour. If a person is unemployed, he or she will receive €200 per week for not going to work. I accept that people are entitled to this rate of social welfare, which, based on a 40 hour week, is approximately €5 per hour. A person in receipt of the minimum wage is, therefore, only paid €3.65 extra per hour for doing 40 hours per week. He or she may be obliged to travel to and from work and to bring lunch with him or her. I would not agree with any reduction in the minimum wage at any stage.
During the past year I have been critical of many well-paid professionals who stated that the level of the minimum wage is one of the problems with which the economy is afflicted. Some of these individuals earn more in one hour than people on the minimum wage earn in a week. Certain comments made by these well-paid professionals and many Members of the House in this regard have been reprehensible. I have been obliged to challenge the views of some of these people during conversations relating to this matter.
I accept that some of the rates of pay agreed in respect of certain trades in the construction area are excessive. Reaching agreement on these rates was just plain wrong. The rates to which I refer were not merely overly generous, they were illogical in nature.
Paying premium rates on Sundays is fine, as long as those to whom they are being paid have done a week's work. If individuals have worked 30 to 40 hours during the week, they should certainly be entitled to be paid such rates. I understand, however, that if a student employed in his or her local chip shop works on Sunday having only worked six hours during the remainder of the week, he or she must still be paid the premium rate for the first hour's work in the week. That is wrong. A person should be obliged to work a minimum number of hours before he or she is entitled to be paid an overtime or premium rate. The concept of paying such a rate in respect of someone's first hour of work is not great and is preventing some employers from taking on official part-time employees at weekends because they must pay this rate even though said employees may not have worked any hours from Monday to Saturday. This matter must be examined in practical terms.
I wish to provide an example as to why some rates of payment were not only uneconomical but also illogical. I refer to the social and affordable housing that has been build under the Part V provision, which was designed to ensure that there would be a social mix in new housing estates. Part V provides that a developer or builder who is building houses and selling them to the local council under the affordable housing scheme is entitled to charge the cost plus a profit margin of up to 15%. The legislation does not stipulate that they must receive 15% but, by and large, this is the benchmark paid to them. A builder in Portlaoise explained to me how the system operates. Under the approved rates relating to the construction industry, a person who is a construction operative class D and who might only be employed to sweep the floors of new houses is entitled to €14.88 per hour. An individual employed to sweep the floor of the local shop only receives the minimum wage of €8.65. The builder with whom I spoke wanted to know why he should be obliged to pay someone €14.88 per hour to sweep the floor of a new house when that individual's brother or sister might be paid €8.65 for doing the same job in the local shop. In my opinion, it is illogical to pay €14.88 per hour in such circumstances. That is what has brought some of these arrangements into disrepute.
I wish to discuss the logical consequences of what happened in Portlaoise. There will be similar consequences in Monaghan, Castlebar, Ballina and every other provincial town. The production costs incurred by the builder to whom I refer in Portlaoise must, as a result of it being a public contract, be based on the officially agreed construction industry rates. This means that €14.88 is the lowest rate that can be paid to anyone who carries out work on the site. Obviously, higher rates apply in respect of craftspeople. When the builder calculates the cost of building social and affordable houses for Laois County Council and adds a profit margin of 15%, the actual price — including the legitimate profit margin provided for in legislation — is €170,000 per house. The market value of such a house in Portlaoise would only be €130,000.
The builder in question is, therefore, obliged to charge the local authority €170,000 for a house that can only be sold for €130,000. The Part V provision obliges the council to pay him the construction cost plus a profit margin with no regard to market value. Though well intentioned, the Part V provision was somewhat naive in nature because it was designed on the assumption that prices would always be higher than the cost plus a profit margin. Those who drafted the provision never conceived that prices might drop. Part V is actually perverse in nature, particularly when house prices are dropping and when market values are lower than the officially approved construction rates.
The council has objected on every occasion to paying a price above the market value but the builder in question has won out each time because the law in this regard is black and white. This is an example of artificially high approved rates which are not based on local market conditions producing a cost that is higher than the market value. Taxpayers are losing out in this situation and, ultimately, that is to no one's benefit.
The Minister of State, Deputy Calleary, and I discussed a particular matter at a meeting of our parliamentary party earlier this week. In the past I have criticised the excessive nit-picking of the National Employment Rights Agency, NERA, in respect of certain inspections. If a person works in a hotel and if, due to the fact that a wedding was taking place there, he or she does not go home until 12.45 a.m. on Sunday, different rates of pay apply. This may be the law but there comes a point when this must be viewed as nit-picking. However, there is a role for NERA to play. I tabled a motion at our parliamentary party meeting, which the Minister of State commented upon and which was passed, recommending that compliance officers inspect building sites operated by those who were awarded publicly-funded contracts to construct schools, schemes of houses or roads in order to ensure that the approved construction industry rates are being paid to employees.
If a builder is awarded a contract on foot of a tender based on a high price and then pays his employees at half rate, he is pocketing taxpayers' money. This type of behaviour drives down wages. In such circumstances, the taxpayer is paying the full, approved tender price. I want compliance officers to be appointed to inspect projects relating to publicly-funded contracts in order that we might ensure that the full rates of pay are being paid to employees by contractors and sub-contractors.
I look forward to the legislation being progressed through both Houses.
I welcome the opportunity to contribute to the debate on the Industrial Relations (Amendment) Bill 2009. As Members are aware, the need for this legislation arose on foot of a number of High Court challenges in respect of employment regulation orders, EROs, and registered employment agreements, REAs. As Deputy Fleming stated, it is difficult to keep track of the various matters relating to the area of employment to which the Bill refers. Coming to terms with the legislation continues to be an education for me. The Fine Gael Party believes that not to revise the whole labour relations system and structures, including employment regulation orders, EROs, and registered employment agreements, REAs, is a missed opportunity. Many of these go back to the Industrial Relations Act 1946 and have been added to along the way. These need to be stripped down and built up again. I am not saying there should not be protections in place for employees but the structures must be able to support them in areas such as pay, sick leave, overtime payments, time off etc., effectively.
Not all workers are represented by unions or in an organisation that recognises unions. In 1984, 30,000 workers were covered by joint labour committees, JLCs. In 1998, it stood at 162,000 and I have no doubt it has grown again in the past decade. A substantial sector needs representation. We have the anomaly that in the hotel sector, unions are on the JLCs. It is important this area is reformed, particularly when we see the challenges in many sectors.
Supports and protections must be in place for employees who do not have the support of a union in their workplace. However, there are anomalies in certain sectors such as the hotel and hospitality sector. Due to these, many hotels and catering establishments are not open seven days a week. I accept the current economic climate may also be a factor but there are difficulties for them to match the commitments required of them under EROs. Many Members have been made aware, as Deputy Fleming said, of how different employment rates apply in the hospitality and catering sector if it is open on a Sunday and whether it is city or rural based. I can understand that in some areas there may be a premium but that should be for the employer to decide. It is not a consistent approach and we have missed the opportunity to examine it in this legislation. The same applies to the different rates that apply across various activities in the retail sector such as whether one is working in a butcher's shop, selling bread or clothes. These different rates are leading to many challenges for employers.
Hotel and catering work on Sundays can suit students, who have college commitments Monday to Friday, and young mothers, who find it easier with child care if their partner works Monday to Friday. However, because of the onus on employers to pay what they consider restrictive rates and enforce restrictive EROs many have stopped trading on Sundays. Pubs, for example, that did food on a Sunday are not doing it any more. It is a pity as Sunday is a recreational leisure day for many people.
I do not agree that the minimum wage base should be changed. Many of the EROs and REAs set higher pay rates for different skill-sets which is important. If people have developed their skills and a trade, then they deserve recognition for that. The minimum wage legislation is a protection for workers, particularly ensuring they are not exploited. Many Members know of employers who think they can get away with not adhering to the legislation, particularly with immigrants. Many immigrants are not aware of the legislation and the obligations employers have in this area. To many of them, €8.65 would seem to be a substantial pay rate and anything less than that might still seem attractive. The National Employment Rights Authority is slowly making its presence felt across the country in ensuring adherence to the legislation.
Members will have had representations on REAs from electricians' bodies on the restrictive fact that before an electrician can work he or she must be a member of the Technical Engineering and Electrical Union. That is a bizarre position which I want to raise directly with the Minister.
I agree with the Bill's principle that the JLCs must recognise the legitimate interests of workers, employers, the prevailing economic and commercial circumstances of an employer and the terms of the national agreement relating to pay and conditions. The Bill allows for an REA or an ERO to be amended or revoked, an important provision as they have been seen to be restrictive to date and did not allow employers or their representatives to take cases to the High Court.
