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Seanad Éireann debate -
Tuesday, 29 Mar 1977

Vol. 86 No. 7

Worker Participation (State Enterprises) Bill, 1976: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

In recent years developments about worker participation have been gathering momentum throughout the industrialised world but especially in Western Europe. In France the report of the Government-appointed Sudreau Committee on Company Reform was published recommending radical changes in company law and company structure. The EEC published its Green Paper outlining tentative proposals about employee participation and company structure on a Community-wide basis. In Germany co-determination in decision-making was extended to companies with over 2,000 employees. In January this year the Bullock Committee, appointed by the British Government, published their recommendations on industrial democracy.

It is not too difficult to identify the factors which have given rise to the mounting concern about company structure and the related question of worker participation. Apart from the more basic reasons such as the democratisation of the workplace and the humanisation of working conditions, the recent experience of a worldwide recession has exposed the serious limitations of economic liberalism as regards curbing inflation or reducing unemployment. Indeed, the recession has given greater urgency to the search for another system of economic and social development that will combine efficiency and freedom for the citizen.

In that quest inevitably the role of industrial and commercial enterprises, as institutions of strategic importance in relation to a country's economic and social system, had to be looked at and assessed. However a justification for company reform should be sought less, perhaps, in its operational deficiencies than in developments and trends occurring in society itself. Quite simply, because a response has to be found to the rapid and profound changes that are now taking place in all industrial societies, the enterprise cannot expect to remain immune or out of step with new ideas and events. As a sub-group of the economic and social system, the enterprise cannot escape the latter's general logic of change. Indeed, it could be said that the whole question of worker participation and industrial democracy is bound up with the debate about the place of the enterprise in society.

The entitlement of workers to participate in company decision-making is based on the emerging concept of the company as a social institution, comprising a variety of interest groups such as shareholders, financiers, management, employees and consumers, each of which is indispensable to its overall welfare and success. In this light the company is no longer seen as the exclusive property of shareholders: ownership of its physical assets is no longer regarded as conferring an absolute right to exercise control without taking into account other interests such as those of employees or society generally. The power and complexity of industrial enterprise and the remoteness of decision-making have led to increasing demands for large companies to be more responsive to the needs of society in general and of their employees in particular.

Traditionally managerial prerogative has rested on property rights. Through direct ownership or through power delegated by shareholders, managers have claimed the right to manage enterprises unilaterally without reference to their employees. Nowadays the justification of managerial prerogative based on property rights is being increasingly questioned and challenged. The development of a mixed economy with a large public sector has undermined the strength of the case based on private property rights. Indeed, in large firms the link between ownership and control is now so tenuous that the property argument is decisively weakened. However, it would be wrong to assume that new concepts of the role of employees in company level decision making are just reactions to economic trends; they also derive from social changes, especially rising standards of education and higher living standards. The significance of the educational developments is not just that more people have received a basic education; the fact is that the nature of education itself has changed. Nowadays there is less concentration on formal authoritarian instruction and more encouragement towards the adoption of independent and questioning approaches so as to develop individual initiative and ability. As a result of improved living standards people's expectations as regards working conditions have also risen and they are less inclined to accept boring and repetitive jobs, inadequate provision for safety and health in their working environment and being isolated from those decisions which can have an important bearing on their livelihood.

The Worker Participation Bill accepts the principle that employees are entitled as of right to participate in the decision-making of the companies in which they work. The seven State companies in which the legislation will operate are viewed as organisations of social enterprise in which the contribution of each person, whether he or she works at desk or on shop floor, is considered on its merits. The assumption underlying the quest for improved participative systems it that the total resources of the company must be harnessed if company objectives are to be attained. For this purpose new mechanisms have to be found whereby workers' knowledge and ideas can make a valuable and positive contribution to the quality of company decisions. In this way participation should make for greater efficiency and more worth while employment. In this context management based on the traditional hierarchy principle is increasingly becoming an anachronism as new industrial structures develop. Industry in the future will tend to be organised increasingly along these lines in this general direction. The Bill now before the House is designed to provide the framework in the State sector for this evolving situation in industry generally.

One may ask why State companies were selected for implementation of the proposed legislation. The reason is that for many years now I have thought that the take-off point for worker participation in Ireland should be in the State sector. Indeed, as far back as 1968 I advocated the development of forms of industrial democracy in State companies, since it is they which approximate nearest to the ideal of the company as a social enterprise which I have already referred to.

State enterprises have already made a substantial and creative contribution to the development of our economy. Unfortunately too often their contribution does not seem to be fully appreciated or recognised as the integral part that it is of the mixed economy which has evolved here. However State enterprises must not be regarded as some kind of second-best expedient if their full potential is to be secured. I have always believed that the State companies should be different in their inspiration and management from firms in the private sector. Many of them have been set up to do jobs in the national interest and, if their pioneering role is to continue, I would like that role to include innovation in the field of industrial relations. In other words, their traditional economic contribution to the general wellbeing must now be augmented by their adopting a creative role in the development of new and progressive organisational forms. While the provisions in the proposed legislation are intended to meet the imperatives of work reorganisation which would, in turn, contribute to humanising relations in the work-place, the extension of worker participation as envisaged must also I believe have a beneficial effect on the climate of industrial relations.

One may speak positively of the achievement of the State companies in economic terms. Nevertheless, even on the most superficial examination, the conclusion is inescapable that their industrial relations record in many instances reflects to a large extent the same level of confrontation and unrest observable in the private sector. One may speculate about why this is so, but nobody who is familiar with the background can be in any doubt that the large number of unions organising a relatively small number of workers is a contributory factor.

Hear, hear.

While I have already sought to improve this state of affairs through the adoption of the Trade Union Act, 1975, I would hope that the implementation of the proposed legislation will lessen the potential for conflict in a multi-union situation by the substitution of a single electoral list for all workers and thereby create a more favourable climate which will facilitate closer co-operation between the representative bodies.

The Worker Participation Bill is concerned with worker participation at board level: that is the area where the most important decisions in a company are made. Apart from defining and articulating general policies set up by the Government, State boards should also be concerned with the evaluation of management performance and with the exercise of strict financial control. For this purpose it is essential that board members should have a strong sense of commitment to community-owned enterprise. At the same time, if worker participation is to be a meaningful exercise and a positive force in industrial relations, it is essential that it functions at every level of the organisation from the board room to the shop floor.

In the case of the seven State companies covered by the proposed legislation, now, for the first time in the history of this State, their boards will be reconstituted to provide for the direct representation of employees. I am convinced that the advent of employees as board members will add a new and fruitful dimension to the functioning of these enterprises as a whole. Employees can make a positive contribution to their boards' deliberations because they will bring with them a wealth of practical knowledge and experience of their operations, as perceived by workers. As a result, a new grouping in the trade union leadership will evolve, one which will be well acquainted with the realities of the economic situation in these companies and with the kind of problems with which State boards are confronted from time to time. The introduction of worker participation in the seven State companies, which have a total employment of 50,000, will have a significant contribution to make in the development of a new State enterprise role and to the creation of a new economic mandate for our State enterprises, leading, I would hope, to the revitalisation of the entire public sector in our mixed economy.

