I move:
That Seanad Éireann takes note of Report No. 20 of the Joint Committee on the Secondary Legislation of the European Communities: Fifth Company Law Directive.
Since this morning we have been listening to tributes to Senator Robinson for the manner in which she has chaired and pioneered consideration of both of these documents, the Vredeling Directive and the Fifth Company Law Directive. It is my pleasure to pay a tribute to her for the amount of work she has done with regard to this draft paper. I compliment her for her patience in listening to the various arguments from the social partners as they ranged against one another and their views conflicted in relation to the particular views contained in the document; for unravelling the views for them and making them digestable and comprehensible to us and for getting to the core of the argument, that is, that we are talking about the short term or long term participation of workers in the management and running of private enterprises.
The discussion document, like the previous discussion document on the Vredeling Directive, is very useful in that it helps to focus and fix our attentions on many of the deficiencies and inadequacies that exist in our current industrial relations procedures. Indeed, it highlights once again the innate suspicions that arise when the social partners are confronted with one another and when an area of compromise or give is asked in relation to one or the other's particular domain.
This is but one of ten directives dealing with company law of which seven have been adopted. Like the previous directive, it is also controversial in that one would see that there is a greater area of give required on the part of the employer in this instance. It is controversial because we are asking for the actual participation of the employer and employee representatives in the actual running of companies. As was stressed in relation to the Vredeling Directive, we have a number of very useful precedents particularly in relation to the Guinness experience going back 20 years ago. The company has been all the better because of it.
The original draft of the agreement was amended to accommodate the views of the European Parliament and to take on board the suggestions made in that forum. The document basically pivots around two suggestions, as to whether we should, on the one hand, have a two-tier structure, a management organ under a supervisory organ or, alternatively, where we have the option of a one-tier structure with two distinct tiers of structures therein, strictly defined areas, supervisory and management functions, or executive and non-executive members.
The member states are given a number of options. First of all, the option of having a minimum of one-third or a maximum of one-half of the members of the supervisory organ drawn from the employee content of the enterprise. Again, we have the option of having representatives having the same right to information as those on the supervisory organ, the right to consultation on all major decisions, the right to get explanations in relation to all aspects of the running of a company and, indeed, the right to demand advice and explanations if the views of the employees are turned down.
Another option we have, which is given to us in the draft document, is that of collective agreements between the company and employer organisations specifying the rights to be contained. There is no question whatever about it but that what is being asked for and expected in this document is far more stringent than those particular tenets applying within company laws enacted between 1963 and 1983. The Commission comes down very strongly in favour of the option of the two-tier system as against the one-tier system. It is quite natural that we should, by virtue of experience, plump for the one-tier system in that this has been the basic system on which current industrial law and the operation of industries and boards, etc., have operated.
We notice that basically we have in this document a regurgitation of the arguments made by the various opposing forces which we quite neatly classify as social partners when it comes to making the relative arguments for and against the various decrees in this document. The FUE and the CII again come up with the same arguments which we had in the Vredeling Directive, that you will have confusion and delay. On the side of the FUE and the CII, we have the Department of Industry and Commerce whose main worry is that if we have too much participation this will act as a deterrent to foreign investment. Not wishing to recycle again the arguments made in relation to the Vredeling Directive, we have to acknowledge that we always have to keep looking over our shoulder all the time in relation to the possible consequences and effects that any such fundamental changes would have in relation to the attractiveness of Ireland as an establishment base for foreign industry.
The 1984 figures which are contained at the back of the document reinforce the argument that we have to be vigilant and that we have to take cognisance always of the likely views of these people in relation to their view of Ireland as an attractive base for industrial establishment.
I said during my contribution that, at the same time, looking at the previous pages where we outlined the number of foreign firms who have pulled out of Ireland over the past number of years that these people would not be here in the first place unless Ireland was a profitable and attractive base. We must not do anything to jeopardise that. At the same time, we must encourage these industries to be more appreciative of the role that Ireland, the IDA and the Department of Industry and Commerce have played in attracting them here. Many of these industries are essentially "torso" industries. We have the trunk here and the head, the feet, the decision making process, elsewhere. Too often they have pulled out without taking into consideration the rights, the entitlements and welfare of the workforce which served them so well.
On the other side of the argument, there is the Irish Congress of Trade Unions who are most anxious, quite naturally, to have the necessary legislation introduced and implemented as soon as possible. The Commission's view is central to the whole thing in that the Commission views the company as an enterprise where there is a joint input, where there is a joint social partnership and a joint dimension, where, on the one hand, we have the input and the investment of labour and, on the other, we have the capital element. Both of those should be seen as social partners and the necessary suspicions should be allayed and the joint and the mutual role of each being recognised for what they are, vital interests and fifty-fifty components in relation to the make-up and success of the enterprise itself.
The CII, and the FUE, say — I suppose there is a certain amount of justification here — that if one looks at the existing company structure in this company one will find many misconceptions about the board of directors. Basically in many cases boards are essentially for strategic planning. The day-to-day mangement and running of the company is generally left to a joint co-operative effort between designated managers on the floor and the workforce. The Irish Congress of Trade Unions do not accept that this will act as a discouragement for investment here. There is an anxiety which I echoed in my contribution on the previous document, the Vredeling Report, that because of the threshold at which this qualifying mark is pitched, a threshold of 1,000, enterprises may be tempted on foot of the obligations contained in this draft directive to scale down the workforce, in order to take the experience in the semi-State sector.
One of the best ways we could induce employers, and allay their fears in relation to what is contained in this document, or bring about a transition or a process of change, would be to look at conclusion of the Minister's speech.
The Minister of State at the Department of Labour, Deputy Kenny, referred in his summary of the previous debate to the 1977 Act which permitted employee participation on the boards of seven commercial type semi-State companies. He announced that the Department of Labour have signposted their intention to give worker participation on the boards of an additional six. We can take it, therefore, that it is generally recognised that the experience has been a successful one and that it will be carried into virtually all of the semi-State sector.
The joint committee have managed to unravel many of the arguments, to put them in context, and to highlight the fact that in 1980 the then Minister for Labour welcomed the broad thrust of the directive. I should like to signal the broad thrust of the directive. We have a long way to go but it is the beginning of a receptive process and one of acclimatisation to the view that we expect that not alone in the long term will it apply to enterprises of 1,000 but will percolate into enterprises which are pitched at a much lower scale. If it does anything to reduce tension, to reduce possible man days lost in industry, industrial action and so on, it should be welcomed.
Being pragmatic and realistic, it is my view that this document is taking us a long way down the road. I appeal for flexibility and understanding on the part of the Commission in relation to the imposition of this tenet or decree. We have a long way to go and we have to strike a fairly sensible middle ground, but the document is useful in that it starts the process in train. We are merely putting our foot into the water.
