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Seanad Éireann debate -
Wednesday, 21 Jun 1939

Vol. 22 No. 22

Public Business. - Local Authorities (Combined Purchasing) Bill, 1938—Committee.

Sections 1 to 6, inclusive, ordered to stand part of the Bill.
SECTION 7.
(1) The Minister may by order provide that every application for appointment as official contractor for the supply of a commodity specified in such order shall be accompanied by an undertaking by the applicant that, in the event of his appointment,—
(a) such commodity when supplied by him in pursuance of such appointment shall be manufactured or produced in Ireland, and
(b) if he manufactures or produces such commodity at any time during the period of his appointment, the wages paid and the conditions of employment observed by him in such manufacture or production shall be not less favourable to his employees than those required in the execution of contracts with a Minister of State.

Mr. Lynch

I move amendment No. 1:—

In sub-section (1), page 5, to delete paragraph (b), and to substitute therefor the following new paragraph:—

(b) such commodity when supplied by him in pursuance of such appointment shall be manufactured or produced by trade union labour under trade union conditions of employment.

This Bill alters previous legislation to a certain extent and in doing so vitally affects certain trade union interests. Hitherto local authorities were entitled to take from local contractors such commodities as they desired, provided that certain conditions were observed. Under the previous legislation, local authorities were also entitled to make certain regulations imposing certain obligations on contractors who were suppliers. The present Bill will take from local authorities such powers as will affect trade unionists where trade unions have had arrangements or understandings with such local authorities to impose these conditions which safeguarded the interests of trade unionists. In the amendment before the House, we are endeavouring to amend Section 7 of the Bill so that the Minister may in future, if the Bill should become law, be enabled to authorise local authorities to formulate such regulations as will preserve the privileges which trade unionists enjoyed before. Under Section 12 the Minister—

"may at any time require any local authority to submit to him, in the prescribed form and manner and within a specified time, an estimate of the total quantity of a specified commodity which such local authority will require during a specified period for the purposes of their powers and duties."

Then, under paragraph (b) of sub-section (3) of that section—

"it shall be the duty of such local authority to order and take from such official contractor, under and in accordance with this Act, during the said period to which such estimate relates the quantity of such commodity stated in such estimate."

Therefore, it is made absolutely obligatory on the local authority to take the amount which they have prescribed they should take in the beginning of the year.

We should be satisfied if the Minister will say that the local authority may make such regulations as they made formerly when they were entitled to make such regulations and, if in the prescribed form—we have no knowledge of the manner of such prescribed form—that the local authority will be entitled to incorporate in that form the regulations which they hitherto put into the forms when they were asking local contractors to supply goods. But, if the amendment which we are suggesting is not accepted, then it would seem that the powers which the local authorities possessed heretofore to make orders and regulations and to make the orders and regulations obligatory on contractors, may be taken from the local authority under Section 12. If that is so, then we think that the Bill is retrograde and deprives local authorities of making such regulations as they may desire to make in regard to goods to be supplied by the contractors to the local authorities. I should like, therefore, if the Parliamentary Secretary would say he will accept the amendment, which will enable the local authority to do as it formerly did or that in the prescribed form there shall be prescribed also that the goods to be supplied shall be made under trade union conditions.

I have no hostility of any kind towards trades unions, and if and when there is a recognised trade union in the particular industry concerned, working under normal conditions, I would have no objection at all to this amendment, but, to my mind, as it stands, it goes too far because it deals with every commodity, and it also makes no proper provision as to who is to decide it. It is not that in the opinion of the council or somebody that they are working under trade union conditions. You would simply have to go to the court to decide that. I know of one case where a firm had two factories. One factory was under one trade union and the other factory was under another trade union. The local authority refused to take the goods from the factory that was working quite amicably in accordance with the conditions of one trade union because there was a quarrel with the other trade union in the other factory. The question is really what are trade union conditions? Will it be assumed that they are not trade union conditions because there is a dispute at that moment, although if the trade union and others agree as to the same conditions, then they become trade union conditions again? It seems to me an amendment going as far as this one does would not be practicable and ought not be passed in that form. Where there are recognised trade unions, I believe that it is highly desirable that the State should recognise the fact that they exist, and that employers should work with them in the most amicable way possible, but I do not think that local authorities should be put into the position, by legislation or otherwise, to take an active part should there be a dispute between the two at any particular time.