As regards the preparation of the Bill itself, the House may recall that, before deciding what provisions it should include, I issued a document outlining my ideas and proposals on the legislation. These proposals were considered by individual trade unions and were the basis for extensive consultation with other interested groups including the Congress of Trade Unions and representatives of management. The provisions in the Bill are those on which there has been a broad measure of agreement. Indeed, it goes without saying that the full cooperation and support of those concerned is absolutely essential if the measures are to be a success.

Because of its innovative nature, the Government decided to confine its scope initially to seven companies. The reason behind this decision was to facilitate a close and effective monitoring of the operation of the scheme in order to discover what lessons might be learned from its practical application and to see whether any changes might be called for in future legislation on the basis of this practical experience. Based on the successful implementation of the proposals it is intended to extend it, by way of further legislation, to other State enterprises.

I should explain that the seven State bodies to which the Bill applies —Aer Lingus, Bord na Móna, B & I, The Irish Sugar Company, CIE, ESB and Nítrigin Éireann—were specially selected because they satisfied certain criteria which would seem to indicate that they offered the best prospects for effecting a successful transition to a more participative form of company structure. The criteria included a requirement that the company should be engaged in operations of a commercial or quasi-commercial nature involving a medium to fairly high level of technology, coupled with the existence of developed trade union/management relationships, preferably with some experience of joint consultation structures such as works councils.

It will be noted that while some of the companies involved are relatively compact, others are very geographically dispersed. This was a deliberate policy decision to ensure that the legislation would be applied on a national scale rather than confining it to traditional industrial centres.

The operations of the companies concerned include air services, air transportation, peat production, processing, shipping services, sugar manufacture and food processing, rail and road transport, electricity generation and fertiliser production. In effect, the full range of the country's economic life is represented. At the same time a very wide range of occupational skills is covered among the 50,000 workers who will be affected by the legislation.

The primary objective of this Bill is to enable elections to be held in the seven State enterprises, referred to as "designated bodies" in the Bill and which are listed in the Schedule, so that employees can be selected by and from the workforce for appointment to their boards. The provisions of the Bill are brought into operation by means of an Order made by the Minister for Labour under section 3 which empowers him to prescribe an "appointed day" for the purpose of determining "election years" under section 6.

For the purposes of the Act "election years" shall occur in the year in which the Minister makes the first order under section 3 and every successive third year thereafter to coincide with the three-year terms of office of elected directors. Section 6 requires that not later than the 15th September in each election year the Minister must prescribe by regulations the day for receipt of nominations of candidates. I should like to emphasise however that under section 13, which allows a ballot to be taken among employees, implementation of the legislation can be suspended where a majority of the workers so decide.

Section 7 provides that the secretary of the State enterprise concerned shall act as returning officer for an election or, alternatively, any other person who in his opinion is able to do the job of returning officer and is acceptable to the majority of employees. Under section 8 the returning officer is required to fix a day called the "stated day" by reference to which he decides which employees shall be eligible to vote and to stand as candidates.

Section 9 empowers the Minister for Labour, in consultation with the other Minister concerned and with the designated bodies, to prescribe by regulations the manner in which elections shall be conducted. In this connection I should like to assure the House that prior to the holding of elections there will be consultations with all the interests concerned, including management and trade unions, in regard to the procedures which should be prescribed for the conduct of elections in each individual State company. Section 9, subsection (3), provides that where an election is contested—that is, where the number of candidates exceeds the number of seats—a poll shall be taken by secret vote according to the principle of proportional representation. There will be only one electoral list in each State enterprise, comprising the total number of employees eligible to vote. This is provided for under section 9, subsection (4) (w).

Section 10 provides that every employee who has completed not less than one year's service and who is not under 18 years of age shall be entitled to vote in elections. Section 11 provides that candidates must be over 18 and under 65 years of age and must have completed at least three years' unbroken service. I might say at this point that these age and service qualifications have been agreed in consultations.

Subsection (1) of section 11 provides that only a "qualified body" shall be entitled to nominate candidates. Subsection (6) states that a qualified body is a trade union or other body recognised by the State enterprise concerned for the purpose of conducting collective bargaining negotiations. As regards the inclusion of this stipulation may I say that I am convinced that any approach to worker participation must be based on the already existing trade union structures here, especially since the vast majority of employees in the seven State companies are, in fact, organised in trade unions? To attempt to introduce new forms of representation without the support and co-operation of trade unions would be to ignore one of the basic realities of Irish industrial life. For that reason I am satisfied that the provisions in the Bill about nominations are the only ones which have any prospect of general acceptability and success.

Under section 13 I have provided an "opting out" provision whereby a trade union, or a number of trade unions, representing not less than 15 per cent of employees eligible to vote, may call for a ballot to determine whether or not a majority of the workforce favours holding an election. This provision is an essential feature of the Act. It is not my intention to impose industrial democracy on workers who do not want it. Where a majority of employees votes against the holding of an election, it lapses for three years; otherwise, it is proceeded with in the normal way. In other words, after we have passed this Bill—even when it is enacted—if a majority of workers in any enterprise do not favour the application of the provisions of this Bill in their work place, so be it. Their final sanction will be required if the provisions of this legislation are to be applied in the place of work.

Section 23 empowers me, after consultation with the other Ministers concerned, to prescribe by order the number of members of the reconstituted boards, including the number to be appointed under the Act. Where the total number is a multiple of three, elected representatives must constitute one-third: otherwise, the proportion must be rounded upwards to the number which is next to that which would constitute one-third.

Since it is not possible at this stage to determine in advance the size of the reconstituted State boards, I have refrained from specifying the numbers in the Act. In order to afford the Government Ministers concerned a degree of flexibility in this respect, I feel the best solution is to allow the number to be prescribed by affirmative order under the Act. In this connection Members of the House will have noted that under section 4, subsection (4), a draft of an order to be made under this section or under section 25, which deals with quorums, requires the approval of the Oireachtas by way of affirmative resolution of each House. This will ensure that there will be no diminution of the authority or responsibility of the Oireachtas as regards determining the appropriate size and quorum in relation to the boards of individual State enterprises.

The debate and discussion on worker participation has been proceeding for almost a decade now in this country. While I believe that such debate and discussion has been useful, I also believe that it has yielded us at this point all that analysis of ideas can in fact yield. I believe it is now time for the discussion phase to give way to practical decisions. The legislation now before the House would not have been possible without this prior discussion-phase for which we are indebted to the trade unions, the employer organisations, the Productivity Centre, the Irish Management Institute and other bodies which over the years have played a prominent role in advancing the debate and in stimulating interest.

The Bill was generally welcomed in Dáil Éireann where it was the subject of a very constructive and comprehensive debate. On the Committee Stage there I was happy to incorporate a number of improvements in the measure. As I am anxious that elections under the Bill be held this year, I would respectfully urge the House, without wishing in any way to curtail debate and discussion on its provisions, to accord the Bill a speedy passage.

