I wish to place in their proper context these proposals which concern industrial relations procedures.
The basic approach to industrial relations in Ireland is one of voluntarism, whereby the law is not used to impose a solution on the parties but will, where appropriate, be used to assist them in arriving at a solution. While labour laws cover such matters as protection from arbitrary dismissal, organisation of working time, employment equality and occupational safety and health, there is agreement on all sides that the voluntary collective bargaining process between the employer and employers' association and one or more trade unions or staff associations shall determine the terms and conditions of employment of workers. The process covers the entire range of issues arising from the employment relationship. Unlike the position in many other countries, collective agreements – consistent with the notion of voluntarism – are not legally binding; they have a moral force only but in practice are no less successful for that.
The State provides dispute resolution services to assist parties in resolving their differences. In the case of collective disputes the Labour Relations Commission provides a conciliation service. Some 2,000 meetings per year are chaired by the LRC and four-fifths of cases are settled at conciliation. Unresolved issues are normally referred for investigation by the Labour Court. The majority of recommendations issued by the court are non-binding. Despite their non-binding nature there is an acceptance rate of more than 80% by the parties to the disputes.
As a result of agreements on the vast majority of disputes by the parties themselves and the assistance provided by third parties in facilitating resolution of disputes, only a very small proportion of disputes result in industrial action. The numbers of strikes and man days lost due to industrial action in recent years are at historically low levels. This improvement in our industrial relations culture is due to an approach by Government, employers and unions which is based on voluntarism, on partnership and mutual gains principles rather than adversarialism. By adopting a macro-economic approach based on social partnership all sides have benefited from the increased competitiveness of our economy.
Partnership was defined in chapter 9 of the last national agreement, Partnership 2000, as an active relationship based on recognition of a common interest to secure the competitiveness, viability and prosperity of the enterprise. It involves a continuing commitment by employees to improvements in quality and efficiency and the acceptance by employers of employees as stakeholders with rights and interests to be considered in the context of major decisions affecting their employment.
It is right to acknowledge that the turning point in our economic fortunes can be traced to this consensus formed by the social partners. The severe difficulties we faced in the mid-1980s were overcome by a common approach to economic recovery.
National agreements which commenced with the negotiation of the Programme for National Recovery in 1987 and have continued through to the recent Programme for Prosperity and Fairness have helped to deepen that social partnership. We have built progressively through five successive national agreements to the point where the growth rate of our economy is the envy of many other countries. A feature of our national agreements has been the willingness of participants to appreciate and take account of the perspectives of other groups. The outcome has been the development of a wide ranging economic and social approach which has produced benefits to our whole society. A number of indicators amply demonstrate this. For example, a substantial current budget surplus in 1999 compared with a huge deficit in 1986, unemployment was reduced over 11 years from 17.5% to under 4.7% today, the numbers at work increased from 1.1 million in March 1987 to 1.6 million by March 1999, a dramatic reduction in our national debt/GDP ratio and a GDP growth in recent years of up to 11% compared with EU and OECD averages of 2% to 3%.
This is not to suggest, however, that the story over the past decade has been entirely positive nor that it has been solely due to the partnership process. The persistence of long-term unemployment, the evidence of significant rates of poverty and social exclusion reflecting a tendency towards widening inequalities across the full range of income levels, regionally imbalanced growth and significant gaps in infrastructure all point to an uneven societal performance. There are also a number of structural factors which have been operating quite separately from the social partnership approach to economic management and industrial relations.
The cumulative impact of increases in educational provision and participation, membership of the EU, including the benefits of participation in the Single European Market and the support of EU Structural Funds, the capacity for rapid expansion in the labour force and, crucially, high rates of overseas investment in high growth sectors have all played an important part in Ireland's success in recent years. Nevertheless, it must be said that a number of these factors were in place prior to 1987. It is difficult to resist the conclusion that their impact was, at the very least, facilitated by the conditions produced through social partnership. In particular, the credibility of economic strategy and the stability and predictability of multi-annual policy commitments and wage agreements provided a very attractive environment for development, not least to overseas investors.
Clearly, it was not and is not necessarily the case that social partnership agreements will, of themselves, secure strong economic and employment performance. That can be expected only when the terms of such agreements reflect the objective of global competition and an internally consistent approach to interacting policies and behaviour. Recent performance is, however, highly suggestive of a policy mix and approach to the behaviour of key economic sectors which met these criteria in a way which was not true of many of our European partners over the same period.
One of the features of our national agreements has been their ability to reflect a consensus on a range of issues apart from pay. In framing the previous national agreements, in particular Partnership 2000, ICTU and IBEC recognised the need to modernise our industrial relations procedures and institutions. One of the initiatives agreed was the establishment of a high-level group to consider detailed proposals submitted by ICTU on the recognition of unions and the right to bargain. This group was composed of representatives from IBEC, ICTU, the Department of Finance, the Department of Enterprise, Trade and Employment, IDA Ireland and Enterprise Ireland and was chaired by an official from the Department of the Taoiseach. Proposals made by the group in December 1997 were not subsequently accepted by the trade unions generally.
