The Bill now before the House provides a legal framework for the introduction of worker participation at sub-board level in State enterprises subject to the consent of a majority of employees. It also extends provision for worker director elections to the boards of three further State enterprises, Aer Rianta, Foras Forbartha and the National Rehabilitation Board. The Bill also amends certain features in the Worker Participation (State Enterprises) Act, 1977.
Nine years ago the Worker Participation (State Enterprises) Act, represented a novel form of legal support for industrial democracy and a breakthrough in Irish labour legislation. It involved no genuflection either to British precedent or to any directive from Brussels. It reflected the translation into statute of a set of policy objectives which had been developed and promoted for public debate by the Labour Party since the mid-sixties. Economic democracy is about the right of working people to know that their views and the wealth of their experience will be taken into account in the important stages of management planning. This is important not alone for immediate economic recovery, but is in the interest of the long term viability of firms and the security of jobs.
The Worker Participation (State Enterprises) Act represented a balance between State intervention in the interests of establishing basic rights of representation and the provision of voluntary mechanisms which leave it up to workers to decide whether or not to exercise those rights. It was intended to serve as a guide to industry as a whole, demonstrating what might be done in a range of diverse situations. Uniquely, the experience of the operation of new statutory provisions was the subject of an independent monitoring study conducted under the aegis of the European Foundation for the Improvement of Living and Working Conditions. The outcome of this exercise has thrown light on the role of elected directors and their relations with other board members, and the management, employees and unions within their companies.
The operation of the original legislative model has revealed two striking features: first, the manner in which the primacy of union authority and responsibility in the collective bargaining field was accommodated in the nomination process; secondly, the fact that the election of worker directors has generated pressures for greater accountability and highlighted the need for more progressive corporate communications policies, greater disclosure of information and agreed reporting back procedures.
Unfortunately, many of the lessons of this experience have been slow in getting through to both sides of industry, with the emphasis on both sides whether in the public or the private sector.
The worker director experiment, initially confined to the seven State companies covered by the 1977 Act and subsequently adopted in An Post, Bord Telecom and ACOT when those bodies were established by statute, has been adjudged largely successful. Nevertheless both management and unions have been reluctant to consider the effects of the experiment on developments at lower levels in the enterprise. For their part, the elected worker directors recognise the need for more support in reporting back and in maintaining contact with other employees. Across the State sector generally the information issue has been tackled in a piecemeal fashion. The outcome on all fronts has, by any standards, reflected limited success, limited awareness and hardly any integration within a wider philosophy of what workplace relationships should be about.
My own approach since I became Minister for Labour has been to try to shift attention away from the sterile debate about "top down" or "bottom up" approaches to industrial democracy. To this end I established a broadly representative advisory committee to advise me on the scope for the development of employee participation at sub-board level with terms of reference agreed with both ICTU and FUE. I also made clear my intention to advance the original legislative model by extending it on a parallel level to some additional State enterprises and to reinforce it by mobilising support for sub-board structures.
Accordingly, the Bill before this House gives support to employee influence without regulating in detail how decisions should be made or what decisions should be reached. This should enable complementary agreements to be developed through the State companies which will provide for differences based upon company size, type of production, local interests etc.
The Bill before the House will provide a stimulus to State enterprises which have not yet embraced joint consultative procedures to take steps to introduce such practices; for others, it will provide a framework within which exemplary practices can be developed nationally; where satisfactory participative arrangements are already in operation, the legislation will lend statutory support to such initiatives.
The Bill gives a statutory right of initiative to the employees in the State enterprises covered by its provisions enabling them to invoke procedures for the setting up of below-board arrangements. The details of the trigger mechanisms are set out in the Bill but, essentially, the process is set in motion where a majority of the employees are in favour of below-board participation. I must emphasise that nothing in the Bill will detract from or weaken existing sub-board arrangements. Nor should it deter the management of any State enterprise from devising its own blueprint for sub-board arrangements for purposes of discussion and agreement with its employees.
The Bill contains no prescriptions about particular forms or types of participation. The emphasis is on flexibility and on stimulating labour-management accord at enterprise level on the most appropriate form participation should take. It may be that many of the larger State enterprises will opt for some representative form of participation involving the establishment of a joint consultative committee or works councils or such like. In other State enterprises, particularly the smaller ones, a formal structure may not be necessary.
The Bill requires that the participative arrangements to be introduced must be the subject of a collective agreement and must be set down in writing. The Bill does not set out to regulate the content of these agreements in detail. This offers both sides the opportunity to start with a limited range of issues and gradually extend the scope of the participative arrangements to cover wider aspects of the business of the enterprise.
I have stipulated in the Bill that these agreements must contain certain essential features which I believe are fundamental to the concept of participative arrangements. The Bill provides for the regular exchange of views and information between the enterprise and its employees; the communication in good time to employees of information likely to significantly affect employee interests; and the dissemination to all employees of feedback on the operation of the participative process itself.
This initiative affords all State enterprises adequate flexibility to select and implement the type of arrangments which are best suited to their specific circumstances. I have kept the prescriptive element in the legislation to a minimum so as to ensure that the parties at enterprise level have the maximum degree of discretion available to them in framing participative proposals themselves.