This Bill is in line with similar legislation that is being proposed, is being passed or has been passed in most countries within the European Economic Community. Indeed the most private enterprise society within the Community, paradoxically, is the most advanced in this area of worker participation. I refer to the Federal Republic of Germany. The British, ourselves and indeed all other EEC countries have not proceeded as fast as the Federal Republic of Germany in regard to this whole question of devolution of responsibility down to shop-floor level. The Minister might correct me here, I suppose the Germans would be first and the Dutch second in this respect. Other European countries are attempting now to follow them. I mention that point because I regard worker participation as being an essential counter-balance to enterprise. I believe the two can go hand in hand. This is one area in which we can make the enterprise, as such, more human, meaning something to the worker and manager at every level and, at the same time not take from the essential ingredient of enterprise fundamental to the success of any operation in a market economy.

This is the area of social improvement that one can support totally without being in any way doctrinaire in either the capitalistic or communistic sense. Without being doctrinaire and ignoring doctrinaire attitudes it makes tremendous sense that the enterprise in a free society should be balanced by the undertaking of responsibility by all the workers and managers in that enterprise; that the old notion of company or enterprise being merely responsible to shareholders, without any responsibility to the managers and workers, is old-fashioned, is not geared to today's society and is unacceptable.

I go along fully with the thinking involved in worker participation. I would suggest only—and I appreciate this is a start as far as Ireland is concerned—that this not be regarded as the conclusion in the matter, that this is really a very tentative, initial type of Bill and that much more needs to be done in this area. In particular there is a lacuna in the Bill in that there is no reference to the essential role to be played by works councils, the essential role that a whole structure of works councils right down to shop-floor level play in the social and economic functioning of an enterprise. I appreciate that the seven State enterprises the Minister has chosen—and I take it that this was one of the paramount reasons they were chosen—are probably the most advanced in the development of joint management/ worker consultation procedures and in the development of works councils. There is no question about that. I know from personal knowledge, as a former Minister responsible for a number of them—it would be invidious to pick out any particular ones—that some of them have been quite outstanding in this area. I might mention in particular the B & I, the Sugar Company and Aer Lingus. The other four involved have been exceptionally good in this respect. I would like to hear reasons from the Minister why Irish Shipping Limited are not included because they have always appeared to me to be very advanced in their whole philosophy in this area. I appreciate that the dispersed nature of the Irish Shipping Limited enterprise, geographically speaking, may be responsible for this. Along with the seven included by the Minister, Irish Shipping Limited have always been a very advanced organisation as far as consultations are concerned between management and worker, the establishment of consultation procedures and so on.

This must be only the start in this area. The whole question of not merely recognising but having, by way of regulation under legislation, the establishment of works councils built into the whole structure of each of these seven and all State enterprises must be the objective of anybody concerned about worker participation. Linked with that are the training and education of the relevant participants in works councils, people going for election, possible qualifications in this area of education and training and, similarly, after their election to the board. What we are concerned about here is not just people who may represent a third of the board, who can then sit on the board and be isolated by reason of their lack of knowledge and training in the matter, being on the board merely to make representations on the part of their constituents. I take it the Minister will agree with me that we are concerned here with a lot more than that. We are concerned with a third sitting on the board who are trained and educated in the whole procedures of the enterprise's operation, what the company is about, what their objectives are, what their tactics are and what their strategy is—the whole basis of knowledge that the board or company director should have, in the fullest sense, to operate efficiently on the board. This is what we want, not just people sent as delegates to represent a particular cause or interest, valid though that may be. They must be in a position, through education and training, to take the view of the enterprise as a whole and participate in board decisions as fully responsible people.

The works councils are a more fundamental aspect in regard to this than membership of the boards concerned. It is in the strengthening of works councils, in their recognition in statutory and regulation form, that greater progress could be made. I am sure there are reasons for it but I am a little disappointed that this aspect is not included in the Bill. The Minister will probably say that this Bill is a tentative start—I agree, a definite start —but that much more needs to be done to strengthen the involvement of worker and mid-manager through works councils and other consultation procedures at every level through a company's operations and that actual presence on the board itself is not as important as the other involvement of which I speak down to the shop-floor. That is more fundamental. The presence in the boardroom, as such, should be a distillation of the experience and knowledge garnered through the works councils and various consultation procedures at mid-management level up to the top.

We must not allow this excellent philosophy of worker participation to get bogged down in the notion that once you send your men through the voting procedures outlined in the Bill that is the end of it—they will make representations for us in the board room for the new three years and that is the only function they have. That is a valid part of their function but should be a minor part, the main part being to contribute to the overall development of the strategy, policy and philosophy of the company to which they belong and of which they form a part. If it is fleshed out in that way we could see a gradual beginning of the organisation of better industrial relations in some of the firms concerned. One or two of them here have had certain unfortunate experiences over the years, due to a multiplicity of trade unions within their operations. Let us hope that this type of worker participation—provided it is properly fleshed out right down to the shop-floor through the various consultation procedures and works councils—will see the assumption of responsibility gradually developing so that disputes and misunderstandings that should not happen are nipped in the bud and basically that situations do not arise where face cannot be saved and the inevitable unfortunate dispute takes place. This will not be settled merely by implementing the Bill and by having the members represented on the board. Much more needs to be done in regard to fleshing this out at all sorts of levels further down that are not incorporated in this Bill.

I hope the Minister, or some other Minister at some future date, may introduce more advanced legislation along the lines about which I have been speaking. There is nothing Utopian in what I say. It is already a fact in the Federal Republic of Germany and the Netherlands. We are merely taking the first, faltering step in this direction, something I welcome.

Section 11 states that the only qualified bodies entitled to nominate candidates are trade unions. For the time being that may be all right, but to some extent my democratic instincts rebel against it. There should be some places for popular vote on the part of responsible workers in a plant—for the voice of a man, either at worker or management level, who is appreciated by his fellow workers, managers or foremen and who is regarded by them as somebody fit to participate in board discussions. Trade unions are an integral part of the Irish industrial scene. But as soon as possible this or another Minister might provide in some future legislation for one or two, as a start, of the third to be selected by popular and well-merited support from workers and managers within the operation.

I understand the inherent dangers. It may be felt that by having the trade unions as nominated bodies what are alleged to be responsible people will emerge and accordingly be selected and adopted as members of the board. There is a certain exclusivity about that I do not altogether like. One may then have on the board merely people who are replicas of trade union representatives. They may be putting to the board, merely points of view that have already been put by the respective trade unions in the course of negotiations with the management. In other words, one would be merely duplicating a point of view through these board representatives which is already well known through ordinary management/trade union and board/ trade union discussions. I appreciate the Minister may fear that some sort of mad Bolshevik representatives may emerge if there is not a trade union as a nominating body. That possibly is the Minister's conservative fear.

I suggest to the Minister that in the first amending Bill—and there must be an amending Bill because this is only the start—providing for a greater degree of participation down to shop floor and so on, there will be provision for a proportion of this third to be elected freely by the operatives themselves irrespective of whether they are nominated by trade unions. This would bring to the board a fresher point of view that will not be obtained from merely having a trade union nominated member on the board.

There is another point of view to be expressed that may not come up through the orthodox trade union and management channels to the board. Perhaps there is a case for this other type of person who may not be a favourite child of a trade union but who would be highly regarded by his fellow workers and managers. Possibly there may be a case at a future date for amending section 11 to allow that type of person to emerge on the board within the third suggested by the Minister.