In December 1998, I, as Minister of State with responsibility for labour affairs and on behalf of the Government, reconvened the group following publication of the report of the inquiry into the dispute at Dublin Airport – the Ryanair dispute. In revisiting the issue, the group had the Supreme Court judgment in the Nolan Transport case as well as the Ryanair report to hand. Members of the House are no doubt aware that the courts, including the Supreme Court, in Nolan Transport v. SIPTU, already accept that a trade union recognition dispute falls within the definition of a trade dispute as provided for in industrial relations legislation.
The high-level group sought to agree a consensus approach. Following an intensive round of meetings the group reached agreement and published its findings in March 1999. The group reaffirmed that where negotiating arrangements are in place, the most effective means of resolving differences which arise between employers and trade unions representing employees was by voluntary collective bargaining. It went on to address the problems that arise in the case of disputes where negotiating arrangements are not in place, advocating two distinct procedures. The first procedure involves a voluntary approach to deal with those situations. This procedure had been incorporated into a code of practice on voluntary dispute resolution by the Labour Relations Commission which has now been circulated by my Department.
The objective of this code is to provide a recognised framework for the processing of disputes in situations where negotiating arrangements are not in place and where collective bargaining fails to take place. Management and unions should co-operate fully in seeking to resolve the issue in dispute effectively and expeditiously by means of the following steps. First, the matter should be referred to the Labour Relations Commission which will appoint an officer from its advisory service to assess the issues in dispute. Second, the Labour Relations Commission's officer will work with the parties in an attempt to resolve the issues in dispute. Third, in the event that the issues in dispute are not capable of early resolution by the Labour Relations Commission's intervention, an agreed cooling-off period shall be put in place. During the cooling-off period, the Labour Relations Commission's Advisory Service will continue to work with the parties in an attempt to resolve any outstanding issues. The commission may engage expert assistance, including the involvement of ICTU and IBEC, should that prove helpful to the resolution of any differences.
Fourth, if after the cooling-off period all issues have been resolved, the Labour Relations Commission will disengage. Before disengaging, the commission may make proposals to the parties for the peaceful resolution of any further grievances or disputes. Fifth, in the event of issues remaining unresolved after the cooling-off period, the Labour Relations Commission shall make a written report to the Labour Court on the situation. The Labour Court shall consider the position of the employer and the union and shall issues recommendations on outstanding matters.
This procedure is, I stress, the preferred approach where collective bargaining does not take place. It is only in the case of parties not participating in good faith in this voluntary approach that a special fall-back procedure, as set out in this Bill, could come into operation. It can be seen from its report that the high level group envisaged this second procedure would operate only in exceptional circumstances. The Bill will give effect to that special fall-back provision.
The Bill provides for a unilateral referral by an authorised trade union or excepted body to the Labour Court in a case where all the following circumstances pertain. First, it is not the practice of the employer to engage in collective bargaining negotiations and the internal dispute resolution procedures normally used by the parties concerned have failed to resolve the dispute. Second, the employer has failed to observe a provision of the code of practice on voluntary dispute resolution, which I mentioned earlier, or has failed to observe such a provision in good faith. Third, neither the trade union nor the employees, as the case may be, have acted in a manner which, in the opinion of the court, has frustrated the employer in observing a provision of such code of practice. Fourth, neither the trade union nor the employees, as the case may be, have had recourse to industrial action after the dispute in question was referred to the commission in accordance with the provisions of the code of practice.
I would like to emphasise that an employer must have failed to participate in good faith in the voluntary code of practice for the procedures in this Bill to commence. It is only where an employer has failed to avail of the voluntary approach by use of the Labour Relations Commission and the Labour Court that a trade union can activate referral to the Labour Court for a procedure culminating in a legally binding outcome. Under this Bill, issues in dispute will be processed through a number of steps. An investigation by the Labour Court will result in a recommendation. Failing agreement on the recommendation, the court may issue a determination which has binding effect for 12 months. If matters have not been resolved the Labour Court can review its determination and issue a final determination without a time limit as to its effect. Where an employer fails to comply with this final determination an enforcement order can be sought in the Circuit Court.
This is a short Bill and I would like to outline its terms in detail. Section 1 deals with interpretation and provides for the definition of certain terms which are mentioned later in the Bill. Section 2 covers investigation of disputes by the court. The purpose of this section is to give the Labour Court a new dispute settling function where it is satisfied that the circumstances I outlined previously obtain. The section also obliges the Labour Court to take account of any existing practices in place in the employment concerned for setting terms and conditions of employment. It shall have regard to the entirety of labour relations practices in the employment concerned.
In section 3, I am giving power to the Labour Court to hold a preliminary hearing in order to satisfy itself that the requirements of section 2 have been met. Section 4 extends the powers to summon and examine witnesses and require the production of documents, granted to the court under section 21 of the Industrial Relations Act, 1946, to any investigation carried out under this Bill.