Fine Gael believes this is a missed opportunity to reform the system, however. Deputy Varadkar produced legislation in this area recently, outlining our proposed reforms to EROs, REAs and the JLCs. A JLC comprises four representatives from employers and employee representative organisations and three independent members. It has been noted the latter tend to carry the balance of power in the JLC, resulting in EROs being imposed on employers and employees. The Fine Gael legislation would remove the independent members to have a JLC consisting of equal numbers of employer and employee representatives. We have looked at it to try to achieve a consensus approach rather than the imposition of decisions on any one group.
We need to see the detail of the inability to pay clause the Minister has proposed. It must be acknowledged that in some cases there will be an inability to pay, but there are many concerns surrounding that issue. For example, I hope it does not affect the minimum wage and that it would apply to higher pay rates. If one employer claims inability to pay, will that allow others not to pay? Under the structures outlined, the employer's books will be open and they will be examined. The employer's ability to pay will be adjudicated on, but what affect will that have on other employers who are in competition in the same business in the area? That needs to be examined because we have many concerns in that regard also. In addition, will people be queuing up to claim inability to pay? There is an inability to pay clause in the National Minimum Wage Act 2000, but that has not been invoked.
On the whole, we welcome the Bill but we are concerned to ensure that there would be a floor below which the minimum wage would not go and that issues surrounding competition are considered also. IBEC has looked for it this measure but SIPTU has concerns about it and believes it will force a race to the bottom and push wages even lower. We must protect against that happening.
This is a missed opportunity. There are many anomalies and inconsistencies that should be revoked. The Bill is reacting to challenges rather than taking the opportunity to reform the system, which has become outdated and does not represent the current workplace. In this regard, I am referring not to the economic climate, but to how society has changed and advanced, for example, the ability of workers to move from job to job. A mobile workforce and part-time work is very much in demand among young people, and in terms of female participation and students. Some people want to be free to work 12 or 14 hours in one day rather than for seven, eight or nine hours five days a week. It suits people because of their family situations and commitments — they may be carers or whatever. The system does not recognise or allow for such flexibility and the Bill was an opportunity to address all those issues.
I welcome the opportunity to contribute to this Bill and I compliment the Minister of State, Deputy Dara Calleary, and his officials on introducing it. It is timely, not least in the context of the downturn in the economy and the need for a modernisation of labour legislation, but for a much more flexible approach than we have seen in the past. I want to dwell on the inability to pay provision and I very much welcome the Minister of State's intention to introduce an amendment in this regard on Committee Stage.
At the outset, as a former Minister of State with responsibility for labour affairs, I very much stand by the absolute requirement that workers are adequately paid and properly compensated and that workers' rights are protected. That must continue to be the bedrock of our employment legislation. I have always felt strongly about the need for strong unions and strong representations to ensure workers' rights are protected and that any type of race to the bottom, such as we have seen in this country in the past, would be prevented. This is not the purpose of this legislation or the inability to pay clause, but we must start to be realistic about our employment situation in the light of the current crisis in employment and in business generally.
There are many pressures on employers in a number of sectors who are currently experiencing, as a consequence of the absence of proper procedures, very significant difficulties. I receive complaints from employers who have NERA calling into their places of employment, stating it will bring them before the courts if they do not pay in accordance with registered agreements. There might be some case for that in good times but, at a time when companies in many sectors such as catering, retail and construction are struggling to survive, it is ludicrous for a State agency to do such work. There must be flexibility and, consequently, the inability to pay clause is of major significance.
The existing system for the making of both employment regulation orders and registered employment agreements must be improved to provide for their much more effective operation. Given so many recent challenges in the courts, no doubt this Bill will provide for a number of amendments to the existing legislative framework surrounding the GLC and REA systems. I particularly welcome the improved procedures that will be brought about, the clear principles that will be enunciated and the policies which now must be taken into account by the GLCs when they are formulating proposals for the EROs.
It is also important to point out, as the Minister of State has done, that the joint labour committee and registered employment agreements are now coming into line with the procedures already established under the National Minimum Wage Act 2000, which allows individual employers to submit inability to pay claims to the Labour Court for adjudication. In my view, the proposal that the joint labour committee and the registered employment agreement system be brought into line with the procedures that allow individual employers to submit inability to pay claims to the Labour Court for adjudication is a good one. These situations have always featured in national pay agreements and it is interesting that they have never been invoked.
However, the most important aspect of all of this is that any cut in hourly rates will need the consent of the majority of workers. The Tánaiste and Minister for Enterprise, Trade and Employment has pointed out that the clause will not be a diktat for employers and it would have to be negotiated with workers. This is a critically important part of what I would like to see in this legislation, that there must be agreement with the workers involved if there is to be a cut in pay rates. I refer mainly to cuts in pay rates which are far above the minimum wage. I do not for one moment anticipate that in many sectors the minimum wage would be breached, although there are some sectors and companies, particularly in the hospitality business, where minimum wage rates are causing some difficulty at present.
I would certainly not like to see a major breach of minimum wages. In individual companies and sectors where it is a question of trying to stay in business, there may be some arguments. Indeed, we hear continuously from employers the argument that the minimum wage should be discontinued, but I do not agree. It is important that we keep it, but it is also important to allow some flexibility where it provides employment which otherwise would be lost or ensures that companies which would otherwise go to the wall can remain in business.
I want to dwell more on pay rates which were far above the minimum rate and, in particular, I want to deal with the situation in the construction industry. There is no justification in this climate for some of the rates being paid in the construction industry. I have just checked with some people in the industry and the registered agreement for the construction industry stipulates a basic rate of €15 per hour and time and a half after 39 hours. In the current climate, where companies are struggling, where companies are on State contracts, which have very much changed recently, and where the State is paying, I see no reason workers who are prepared to work for less than that amount in order to keep their jobs should not be allowed to do so.
The basic labour rate in London is £11 per hour. That is a flat rate. There is no time and a half for overtime.
What about the cost of living?
I am quoting a company from the west which had the initiative to go to London to try to ensure continuation of employment for its workers. It is currently tendering in London and the purchase price for a load of gravel delivered to Tottenham in London is £5.65. The purchase price for a load of the same material to be delivered in Dublin is €10 per tonne. Structural concrete is €10 to €15 cheaper in London than in Dublin. When one considers that there are no natural quarries within a 100 miles of the centre of London, it puts that price difference into perspective.
If we want to be competitive, get our economy back on track and attract industry, we must be conscious of our cost base and our competitive situation. The registered agreement for the construction industry stipulates that a man operating a stop and go board on a roadworks job earns €850 per week plus €165 subsistence which is more than what a junior doctor or an engineer with four or five years' experience earns. There is also overtime. In this climate in which we are trying to survive, those kinds of rates for water and sewerage jobs or roadworks jobs being paid for by the State make no sense.
The amendment must allow for flexibility. If workers are prepared to work for less than those rates in order to keep their jobs and to keep the company in which they work in business, then that should be allowed. I would not for one moment allow a situation where those workers could be replaced by other people who would be prepared to work for less. I would not allow for any kind of race to the bottom.
I have been made aware by workers and employers in the construction industry that they want to become more competitive in order to keep their jobs and win contracts. Where there could be a local agreement in a company and where the workers say they will work for €10 per hour instead of €15 per hour in order to keep their jobs and keep the company competitive, then that should be allowed. It is vitally important we recognise what is happening on the ground, the number of companies going to the wall and, in particular, that the State is paying for all these public service contracts, including water and sewerage schemes, roads schemes, schools building projects and so on which we all want to see continue.
The Department of Education and Science estimated that the new engineering block in NUIG would cost €52 million. I understand seven of the eight tenders were below cost and that the winning tender was €29 million. The State got good value for money. It should now seek to put more of these kinds of projects out to tender in order that we get good value for money. If a company and its workers agree that in order to get these jobs, they must take some reduction in wages from €15 to €20 per hour to €10 or more per hour, then that should be accommodated.
I very much welcome the Minister's initiative in regard the inability to pay clause, which is of a temporary nature. I am satisfied with that but I believe that in some sections of the construction industry and in some places in Dublin, where some people seem to have lost the run of themselves, flexibility is necessary, as is a recognition that the good times are over and that everybody must take some cut.