Apart from those few remarks— I will have some views to express on Committee Stage—I think it is high time we adopted this procedure in Ireland. It is in the line with general European and civilised thinking in regard to securing the fullest participation in a responsible way by all people in an enterprise. It will help to eliminate the boss versus worker; management versus worker; board versus worker; board versus management type of complex that has bedevilled industial relations. We have a chance to do it in the State boards concerned, who have already reached a high degree of development in terms of worker-management consultation procedures. We have a chance to make a start with them and gradually to move on and out from there. I would hope that the points of view I have expressed will be incorporated in future legislation, providing the experience will work out well and that we can intensify this development in the years ahead.

I join Senator Lenihan in welcoming this Bill. People who have been involved in industrial relations down through the years have heard and spoke and talked about worker participation and finally we see the beginning—I agree with Senator Lenihan that it is only the beginning—of worker participation in industry in Ireland.

Of course I should much prefer to see a wider experiment so that not alone would it affect State enterprises but also private enterprises. However, it is a beginning and I hope it will prove successful. We realise today that ownership is no longer regarded as an absolute right to control decisions which affect the workers and the consumers. For that reason it is necessary that we endeavour to bring about worker participation in Ireland.

I am aware of the limitations of this measure but, although Senator Lenihan has expressed regret at the lack of wider provisions affecting workers outside the trade union membership, the vast majority of firms, especially State enterprises, comprise mainly trade unionists.

They would be trade unionists but not nominated by trade unions.

At this stage it is better to confine it until such time as we have obtained some experience. It will give workers a greater share of decision-making and a greater interest in the concern. My experience of worker councils has been that few decisions have been made there. They play an important part in another stratum, below the decision-making level. I would agree with Senator Lenihan that within the context of this eventually the whole area will have to be broadened. This will only come with experience and time.

The semi-State companies selected seem to be ideal for this experiment. It will make a fair effort to humanise industrial relations in industries. It will also help to bring about closer cooperation between the different representative bodies within the State enterprises. This will be essential to the success of this Bill. I wish the Minister success with this Bill and hope to see him back within a short time with amending legislation.

I support the philosophy in the Minister's speech, which I think everybody here supports—the idea of worker representation. But I am not happy about the way the worker representation is being effected in this Bill. One cannot look at worker participation on boards of semi-State bodies without considering other groups that might well be represented on the boards of semi-State bodies. In my opinion there is an argument for tackling the whole restructuring of the semi-State body boards. This would give more balance. One of the problems in the present proposals is that there is a lack of balance, and this worries me considerably. I am in favour of what the Minister is trying to do; the argument is about the mechanics.

The Minister has talked about the important role semi-State bodies play in our national life. He could not be more correct. I am sure he knows that the only semi-State body which got a really thorough and vigorous debate— a debate in which there were pro and contra arguments—was the first one that was set up by Mr. McGilligan, who was the Minister for Industry and Commerce in the first Government of the State. That was the Shannon Scheme legislation. Mr. McGilligan's proposals, which he pushed through against very considerable opposition from the Labour Party, led by Mr. Johnson, are very illuminating. The Labour Party opposition was constructive. It was a total new concept: it was the establishment of semi-State bodies and was probably the biggest change from the previous regime to occur in the country apart from the adoption of a written Constitution. It was probably the biggest single difference that occurred after 1921.

The semi-State bodies have played a tremendously important role. It is a complicated role and something we should try to understand. I am glad to say that people are looking into the origins of semi-State bodies now. The only Dáil debate that really worked thoroughly through the establishment of semi-State bodies was the famous debate on the Shannon Scheme. There was tremendous opposition to it. The Minister involved told me that he staked his whole future on the Shannon Scheme. The scheme has been a huge success and, of course, from there on semi-State bodies have been accepted without much debate in the Oireachtas.

One of the problems that we face as Oireachtas Members is that the semi-State bodies are at some remove from the Minister. It is not possible to get information by means of Dáil questions on the operation of semi-State bodies and virtually the only opportunity the Seanad has to question the operations of semi-State bodies is when a Bill comes before the House to increase the borrowing powers of that body or do some restructuring such as this.

The Government have—and it is generally agreed that this is a useful move—attempted to overcome this by setting up a Joint Committee of the Dáil and Seanad of 11 Members to oversee the operations of semi-State bodies. I protested that after some initial juggling there was no independent Oireachtas representative on that committee. I wish to protest again that I do not think this Joint Committee will provide the flow of information that is necessary and my feeling is that, with 25 semi-State bodies to survey, they will find themselves unequal to the task and will turn out rather like the corresponding UK Committee on Nationalised Industries and find that the work is too much for them. It has not really contributed to the development of nationalised industries in the UK.

I have advocated for some time that one of the groups that should be represented on the boards of semi-State bodies is the Oireachtas. There is a clause that we inherited from British legislation which debars Oireachtas Members from being members of boards of semi-State bodies. It is time we grew up. We are not past the stage when we have to accept this without discussion, without questioning. I think that Oireachtas Members should also be represented on the boards of semi-State bodies. This would fulfil a number of functions, including the one of providing information for the Oireachtas on certain operations of the body, and it would also see that as well as the worker being represented on the boards of semi-State bodies there would be a consumer interest and a taxpayer interest.

Of course if one is to contemplate this one should not contemplate the single-tier structure the Minister seems to have in mind here. One wants to go the whole hog and copy the European model and set up two-tier boards. I do not agree with what Senator Lenihan has said: we are not just slavishly following the German model or the European model. We are going on a linear path when to my mind the real argument is for two-tier structures. One of the problems that I see in having worker representatives on the boards, just putting in workers and having other directors as they are at the moment, is that the worker can end up in no man's land. He can end up involved in taking decisions which will be unpopular with his fellow workers and he can end up just as a worker representative not fully involved in the total business of the board. This would be to a great extent circumvented if we had followed the two-tier model and if we had an upper tier board which was really the board which looked at overall policy and had played no part whatever in executive decisions and then a lower tier which carried out the executive and management functions of the industry.

I should like to quote at this stage from the Common Market Law Review, an article written by a distinguished Irish expert on European Law, Mr. John Temple-Lang, entitled “The Fifth EEC Directive on the Harmonisation of Company Law.” I quote from page 158:

The Draft Directive, which applies to the AG, SA etc. in the old Six member States would require all these companies to have two organs, a management and a supervisory body. These would be an executive or management board (Vorstand in German terminology), responsible for managing the company's affairs and representing the company in negotiating contracts, and a supervisory board (Aufsichtsrat), responsible for supervising and controlling the management board. In addition, the company would, of course have general meetings of shareholders. Such two tier management structures have been obligatory under German law for certain types of company for many years, and the principle has recently been introduced, on an optional basis, in France by a law of 1966, and for large companies in the Netherlands in 1972.

Mr. Temple-Lang goes on to divide the functions of the two and he says again, and I quote from page 159:

The supervisory board appoints the management board for fixed periods under the Directive. The members of the two boards must be mutually exclusive and the supervisory board must designate one member of the management board to be responsible for personnel and labour relations.