I do not think Senator Douglas has quite appreciated the point which I endeavoured to make. I will endeavour to clarify it by saying that all we are asking is to allow to the local authority the right of making the same regulations as they formerly made. Disputes between trade unions have nothing at all to do with that. We think that this Bill in its present form will subtract from the local authorities the rights which they formerly possessed to make a regulation that the goods to be supplied shall be made under trade union conditions. We think this legislation would definitely take from local authorities the right of making such regulations.

Is it not obligatory on all public bodies when ordering such goods to see that these goods must be produced by trade union labour? I understood that no contract could be accepted by any public authority where the goods were not produced by trade union labour. Therefore why the change?

That is not true, Senator.

I think the amendment is in a section which provides that "the Minister may by order provide"—which is a very different thing from what Senator Lynch says he wants.

This amendment is not acceptable and I think it must be clear to the House why such an amendment could not be accepted. Let us examine first the provisions of Section 7 as it stands:—

"The Minister may by order provide that every application for appointment as official contractor for the supply of a commodity specified in such order shall be accompanied by an undertaking by the applicant that, in the event of his appointment,—

(a) such commodity when supplied by him in pursuance of such appointment shall be manufactured or produced in Ireland, and

(b) if he manufactures or produces such commodity at any time during the period of his appointment, the wages paid and the conditions of employment observed by him in such manufacture or production shall be not less favourable to his employees than those required in the execution of contracts with a Minister of State."

In so far as it is necessary to protect the interests of labour under a contractor who is a manufacturer, that has been done, and I think satisfactorily done, in the section as it stands. The question was asked on the Second Reading here as to what conditions of employment meant in relation to a contract with a Minister of State. I think the impromptu definition I gave on that occasion was fairly accurate. For the information of the House, I shall read a typical fair wages clause— the type of fair wages clause that would be inserted in such a contract as the one under discussion:—

"The contractor shall pay rates of wages and observe hours of labour not less favourable than those commonly recognised by employers and trade societies or, in the absence of such recognised wages and hours, those which in practice prevail amongst good employers in the trade in the district where the work is carried out. Where there are no such wages and hours recognised or prevailing in the district those recognised or prevailing in the nearest district in which the general industrial circumstances are similar shall be adopted."

What does the amendment in fact propose? What does its acceptance by the House involve? It proposes that the contractor, when duly appointed, will be responsible, whether he is a manufacturer or not, to ensure that not only are fair wages conditions operating in the factory where the particular commodity is being manufactured or produced but that none other than trade union labour will be employed in that concern. It does happen—and is bound to happen in the future—in fact, I am sure that if an analysis were made of the list of the local employers or the list of contractors, it would be found that quite a big number of the contractors are not manufacturers. If, in fact, a wholesale merchant becomes a contractor, say, in the City of Dublin, for a commodity manufactured in Cork, the acceptance of this amendment would involve putting on him a statutory obligation to ensure that certain conditions of employment operated in Cork where the commodity was manufactured. I think it would create an impossible position and, in fact, it would be bound to result in putting the wholesale merchant out of business altogether as a possible contractor. Only manufacturers could under such circumstances become contractors in the future. I do not think that the House desires that.

There is something else involved in this. We are asked in this Bill to give statutory effect to a principle regarding conditions of employment that the Oireachtas has not yet accepted. It is a very important principle, and a principle with very far-reaching possibilities and repercussions. That principle is, that only trade unionists shall be employed in manufacturing industry. Now, that may be a desirable principle. Its desirability or otherwise is not the question at issue here; but, if that is a desirable principle, it ought to be debated and decided in relation to conditions of employment, and it should not be accepted in relation to a particular small group of manufacturers or contractors if the principle is not to have uniform application. Suppose, for the sake of debate, that we did accept this amendment here, what would the position, in effect, be in areas where trade unions do not exist, but where trade union conditions of labour exist and are preserved, and where there are trade union conditions of employment? Under this amendment—if it were accepted and incorporated in this Bill, and that the Bill became an Act—manufacturers in areas where trade unions did not exist at the present time would be bound by law to insist that their employees would form a trade union, and nobody but trade unionists would be permitted to take part in industrial employment in the future. As I have said, that raises a principle that has very far-reaching possibilities in it, and I think that, if that principle is to be adopted, if a decision is to be taken as to the desirability of the uniform application of such a principle, it is in relation to the Conditions of Employment Act that such a principle should be introduced. I hope the House will agree with me that, in the circumstances outlined and in relation to this particular Bill, the principle embodied in this amendment cannot be accepted.

