Vol. 735 No. 1
1 Deputy Willie O’Dea asked the Minister for Jobs, Enterprise and Innovation if he had discussions on the Duffy/Walsh report on reforming the wage setting mechanism; if he has agreed a common approach; when he intends to introduce and implement legislation; and if he will make a statement on the matter. [14986/11]
5 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the number of families and persons his proposals for the reform of the joint labour commissions and registered employment agreements will push into poverty as defined in the National Action Plan for Social Inclusion 2007-2016; the number of new jobs that will be created; if these new jobs will be outside or inside the definition of poverty as defined; and the savings, if any, that will accrue to the State. [14998/11]
I propose to take Questions Nos. 1 and 5 together.
On 24 May last, the Government decided to publish the Report of the Independent Review of Employment Regulation Orders and Registered Employment Agreement Wage Setting Mechanisms. The report's overall finding is that the basic framework of the current JLC-REA regulatory system requires radical overhaul so as to make it fairer and more responsive to changing economic circumstances and labour market conditions. The report of the independent review does not recommend, nor have I proposed, specific adjustments in wage rates for the sectors covered by JLCs and REAs. The proposal by the Government to retain the joint labour committee structure, along with the restoration of the recent cut in the rate of national minimum wage, together represents a significant commitment by the Government to low paid and vulnerable workers in the economy.
Of course, the most vulnerable workers are those who have just lost, or are just about to lose, a job. We have a duty of care to protect existing employment in enterprises that are hanging by a thread and to incentivise employers to take on new workers where possible. Ultimately, the best way out of poverty for any individual is to have a job. The report states that there are potentially substantial competitive gains that could be realised in some of the affected sectors by reforming the structure of decision-making in JLCs so that the system is more flexible and responsive to the needs of particular sectors. Competitiveness can also be enhanced by simplifying the system in a way that reduces the burden of supervision and compliance and by providing a degree of co-ordination and oversight over the system that ensures that arrangements across sectors are reasonable and proportionate.
Accordingly, the JLC system must be made more responsive and become more fit for purpose in the context of a modern economy. The benefits of retaining these sectoral wage-setting mechanisms cannot be outweighed by economic and competitiveness penalties incurred as a consequence of a lack of responsiveness, coherence and precision in both EROs and REAs. The report underlines these deficiencies once again and it is now time to signal that decisive action will be taken to remove them.
The sectors and occupations where the greatest job losses have occurred in the economy generally coincide with the sectors where the minimum wage and sectoral agreements are most prevalent. In the past three years, there has been a 60% loss of employment in construction and 15% in the retail and wholesale sectors. While demand in these sectors is clearly a key factor, labour costs represent a relatively high proportion of total costs in these locally traded sectors. The sectors which are hardest hit by the economic collapse are particularly labour intensive, and the impact is badly felt by workers. Too often employers have chosen to let workers go instead of looking at other options. Retail, hotel and catering have seen a 20% loss in employment in the past three years.
The Government believes tourism is a real opportunity, and we must be competitive with our neighbours. If we can find a way of increasing economic activity in these labour-intensive sectors, there is a large group of people who can immediately be brought back into employment. Action that we take in these areas can have an immediate impact on dole queues, and that is why we are prioritising it.
I am, therefore, anxious to pursue the agenda for radical reform in this sector as a matter of urgency. To this end, I have set out an outline of my proposals for that agenda to the social partners, and these have already been the subject of discussion with the Construction Industry Federation, IBEC and ICTU. I have also heard the views of other employer bodies and groups representing vulnerable categories of workers, including migrant workers. In accordance with the terms of the EU-IMF programme, discussions have also taken place with representatives of the troika.
It is my intention to complete discussions with relevant parties in the coming days with a view to submitting a final action plan for consideration by Government before the end of the month. The detailed plan will seek to implement far-reaching reforms of the current system, including making any legislative changes that may be necessary.
I thank the Minister for his comprehensive reply. Despite all the information he gave, he omitted one small item of information in which I am particularly interested, namely, when the legislation will be introduced into the House for implementation. The Minister is constantly making the point that this is vital to stem the haemorrhage of job losses in the sectors covered by joint labour committees, JLCs. If this is the case then why the lack of urgency with the legislation? Apparently, the Minister cannot inform us when approximately the legislation will appear.
It is part of the Minister's proposals that the scope of employment regulation orders should be limited to regulating pay and conditions for those on adult basic rates. Does he realise this will leave the rates for more experienced or skilled employees to be agreed between employers and employees at firm level? Does the Minister not agree that this will put an irresistibly downward pressure on wage rates in this sector?