He goes on to outline the division of functions that would be essential in a two-tier system. I think it is a pity, in view of this EEC directive and in view of the fact that this ultimately will become compulsory in EEC countries, that we have not gone the whole hog and established a proper two-tier structure when we are reorganising the boards of semi-State bodies restructuring.

One of the problems that semi-State bodies face is that it is difficult to judge their performances precisely because the profits and loss criteria of an ordinary private company does not apply and companies such as CIE and Aer Lingus operate under quite different constraints. They have problems in determining their role and, if one leaves aside the basis on which these bodies have been set up, it is very hard to determine exactly what the role of the company should be. Should Aer Lingus continue to fly the Atlantic and lose money because of prestige?

An Leas-Chathaoirleach

The debate is on worker participation. I think the Senator is straying very much into the realm of the semi-State areas specifically without the worker participation element.

I am talking about the restructuring of the bodies, about restructuring the semi-State boards.

An Leas-Chathaoirleach

The Senator is going into the functions and objectives of the companies.

Surely when a board is being restructured and worker participation is being suggested in the Bill the objectives of the company are relevant? The point is that the semi-State body are not like a private company. The Minister knows this; everybody knows this. The problem is how different are they from a private company? A private company would not have their jets flying the Atlantic half empty and losing money, and the problem is the problem of role—the role the semi-State body plays in our national life. We should consider this, and this is another argument for having an upper tier which just determines the framework within which the company works. On this upper tier one would have worker representatives, one would have civil servants from the interested Departments and one would have Oireachtas representatives. That would be my proposal. Instead, the Minister has a single-tier proposal on which there are worker-directors and the directors who are already there. He should have gone the whole hog and it is a pity that he has not done so.

There are obvious links with various civil service Departments and I think that these could be cemented and they could be straightened out, because there is continual tension between semi-State bodies and the civil service. Everybody knows this and these problems could be solved by the two-tier structure. It is a pity the Minister did not go further and did not initiate a fuller restructuring. Perhaps he will tell us that he will be able to do this later and perhaps it is his intention to develop the structures further and establish a two-tier system as we may be forced to do by EEC law.

I should like to comment on the problem of the trade unions, which the Minister mentioned in his speech, and particularly the problem which occurs in section 11 (1)—nomination by qualified bodies. I presume that this is constitutional and that the Minister has the best advice. I know that there is a problem about a trade union. The elections could not be carried out by a trade union, even if the trade union represented all the workers in the company because of constitutional difficulties.

Here we ought to think about the role that the trade unions play in Irish life, an absolutely vital role. One of the sad things is that we slavishly copy the British model in our trade union structures. We should have our own union structures much more suitable for our own situation, and I would hope that sooner or later we can get round to a practice in certain other European countries of having a single union dealing with the problems in one industry. There are moves in that direction and I welcome them. That is the right way to go. It would get over these problems, and then there would not be the difficulty that occurs in section 11 of this Bill. Perhaps it is asking the Minister for a great deal, but I should like to see him contemplating legislation which would have a single union representing all the workers in certain of our larger industries. We should be thinking about this sort of thing and then this difficulty would not arise.

The Minister made a very valid point and he is right. One has only got to look at what is happening in the NET factory in Cork. One of our problems is the appearance on the particular shop floor of many different unions. It causes terrific problems. I wish we could move away from that. I am glad to see, for example, unions like the Irish Transport and General Workers' Union moving towards the stage where when a company are set up they will become the only employee representative, the only trade union involved in that company. I would be quite happy to have a situation in which I as on employee of a big company would be represented by the ITGWU. I think they would do an excellent deal for me and in the long run would do a much better deal for the worker involved than a multiplicity of smaller unions. We should move towards that and I am glad to see that the ITGWU are hoping to achieve this. It is very important. There are probably constitutional problems but they have been overcome in other European countries. That is the way things should go and I should like to see them going in that direction a great deal faster.

It is clearly in the interests of the employees that a semi-State body should be run efficiently and well. It is not in their long-term interest that the body should be continually showing signs of coming apart at the seams either through bad management or through bad labour relations. It is in their interest that the body would be run efficiently, and I hope that the practice which was practised in the early days of the State of getting experts from the private sector to come and take responsible positions in semi-State bodies will be continued and that attractive salaries will be offered to first-class people to come in and take managerial posts.

We might look at the problems which have been highlighted in the nationalised industries in the UK, and the McKintosh Report bears out what I have said. It suggests that rather than the single tier there should be two tiers, a policy council and a corporation board which would fulfil the functions that I think the boards of semi-State bodies should fulfil. As I have said before, my fear is that the worker-directors will be in no man's land and that their position on the board should be balanced by other interests, by Oireachtas Members, by civil servants—that this should be in the top tier which would look after policy only in the most general sense and that there should be a separate executive structure which would do the actual day-to-day management of the semi-State bodies.

I welcome the Bill. In doing so I will begin by saying that perhaps this Bill will not satisfy all of the needs of the concept of democratising industry and the services as a whole. But it is a good beginning and, particularly since it is starting in the State industries, it will lay the basis for future development within industry. I say that particularly having regard to the question of works councils. Perhaps one of the speakers today might have confused work committees with works councils. I am talking about works councils in the sense of people who participate at middle level and who are involved in the decision-making process at that level.

Even the most hard-nosed in society cannot afford to ignore now the sort of might that is rowing in behind this challenge to the question of one-sided decision making and the challenge that is cropping up to the traditional structures and authorities, particularly when we realise that we have a much better educated workforce. It is becoming abundantly clear they will not wait for long on the sideline and accept the monopoly of one-sided decision making. This Bill, of course, will not necessarily change the monopoly but it will lay the basis for change, and in putting people on the board it allows workers to bring to that level of industry shop floor expertise and knowledge and, at the same time, help in the overall development of good industrial relations within the plant. It will not happen overnight; people have got to find their way. There is in the first instance a need to recognise that they are elected to the executive board and therefore will in some case be described as members and directors. But, nevertheless, they will be involved in running the place. They will be no different. They will be directors, but not necessarily there to protect the interests of trade unions as such, even though the trade unions will be the nominating bodies. They will be there to help the other directors run the company efficiently.

It would be unjust if I claimed that the trade unions in Ireland have been advocates of the introduction of industrial democracy, of participation. In fact, it would be true to say that some of the trade unions looked at industrial democracy a little askance. Equally, it would be untrue to say that the employers have resisted it. What has been happening over the past decade is that discussions have been proceeding and, through the benefit of analysis of those discussions and the ideas emanating from them, some clearer thought emerged. I hope the Minister's idea to bring in worker directors into the State bodies arose as a result of this wider discussion that has taken place. I would also like to think that the Labour Party had some hand in it in the sense that we wrote our policy on worker democracy a long time ago and saw a great need for it to develop. We set out on paper many years ago—we were the one party to the forefront in this field— exactly how the various industries, State bodies and so on should be structured in this respect. For that reason it gives me great pleasure to see a Minister who is a member of the Labour Party introducing the beginning of what is going to be a wind of change in respect of democratising industry.