I reiterate that I do not for one moment accept that there should be any kind of race to the bottom or that workers in a company should be let go and that the company should be allowed to replace them with workers on lower wages. That is not what I am saying. I would not like to see anything like what happened in the Irish Ferries situation where there was an attempt to get rid of workers and bring in contract workers on low pay and on less than the best terms of employment. Employers should not be allowed to deal unfairly with their workers, take advantage of them and impose changes to the rate per hour, nor should that be the kind of diktat available to an employer.
That is very different from a situation where worker and employer are prepared to reach agreement, as is happening in many places. Union members from several companies have come to me recently to say they are happy to work for €10 per hour and that they do not want those NERA guys telling their employers they will take them to court if they do not pay €15 per hour, which is a ridiculous situation. I ask the Minister to put a stop to that kind of carry-on by NERA. If it has nothing better to do than that, then we should get it into some other kind of employment.
I wholeheartedly support the Bill, in particular the amendment in regard to inability to pay clause. I hope we will see greater flexibility and understanding and that unions and employers will respect this clause as being in the interest of workers, in particular, in order that they may continue in their jobs and that the companies in which they work may continue in business.
I am pleased to have the opportunity to speak on the Industrial Relations (Amendment) Bill 2009. The current economic difficulties have resulted in many sectors launching a sustained attack on important areas such as the minimum wage. I was glad to hear speakers on both sides of the House express a decent degree of support for the retention of the minimum wage, which many employers are questioning. It would be very wrong if we were to go down the road of tampering with the minimum wage and the minimum wage legislation.
Last year we put NERA on a statutory basis which was part of the Towards 2016 agreement reached by the social partners. Sadly, the social partnership is no longer in place because of Government measures in the recent budget and Government failure to proceed with the negotiations in regard to it. I was appalled by the level of opposition to putting NERA on a statutory basis. The reports of NERA show just how unscrupulous some employers are, who are using and abusing some of the most vulnerable workers in society. NERA is now a statutory watchdog. It is extremely important that we take care of people in the lower levels of employment, that is, people on the minimum wage or slightly above it who may or may not be represented by a trade union, in particular during a period of economic difficulty, because they are the vulnerable people in our society.
We now have a situation whereby there are sustained attacks on this framework of legislation, including employment regulation orders and registered employment agreements, which have been instanced in the legal and constitutional challenges brought by employers to try to undermine this element of the industrial relations framework, which is a shame. Not long ago the word was there were more dog wardens than inspectors in the construction industry. That situation has improved. There was a target of 90 inspectors and I understand some 75 are currently in place. It is unfortunate they were not there when the construction industry was rampant and all sorts of abuses were taking place therein. All sorts of dangerous practices have resulted in an inordinate number of injuries and fatalities. That is the other side of the coin.
At the current time some 700 top public servants are now retaining a 5.5% bonus while people at the very bottom of the public service, such as clerical officers, are having a 5% reduction in their wages after they earn the first 50 cent. We still have grave inequalities in the way in which we conduct our business. It important that we have a solid, legally-based industrial relations framework which will protect the most vulnerable in our society because many sectors are not properly unionised and many people, particularly in times of difficulty, can be abused and used by unscrupulous employers.
For that and other reasons I welcome this Bill, the purpose of which, according to the explanatory memorandum, is to strengthen the existing system for the making of employment regulations orders, EROs, and registered employment agreements, REAs, and to provide for their continued effective operation. The Bill also provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990. EROs and REAs have been in operation since 1946 and regulate the terms and conditions of an estimated 300,000 workers at present, a figure we would like to see examined carefully because we know there has been an inordinate increase in recent years but we do not know to what extent.
The minimum pay and conditions of employment in low paid sectors where collective bargaining is poorly developed are negotiated and drafted into an ERO by the joint labour committee. These terms and conditions are legally binding and apply equally to union and non-union employment, which is the strength of the EROs, when approved by the Labour Court and are transposed into law by the Minister for Enterprise, Trade and Employment, a new role which will be given to the Minister. In contrast to EROs, REAs are collective agreements negotiated by the trade union movement and employers in a particular industry or business and registered with the Labour Court. They also apply to all workers and employers in that industry.
The system has stood the test of time in protecting Irish workers against unscrupulous employers who are only interested in profit and a race to the bottom in terms of wages and ensuring there is a decent wage for a decent level of work. They are also automatically applicable to contractors based outside of Ireland and can be enforced against such contractors. Thus, these instruments protect against unfair and unscrupulous cross-border competition and a race to the bottom for wages. In recent years employers have engaged in constitutional and legal attacks on the system. In Towards 2016 the trade union movement persuaded the Government to introduce legislation to protect and secure the system against legal challenge.
From a worker's viewpoint the JLCs, EROs and REAs are valuable industrial relations mechanisms. They apply to categories of workers who are generally above minimum wage rates and below unionised rates in fraught and precarious areas of employment. They are good ways of collectively vindicating workers' rights. As a result of their binding nature on all employers they provide a strong barrier against a race to the bottom. This point became particularly obvious in the debate on the first Lisbon treaty referendum and demonstrated that Ireland had a more robust system of worker protection than many other European Union countries due to the legal underpinning of the orders and agreements.
However, employers at home and abroad have been seeking to undermine that legal protection. The debates on the first referendum on the Lisbon treaty were very focused on workers' rights. Some 40% of those who voted against it stated one of the main reasons for this was because of their fear that the Lisbon treaty would result in an undermining of workers' rights. They pointed to the lack of legal protection for workers' rights in vulnerable areas in other countries. Sweden, Finland, Luxembourg and Germany did not have the same type of protective measures in place. They were unable to apply and connect the system directly to the Irish situation, largely because of EROs and REAs. Nevertheless, because the situation was not properly explained it resulted in a significant number of people who would be sympathetic to a good legal statutory structure of industrial relations voting "No" in the first Lisbon treaty referendum. That was something which we argued and the legislation which was being introduced to strengthen it was also an argument put forward in the second Lisbon debate and carried a lot of clout. It is another reason we should make sure the agreements to which I refer have a strong underpinning. A number of challenges have been taken, most notably a constitutional action by the Irish Hotels Federation in 2007. Thus, the present legislation is a welcome measure to tighten the legal and constitutional basis of the system. Despite that, it is time to examine, regulate and overhaul the JLC system. For example, the last official estimate of the number of workers covered by the system was 162,000 in 1999, more than ten years ago. It had increased enormously since the previous ten years. The increase is largely due to the huge boost in the economy and the massive increase in the service, hotel, tourist, catering and construction industries in recent years, as well as the unprecedented expansion in the economy.
I understand the current estimate being compiled estimates those working in the industries to which I refer at between 156,700 and 461,600, or 9% and 25% of total employment in Ireland. It is a huge disparity. We do not have accurate figures on the number of REA, EROs and workers affected by them, and the difference between the different ones which have been negotiated. A significant job of work is required to put a proper database and audit of the system in place. We need information and an audit of the number of practices in order that we can streamline the system. This is an area which the Minister should address as a priority. In the context of this Bill it would be very valuable if we had all of the information, which we do not currently have, to hand. I hope it will be done shortly, because we should consider the extent of the workforce which is affected by this Bill.
The Minister received a submission from the Irish Congress of Trade Unions shortly after the Bill was published in 2009 which expressed support and some concerns. The delegates expressed their support, and some of their concerns, to the Minister of State. Of particular concern were remarks made by the Minister of State to the effect that he was considering introducing an inability to pay clause which would allow an exemption from the requirements of the ERO-REA. He said the Government was thinking along those lines. The danger in having such a condition is that application for the exemption would become the norm in the armoury of every employer and the bottom line payments across the board, which characterise the ERO-REA, would be frustrated. With an inability to pay clause, the legal integrity of the ERO-REA system might be frustrated and if this exemption were to be created the system would require a great deal of care.
The Irish Congress of Trade Unions listed a number of other concerns which I wish to place on the record in summary fashion. First, ICTU feels that the provision of exemptions will encourage and reward unfair cost competitions, as companies will tender, even for public procurement, on the basis of the exemptions. This will have the effect of increasing all companies' inability to pay because any company that factors the full rate of the REA-ERO into its tender will be put at a disadvantage. The procurement system would itself immediately distort the entire process.
Second, the safeguards are too easily evaded. For example, the provision that the majority of workers must agree to an exemption will not offer robust protection in employments where there is no trade union. It is easy to imagine the type of pressure that might be exerted on workers to agree to their employer being given an exemption. Here again we would bring an unwanted factor into the equation.