The legislation will be introduced at the earliest stage. First, we must get a decision of Government and we hope to go to Government on 21 June. As the Deputy is aware, we have the shell of legislation prepared by the Deputy's Government previously. Part of the legislation is drafted. We hope this will help us to minimise the delay and the Parliamentary Counsel's time and that we can move swiftly to implement it. Several factors are at play and I cannot give precise predictions on the timing but it is my determination to do this as rapidly as possible.
The review recommends that consideration should be given to confining the JLC rates to the basic adult rate. One of the recommendations put forward by our proposals is to implement what the review has raised as an issue for consideration. The reason for it is that in some sectors there are 25 different rates which must be recorded and accounted for separately. The review raised the point that this is too cumbersome and ought to be reformed. This is why the proposal is on the agenda and part of the ongoing discussions.
In an earlier debate the Minister, Deputy Noonan, stated in jovial form that one of his colleagues had to bring his payslip with him to the local bar in his pocket to prove to the people in the pub that he was struggling himself. I realise the statement was made in humour but it is important to note that the average Deputy's wage at the moment is nine times the average JLC wage. Roughly 300,000 people work under JLC agreements and they receive on average €18,000 per year in pay. That is a low wage. It is half the average industrial wage, nine times less than the average Deputy's wage and approximately 12 times less than the average Minister's wage at the moment.
Can we have a question Deputy?
There is a question. Several individuals will be pushed into poverty. Standards and criteria exist under which one judges what constitutes poverty. The question asked how many people will be pushed into poverty on this issue. I have not heard the answer to the question and I call on the Minister to address it.
There is no proposal to cut any specific rate of pay. As the Deputy is aware, the Duffy Walsh report did not recommend reducing JLC rates to the national minimum wage although it was one of the issues considered, nor has this been included in the proposals. All the assessments of the impact of poverty indicate that the greatest source of poverty is the loss of a job. Persons who are unemployed are at risk of being in serious poverty at a level ten times greater than a person in employment by all tests. The motivation is to reduce the number of people who are becoming unemployed and to increase the number going back to work. All the poverty analysis indicates that this is the best way.
These sectors have been subject to a great degree of attrition in employment. They are also sectors in which we hope to build opportunities under the Government's initiatives for tourism. However, the businesses must be capable of responding to the opportunity. This is why we believe and the authors of the report believe that we must reform the system so that those employment opportunities can be seized.
In reply to Deputy Tóibín, the Minister stated that the purpose of his reforms were twofold: to enable employers to create more jobs in these particular sectors and to prevent further job losses. The Minister stated in the public domain last weekend that this would apply only to new people, not to existing workers and that existing workers were already protected by contractual rights, legislation and the devil knows what else. If there is to be no change to those currently employed under JLC arrangements how will this assist in preventing job losses in these sectors? There will be no change. How will the reforms prevent further job losses?
For example, if we change the rule whereby a bar that offers food need not apply a premium, it could represent an opportunity for a business to protect part of its trade. If an employer can generate more business through the flexibility this generates, he or she can respond and protect employment. Many businesses are under severe pressure in these sectors. Let us not forget that we apply the rules in 25% of the retail sector. These arrangements are applied in some sectors but not in vast swathes.
The issue of Sunday working has been raised as controversial. There is protection in the organisation of working time legislation for people in respect of Sunday working. One need not be part of a JLC arrangement to have protection under the law. This flexibility allows employers to have a better cost base and to seize opportunities. Clearly, this protects employment.
The flexibility will not apply to existing employees.
To implement something such as this there must be two criteria: it must create jobs and it must not push people into poverty. There are some 100,000 working poor in the State. Having a job in itself provides no insulation against poverty. Models exist within the Department of Finance into which Ministers, such as Deputy Bruton, can input figures which give readings of what job creation is to be expected. If the Minister intends to proceed with the policy outlined, how many jobs will be created? How many people will be pushed into poverty? The systems are in place for the Minister to analyse that much.
The view is linked to the impact on reducing the average wages of people already in work. I admit that although they are protected by existing contracts there may be reductions over time. That is significantly outweighed by the employment opportunity created by getting people back to work. I quoted the figure that a person is ten times more likely to be in poverty if he or she is out of work rather than working. That is a significant benefit.
We do not have a model to predict accurately the impact of the changes. The changes cannot be computed by models which simply bring a rate down or up such as the minimum wage rate. Those changes have been analysed by these models but that is not what is being proposed. It is proposed to make some changes in respect of Sunday premiums, to standardise these over time, to look at excessive compliance costs in place and to create a more flexible model to respond to opportunities. There is no detailed model in my Department or any other Department that can predict the impact of these.