It is a good development and I have no doubt it will be welcomed by all. It will be a development towards industrial harmony and I do not think anyone would quibble at that. There has not been any evidence of quibbling today. At the same time we cannot forget what was happening over the years if we are to think of how democracy should develop. People have been exercising democracy outside their work place and it is only natural they would want to exercise it inside the work place. The workers and the community, as investors—just as people invest in finance or the State invests in State bodies—are partners in the industry. They and the community, over the years have been denied their rightful place in industry and it is good to see this matter being tackled in this way because it will lead to better things.

If someone asked me the most effective way workers can exercise an overall influence I would be inclined to go for the concept of works councils with a development from there. That is where the hub of it all lies, where the people involved in running the plant assemble. That includes unions and different categories of management; they all come together at this point. Through the structures, information, discussions, recommendations and so on a lot can be done. A lot can be done to help people develop towards the board situation. I am a little worried that we might pass the Bill today and leave it at that, say that we have sort of done a good job in introducing worker participation in State industries. Directors may become more part of the company than the original directors themselves and the vital areas where participation is needed may, in fact, be ignored. I support this measure, but we should not pass the Bill and leave it at that. We should have regard for the fact that there has been this denial of a right for many years. It was not only the denial of a right to participate at board level but to participate in he social funcion which is exactly what work is.

Workers should be entitled to participate at levels where they can make the best contribution in the initial stages. In order to give emphasis to this question of denial of a right it is necessary to trot out an old argument about investments. Some people invest money —even the State invest it in State enterprises or spend money to protect industry—but investment by workers is investment of a human kind. Of the two, the investment of the human kind is more precious. Therefore, there is no reason why this category of worker or investor should be denied that right any longer. I say that not only in respect of State industries but in respect of the private industries. We cannot leave it lie at just having people put on a board and forget the other levels that are important.

I was surprised at the amount of harmony on the Bill and I will not flog it to death, but the whole idea of one-sided decision making must continue to be challenged by the workers. They must assert this as often and for as long as possible through constructive means and by constitutional behaviour to ensure they are no longer denied their rightful place as investors in industry. I say that not only in respect of the workers but in respect of the community. We have a situation where the investors of capital had two says—a say in appointing people and a say in the government of industry. They have also taken the profit out of it while the workers, either weekly or annually after long negotiations, merely get the one right out of it. I was pleased to hear the Minister say it will no longer be sacrosanct that a person because he puts money into something has an overall right that cannot be challenged.

A lot has been done in some places, apart from the State industries. It is hard to talk about worker participation in its fullest possible way without having regard to what is happening in other areas. There is development in some of the areas with regard to the question of participation in decision making. Therefore, I should like to give credit to some of the employers who have embarked on this, particularly those who have brought in a substantial number of trade unions. I know of one industry where there was a multiplicity of unions, somewhere in the region of 26, and they have established a works council. It is operating on a trial period for one year. I hope a lot of other employers will take the lead from that industry. I urge that for the reason that over the past 50 to 60 years a guerilla war has been going on. Both sides have had control, but it was of a separatist nature and was based on how much injury one could inflict on the other.

Participation will go a long way to take us from that road and help ease the situation. I do not expect it overnight, but this beginning should give some hope to a lot of people who want this development and have been advocating it. When they get the opportunity they will be the first to cooperate with it. I hope we are now at the point where the exclusive control of capital and management in the government of industry—including the State in the context of capital because the State is an investor—can no longer be the situation. Where it is possible and practicable further developments along the line of democratising those industries should begin so that we can get away from the cause of the denial of that right. There are many areas in which they can jointly pursue solutions. It does not happen regularly but there are many areas where it does and in those one will find that industrial relations have been developed to a fairly good pitch. The coming of industrial democracy to State industries, where we have not a great record in regard to good industrial relations, is a great step. It is only on the basis of people having got their rightful place in industry and the services that a joint approach to solving problems can be made.

I welcome the Bill and I should like to thank the Minister for it. The idea in it expresses harmony of interests and I hope it is taken that way by the people who have to work it.

I will not delay the Minister or the House with my contribution. Like the last speaker, I welcome the Bill. It is the first of its kind introduced into these Houses and is very welcome. One important consideration for us is to remember our membership of the EEC. Consequently, we will have to make a greater effort to ensure our country advances economically and that we will be able to sell our goods on competitive markets. That should be the aim of our manufacturers and workers. To do that it is essential that there should be a certain amount of harmony, liaison and co-operation between the owners of industry and the work force. For too long real economic progress has been jettisoned and bedevilled because of the attitude of management and by strikes very often forced upon the workers. In the past many of the wealthy got richer because of the way the workers were treated. Indeed, it was only when trade unions were established that the workers were able to fight for their rights, not alone for fair wages but for proper holidays, amenities and various other things they felt were necessary to enable them to stand as equals in the world. That should be the purpose of this legislation.

One cannot cast any aspersions on the people who set up industries. The Government set up these State-sponsored bodies and it is in regard to the seven mentioned State bodies that this Bill refers. Naturally it took a long time to get around to the idea that the workers were an important part of any industry. While the people who invest their money in industry do so to make a profit, and as good a profit as possible, it would be too bad if such industries paid their way at the expense of the workers. All the workers wanted in these cases was to know exactly what the position was. For too long there has been a great lack of communication. This Bill aims at rectifying that. Whether it will succeed or not we will have to wait and see because if a shop steward in a factory, being a prominent man in the industry, is elected on to the board, there is always the danger that he will lose the confidence of his fellow workers. They may eventually say to him that he is running with the hare and hunting with the hounds. How that will be got over I do not know, but I welcome the idea that the workers will get a seat on these boards. In fair play they would be very anxious to see that the enterprise succeeds. It is most important for our economy that we should do everything in our power to avoid lightening strikes that cause chaos in our cities and towns. The Minister gave the number of man-days lost last year as a result of strikes and the great loss to the economy.

If this Bill can do anything to avoid a situation such as that it is certainly going in the right direction. It is true, as Senator Harte said, that the workers are well educated. They are not workers like those in the 1920s. They have had the benefit now of good primary, post-primary education and often university level. They are highly skilled. I do not think there is any place in Irish industry today for an unskilled worker. Any person not properly qualified has to wait for years and probably never gets a job. No matter what type of a job one is engaged in at present in industry a certain amount of technical knowledge and expertise is needed, and that is recognised.

Our vocational schools, colleges of technology and universities have been turning out tremendously well-skilled personnel. These are the people who are often working on the shop floor and they will not be fobbed off with lame excuses. They know their rights. Their experience will be useful on these boards. It is well too that the members of the boards themselves understand that they are dealing with highly educated workers. By both sides understanding each other they will be able to work out a compromise beneficial to the firm, one that would give the workers and the owners a pride in the firm and would make them glad to be associated with it. It is important that they play on sports teams if the firms have such, that they buy the products of the concern, that they advertise these products at home and abroad and, indeed, that they be proud to wear the products their fellow workers make in the factory rather than some of the imported goods being foisted on us.

