I am pleased to bring this Bill before the House. Its basic aim is to establish a general framework for the right to information and consultation of employees in undertakings over a certain size. The Bill introduces for the first time in Ireland a general right to information and consultation for employees from their employers and is without prejudice to existing rights to information and consultation, which at present are limited to specific circumstances, for example, collective redundancies and the transfer of undertakings.
I will first describe the background and set the context for the Bill and then outline the approach taken in transposing the directive. I will then describe the purpose and reasoning behind each section of the Bill. The Bill transposes the European Union Information and Consultation of Employees Directive 2002/14/EC of 11March 2002. The directive was the result of extensive negotiations at the European Council and Parliament and, while it sets out clear principles, it leaves much of the detail of implementation to national governments. It aims to establish minimum requirements for information and consultation of employees across the European Union. For the first time, employers are obliged to establish arrangements for the provision of information and consultation to their employees. The directive is an important EU intervention in national industrial relations systems.
Much of existing EU-inspired employment legislation relates to individual rights such as the right to equal pay or health and safety. When it has impacted on collective rights, EU law has done so in limited circumstances. The rationale of this directive was based on the need to address perceived gaps in the existing legal frameworks for information and consultation at EU and national levels. These frameworks tend to focus on the provision of information and consultation when crises such as collective redundancies arise rather than on its provision on an ongoing basis. This does not contribute either to genuine anticipation of employment developments or to risk prevention.
The directive specifically states that its implementation shall not be sufficient grounds for any diminution in respect of the general level of protection of workers in this area. Accordingly, any obligations to inform and consult under this directive are in addition to existing obligations. Irish law, stemming from previous EU directives, already obliges employers to inform and consult their employees in certain defined circumstances. First, it includes the Protection of Employment Act 1977, as amended, which provides that employers planning collective redundancies must consult employees' representatives and notify the Minister for Enterprise, Trade and Employment at least 30 days before the redundancies commence. Unfortunately, there are exceptions to this. Second, in the event of a transfer of ownership of an undertaking, the Transfer of Undertakings Regulations 2003 provide that an employer has certain obligations to inform and consult employees at least 30 days in advance of the transfer. Finally, the Transnational Information and Consultation of Employees Act 1996 applies to Community-scale undertakings and Community-scale groups of undertakings, and provides for information and consultation of employees on transnational matters affecting those employees.
The intention of the information and consultation directive is to ensure that information and consultation are provided by employers systematically so employees can acquire an informed understanding of the challenges faced by the business. Timely information and meaningful consultation are prerequisites for the improved adaptability of Irish workplaces, which is vital to meet the challenges created by the globalised economy. It is incumbent on all of us to be aware of the advantages that flow from having such a transfer of information.
In transposing this directive into Irish law, there has been extensive consultation with the social partners and other interested bodies in recognition of the partnership approach that has served Ireland so well. Consultation with the Irish Congress of Trade Unions and the Irish Business and Employers Confederation included bilateral meetings, in accordance with the commitment given in the mid-term review of Sustaining Progress. The consultation process commenced in October 2002 and a formal consultation paper was issued in July 2003 which invited all interested bodies and individuals to make submissions setting out their views. The formal submissions received on foot of the consultation paper, together with the wider consultation process, helped inform the drafting of the Bill. The Bill is a balanced reflection of the needs of Irish employees and the needs of Irish business, within the context of the needs of Ireland as a society and an economy. I cannot pretend everybody agrees with me in that regard.
Ireland has a wide variety of systems of workplace relations in operation. My policy approach in transposing the directive has been to provide the maximum flexibility to employers and employees to devise arrangements which best suit their particular circumstances. The objective of the directive is to establish a general framework for the right to information and consultation of employees, and consequently it is not overly prescriptive in terms of its provisions. It leaves considerable discretion to member states in setting out national procedures. This discretion has been utilised by me to tailor the legislation to Ireland's workplace culture and to minimise the burden on enterprises. The Bill respects Ireland's voluntarist tradition of industrial relations and allows maximum flexibility to employers and employees to implement new procedures or continue with existing customised information and consultation arrangements. There is a wealth of research showing that companies which share information and consult with their workers are the high performing companies not only in today's but tomorrow's markets. Embedding effective information and consultation arrangements at the level of the workplace leads to a sense of involvement for employees and a greater understanding on their part of the environment within which the undertaking operates. This facilitates workplace adaptability and the development of a greater sense of partnership at the level of the enterprise, both of which are vital in maintaining and improving competitiveness.
This Bill aims to encourage and support the establishment of arrangements for information and consultation which will play a key role in increasing company performance through employee involvement.