2 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if he has a State wide policy for small business; if he has developed a State wide comprehensive entrepreneurial development programme; and if the necessary funding is in place until the end of this year to meet the grant funding demands of viable start-up businesses. [14997/11]
I thank Deputy Tóibín for raising this important question. Small and medium enterprises are central to our economy. My appointment as Minister of State with responsibility for small business is confirmation of the Government's commitment to this sector. The programme for Government outlines several measures which the Government will take to assist small and medium enterprises with a view to maximising their potential in the context of economic recovery. These measures build on the existing enterprise supports available to small business.
Support nationally and locally for micro-enterprises, small businesses and new start-ups is provided by my Department through the wide range of assistance offered by the County and City Enterprise Boards, CEBs, and Enterprise Ireland. The role of the County and City Enterprise Boards is to provide support for micro-enterprises in the start-up and expansion phases, to promote and develop indigenous micro-enterprise potential and to stimulate economic activity and entrepreneurship at local level. The CEBs deliver a range of tailored programmes and supports to fulfil this role. CEBs are required to give priority to enterprises in the manufacturing or internationally traded services sector which, over time, may develop into strong export entities and graduate to the Enterprise Ireland portfolio. This is done through the provision both of financial assistance in the form of grants and non-financial assistance in the form of business advice, training and mentoring. The Exchequer allocation for the county enterprise boards in 2011 amounts to €27.242 million, of which €15 million is available for direct grants and training, mentoring and advice services to micro-enterprise clients. This represents a strong investment in the micro-enterprise sector.
Beyond the micro-enterprise sector, Enterprise Ireland operates a range of enterprise supports which provide participants with the business skills, contacts, mentoring and support potentially to transform their innovative ideas or technologies into exporting businesses. Under the auspices of Enterprise Ireland, the Government has also invested significantly in the broader environment for business start-ups, including investment in incubators, seed and venture funds, angel networks and mentors. More than 90% of Enterprise Ireland's company clients are small and medium-sized enterprises. Enterprise Ireland works with companies to strengthen their business plans, build their leadership and management capability, connect them for opportunities with overseas buyers and researchers, and provide them with access to finance.
Additional information not given on the floor of the House.
Funding of more than €213 million is available to Enterprise Ireland in 2011 from my Department's Vote to support companies, including through research and development grants and collaboration with third level institutions. The allocations both to the county enterprise boards and Enterprise Ireland are very significant, especially in the context of the pressures on the public finances. It is a matter for each agency to determine how they will respond to client demand and allocate funding to clients during the year.
In addition to these agency supports, the Government is developing a temporary targeted partial credit guarantee scheme and a micro-finance fund, both of which will be designed to help viable businesses at start-up and expansion stages. Other measures, such as the halving of employers' PRSI costs for employees earning less than €356 per week and the announced reduction in the 13.5% VAT rate to 9% are designed both to assist small and medium-sized enterprises and to stimulate consumer spending.
Through my engagement with enterprise stakeholders throughout the State in recent months I have seen the fear among them that the Government may not have bought into the idea of entrepreneurship and that policy is not being generated around the needs of entrepreneurs. There is also concern regarding the transfer of enterprise responsibilities from Údarás na Gaeltachta, for example, to Enterprise Ireland, which will dilute the focus on jobs going into places like Carna, Gweedore and Dún Chaoin. It is difficult enough to get Enterprise Ireland to create jobs in Meath, never mind these more peripheral parts of the State.
I accept there is a comprehensive structure in place in terms of assisting enterprise. However, in my county, for instance, there are no funds remaining for feasibility study grants for people who want to set up businesses. The money for the year is gone and it is only June. Does the Government have a plan to facilitate the needs of entrepreneurs? There is €100,000 in grant applications in the pipeline, which equates to approximately 20 jobs, all awaiting funding allocation.
The Government certainly acknowledges the importance of entrepreneurship, as indicated by my appointment as Minister of State with responsibility for small business. We fully recognise and support the role of the 250,000 small companies in the State which employ 700,000 people. The Government is devising a clear and direct plan for small enterprises which will work with third level colleges and will recognise and support talent. A focused plan will be agreed by Government in the coming weeks which will directly benefit and support small businesses, sole traders and companies employing one or two people.
The main task of this Government is to kick-start the domestic economy, and we fully recognise the role of small companies and entrepreneurs in that regard. I will deal with the allocation of funding in my response to a later question, but it is about ensuring value for money for the supports we provide. County enterprise boards have been very effective in terms of supporting and recognising incubation facilities at third level colleges and so on. The Government's plan fully recognises the role of entrepreneurship in kick-starting the economy.