Third, the safeguard whereby an employer would be granted an exemption only once can be avoided by recasting the company and thus easily disguising repeat applications for exemptions. This is a particular worry given the contracting-sub-contracting and phoenix-like features of the construction sector. We know very well how companies can restructure themselves and use the system if the opportunity is present.
Fourth, the proposed method of establishing inability to pay, namely, that the Labour Court must be satisfied the employer is unable to pay and is likely to lay off workers or terminate their employment, is much easier to establish by contractors in poorer EU member states. This could give rise to unfair and inappropriate cross-border competition. In other words, the very strength of the ERO-REAs in the 27 member states and some other countries would be undermined because poorer countries could plead inability to pay much more easily than, for example, strong companies in this country.
Fifth, there is no limit to the amount below the ERO-REA that the Labour Court will exempt an employer from paying or providing. There are particular concerns about how exemptions will interact with pension obligations and other entitlements set down in the agreements. Again, we must ask what is the bottom line.
Sixth, the proposed duration of the exemption is too long — at between 3 months and a year — as construction contracts regularly last for periods less than a year. This again is an avenue for undermining the EROs and REAs.
I offer as an example, the recent high profile case of the popular Italian restaurant, Carluccio's, on Dawson Street, which demonstrates how external factors can impact on employment and wages. The retail sector in this prime Grafton Street area has plummeted in business activity but commercial rents have remained similar to what they were in the heady days of the Celtic tiger. Most of the retailers in this area not far from Leinster House are up in arms about the incredible rents they are still expected to pay. Although it continued to do good business Carluccio's could not reduce its prices, pay staff and pay the rent and so it was forced to close its doors. A viable business, even in these hard times, was shut down. Happily, a compromise was reached with the landlord on the rent issue, the restaurant was reprieved and is again open. However, very many other retail outlets in the general area have closed because of excessive rents. The landlords in this High Street area are mainly large companies and pension funds and are based abroad. They do not know the situation on the ground in this country and they do not care. They want to get the return on their pension funds or for their shareholders. That is a feature of the High Street rents just down the road. An inability to pay exemption would allow the ERO-REA to be breached and permit a race to the bottom but would do nothing about the real cause of the problem — the exorbitant rents being charged in these difficult times. This is not a single issue but is much broader in terms of how we must deal with keeping down prices in this economic climate.
The amendment to the definition of worker is extended to include workers in the Vocational Educational Committees, VEC, who are other than teachers, to enable them access the dispute settling agencies, namely, the Labour Relations Commission, the Labour Court and the Rights Commissioner Service. That is reasonable because at present they have access only to a scheme of conciliation and arbitration and they should have the expanded access. However, any future change, according to this legislation, will be made possible only through fresh primary legislation rather than by statutory instrument. Even though I am not a proponent of the statutory instrument, nevertheless this requirement will result in a lengthy parliamentary process and the workers concerned will undoubtedly experience a considerable and unnecessary delay before the new definition is in place. There is a balance to be arrived at between protecting the worker and allowing a procedure that may go on for months or years. This seems to be an area where a ministerial order would be appropriate, as with a statutory instrument, unless there were a particular aspect to a case that would require primary legislation..
There is need to address the totally unsatisfactory situation whereby workers who retire are denied recourse to the employment rights mechanisms unless they refer their claim prior to retirement. This is an anomaly in the legislation. An amendment should be tabled and we should address the situation. Retired workers are exactly that and deserve their rights as workers. The legislation should be amended to provide a facility for those workers to have their grievances heard and examined.
The industrial relations architecture which contains employment regulation orders and registered employment agreements has served workers, the country and employers well for more than half a century. I welcome the legislation's main thrust which is to strengthen this legal framework. However, it would be short-sighted if the minimum wage were to be threatened in the present economic recession and if agreed minimum rates negotiated between employer and trade unions for the most vulnerable workers in our society were to be undermined.
I welcome the opportunity to make a brief contribution to a very important debate. The purpose of the Industrial Relations (Amendment) Bill 2009 is to strengthen the existing system for the making of employment regulation orders and registered employment agreements. The Bill also provides for the amendment of the definition of "worker", as made in section 23 of the Industrial Relations Act 1990. As we know, this Bill was necessitated by recent High Court challenges.
I was interested in Deputy Costello's point about a particular restaurant near Grafton Street, although I am not familiar with it. The Deputy might be interested to hear that I went to a football match at a very famous ground in England some time ago. The very prominent chairman of that club told me that a long time ago he had bought properties in Grafton Street. I am not getting at this chairman of a Premiership club and I will not name him. He told me that the property he had bought in Grafton Street was a good investment. What Deputy Costello said in regard to those landlords is very accurate. I am not getting at anybody and I do not know if the particular individual has retained his property but I am sure he has because it was a good investment for him at the time.
I welcome the presence of the Minister of State, Deputy Calleary, who was my former neighbour in the dungeons of LH2000. It is good to see him progressing so well and I compliment him on the job he is doing. I do not patronise him when I say this. In any dealings I have had with the Minister of State and his office, he has been very helpful.
This Bill sums up my position regarding employment issues. Deputy Martin Ferris was wondering how I would slip Tallaght into this speech. While there are many people working in Tallaght, there are many people in Tallaght who are unemployed. I am not afraid to express my concern for those people in my constituency and in the Dublin region generally who are unemployed. The unemployment figures for those registering at the social welfare office have increased hugely in the past year or so, like everywhere else in the country, and there are now almost 10,000 people unemployed in Tallaght. This is relevant in the context of this Bill.
When I first worked, I worked in Carton Brothers wholesalers, a well-known old Irish company then situated in Halston Street. I was lucky to get a job there and while there took an interest in industrial relations and trade unions. A great man in Carton's at the time, Joe Forde, encouraged me to become involved in this area and nominated me for the Dublin District Council at the time. It may come as a shock to some Members that I have that trade union background and that I took evening courses in industrial relations. At a time I was not sure of what I wanted to do with my life, this was something I genuinely wanted to do. I had no notions about politics at the time, but wanted to do something meaningful. That is not to say politics are not meaningful this week. I was wondering earlier how I would slip George Lee into this contribution, but I will take the advice of Deputy Enda Kenny and move on. I do not want to get into any more trouble with my colleagues in Fine Gael.
I recall that in those days we responded in a trade union way with regard to little issues that arose in the workplace. I often think back to those times and wonder what I was doing. Things have changed over the years. The role of the trade unions has been modified and they have had to do things differently. This legislation points that up. The year 1946 was a long time ago, but it was a good year for me. Other people have probably told the Minister, both in this debate and elsewhere, that there is much to be done in this area. At the same time, industrial relations policy is changing by the day. It has certainly changed over the past year and some of the attitudes that prevailed over a year ago are now outdated. However, as the recession recedes and the good times return in some form, industrial relations policy must take stock again. At this point in our history, it is good we are taking a look at industrial relations and the various issues involved.
I am not going to say that I am comfortable about the section in the Bill dealing with inability to pay. At the same time, I understand the reason the challenge is there. There are two sides to the issue. We must continue to create a situation where there is confidence in business and where jobs are created. The issue is about creating jobs. Bill Clinton may have said, "It's the economy, stupid", but it is now all about jobs. This is true for all of our constituencies. The situation is no different in Tallaght in Dublin South-West than it is Mayo, Wexford, Cork or Kerry. We must all fight our corner and come in here and make the case for jobs for our constituencies. I am not going to fight with anybody else, although I know some of my country cousins often say that everything goes to Dublin. It does not. However, Dublin is the capital of the country and I am not afraid to stand up and fight for it. Lest that statement start a rumour, I am not nor will I be a candidate for mayor of Dublin. I am quite happy being a Fianna Fáil Deputy for Dublin South-West.
Deputies should never rule themselves out of any position.
Never say never.
I want to be clear about this in case somebody takes that meaning. I am happy doing what I am doing and am positive about the need for jobs in the Dublin region, particularly in Dublin South-West and Tallaght.
Deputy Costello and others referred to the issue of pressure on families and people with jobs who face the taunt that at least they have a job. It is important we listen to these people. Some of them are faced with the threat of the company they have served and to which they have been loyal considering the inability to pay clause. At the same time, there are issues that may give rise to the need for that. Some Deputies and business representatives have made the point that companies must get some assistance to keep going and maintain employment. One of my colleagues made the point last week that many small companies around the country support four or five jobs, but other companies have much larger workforces.
Everything must be done to facilitate the retention of employment in small companies. However, my jury is still out on the issue of the inability to pay clause. It is very much a matter of balance. Where a company genuinely feels it has an inability to pay, we must understand the effect that may have on the workers. Many of those who have visited me at my clinics or elsewhere have made the point that while they had a good job a year ago, their company is now under pressure and they are being told they must take a pay cut or that they must cut their hours. Times are difficult.