Is the amendment being pressed?

We feel that there is an important principle being lost to the trade unionists in this Bill. I can understand the attitude adopted by the Parliamentary Secretary, but I would point out to him that local authorities throughout the country have over and over again had an arrangement with the trade unions whereby trade union conditions were made obligatory in the production and supplying of commodities to these local authorities; and we are merely asking that the Bill be amended in such a manner as to allow that flexibility. It could be done without rigidity, because I appreciate that there are differing circumstances in the country. If it could be done without a rigid application, or done in a flexible manner, it would satisfy our purpose. In the circumstances we will not press the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 2, standing in the name of Senator Campbell:—

In sub-section (1), page 5, line 9, to delete the word "or," and after the word "produces" to insert the words "or supplies," in lines 11-12 to delete the words "by him," in line 13 to delete the words "his employees" and to substitute therefor the words "the employees engaged in the manufacture or production of such commodity."

This amendment is much on the same lines as the previous amendment. It deals rather more with the fair wages aspect of the issue than the endeavour to have trade union conditions embodied. In Section 7 (b)—if the contractor "manufactures or produces such commodity at any time during the period of his appointment, the wages paid" etc.—it is during the period of his appointment that the obligation is imposed on him to manufacture or produce such goods under fair conditions. This embodies the old fair wages clause of 1909 and nothing more; but the goods to be supplied may be manufactured or produced by a contractor anterior to his appointment, and in such case they may be made under conditions which would not satisfy the section or the fair wages clause. Therefore, it seems necessary that besides manufacturing and producing the clause should also say that the goods supplied by him during the period of his appointment should be manufactured or produced under conditions such as would satisfy the section or the fair wages clause. There is that—in our opinion—lamentable weakness in the section and the Bill which endeavours to apply the fair wages clause in this section. The clause may be avoided. Therefore, to make the clause absolutely watertight and observe the purpose which the legislation demands, it would seem to us that it is necessary to amend it in such a manner as to make the goods to be supplied be produced under conditions to satisfy the fair wages clause. Otherwise, it can be avoided and ignored: the goods supplied during the period of appointment may be made much earlier than the time at which the appointment took place and, consequently, may be made under sweated conditions.

The House will, I am sure, observe the adroitness with which the Senator has got around the explanation of the second amendment which, in effect, for all practical purposes, is intended to achieve what the first amendment was intended to achieve. Paragraph (b) of sub-section (1) of Section 7 would read, if this amendment were accepted:

if he manufactures produces or supplies such commodity at any time during the period of his appointment, the wages paid and the conditions of employment observed in such manufacture or production shall be not less favourable to the employees engaged in the manufacture or production of such commodity than those required in the execution of contracts with a Minister of State.

If he manufactures, produces or supplies a commodity, under this amendment, a statutory obligation would be put upon him to ensure that certain conditions of employment were observed in the production or manufacture of the particular commodity. That, as the House already realises, is an impossible condition to comply with, and, in fact, I believe that if it were inserted in the section, it would have the effect of completely nullifying it. I feel sure that the Senator appreciates the difficulty in relation to it and how near he gets, if he has not got completely, back to the position he tried to secure in his first amendment.

The Parliamentary Secretary has probably made the position quite clear in regard to Senator Lynch's amendment, but I am not at all sure that the Government fully appreciate that this section, unamended, may also create a position which is not altogether fair. The Minister may make an order providing that a manufacturer must manufacture in accordance with certain conditions, if he is to supply goods direct, but a distributor may buy goods from somebody who is not observing those conditions and supply them, which might easily work out unfairly to the manufacturer who is carrying out those conditions. I am not at all certain that the section as it stands—though I do not believe the position would be met by the amendment—is satisfactory, because you certainly do not want to do anything that would penalise the manufacturer who is carrying out the conditions you want to see carried out, but you will penalise him if you allow others to supply to someone else who for a small commission will act as the person who supplies the council and thereby get over the order. I think it requires some consideration.