I will not weary the Minister by a long speech. Indeed, I should like to concentrate mainly on complimenting him on the Bill. It has had a fairly long gestation. It is arguable that a Bill such as this should have been introduced 20 years ago. The Minister is certainly to be applauded for having brought in a Bill which is so elegant and compact in its format. Those who drafted it clearly were very cognisant of the need to make legislation meaningful. This Bill is eminently technical. It reads well, and that is one aspect of it that should be welcomed and commended.

The essential part of it—and this is really the main burden of what I have to say and I will say it briefly—is that it shows an awareness that one of the biggest sicknesses in western society and, indeed, throughout the world wherever large conglomerates and heavy industry exist, where multinational companies function, and where there is the industrialisation of society, one of the concomitant sicknesses of that society, the kind of malaise that tends to fall over it, is first of all the dehumanisation of labour. After that there is their alienation from both their management and their country and, finally, the kind of barren confrontation that results in this "I", "thou" opposition that exists within society. We witnessed in Great Britain some of the worst examples of that recently—absolutely barren, totally non-philosophical, utterly unfruitful antagonism between workers and management. There is no doubt that the captains of industry have been very slow in recognising the need for this kind of worker participation. Equally, states have been unaware of it. That is why its introduction to these seven companies which are well within the ambit of the State's direct power and influence is very important.

One of the faults in our society has been the alienation of the individual from the State itself. The word "bureaucracy" is not a neutral term, as everybody knows. It is a term of opprobrium and of abuse and it very properly has become so. There is a difference between a civil servant and a bureaucrat. If one is talking about a civil servant, one is reasonably respectful, but if one is talking about a bureaucrat, one is exercising the rhetoric of abuse and condemnation. That kind of abuse and condemnation involves the "I", "thou", the "me" and "you", the sense of antagonism confrontation and alienation that exists so much and is becoming such a canker at the heart of so many countries. It destroys not just goodwill, good work, good effort and so on, but old and very important values like patriotism and selflessness and the sense of community. That is what this Bill sets out to alleviate and to that extent it has been welcomed by everybody.

This Bill creates an instrument for communication and co-operation. But the instrument itself will be useless unless it is constantly monitored and unless it is implemented with the maximum of humanity, delicacy and finesse. In other words, we welcome the Bill but are aware that it may hit many pitfalls. Its spirit is correct; its drafting is elegant and effective. We will all be looking with great anticipation and interest to see its functioning on the ground. I should like, in concluding, to wish the Minister and his Department every success both in the spirit and the letter with which the measures set out are pursued.

I welcome the Bill. The underlying social and humanitarian reasons for it are obvious to all. In welcoming it, it is only right and proper that we should pay tribute to one of the first and most effective writers on co-partnership, one of the first who called for the participation of workers in decision-making and in other areas, who sought to humanise industrial relations. That person whom I am happy to pay tribute to on the floor of Seanad Éireann is Most Rev. Dr. Newman, Bishop of Limerick, who has at all times been courageous and outspoken and, indeed, at most times very far ahead of his time in his thinking. It is well to recognise that his pioneering work—I think it was written in 1952; 24 years ago—is at last being realised in some measure. That should be a great consolation to him for the lonely road he trod at that time.

While we welcome this and all the emphasis on workers' rights and participation, it would be less than honest on our part not to query why, in turn, the responsibilities of workers are not being more underlined and encouraged by Government action. I have in mind in particular the outmoded strike weapons in the way it hits at all and especially at the defenceless and the innocent in the struggle. It is no longer a proper instrument of industrial action or industrial partnership. I would hope that with the introduction of worker participation into our enterprises this would be used as a means to develop the social consciousness of workers of their obligation to their fellow workers in the industry itself but especially to their fellow workers at all levels in Irish society. Damage done to any one section hits the whole economy. It is about time we showed some enlightenment and some progress in this direction.

I pay tribute to the many enlightened leaders in the trade union movement who are trying to achieve this, but unfortunately the message is very slow in getting down to the factory floor to the rank and file. We have too many needless, destructive and absolutely unnecessary strikes at the present juncture. I would ask the Government to bring about a balance in their approach to this and let us see some effort to get the strike weapon into perspective and into its place in a modern society. Without that I am afraid we will still occupy a rather sorry position in the European league of days lost through strike action.

It grieves one to tot up those days and find the millions that are lost and see what could have been done for the educational process. We are told that the demands for money, especially in primary and secondary education, almost exceed our capacity to keep up. Even 25 per cent of what is lost by strike action would revolutionise the facilities in primary and secondary education. It would bring the pupil-teacher ratio down to an acceptable figure. It would provide us with remedial teachers and with all the other ancillaries that we need for the proper education and development of our children.

The Senator has taken a number of steps which have brought him rather wide of the Bill.

I am looking for some response from the trade union movement and from the people as a whole to this very positive Bill which gives the workers so much and gives them rightful participation in company decisions and in general management. Let us, as a people together, cut the waste of strike action, even by 25 per cent, and make the benefits available for the better education of our children. If we do that we will be acting in a proper, responsible, patriotic and Christian fashion. It will be the type of answer that Dr. Newman will value most in seeing his work on co-partnership come to fruition. Co-partnership meant partnership between all elements in society and ruled out anything that was anti-partnership—any deliberate and wanton destruction of our national assets. To my mind unjustified strikes or rash strikes are just that. I call on the Government and the trade union movement to back up this series of Bills with some positive action that will get us out of the appalling position of being either at the bottom or on the second rung of the ladder in regard to days lost through strike action.

I want to thank Senators generally for their positive welcome to this Bill. Senator Lenihan said that it marked the first faltering steps. I agree with him that it marked the first steps but, I would hope, not excessively faltering. This Bill is the end product of four years' work. Soon after the change of Government I established a worker participation unit in my Department which started work in this area. As I made clear—Senators have referred to this—there has been a good deal of discussion on the topic for many years. Like a lot of discussion in this country, plans seem far more golden, interesting, more ambitious when left at the discussion stage and the actual product, the proposals for implementation, look somewhat prosaic by contrast to the dreams and the fantasies. I always line myself up on the side of perhaps prosaic action, but action as contrasted with discussion. In any case I have made the point that we have had sufficient discussion in this area.

Many Senators referred to the question of whether we should have gone for the two-tier or single-tier system. We have gone obviously for representation at board level. We have not taken up the model referred to by Senator Lenihan, the German two-tier system. That is an old debate. I do not want to take up the Senator's time in going into a debate on the relative superiority of the single-tier or the double-tier system and which should we have chosen. The merits of that two-tier as against one-tier system were thrashed out in the reports I referred to at the start here today and the majority reports of the Bullock Committee, signed by the two academics and the TUC nominee, opted for the unitary system, while the minority reports, signed by the employers' members of the Bullock Committee, came out strongly for the two-tier system.

I do not make a special point about the employers favouring a two-tier system and the TUC and the academics favouring the one-tier system. Apart from my own conviction of the single-tier system being the appropriate model for us here, the substantive reason was that the two-tier system would require further changes in our company law. If we wished to take the German model we would not be in a position to talk about any legislation here in this area in the near future.

Does the Minister not believe that the EEC will actually ensure that we must take the two-tier system?