I said yesterday when speaking in another debate that people sometimes think this only happens in our jurisdiction. However, if one watches Sky News or CNN, one sees the same thing is happening everywhere else. In the news today all the talk is about economies I would have thought were good economies, the economies of Greece, Portugal and Spain. These countries all face similar challenges and difficulties and we should be aware of that. The issue is about retaining jobs and creating employment. It is also about protecting workers from employers who might take advantage of the current climate and treat their workers in a way they should not.
On the legislation, I understand there has been a commitment, under the social partnership agreement, Towards 2016, to a follow up review and transitional agreement. The main amendments proposed relate to the Industrial Relations Acts 1946 to 2004. I understand the amendments include introducing a set of principles and policies to which regard should be had in making proposals for an employment regulation order, ERO. The Bill also introduces a set of procedures to be followed when formulating proposals for an employment regulation order and ensures Oireachtas scrutiny of such orders and registered employment agreements,REAs.
In talking about the work of the Oireachtas I will not be drawn into the debate in the media this week. However, I listened to "The Late Debate" on Tuesday night in which two of my colleagues, Deputies Niall Collins and Joe Costello, took part. Both of them skilfully and effectively supported and defended the political system against those who were saying that Monday's episode was all about the need to reform the Dáil. It is important that those who are responsible for getting a positive message out about the Houses of Oireachtas understand the challenges. We are easy targets in that regard. We are reminded by the line taken that the Oireachtas has a lot to do. I favour a process where Oireachtas committees take an active role in issues like this and issues such as nominating people to sit on State boards and committees. I have no difficulty in that regard.
I take a lot of interest in American politics, although I have never been to America. However, I have studied the American system and believe its Senate hearing system is very effective. If that kind of system could be introduced here — there is slow movement towards that in the Oireachtas — it would send out a positive message and negate some of the negative views that have been circulating since Monday. People are entitled to martyr any Member and say it means we need reform, but I have a different view. At the same time, I believe we should not be afraid to reform and to create the situation where the Oireachtas——
Could we meander back towards the legislation?
I take the Leas-Cheann Comhairle's correction. However, I have listened to many of the other speeches and I am not beyond the parameters used by others. Nonetheless, I am happy to take the direction of the Chair.
It could be the definition of worker party legislation.
I will not rise to that. The Bill secures the validity of both the REAs and EROs that were made and registered under the legislation prior to the current proposed amendments. It also introduces a power to amend an ERO within six months in the case of error and set a fixed term of office for the chairman of the joint labour committee. While I will not challenge the Leas-Cheann Comhairle, my remarks on Oireachtas reform fall very much into that section, which it is important to note.
It is also interesting to note that the Bill includes provision of an amendment to section 23 of the Industrial Relations Act 1990 to allow officers of VECs, other than teachers, access to the dispute-settling agencies. I understand the legislation proposed by the Minister proposes to remove the power to make changes in the definition of workers by ministerial order and to ensure that future changes in the definition will be made only by means of primary legislation. I am told a ministerial order dated 1998, giving local authority staff access to dispute-settling agencies, will also be confirmed by a proposed amendment of the statute. I understand that in addition to proceeding with the proposals to strengthen the existing JLC and the operation of REAs as outlined in the Bill, the Minister of State, Deputy Calleary, has also signalled his intention to bring forward amendments on Committee Stage to address a number of issues, including inability to pay, on which I made my point, interpretation by the Labour Court of EROs and REAs, access by retired workers to IR bodies and other issues.
To stray again into the area of Dáil reform, I have always taken the view that with regard to proposed legislation, it is good that we all have an opportunity to contribute, across the board, because we all have our views. It is a good system that we have a plenary session in which we have an opportunity to speak on legislation and get our thoughts on the record. Following that, the process moves to the relevant committees.
I would like to go to all the meetings of some of the committees. I once told a former Taoiseach that I enjoy committee work but I wonder sometimes whether the committee cares whether I attend or not. It is the problem of the Dáil that people do not see the committees at work. If anybody is looking at this debate, and I am sure not many are, they will see there are only four or five Members present and they will think everybody else is gone home, which of course is not the case.
The committee system of going through legislation, line by line, listening to what people have to say and dealing with Government and Opposition amendments, produces good work. The process then comes back to the Dáil, which makes the final decisions. I am a big supporter of the committee system. In a week in which there has been a lot of media coverage about what we do in the Dáil, how we do it and what systems we use, it is fair to make the point that good work is being done in regard to legislation, certainly in regard to this Bill. Much dotting of the i's and crossing of the t's will come forward from this process. I wish the Minister of State well in this regard.
I had hoped to stray into a couple of local issues that I wanted to put on record but, as the Leas-Cheann Comhairle has already chastised me, I will be careful. I have been getting a lot of mail——
The Chair has shown the Deputy great latitude.
The Leas-Cheann Comhairle might know Tallaght. He will know that in the area close to where he visited this morning, there is a major issue concerning St Joseph's special school in Balrothery. I put on record my support for that school, as well as my support for the west Tallaght resource centre. While I apologise for being parochial, having listened to some of the speeches, I know other colleagues have done the same.
I want to record my views in regard to the High Court challenge to which I referred earlier. As we know, it came from proposals made by the hotels to the Labour Court on the revised minimum rates of pay for workers, affecting an estimated 25,000 staff. This was an issue that crossed my desk in a big way and people in my constituency and in the Dublin region generally made contact with me on it.
At the end of 2007, workers' representatives voted in favour of the proposals while the employers' representatives opposed the proposals, leaving the casting vote to the chairman, who felt he was obliged to implement the proposals in 2008. On the same day, the Labour Court made an order to give effect to the proposals, with the resulting ERO due to come into effect on 16 November 2007. I understand that on hearing the ERO had been made, the Irish Hotels Federation immediately sought and was granted an interim injunction stopping the order from coming into force. The organisation, along with other members' organisations and a particular individual, were also granted leave to bring judicial review proceedings against the HJLC, the Labour Court, Ireland and the Attorney General.
It is fair to make the point in regard to balance in the implementation of the ability to pay clause. Two or three years ago, one could make points from these benches in regard to that issue, express one's attitude and everybody would be quite happy. Today, one must be very careful. I will not stand here and talk about, to quote a word often used by the leader of the Opposition, screwing employers at a time when we want them in all our communities to create jobs, to invest and to look after their employees. At the same time, we have to be open to the upset and concern that is often expressed by workers, not only in hotels but in many other jobs in many other industries, that it is difficult for them. While they are happy to be in a job, they do not like to be taunted with the suggestion that just because they are in a job, they should stay quiet.
I appreciate the latitude the Leas-Cheann Comhairle has allowed me. I wish the Minister of State well. This is important legislation and I look forward to supporting it.
The Bill is a further development of legislation that was introduced by Fianna Fáil in the 1940s at a time when there were similar pressures from employers to undermine wages and conditions. It is significant that such legislation, which reflected Fianna Fáil's then close relationship with the trade union movement and its support among workers, reversed what had been a period of sustained decline in wages from the 1920s onwards, when employers of that time had a close, cosy relationship with Cumann na nGaedhael.
At that time also, the economic debate was dominated by people sympathetic to employers who bemoaned the allegedly high rates of pay that were preventing the development of business here. However, despite the fact the tax on profits was cut in the 1920s, that there was little or no public expenditure to improve social provision and that wages and even pensions had been cut through official measures, and despite all that was done to penalise workers, the economy stagnated up to the 1930s . Then, as now, those who had money in the country were happy for the most part to engage in speculative investment or to invest their money abroad. It was only when the first Fianna Fáil Governments after 1932 introduced progressive legislation to encourage both industrial development and to improve workers' living standards and wages that any kind of development took place. Fianna Fáil might perhaps reflect on its history and on the contents of this Bill in the context of how it corresponds with its historical past before rushing to introduce the proposed amendments to reduce the minimum wage.
A similar process of economic growth and improved wages and trade union involvement in what has become known as "social partnership" was also evident in the 1960s and during our most recent period of growth. The clear lesson is that economic growth does not come from driving down wages and undermining hard work and improved conditions of employment. The contrary is the case. Yet, this is what is being claimed by many employers, economists, economic commentators and political representatives who take their cue from the employers' organisations. It is important mechanisms to allow workers some type of defence against efforts to undermine wages and conditions remain in place. How effective this and the measures contained in this Bill will be is by no means certain given the willingness of some employers to ignore existing procedures agreed between employers and trade unions and enshrined in legislation.