I will outline the main features of the Bill. Section 1 is a standard section in all Acts. It provides for the interpretation of certain words or expressions which are mentioned in the Bill and also permits abbreviated references to sections, subsections and to other Acts. The section draws on the text of the directive, but it also interprets some terms not defined in the directive and includes terms such as employee and employees' representative which the directive leaves to be defined in accordance with national law and practice.
Section 2 is a standard provision which empowers the Minister for Enterprise, Trade and Employment to make such regulations as may be necessary to give full effect to the Bill. Section 3 establishes a right to information and consultation for employees in undertakings with 50 or more employees. The provisions set out in the Bill are without prejudice to existing rights to information, consultation or participation under other legislation, for example, collective redundancies and transfer of undertakings legislation. They are also in addition to the rights accorded to employees under the Transnational Information and Consultation of Employees Act 1996. Procedures established on foot of that Act are not sufficient to fulfil the rights accorded by this directive and hence this Bill.
Section 4 sets out the number of employees that must be employed in an undertaking for it to fall within the scope of the legislation. This section avails of the option in the directive to phase in its application in member states where there is no general statutory system of employee information and consultation, as is the case in Ireland. The timetable for the phased-in application of the legislation means that it will apply on a date to be prescribed to undertakings with 150 or more employees. I intend to make an order shortly after enactment of the legislation prescribing a date on which the legislation will apply to undertakings of that size. Undertakings with 100 or more employees will be covered from 23 March 2007 and by 23 March 2008 all undertakings with 50 or more employees will fall within the scope of the Bill.
Section 5 sets out the method of calculating the workforce thresholds for the purpose of determining whether an undertaking has enough employees to fall within the scope of the legislation. The directive allows member states to determine the method for calculating the thresholds of employees employed and the Bill bases the calculation on an average number of employees taken over a two-year period. This takes out seasonal factors which might skew the figures if employee numbers were to be counted on a certain date each year. An obligation is placed upon the employer to provide details of the workforce numbers within four weeks of such a request being received. This period of four weeks may be extended by agreement between the parties.
Section 6 defines an employees' representative for the purposes of the Bill. An employees' representative must be an employee of the undertaking and must be elected or appointed for the purposes of the Bill. This ensures that the representatives are democratically elected or appointed by the employees and are representative of them. Where it is the practice of an employer to conduct collective bargaining negotiations with a trade union or excepted body, which represents 10% or more of the employees, the employees who are members of that trade union or excepted body are entitled to elect or appoint their own employees' representative or representatives. This section also provides that the number of trade union or excepted body representatives will be determined on apro rata basis with other elected or appointed representatives. There is an obligation in this section on the employer to arrange for the election or appointment of the employees’ representative. Where a dispute arises under this section, it may be referred by the employer, trade union, excepted body or one, or more than one, employee to the Labour Court for determination in accordance with the procedures set out in subsections 15(6), 15(7) and 15(9).
Section 7 sets out the process by which employees may trigger negotiations that will lead to an information and consultation arrangement being put in place in the undertaking. At least 10% of employees must make a written request for an employer to commence negotiations to establish such an arrangement. This 10% is subject to a minimum of 15 and a maximum of 100 employees. An employer can alternatively commence negotiations on his or her own initiative. Provision is made for employees to make their request to either the employer or to the Labour Court or a nominee of the court and various steps are set down in terms of the Labour Court or a nominee of the court processing a request received. Negotiations must be concluded within a six-month period although this period may be extended by agreement of the parties.
There are two possible outcomes to these negotiations: the establishment of a negotiated agreement under section 8; or the application of the standard rules as set out in section 10 and Schedule 1. Where the employee threshold is not met at the time of making a request, the employees of the undertaking shall not make a further request for negotiations for a period of two years from the date on which the request was received by the employer or the date that the employer receives notification from the Labour Court that a valid request has been made.
Section 8 sets out minimum requirements for negotiated agreements on information and consultation. Employers and employees are given a wide degree of autonomy in these negotiations to devise their own information and consultation arrangements in line with the discretion allowed in the directive. In order to encourage such agreements, the conditions and limitations attached to them in the Bill are few. This affords the parties the opportunity to develop information and consultation arrangements that are tailor-made to their particular needs. This section also provides for different options for approving a negotiated agreement. A majority of employees or a majority of employees' representatives must approve the agreement.
Alternatively, some other system of approval can be agreed by the parties. At any time before a negotiated agreement expires or within six months after its expiry, the parties to the agreement may renew it for any further period they think fit.
Section 9 deals with pre-existing agreements which are information and consultation arrangements which are already in place in an undertaking before specified dates. Many undertakings already have agreements in place which provide for information and consultation either specifically or as part of a wider agreement on terms and conditions. Parties to these agreements may be satisfied that they have a workable and suitable system to meet the provisions provided for by Article 5 of the directive. In line with the policy to encourage tailor-made agreements, the conditions and limitations attached to these agreements are few.