Might I draw the Senator's attention to the fact that the manufacturer is operating under the terms, conditions and restrictions of the Conditions of Employment Act, and that no manufacturer can get outside that? That Act, I think, is generally admitted to have been a very considerable advance in our social legislation. It was passed only a few years ago after a good deal of debate in both Houses. It governs such matters as holidays for workers, working hours, overtime, shift work, intervals, etc.—a most extensive code of legislation dealing, as the Senator well knows, with conditions of employment. In the light of the fact that a manufacturer has to observe that code of social legislation in relation to persons employed in manufacturing these commodities, I cannot see that there is any possibility of any abuse from the labour point of view. But, again, I would say what I said in relation to the first amendment, that, if the legislation governing conditions of employment in industry is not sufficiently comprehensive and far-reaching, then, by all means, get after the question of amending that legislation, but so long as we have specific legislation dealing with conditions of employment, I think we should accept the conditions laid down in that as applying to contracts such as the one under discussion.

I quite agree that all manufacturers are bound by the law, but what I cannot understand is what (b) of sub-section (1) means, if it does not mean that conditions in addition to the law can be specified. Otherwise, why have it there at all?

Because he is a contractor in (b) as well as a manufacturer.

Yes, but my point is that if a manufacturer is producing such a commodity, if under (b) he is a person who manufactures or produces—I am not going into the technical difference between producers and manufacturers—it clearly is not a question of simply handing it over a counter or papering it and sending it out. There seems to be something more than the law visualised, because the Minister does not have to make an order that a firm which supplies goods to a local authority, or to an individual, must keep within the law. He simply has the law carried out. This clearly suggests something more than the law is required. Otherwise, I cannot see what it means at all.

I do not know whether I can further clarify the position for the Senator's benefit, but the class of person we are dealing with in (b) is a manufacturer or producer who is also a contractor. As a manufacturer or a producer, I grant you right away that he is bound by the Conditions of Employment Act in respect of his manufacture or production. But he becomes a contractor and, as a contractor, it is usual, in the matter of contracts with the Minister anyhow, to have a fair wages clause inserted. It is in order to maintain that position in relation to this particular type of contract that, as a contractor, he is put in the same category as a person who undertakes to execute a contract with a Minister of State.

Then, the position is that a fair wages clause may be attached in respect of a manufacturer, but a distributor may buy from some other firm which has not got a fair wages clause attached, and possibly sell at a lower price.

Yes, but the manufacturer from whom the contractor will get his commodity is bound by the Conditions of Employment Act.

But not by a fair wages clause, which the manufacturer is to be bound by.

But surely the Conditions of Employment Act implies a fair wages clause?

If that is so, why is it necessary to put it in here?

Is it not evident that this fair wages clause is a remnant from the time when legislation with regard to conditions of employment did not operate here? It seems to me from what the Parliamentary Secretary has said about legislation with regard to conditions of employment that the section is unnecessary and quite supererogatory. It seems to me that the position is that the Department has had the habit for many years of putting that provision in and has not adverted to the fact that, for the last year or so, there has been all-embracing legislation with regard to conditions of employment and that this is inserted as a matter of habit. It seems to me that the case has been made, and that no answer has been given to it, that the section means nothing whatever.

Mr. Lynch

I am afraid that the Parliamentary Secretary is not entirely familiar with the Conditions of Employment Act, or he would not endeavour to substitute it for a fair wages clause in this case. Firstly, the Conditions of Employment Act does not standardise, lay down or regulate wages. It regulates hours of labour and fixes a maximum in respect of hours of labour, but I should like to point out that trade unions have fixed standards much superior to those fixed by that Act of Parliament, consequently, we are in this amendment endeavouring to protect, through a fair wages clause, these trade union standards which are not protected by the Conditions of Employment Act to which the Parliamentary Secretary refers us.