The context of this Bill has changed since it was first indicated that the Minister intended to amend it to allow employers to pay less than the minimum wage and the minimum agreed rates in other sectors under employment regulation orders and registered employment agreements on the basis that companies can claim an inability to pay. An estimated 300,000 workers will potentially have their wages cut if this happens. There are already people who are surviving on well below the average industrial wage, many of whom could be described as the working poor. These are people who despite working hard find it difficult to meet their mortgage commitments, rents and bill payments. What has been forgotten in all of this debate is that people earning the minimum wage, low income families and those in receipt of social welfare payments are part of a sector of our communities and society who spend every penny they earn in their local economies, unlike those in other sectors, including the rich, powerful and elite, who by and large invest their moneys abroad. The Government, supported by some of the Opposition, is prepared to go down the road of undermining and reducing the minimum wage.
The State already recognises the plight of people in this sector by way of the family income supplement scheme, which has been accurately described as a mechanism through which the State subsidises low wage employers. The Government is aware that it is virtually impossible for any person with children to live other than hand to mouth on €346 per week given the high cost of necessities and accommodation, many of which have been rented or purchased from the brothers, sisters, sons and daughters of the same people who believe that earning €8.65 per hour for serving meals or drinks that cost more than that represents a fair return.
Now that the Government, at the behest of ISME and IBEC and their friends, has put manners on the big bad public servants, including the ushers, bar staff, secretarial assistants and restaurant workers in the Oireachtas, who unbeknown to them were responsible for the recession, it is going after the minimum wage. These are people employed here and elsewhere in the public service who if their weekly wage was calculated on an hourly basis have already slipped below that threshold. We recently witnessed an attack on the public sector unions and workers, 49% of whom earn below the average industrial wage. Unashamedly, this Government attacked their incomes resulting again in money being taken out of the local economies where these people live. This is happening right across this island, in particular in towns like Tralee in which the biggest employer is the public sector. Cutting public sector pay has taken millions out of the local economy. People in the public sector are at least unionised and have the means to resist the attacks upon them. I welcome that unions are becoming more unified. Many in the low wage sectors, including security, hairdressing, hotels, pubs and so on are not unionised and are therefore more vulnerable to having their wages and conditions undermined. In many cases people in these categories are not unionised, are isolated as individuals and will be preyed upon and abused by unscrupulous people who will take advantage of the reduction of the minimum wage for their own selfish gain.
If this legislation, designed originally to protect workers in such situations, is amended in the manner proposed people will have no legal protections against their wages being driven below the minimum rates and legal protections will count for nothing. For this reason, it is vital that any attempt to amend this Bill to cut the minimum wage rates for the lowest paid workers in this State is opposed and defeated.
When preparing my contribution for today I came across a Press statement from last year in regard to a report on minimum wage levels throughout Europe drawn up by the EUROSTAT wherein this House is referred to several times. It states that the minimum wage in Ireland is the second highest in Europe at €1,462 per month as compared with Luxembourg at €1,600, a fact loudly propagated by Government at the time. Many Cabinet Ministers highlighted the fact that Ireland was second highest in this regard. However, according to the new EUROSTAT report, when adjustments are made for purchasing power in different countries Ireland falls to sixth position on the league table, which is a big drop.
I want to share with the Leas-Cheann Comhairle and Members present a letter I received from a constituent, a married women whose husband, a C2 sub-contractor, has been unemployed for the past 12 months and who experienced great difficulty obtaining his social welfare entitlements. Every obstacle was put in his way. There is not a Member of this House who does not know someone or has not received representations from, I assume, a large number of people in respect of previously self employed people who are unable to obtain their social welfare entitlements. As I stated, the woman concerned is married and has two children, one of whom is attending secondary school. Her husband has been out of work for some considerable time. She works 40 hours a week and earns €9 per hour and as such does not qualify for any State assistance. Her take home pay is €360 per week. Following the recent budget she now pays an income levy of 2%. She has a moderate but not insignificant mortgage which when paid leaves her with €210 per week. It costs her €110 per week to meet payments on her car loan, ESB, phone and heating bills, leaving her with €100 per week to pay for groceries, school books, fees and any medical bills that may arise. This woman does not qualify for a medical card or family income supplement. She is living in the real world. This story can be replicated in respect of hundreds of thousands of people right across the country.
I listened earlier to the contribution of a Member of this House in which he referred to the construction sector and stated that the income earned in that sector was not of the real world. He referred to the fact that employment would be created by reducing union wage rates in the construction sector. How in the name of God could any Member of this House make such an ignorant statement? The biggest hit in the current high unemployment rate comes from the construction sector. I live in the small village of Ardfert, five miles from Tralee. We had a very good Gaelic football team that won two All Irelands, at junior and intermediate level, three and four years ago respectively. We were able to win those trophies because most of the team was employed in the construction sector. They were young men who were encouraged to have trades because of the boom — the so-called balloon that was never going to burst. The club was very successful and every single penny those people earned was spent in the local economy. The boom turned to bust, however, because it was based on an unsustainable construction sector that was never going to last All those young men, who are now in their mid-twenties, are out of work and have nowhere to go. Nonetheless, a Government Deputy said that high union rates were responsible for unemployment. I could not believe it. There is no work in the construction sector in County Kerry; it is gone. That Deputy's comment was an attempt to fool people that if they took a wage cut there would be work for them. In fact, the construction sector is down and will not be back for a long time. The statistics from Government Ministers indicate there are 40,000 empty units, yet a Deputy could make such a statement here about employment.
We have seen a continual attack on public sector workers, which is so reminiscent of the 1913 lock out. History has an awful habit of repeating itself. In 1913, workers in Dublin were locked out, and in the 1920s and 1930s workers were also penalised. In the 1950s there was mass emigration when people had to leave the country. The big business fat-cats stayed and prospered while the working class were forced to leave. On each occasion we had a controlling press in this State — it was William Martin Murphy in 1913 and it is Sir Anthony O'Reilly in 2010 — that set an agenda attacking both public and private sector workers. The attack on the public sector workers has been made and now the Government intends to attack the weakest people in the private sector, most of whom are not unionised and are on the minimum wage.
We are led to believe that the recession or depression is not the fault of the economic system, big business, developers, multinationals or the banks, which are being bailed out by workers' taxes. We are also told that it has nothing to do with the fact that the political system has been compromised by big business and those who control the economic system. According to the Government side of the House, it is the workers' fault. Let the message go out loud and clear, however, that workers are totally exonerated from the terrible blunders, contrived or otherwise, by the political system in this State, which gave rise to the terrible depression we are living under.
The working class have been continually exploited by a class of people who believe it is their divine right to do so for their own selfish and greedy benefit. The political system propagates, supports and institutionalises the income inequality that exists to this day. It is time for public and private sector unions to come together and stand against what is happening. They should stand united against the wrongs that are being perpetrated against the most vulnerable people in society. They should stand for the entitlements, human rights and justice for working class people across this island. It is time to stand up to the political establishment and a political system in which inequality is ingrained. It is a system that divides workers and utilises mechanisms, including the press, for its own benefit. It is time to stand up to the Galway tent and the multinationals that rape our resources and take them from this island. Those resources are given away by Members of this House who have been entrusted to responsible positions by the people of this State. Until such time as workers unite and the trade union movement comes together, it will be an easy task for the political establishment to divide and conquer. I appeal for the trade union movement across this island to stand against what is being done to the most vulnerable people in our community. They should stand up to those who seek to divide and continue to exploit workers for their own greed and selfish benefit.
The section of the Bill, which is primarily designed to reduced the minimum wage, is a reflection of what the political establishment in this State stands for.
I call on Deputy Chris Andrews. He has up to 20 minutes if he so wishes.
I thank you, a Cheann Comhairle, for the opportunity to speak on this measure.
The purpose of the Industrial Relations Bill, which was published last summer, is to strengthen the existing system for making employment regulation orders and registered employment agreements, as well as providing for their continued effective operation.
Some of the main amendments in the Bill include the introduction of a set of principles and policies to which regard should be had in making proposals for an employment regulation order or ERO; the introduction of a set of procedures to be followed when formulating proposals for an ERO; ensuring Oireachtas scrutiny of EROs and Registered Employment Agreements or REAs; and setting a fixed term of office for the chairman of a JLC.
The Bill also includes provision for an amendment to section 23 of the Industrial Relations Act 1990 to allow officers of VECs, other than teachers, to have access to dispute-settling agencies.