Section 5 empowers the Labour Court to issue a recommendation on terms and conditions of employment and on dispute resolution and disciplinary procedures. Consistent with the overall approach to this legislation, it will not be open to the Labour Court to include arrangements for collective bargaining in its recommendation.
At this point the recommendation is not legally binding. However, if it does not result in resolving the dispute, the court under powers which I give it in section 6 may, at the request of an authorised trade union or excepted body, review all relevant matters and issue a binding determination. Section 7 requires determinations issued by the Labour Court to be in writing, to be served on both parties and also to include a statement setting out its reasons for the determination.
Section 8 outlines the effect of industrial action. It requires the Labour Court, following a request from an employer or trade union, to cease its involvement and withdraw any recommendation it has issued if it is satisfied that industrial action has taken place prior to the issue of a determination under section 6. Section 9 enables the court to review and vacate, affirm or vary a determination after one year where requested by either party.
Section 10 enables a trade union to apply to the Circuit Court for an enforcement order where an employer fails to comply with a determination after 12 months. If there is a review under section 9 the employer has six weeks to implement its findings following which the union can apply for an enforcement order. Section 11 allows a trade union or employer to appeal to the High Court on a point of law only. Section 12 is a routine provision enabling the making of regulations while section 13 outlines the Bill's short and collective titles and prescribes that it shall come into operation on such day as the Minister may appoint by order.
In summary, the Bill charts a procedure for the processing of claims on behalf of employees where an employer has refused to follow the voluntary procedure outlined in the code of practice on voluntary dispute resolution. The Labour Court can use its existing powers in such circumstances to summon parties and can issue a determination on pay procedures or conditions of employment. If necessary, that determination can be enforced in the Circuit Court.
Most trade union recognition disputes have their origins in concerns about pay and other working conditions. The new dispute settling power for the court is an agreement between the parties primarily concerned, ICTU and IBEC, which will enable a trade union to progress pay or other conditions on behalf of its members in that small number of cases where collective bargaining arrangements are not in place and the employer refuses to engage in talks.
Social partnership is rooted in the principle of free collective bargaining. I am pleased that the high level group was able to come up with and agree proposals for dealing with this sensitive issue. The proposals demonstrate that free collective bargaining in a spirit of social partnership can achieve real results in progressing complex questions and can also contribute to the development of the prosperity and competitiveness of our economy.
The justification for such procedures, as I have outlined in both the code of practice and the Bill, was put succinctly by Mr. Justice O'Flaherty in his judgment in the Supreme Court in the Nolan Transport case when he said:
The State, representing the rest of us ordinary citizens and taxpayers, has a very keen interest in seeing to the harmonisation of Industrial Relations. We all stand to lose too much where there is strife and conflict. We should now have advanced sufficiently in our respect for democracy and the rule of law and all its refinements to work out a better way. At this stage of our development this country should be an example to other countries on how to avoid industrial conflict, and when conflict does arise on how to resolve it speedily. That is good for everyone; it will lead to more employment and increased trade.
He went on to state that "employers have an obligation to accord trade unions a measure of respect: representing as they do the rights of the workers." The Bill will provide an avenue for the processing of claims without the need of recourse to industrial action.
Members will recall that the Labour Party introduced the Trade Union Recognition Bill in the Dáil in February 1998. However, the high level group had been given the task by the previous Government of considering ICTU proposals on the matter in the context of chapter 9 of Partnership 2000. While the Private Members' Bill was a valuable contribution to the debate I indicated at the time that my approach was to seek a consensus between IBEC and ICTU before agreeing to legislation. The strongest commendation I can give to this procedure and this Bill is that it adopts an approach which enjoys the support of both ICTU and IBEC. That is my main message. It represents a measured response to a number of difficult disputes in recent years. Both unions and employers have opted for this approach which underpins and reinforces the voluntarist tradition.
Many disputes concerning rights of representation and the right to bargain are resolved without recourse to industrial action. The majority of recognition disputes are referred by trade unions to the Labour Court under section 20(1) of the Industrial Relations Act, 1969. The outcome is binding on the trade union but not on the employer. This has been less than satisfactory as a finding made by the Labour Court can be disregarded. The provisions of this Bill ensure that a finding will be enforceable if agreement between the parties is not reached.
The code of practice and this legislation chart two distinct procedures for dealing with differences between management and workers. The code provides a voluntary procedure while the legislation offers a fall back procedure where an employer has failed to engage in the voluntary procedure or to do so in good faith. Taken together, these measures offer an improved method of dealing with difficult disputes where collective bargaining fails to take place and where negotiating arrangements are not in place
I draw Members' attention to a review clause under paragraph 3 of framework 1 of the Programme for Prosperity and Fairness. Under indent 10 the parties to the PPF have agreed to monitor the application in practice of the legislation which gives effect to the report of the high level group. As the Bill is rooted in an agreed approach to the right to bargain, it is entirely appropriate that the operation of the legislation be carefully monitored and reviewed in light of experience. I commend the Bill to the House.