On a related topic, I received a letter from the Office of the Ceann Comhairle during the week informing me that two questions of mine had been disallowed. These questions related to certain pre-election promises of the parties of Government and whether they would be implemented. The letter stated, "The Minister has no official responsibility to Dáil Éireann for these matters." As a person with a mandate to represent the people of Meath West, I am entitled to ask questions of a Government which ten weeks ago made promises with regard to investment in enterprise. It is a serious indictment of the Dáil system that these questions cannot be put to the relevant Ministers.
The incentives for employers introduced by the Ministers, Deputies Bruton and Noonan, represents the first down payment in the Government's jobs initiative. We are not yet 100 days in government but we have made clear our intention to fulfil the undertaking we gave in the election to deliver to local enterprise, to create hubs where people can avail of support and benefits. We will devise a clear plan for every county and region in regard to both micro enterprises and larger companies which employ more than ten people. It is disingenuous of the Deputy to claim we have failed to deliver in this regard. Unlike the previous Administration, we have an understanding, concern and respect for small companies and will produce a detailed strategy for connecting with and supporting people who have talent and entrepreneurial skill.
3 Deputy John Halligan asked the Minister for Jobs, Enterprise and Innovation if he will introduce legislation to compel all employers to recognise the right of the trade unions to negotiate on behalf of their members and the right for all individual employees to join a trade union. [14989/11]
There are no proposals in the Government's legislative programme that would require an employer to recognise a trade union or compel an employer to engage in collective bargaining with a union. While Article 40 of the Constitution guarantees the right of citizens to form associations and unions, it has been established in a number of legal cases that the constitutional guarantee of freedom of association does not guarantee workers the right to have their union recognised for the purpose of collective bargaining.
There is a commitment in the programme for Government to ensure that Irish law on employees' rights to engage in collective bargaining is consistent with recent judgments of the European Court of Human Rights. This process will require consultation with stakeholders, including employer and worker representatives, and a review of the operation of the existing legislative framework as put in place under the Industrial Relations Acts 2001 and 2004 and the consequences of the litigation that has arisen in the course of the operation of those Acts.
That was something of a non-answer. Union recognition by employers is a basic issue of democracy and the right to representation. Does the Minister agree, where employees come together for the purpose of securing their interests and protecting their conditions and are of the view that those rights are best served by being members of a trade union and selecting their own representatives to negotiate on their behalf, that they have the right to do so and that employers should respect that right? Does he agree that employers should negotiate with workers on that basis rather than do as some employers, such as Mr. O'Leary at Ryanair, have done, namely, to deny and subvert that right and to make their employees' lives a misery for seeking to assert their right to trade union representation? Should a Government which claims to care about ordinary working people and the vulnerable in society — if its deeds are to match its words — not ensure such a basic right for workers?
As I outlined in my answer, the Constitution recognises the right to join a union and to select representatives, but it does not oblige employers to recognise trade unions for the purpose of collective bargaining. That is the law as it stands and it remains the law.
The issue of collective bargaining and what happens where employers refuse to recognise unions has long been a contentious issue. As I understand it — and I am not an expert in this field — the industrial relations legislation introduced between 2001 and 2004 sought to introduce a system to deal with that. It was a negotiated solution between the two sides. Where a dispute had arisen and where the employer does not recognise the union, it allowed that the matter should go to the Labour Court for an adjudication. That is the system that has been developed under our voluntary industrial relations system. Some judgments have thrown doubt on that system and as I indicated in the initial reply, there will be discussions in this regard, as well on the issue raised by the European Court of Human Rights, which concerned the victimisation of individuals because they had joined trade unions. Consequently, the Government must ensure that Ireland's law is in conformity in this regard.
The Minister's response appears to be that the Constitution does not require mandatory recognition of unions but nor does it prohibit it. The question is what will the Government do and not what the Constitution states. While the Minister may correct me if I am wrong, he has adverted to the existence of union-busting employers. When such employers hear that employees of theirs are getting organised in trade unions, they sack them. They get rid of them and make life unbearable for them, which is unacceptable. The way to deal with this is for the Government simply to introduce legislation whereby in the case of workers who choose to join and be represented by a trade union, their employer is required to negotiate with them and not to victimise them. Why can the Government not introduce such legislation and why must it defer to Europe or anywhere else? It should simply bring in the legislation to give people the basic democratic right to be represented by those they elect to represent them.