Last week, at a meeting of the Joint Committee on Enterprise, Trade and Employment, a worrying picture was painted by the Restaurants Association of Ireland of that industry's future. The association's representatives made a stark presentation which was heavily critical of the JLC structure. Those engaged in the catering industry are invariably small operations, yet collectively they employ a large number of people. They can be compact operations which generally have good relations with their staff, with whom they interact closely.
If there are too many restaurants in the sector it can, by its nature, pose difficulties. Nonetheless, many restaurateurs have tried to franchise their businesses, although it is a personalised operation. Their dealings with staff and customers are very personalised. Owners invest much time and money in establishing restaurants and it is natural for them to have a vision and aspiration as to how they will develop. They want to make a difference in terms of employment and all the benefits that bestows on society. However, in some cases the staff in restaurants are earning more money than the people who invested the money and time and who, when the business is quiet, cannot relax because they are worrying about whether they have done something wrong or upset a group of customers and, when it is busy, just do not have time to do all the work that is required. They take all those worries home with them. In most instances not many of the staff do that, and when it gets to the stage where the staff are taking home more money than the business owners, we have a problem. Last week, the Restaurant Association of Ireland painted a very bleak picture of the future unless we make changes. This Bill, with the introduction of an inability to pay provision, should go some way towards alleviating the pressures that employers in this and other sectors currently experience under both systems, as a consequence of the absence of a mechanism for processing claims for inability to pay. I welcome that measure.
Clearly businesses are under severe pressure from every quarter. Rates, rents and staff costs all contribute to putting businesses out of business. The consequences are not just limited to the business and its employees, but also affect their spouses and children. We should not just dismiss it as an attack on the workers. Restaurateurs have no interest in attacking workers. They want to make a living and get a few bob out of the business. They enjoy the cut and thrust of business. They also want to ensure that their staff are treated well. They work with and know their staff. It is certainly not "them versus us" in the restaurant business. I have worked in the catering industry for many years and I know there is not great glory involved — except perhaps for one of these new celebrity chefs. For the vast majority of people working in the restaurant business, while it is very rewarding, it is also very difficult work. The Bill goes some way towards addressing that matter.
While on the subject of labour affairs, there is an issue in my constituency outside the restaurant business which, while not affected by any of the measures to be introduced in this Bill, requires urgent attention from the Minister of State with responsibility for labour affairs. Last summer, the official industrial dispute at Marine Terminals Limited in Dublin Port received much media attention and there were some protest marches. The dispute started on 3 July 2009 and was suspended by the striking workers more than three months ago. One would have expected some resolution could have been found during that period. The company accepted a Labour Court recommendation on 20 October 2009. The outstanding issues were referred to a Labour Court appointed arbitrator who issued a final decision on Wednesday, 6 January.
People may not realise that the company is question, Marine Terminals Limited, whose parent company is the Peel Ports Group, has now stated that it is not bound by the arbitrator's decision and will not comply with this decision. This action displays an appalling disregard for the State's labour dispute mechanisms and means that the staff affected by this dispute have been left in limbo, with apparently no other options available to them. Furthermore, it would appear that there are no repercussions for this company which is behaving so disgracefully. The people who criticise unions and are ideologically opposed to them do not seem to realise that the unions only exist because of the actions of such companies which have an absolute disregard for employees. Such cases have an impact on staff relations in small and medium-sized enterprises with a knock-on effect in the restaurant business. Every business is perceived in terms of them and us, which is not always the case. In this case, Marine Terminals Limited's blatant disregard for the industrial relations process in many ways hardens people's views. It certainly hardens the views of those working there and their families.
The Labour Court is a court of last resort in the industrial relations process. It is expected that the parties come to the process in good faith and consequently are prepared to give serious consideration to the court's recommendations. In an ideal world, companies entering these negotiations would behave in an honourable manner and concede to the courts and arbitrators recommendations. However, we all know that in the real world, money is what drives commercial companies rather than doing the honourable and decent thing. That certainly appears to be the attitude of some very large international companies. The Government must place some form of sanction on companies who choose to abdicate their responsibilities. Why do we have all of these systems in place if there is nothing to ensure that they will be abided by?
It makes me angry when I reflect on this particular case. At this stage, the Government must take some action to ensure that companies, which accept Labour Court recommendations and then renege on them, must face some consequence; otherwise, it undermines the entire industrial relations system. The employees of Marine Terminals Limited are decent and honourable people in my constituency who placed their faith in the Labour Court system. At this stage they appear to have been failed by the system.
While I have drifted somewhat off the point, it is a serious matter that needs consideration. The Bill is a step in the right direction and addresses some of the issues and concerns of businesses. Ultimately, we must support businesses which represent the lifeblood of society. People talk about the differences between society and the economy. The economy supports society. It ensures that we have and can pay for a good healthy society. The Bill is good and I commend it the House.
I thank the Deputies who spoke today and on the previous occasions for their contributions. I thank my departmental officials for attending and listening. We have noted many ideas and themes from the debate. There is general agreement about the main objectives of the proposed legislation. A common theme of the majority of contributions has been the importance of maintaining protection for the most vulnerable workers and ensuring that the existing mechanisms for making employment regulation orders and registered employment agreements operate effectively and are seen as being fit for purpose.
While this particular measure constitutes only one part of a suite of measures intended to strengthen the protection of the rights of employees and to secure greatly increased public confidence in the system of compliance, Deputies emphasised a need to reform the State's architecture providing avenues for redress of workers' grievances and have argued that the current system is excessively complicated for employees and employers alike.
There has been a general welcome for the proposal to establish Oireachtas scrutiny of EROs and REAs and to secure these mechanisms against the risk of legal challenge.
The introduction of a clear set of principles and policies for JLCs to consider in framing their proposals and the more focused supervisory role of the Labour Court in relation to the work of JLCs was also generally supported. The proposed extension of the definition of "worker" and the proposal to use to primary legislation in future as the mechanism for effecting changes in this area was generally welcomed.
A number of Deputies referred to the severe competitive pressures operating in many sectors, and the importance of sustaining employment levels by maintaining reasonable wage rates that reflect the reality of the current economic and trading environment. Some Deputies have referred to recent examples of constructive engagement by all parties within JLCs that have resulted in adjustments to both rates and conditions of employment under the relevant EROs covering key sectors. It was acknowledged that the provisions of this Bill would facilitate such consensus-building in future. I pay tribute to my predecessor, the Minister of State, Deputy Billy Kelleher, for his work in this regard.
The need for safeguards to protect the workers that may be affected where employers may claim inability to pay was urged by Deputies across the board. They were concerned that those securing exemptions might obtain an unfair competitive advantage relative to other compliant firms and cause a collapse in wage protection standards. I will refer to this later.
The broad endorsement Deputies have given to the main purpose of this Bill echoes the welcome it received in the Seanad, as does the social partner consensus in favour of changes to modernise and streamline the JLC system. Together, the social partners had resolved to rectify legal and constitutional deficiencies affecting the JLC and REA systems and to update the provisions of the Industrial Relations Acts so as to ensure the responsiveness of our industrial relations machinery to changes in the labour market and to the immediate challenges facing the economy.
I want to reassure Deputy Penrose in particular that, as was noted this morning by Deputy Costello, there was continuing consultation with employer and trade union interests both before the publication of the Bill in August 2009 and in the period following. I invited ICTU and IBEC to participate in consultations in August 2009. At that stage I informed them of my intention to introduce an amendment providing for an inability to pay mechanism. Both organisations, as was noted by Deputy Costello, made submissions to me in recent months and those submissions are the subject of continuing consultations between my officials and representatives of the main employer and trade union interests. I have also made a commitment to spokespersons that we will consult with them about the amendment when we are in a position to table it.
Many Deputies wanted to see the streamlining of the whole architecture — Deputy Clune referred to that this morning — for the redress of employment rights grievances and disputes. While the Bill deals primarily with the streamlining of procedures for making EROs and REAs and makes limited changes regarding access for workers to the industrial relations machinery, I agree that a piecemeal evolution of employment rights legislation over the past 30 years has resulted in a complicated system which is confusing and costly, with a duplication of functions as well as divergences in procedures and remedies. I have found, however, that there is a general acceptance by stakeholders and service users alike of the desirability of simplifying and streamlining the complaint, appeal and enforcement procedures across existing bodies and I agree with every speaker who has said thestatus quo is unsatisfactory.