The ambivalence of the organisations of employers and trade unions on the question of worker participation has up to now undoubtedly reflected a preoccupation with the narrow focus of their traditional adversarial concerns. In this regard, at least, they mirror the reactions of many shop stewards and middle managers to the worker director experiment. There has been no significant history in this country of the social partners coming together to issue joint declarations on issues extending beyond the narrow wages front. Our situation differs from Norway, for instance, where the social partners have entered upon highly visible commitments on worker involvement in the introduction of new technologies and work organisation initiatives.
For this reason the report provided to me by the Advisory Committee on Worker Participation, which was chaired by Fr. Tom Morrissey, marks a very important development. The report, which has been published, indicates that a broad consensus of thought and action has been achieved between the representatives of the social partners on a wide range of issues. The report of the advisory committee will, I believe, greatly assist in removing the puzzlement and the disinterest and also some of the myths which have bedevilled the discussion of participation in recent years.
It is clear from the report of the committee that it was divided over the question of the prospect of the promotion of worker participation in the private sector by statutory means. I believe that many progressive firms and managers in the private sector will see that this Bill represents a catalyst for change. It is intended to operate on the basis of agreement and is sufficiently flexible to accommodate a diversity of circumstances. Nothing could be further removed from the old bogey that legislation necessarily entails the imposition of a "straitjacket" upon firms that would divert them from pursuing more appropriate voluntarist methods.
In this Bill I am extending arrangements for worker director elections to three further State enterprises. As I already mentioned, these are Aer Rianta, An Foras Forbartha and the National Rehabiltation Board. Two of these bodies are State enterprises whose purpose is non-commercial in nature. I have decided that there are no grounds for restricting the election of worker directors to State bodies of a commercial or quasi-commericial character. However, in taking this step, I have had to look again at the formula which stipulates that not less than one-third of board members should be worker directors. Employees are only one element among a diversity of representational interests which have to be accommodated at board level in the non-commercial State enterprises. All of these interests are directly concerned in developing the board objectives and strategic decisions of the enterprise. It would not be acceptable if the accommodation of these interests were to suffer as a result of adherence to a rigid formula.
There are also pragmatic considerations relating to optimum board size and the necessity of providing a balance at board level between a diversity of interests. These considerations call for the introduction of more flexibility than existed under the 1977 Act particularly in the case of some non-commercial State enterprises, for example, those with very large diverse representation on their boards such as An Foras Forbartha. The Bill provides that the Minister for Labour may, by affirmative order, vary the number of worker directors providing, of course, that there are not less than two and up to a ceiling of one-third of board members.
The Bill also enables the Minister for Labour, with the approval of both Houses of the Oireachtas, to add to the number of State bodies in which worker director elections can be held without recourse to further legislation. By facilitating future extension on the basis of an affirmative order, I hope I have removed any necessity to wait another nine years before additional bodies can be brought within this statutory scheme.
In framing this Bill, I have also introduced a number of improvements in the original model which have been prompted by the experience of its operation. The Bill will allow for the right to participate in worker director elections to be extended to the employees of subsidiaries in certain circumstances. The initative for an extension of this kind will rest with the state enterprise concerned. No action may be taken without such a proposal in writing being sent to the Minister for Labour and the views of staff representatives must be communicated to him at the same time.
It is only at this stage that the Minister for Labour, in consultation with other Ministers concerned, will consider the enfranchisement of the subsidiary. If it were decided to proceed, any draft order would require the approval of both Houses of the Oireachtas. I have also sought to extend the range of those eligible to take part in worker director elections by broadening the scope of the definition of "employee" to cover part time employees working at least 18 hours a week.
To ensure a greater degree of stability and continuity in worker representation at board level, I have extended the term of elected board members from a three year to a four year term of office. This change is favoured by the worker directors themselves and also by a number of the designated enterprises. I have also included a provision that worker directors who cease to be employees of the State enterprise should relinquish board membership. This provision is intended to forestall a situation where employees are represented at board level by someone who is no longer one of their number, and appropriate in the context of the extension to the term of office of worker directors.
The Worker Participation (State Enterprises) Act marked a unique development in our industrial relations model. It still has important lessons for us about what the law can hope to achieve in the wider realm of industrial relations. In spite of its limitations it teaches some lessons about how attitudes and traditions can be changed.
It shows that change can come about through the favourable experience of legal support for new developments rather than from any direct challenge to established practice. The limited success which we have had in pursuing and concluding participation agreements begs some questions about the need for structural reform in our industrial relations system. I am convinced that the prospects for advancing worker participation will ultimately require a change in our system of regulating industrial relations.
We have to ask whether the attitudes of organisations on both sides of industry are realistic and adaptable enough. We came late to industrialisation and yet we seem to have drawn on British cultural heritage for our industrial relations conventions. The trouble with some traditions, of course, is that after a time they become inflexible and a substitute for thought. In the face of the constantly changing patterns and power relationships of the modern industrial community, caution and tradition can become blinkers which serve to inhibit progressive developments. It is not only the prospects for worker participation but good industrial relations in general which require policy innovation, accommodation, flexibility and know-how.
I hope that workers across the range of State enterprises will recognise that this Bill offers them an opportunity to become involved in the decision making process of the enterprises for which they work.
I hope, too, that managers at all levels in our State sector will have the foresight and commitment to respond positively to this initiative; their support is essential if the benefits which can flow from these arrangements are to be realised. I commend this Bill to the House.