No. The Green Paper on employee participation and company structures acknowledges that a transitional period is probably required during which member states can choose between the two-tier and the one-tier system, but it proposes four options. We have taken option four, which gives us the unitary system. But there is no doubt that, if we were to take the German model, the two-tier system, we would be required to change our company statute law, and that is a debate that is just in the preliminary stage of discussion in the European Community. It will be quite some time before there is any agreement on a uniform company law structure throughout the EEC. We had the choice of either postponing any legislation in this area until the European debate was completed on a uniform company structure or of proceeding here on the single board system. We have taken the latter path. It does not mean we set our faces against the development of non-statutory consultative procedure below board level in the State companies selected here. We do not set our faces against that development. That possibility is open. Our own trade union movement was itself of two minds on this question of the relative merits of the single board as against the two-tier system, and the amount of discussion within the trade unions accounts for some of the time spent in the preparation of this legislation.

Senator Lenihan referred to the confining of nominations to trade unions. That was a practical decision. I have made it clear that, despite the fact that this is enacted into law, if there is not a majority of support in a particular firm for this provision it will not apply in that firm. In employments which are 99 per cent organised by trade unions if we do not draft our legislation to fit into existing collective bargaining procedure—that is, the collective bargaining procedures represented by trade unions—it is clear we cannot hope to gain that majority support on which the success of this measure depends. It is clear that if we did not give this basic platform role to the trade unions in these companies we would certainly be stacking the cards against acceptance of these provisions in these companies. It must be clear to anybody who would be concerned about the fact that these nomination rights are confined to trade unions that they are also open to staff associations recognised for collective bargaining purposes in the companies concerned. Above all, whether a person is in a union or not —and there are very few who are not in a union in these companies—it must be clear that all can participate in the election. Only the nominations are confined to the unions.

While I sympathise with Senator West in terms of company policy in the State enterprise sector, we are not dealing in this Bill with the restructuring of the boards. We are concerned simply with reconstituting the boards up to a certain number. We are not restructuring the boards as such. That still remains the responsibility of the Ministers concerned, to whose Departments these boards report in the first place. My own responsibilities are directed exclusively to the question of reorganising employee representation on the boards concerned.

To refer back to Senator Lenihan's advocacy of the German works council system, one of the main reasons the works councils developed and gained such wide acceptance in Germany was, of course, the virtual disappearance of the German trade union movement after the second world war. It was necessary to re-establish them rapidly and therefore the works councils gained a good deal of support because of the need to re-erect the trade union structure. Such a need, fortunately or unfortunately, did not arise in Ireland. Trade unions had not been wrecked by the second world war. They had, in fact, flourished both in membership and in the number of separate organisations. I have made the point that German company law is based on the two-tier system.

Senator West referred to the need for having consumer interest. It is open to the Ministers concerned, who nominate all members to the boards of these companies apart from the one-third who are directly elected, to nominate people representing consumer interests. The two-thirds would still remain within the province of appointment of the Ministers concerned.

There was a reference here to the fact that the McIntosh Report on the UK nationalised industries put forward proposals for a kind of two-tier structure. This was used in our discussion this afternoon to suggest that the two-tier system had some innate superiority to the single board representation. I have been reminded that there was a specific reference made in the footnote of the McIntosh Report to the fact that the recommendation for a two-tier structure was being made in advance of the publication of the Bullock and Lord Reports on industrial democracy and that the McIntosh recommendations might have to be changed in the light of what these reports suggested as regards structure. We now know the fate of the Bullock Report, what its majority report suggested, what its minority report——

We do not know the fate. We surmise that it will end up in the waste paper basket.

I have referred fleetingly to the fate of it. As the Senator quite rightly says, we do not know its fate, but it does not appear to be in the direction of the majority report from the Bullock Committee. That is a safe forecast of its fate. The majority report appears to be postponed in view of the accommodation with the Liberals.

Senator Martin suggests that the Bullock Report is about to be emasculated.

Possibly. We are straying into the agricultural Estimate.

The question was raised as to whether giving nominations to trade unions was in itself constitutional. It is a good question. I have received legal advice on the matter and I am told that it would not be repugnant to the Constitution. But, then, the courts are independent and it is open to any anxious entrepreneur to test the legality of it in the courts.

It is open to the Supreme Court.

Senator Lenihan raised the question as to why Irish Shipping were excluded. This company was considered but we thought that because of the fact that so many of the workers were seagoing for long periods there would be practical difficulties, as Senator Lenihan envisaged. I make the point constantly that we will consider the extension of the provisions here to other State companies. Senators have remarked that this is a very limited measure and I agree. Senator Harte made the point that there has not been a great deal of interest up to now on the part of trade unions in the whole area of worker participation. Over the years one looks in vain at annual conferences of separate trade unions to find much interest in this whole area.

The Bill does not address itself to the problems of private industry for the simple reason that there is no area of agreement whatever between either unions or employers in private industry. I would hope that on the practical attainment of this limited measure of worker participation in the State sector we may see a revival of interest in the subject in private industry. Based on the practical attainments of the ideas in the area of the State we might see some of the proposals embraced in the private sector also with the support of trade unions. These companies were chosen so that the lessons to be learned from them might have more direct application in industry. These measures could be taken over by industry in some shape or form and better utilised throughout industry, since we have chosen companies which are in the main involved in manufacturing or commercial activities.

I intend to arrange for a continuous and systematic review of the legislation when it is in operation, and I may amend it in the light of that review and as practical circumstances expose deficiencies in the legislation here. Fresh primary legislation will extend the scope of the scheme to other State enterprises following practical experience of its operation. Full worker involvement can increase efficiency and improve organisation of industry. Those who are substantially affected by decisions of social and political institutions must be involved in the making of those decisions.

At this point I should like to thank the members of the industrial committee of the Irish Congress of Trade Unions who spent a good deal of time considering these proposals. This is the end of four years' work. We started by setting up the unit on worker participation. After a period of work by members of that unit, a paper embodying all proposals in this area was published. These were subsequently studied by the Congress of Trade Unions and there was a good deal of public discussion on the merit or demerits of these proposals. Subsequently agreement was reached with the industrial democracy committee of Congress, who went into very great detail on the proposals. It is correct that I should read the names of the members of that industrial committee of Congress into the record. It was chaired by Harold O'Sullivan. The members included such well-known personalities in the Irish trade union movement as Donal Nevin, Dermot Doolin, Ruairí Roberts, Paddy Cardiff, Senator Fintan Kennedy and John Carroll. All of these men took time off from their normal full-time work to consider very seriously the concepts and provisions of this Bill. I am indebted to them for many suggestions they made which I am convinced contributed to the improvement of the proposals we had in mind.

I have attempted to cover most of the points raised by Senators. If it is true so say that in this country, as in all EEC member countries, our prospects for economic survival in the immediate future depend on the efficiency of our industry, then it must be accepted also that if we are to free the resources of our industry and fully utilise them in getting back to a growth path in our economy a new basis of consent is needed throughout industry by both sides. That new basis of consent, I am convinced, is given in the provisions of this Bill.

I should like to ask the Minister if the boards of the semi-State companies involved welcome these proposals.

Question put and agreed to.
Agreed to take remaining Stages today.