I have begun an examination of the scope for effecting a more coherent and streamlined organisation of the roles and functions currently discharged within the fragmented architecture in the industrial relations and employment rights field. I have already met with both ICTU and IBEC in recent months as part of this review of employment rights, industrial relations structures and processes and we have had a useful exchange with their representatives. Both organisations had very positive things to say about the operation of the employment bodies. There are real strengths that need to be protected and built upon. They also had some views about how procedures could be improved. However, nobody was calling for a full "scrap and re-build" approach.
We are in the process of collating views and reflecting on them. I have indicated that my preference would be for a pragmatic twin-track approach involving exploring the feasibility of a one-stop-shop concept that would ensure more coherence regarding the appropriate forum for adjudication on relevant issues so as to avoid wasteful "forum shopping", of which there is evidence at the moment; and the tidying up of the existing corpus of employment law with a view to ironing out wrinkles, inconsistencies, routing ambiguities, etc. I look forward to the support of Deputies opposite through the Oireachtas committees for some sensible reform measures and for a carefully prepared programme of consolidation in the employment law field.
Regarding the joint labour committees, Deputy Varadkar queried the regionally differentiated rates that were set by JLCs within the same sector. He called for uniform rates to apply throughout the country. He also favours the removal of the casting vote that may be exercised by the independent chairman of a JLC.
Existing legislation is not an obstacle to the introduction of uniform rates throughout the country, nor to the amalgamation of JLCs. The key issue here has been the degree of willingness of the parties involved in the JLCs to make changes or to engage. Deputies will be aware that regional differentiation in private sector wage rates was traditionally a feature of the economy. Historically, there has been some ebb and flow between reliance on national rates or on regional pay differentiation, depending upon the strength or weakness of the economy and the labour market. The situation in the catering sector has been referred to by many Deputies and was to the fore last year. There are two separate JLCs in the catering sector, one covering the greater Dublin region and the second the rest of the country. However, contrary to the impression conveyed during the debate, uniform rates are now applied in the catering sector throughout the entire country, including pay rates and the Sunday premium.
The parties involved in the two separate committees reached agreement earlier this year on an amalgamation of the two JLCs. In advance of that amalgamation, the parties representing the employer and trade union interests on the two committees decided, however, that they would first ensure the implementation of a uniform set of terms and conditions before proceeding with formal institutional change. I agree that this was a sensible course of action and I see no need to interfere in the modernisation process that is already under way.
With regard to the composition of the JLCs and the voting rights of the independent chairman, I would be concerned that altering the role of the independent chairman could undermine the JLC system and might only serve to make it more difficult to arrive at decisions and lengthen the process of adjusting rates in response to changing economic conditions. I believe this is appropriate too in the context of some remarks made this morning about the composition of joint labour committees. JLCs comprise people appointed by the Labour Court as representative of employers and workers in designated sectors. Before appointing these representatives, the Labour Court must consult the relevant employer and trade union organisations. The people around the table have been urged by me to become more engaged with the wider sector as opposed to specific employer and union interests. We have seen some success in that regard in some JLCs recently. There was some comment this morning about the low penetration of union membership, but it is appropriate that they should seek to take a wider representative role, in representing workers who may or may not be members of a union. The JLC system provides an opportunity for this, I believe.
Deputy Mary White queried why we were imposing a maximum age limit of 65 and I agree that the case for fixing an age limit, as distinct from the normal limit to any term of office, should be looked at again. We will refer to the committee on that. Many colleagues, including my colleague, the Minister of State, Deputy Kelleher, and a predecessor in this office, Deputy Fahey, as well as many other speakers, have urged that our priority should be in taking action to contain costs and make the country more competitive. We had contributions this morning from Deputy Costello about rent costs, but we must recognise that labour costs in Ireland are high and this issue must be addressed.
The Government is taking a number of actions to accelerate the process of recovering our cost competitiveness across the entire economy. It is sure to be a painful adjustment, but a reduction in unit labour costs delivered through pay reform will strengthen our long-term competitiveness. I have no doubt that having a job is the best route out of poverty. Having work can prevent people from falling into poverty in the future. Employment enables people to provide for themselves, their families, communities and future retirement.
We need to have measures that protect vulnerable workers in situations where they may be unable to protect themselves or to avail of their full entitlements. Workers are most at risk when they work in an environment where the risk of being denied employment rights is high and where employees may not have the capacity or means to protect themselves from such abuse. There are good and poor employers in every sector, but data provided to me by NERA, the National Employment Rights Authority, suggests that problems seem to occur more frequently in some sectors such as retail, hotels, restaurants, construction, security and cleaning, which are those often governed by joint labour committees. We must keep under continuing review the mechanisms put in place to protect these vulnerable workers. Certainly, we must from time to time re-examine, as we have done under section 8, the way in which we calibrate the economic and social considerations that should be taken into account when fixing or adjusting minimum rates backed by the force of law.
There has been much comment in this debate about the "inability to pay" mechanism. Many Deputies have expressed doubts about the adequacy of the safeguards that can be put in place to protect workers under the proposed mechanism to enable employers, subject to certain conditions, to seek a temporary exemption from the strict application of EROs, employment regulation orders, and REAs, registered employment agreements.
I will be very clear. The mechanism under discussion already exists in terms of the legislation for the minimum wage. The lectures we have received from some Deputies on the minimum wage seem somewhat ignorant given the provision to which I have referred which covers those workers paid the minimum wage. The provision is for those subject to the agreement under discussion today. Consultations are proceeding with employer and trade union interests on the best approach to facilitating such a form of temporary relief in cases where employers face short-term financial difficulties. This is a key consideration in terms of safeguarding the jobs and entitlements of workers affected and serves to ensure that any such mechanism would be once-off and time-limited.
The approach to enabling employers to make claims based on their economic and financial situation will depend on whether the employers in difficulty are covered by employment regulation orders or registered employment agreements. Different approaches will apply in the design of the "inability to pay" mechanism in view of the different contexts presented by the EROs and REAs respectively. Many Deputies, including Deputies Penrose and Costello, highlighted the significance of REAs as collective agreements under international law. I appreciate fully the status of REAs as collective agreements, voluntarily agreed by the parties directly concerned. I propose to ensure that the parties to a registered employment agreement should, accordingly, retain discretion in the matter of whether to vary the application of their agreement through the inclusion of a prescribed inability to pay mechanism.
It was originally envisaged that the approach to introducing an inability to pay mechanism would be modelled on the provision in the National Minimum Wage Act, 2000, to which I have referred previously. I am considering the scope for incorporating additional procedures and safeguards in the proposed inability to pay provision in the light of some of the issues that have been raised during the debate, as well as those identified in the course of consultations held with the social partners.
I have noted the concerns raised by Deputies Varadkar, Penrose, English and Costello regarding the dangers of unfair cost competition and the resulting consequences to maintain a level playing field in sectors where wage costs are a major component of overall costs. I am considering requiring that the Labour Court, as part of its examination of a claim for a temporary exemption, should have to consider in advance whether any particular exemption could, if granted, place other employers covered by the same ERO at a competitive disadvantage and result in the displacement of workers employed in competing undertakings. Deputies Penrose, Bannon and Costello expressed concern that pressure might be exerted on workers to agree to their employer's claim for an exemption and that workers might be afraid they could be victimised for failing to give consent to an exemption. In my approach to framing an inability to pay amendment, I propose to examine ways of protecting workers from any improper pressure of that kind. I am also considering requiring that the Labour Court, as part of its examination of a claim for a temporary exemption, should have regard to whether the consent of the majority of employees has been freely given.
In response to many representations made to me by several organisations representing sectoral interests, I am prepared to explore how an application for a derogation from an ERO or an REA might be entertained in the absence of consent on the part of a majority of the employees. It will be recalled that under previous social partnership agreements on private sector inability to pay disputes, such disputes could be referred, in the event of a failure to reach agreement at enterprise level, to the Labour Relations Commission and, if unresolved there, to the Labour Court for an investigation. However, any safeguards that would apply in such circumstances would have to be even more stringent than a given situation in which the exemption is supported by an agreement made with the employees at the workplace level.
Several Deputies, including Deputies Clune, Costello and Fleming, referred to the number of workers affected by JLCs, joint labour committees. I may raise this matter with the Labour Relations Commission, which has powers under the Industrial Relations Act 1990 to undertake periodic review to establish whether these orders should be amended and what volume of workers would be affected. I thank Deputies from all sides of the House for their input to the debate and I thank Senators for their input before Christmas. We will now bring the Bill to Committee Stage. I commend the Bill to the House.