I indicated in my first reply that no proposals exist in the Government's legislative programme that would require such recognition by an employer of a trade union or to compel employers to engage in collective bargaining. As the Deputy is aware, this is a highly contentious issue and many companies that provide extraordinarily good employment do not recognise unions. This issue will not be decided by legislative fiat by the Government. The model that has been used in the past has been that where there is agreement between the two sides to develop proposals, they have been developed and have been enshrined into conventions and law but we have operated a voluntary system. The programme for Government has signalled that where there are flaws within the system that have been exposed by recent cases, the Government will move to correct them but again, this will be within a model of meeting and hearing the views of both sides.
4 Deputy Willie O'Dea asked the Minister for Jobs, Enterprise and Innovation if he will respond to the High Court decision of 11 November 2010 (details supplied) concerning illegal copyright downloading. [14987/11]
In the EMI v. UPC High Court judgment of 11 October 2010, Mr. Justice Charleton decided that he was constrained by the wording of the Copyright and Related Rights Act 2000 and could not grant an injunction in respect of infringement of copyright against an information service provider, ISP, in the circumstances of “mere conduit”. Accordingly, he stated that Ireland was in breach of its EU obligations in that respect.
"Mere conduit" provides that if an information service provider does not initiate a transmission or modify the material contained in a transmission and does not select the receiver of the transmission, it is granted a "safe harbour" against liability by virtue of the e-commerce directive. However, this does not affect the power of the courts to require service providers to terminate or prevent copyright infringements.
Two EU directives, namely, the copyright directive of 2001 and the enforcement directive of 2004 specifically require that the holders of copyright, authors, music composers, lyricists, record producers, etc., are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.
My Department had considered that injunctions were already available under section 40(4) of the Copyright and Related Rights Act and the inherent power of the courts to grant injunctions, which are equitable and discretionary remedies, granted according to settled principles, developed by the courts. However, this was not the court's view in the case.
Having examined the High Court judgement referred to, which was extremely long and complex, the Deputy will be aware that my Department sought the advice of the then Attorney General as to the implications of the judgment and any legislative changes which might be required arising from it.
In furnishing his advice on the issues raised, the Attorney General indicated it would be prudent to consult both with his office and with the Department of Communications, Energy and Natural Resources with regard to any implementing measures arising from the ruling concerned to ensure that any such measures do not impose any unnecessarily onerous obligations on the Internet service providers.
Accordingly, my Department has been in consultations with both the Office of the Attorney General and the Department of Communications, Energy and Natural Resources as to the terms of any legislative instrument which should be made in this area and I expect to consult interested parties to the case very soon about proposed action in this respect.
It is important to note that my Department does not propose to introduce a "three strikes" regime for disconnection from the Internet, as has been introduced by France and the United Kingdom, but simply proposes to provide explicitly for injunctions to be granted, as obligated by the two EU directives I mentioned earlier.
Additional information not provided on the floor of the House.
All other member states of the European Union would have powers to grant such injunctions enshrined in their domestic legislation by virtue of their transposition of the aforementioned two directives.
I greatly welcome the Minister of State's reply. First, I must apologise as the question stated the judgment was given on 11 November 2010 rather than on 11 October 2010. Basically, this matter arose during the regime of the previous Government and when Mr. Justice Charleton handed down in that decision last October, representations were made to the then Minister, Mr. Batt O'Keeffe, but unfortunately other events appear to have overtaken the matter. However, the urgency of this issue has not lessened and, in fact, has grown. As the Minister of State is aware, Xtravision has been placed in administration since this topic was first raised and part of the problem arises from the issue to which I refer. While I take the Minister of State's point about the "three strikes" legislation adopted in France being somewhat harsh, he has acknowledged the reasoning behind the High Court judgment, which is that the directives have not been properly transposed and that as Irish law stands at present, people cannot seek injunctive relief against the service provider. As I understand it, the Minister of State has stated that legislation will be prepared to allow people to seek such injunctive relief. Can he provide an indication as to how long this will take?
As I have stated, a consultation process is ongoing. As Minister, I have just come to this issue, although as it happened I had taken an interest in the matter when the judgment was issued. I have consulted officials in my Department and, as Minister, I have signalled today that the Government must make progress on this matter. I am not in a position to provide a definitive timeline to the Deputy at this juncture but, as he stated, there is a clear and urgent need to engage on this issue and to ensure the directives are properly transposed. I will revert to the Deputy. While I am not obfuscating on the answer, given it was a 70-page judgment and is a quite complex area, I ask that I may revert to the Deputy within a week, when some indicative timelines could be available.
I appreciate the Minister of State's response.
Question No. 5 answered with Question No. 1.