Therefore it is no answer to say that we need not bother with the conditions laid down or obliged, and that the Conditions of Employment Act safeguards us. It does not. The Act fixes a certain maximum. But we on the other hand have fixed hours and conditions of employment much superior to those required by that Act of Parliament. In regard to the amendment specifically, Senator Douglas has put the matter cogently that the supplier, through the terms of his appointment, can evade by this section the fair wages clause. We would like the Minister to take serious notice of that because it is only apparently during the period of his employment that he is obliged to see that all such goods as he manufactures or produces are produced to satisfy the fair wage clause. But there is nothing to prevent him from manufacturing or buying goods previous to his appointment as contractor and thereby evading the section. If the Parliamentary Secretary agrees with this he must see that definite loophole in it. He certainly does not desire to see that his Bill should be so weak as to allow the contractor to escape through it. After having heard the matter debated here this afternoon, is the Minister prepared to amend the section so as not to allow this loophole to manufacturers? I am sure the Parliamentary Secretary desires to see the fair wage clause put into the Bill in such a watertight manner as not to allow any contractor to escape through it. I feel confident that he will say "yes". I am sure that as the sub-section is drafted at the present moment unless some amendment is put into it, it is possible to evade the whole purpose of the fair wages clause. I feel that he does not wish that to happen. We feel so strongly on this matter that we will have to press the amendment, but we are prepared not to do so if the Parliamentary Secretary, having heard our arguments here this afternoon, will say that he will amend the section in such a manner as to make it watertight in accordance with our desires.

As far as I know there has been no statutory obligation up to now on local authorities to insist on trade union conditions in their contracts, but from my experience and practice they always do. I see no reason for the amendment, because I am quite confident the local authorities will continue in future to do what they have done in the past in this matter of trade union conditions.

Is the amendment being pressed?

Mr. Lynch

The Parliamentary Secretary seems silently to indicate that he is not apparently prepared to see our viewpoint or to see reason which is the same thing.

Better stick to your viewpoint.

Mr. Lynch

As the matter is of very great importance to us I am afraid I will have to press the amendment. We have always been very definite in our endeavour to have put in the fair wage clause. We are certainly very definitely concerned with the weakening of our second line of defence as the Parliamentary Secretary was pleased to call it. We see definitely a weakening there. Consequently we will have to press the amendment because the fair wages clause on which we depend so much in a matter of this kind seems to be entirely weakened and of less value to us now than it was previously.

The Senator is pressing the amendment?

Mr. Lynch

Yes.

Question put: "That the words proposed to be deleted stand part of the section."
The Committee divided: Tá, 20; Níl, 10.

  • Byrne, Christopher M.
  • Concannon, Helena.
  • Corkery, Daniel.
  • Goulding, Seán.
  • Honan, Thomas V.
  • Johnston, James.
  • Kehoe, Patrick.
  • Kennedy, Margaret L.
  • MacCabe, Dominick.
  • McEllin, Seán.
  • Mac Fhionnlaoich, Peadar (Cú Uladh).
  • Moore, Maurice G.
  • O'Callaghan, William.
  • O'Donovan, Seán.
  • O'Dwyer, Martin.
  • Nic Phiarais, Maighréad M.
  • Quirke, William.
  • Robinson, David L.
  • Ruane, Thomas.
  • Stafford, Matthew.

Níl

  • Counihan, John J.
  • Cummins, William.
  • Douglas, James G.
  • Fitzgerald, Desmond.
  • Hayes, Michael.
  • Hogan, Patrick.
  • Johnston, Joseph.
  • Lynch, Eamonn.
  • Madden, David J.
  • Tierney, Michael.
Tellers:—Tá: Senators Goulding and O'Donovan; Níl: Senators E. Lynch and Cummins.
Question declared carried.
Sections 7 to 22, inclusive, and Title agreed to.

When is it proposed to take the next stage?

If the House has no objection. I should like to get the further stages now.

If it were agreed that we would give you all the other stages next week, would it meet the case?

That would suit.

Report Stage fixed for Wednesday, 28th June.

The Seanad adjourned at 3.55 p.m. until Wednesday, 28th June, at 3 p.m.

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