In respect of undertakings with 150 or more employees I intend to make an order shortly after enactment of the legislation prescribing a date by which pre-existing agreements must be in place in undertakings of this size. Like section 8, this section also provides for different options for approving a pre-existing agreement. A majority of employees or a majority of employees' representatives must approve the agreement and as an alternative, some other system of approval can be agreed by the parties. Where a pre-existing agreement is not in force for a period of six months employees are then free, if they so wish, to trigger negotiations as set out in section 7.
Section 10 deals with the standard rules which are essentially a fall back position for setting up an information and consultation arrangement. The standard rules will apply if the parties agree to adopt them, or the employer refuses to enter into negotiations within a certain timeframe or the parties to the negotiations fail to agree within a certain timeframe. This section ensures that employees can exercise the information and consultation rights provided for in the Bill, if they wish, in the absence of agreement with the employer. The employer has six months to comply with the requirements of the standard rules. In the event that the terms of a negotiated agreement are not approved by the employees, a moratorium of two years will apply before the standard rules are initiated. Where during this two-year period the parties re-enter negotiations and approve a negotiated agreement, the standard rules shall not apply. This section also provides for a review of the standard rules.
Schedule 1 sets out the detail of the standard rules. These standard rules provide for the establishment of an information and consultation forum which comprises employees' representatives and provide details on the size and structure, expenses, rules of procedure and competence of that forum, together with the practical arrangements for information and consultation. Schedule 2 details the requirements for the election of employees' representatives to the information and consultation forum for the purpose of the standard rules.
Section 11 provides that, in relation to negotiated agreements and pre-existing agreements, an employee may exercise his or her right to information and consultation from the employer either by direct means or collectively by means of employees' representatives. In order for employees to change from a system of direct involvement to one of collective representation, there must be a written request to do so by at least 10% followed by the approval of a majority of those employees operating under a direct involvement system. Following approval of such a request there is an obligation on the employer to arrange for the election or appointment of representatives by the employees.
Section 12 provides that employers and employees and their representatives must work in a spirit of co-operation in implementing this legislation. Section 13 provides protection for employees' representatives in the performance of their functions in accordance with the Bill. It includes provisions contained in other employment legislation, such as protection against dismissal, against suffering any unfavourable change to the conditions of employment, against unfair treatment or any other action prejudicial to the employment. This section also provides for the facilities to be afforded to employees' representatives to enable them to effectively carry out their duties.
Section 14 deals with confidential information. It provides that specified individuals who receive information in confidence in the legitimate interest of the undertaking shall not disclose such confidential information to employees or to third parties, unless those employees or third parties are themselves subject to a duty of confidentiality. This duty of confidentiality will continue to apply after cessation of the employment of the individual concerned or the expiry of his or her term of office and it also extends to the Labour Court regarding confidential information that it receives during proceedings taken under the Bill. This section sets out situations where the employer may refuse to communicate information or undertake consultation and where he or she is prohibited from giving information.
Section 15 sets out dispute resolution procedures in respect of different types of disputes. Disputes regarding agreements, the standard rules or systems of direct involvement may be referred to the Labour Court for recommendation or determination after internal dispute resolution procedures have failed to resolve the dispute. Subject to the agreement of the parties, the Labour Court may mediate or appoint a mediator to assist in resolving a dispute. Disputes regarding confidential information may be referred to the Labour Court for determination. This section sets out the role and procedures of the Labour Court in regard to these matters. In deciding what constitutes confidential information, the Labour Court may be assisted by a panel of experts to be appointed by the court.
Section 16 provides that the Labour Court has the power to administer oaths and compel witnesses in regard to matters referred to it under the Bill. Section 17 provides for enforcement of a Labour Court determination by the Circuit Court. Section 18 sets out the offences for non-compliance with the provisions of the Bill. Section 19 sets out the penalties for non-compliance with the Bill. Section 20 is a standard provision dealing with the Short Title of the Bill. It also provides that the Bill shall come into operation on such day or days as the Minister may appoint by order or orders.
The Bill seeks, as it must, to fully transpose the EU directive on information and consultation into domestic law. In drawing up this legislation, the Department consulted widely with the representatives of the business community and the representatives of employees. The legislation represents a balanced approach within the requirements of the directive. It ensures that the right of workers to information about the companies in which they work will be a real right and will have genuine force. The endorsement of the workforce is key to ensuring that both negotiated and pre-existing agreements are genuinely approved information and consultation arrangements which reflect the concerns of both sides. My approach to the Bill has been to facilitate a co-operative and positive approach by individual companies and their employees in meeting the objectives of the directive. This approach has resulted in a Bill which recognises the voluntarist tradition in Irish industrial relations and which will facilitate companies and their employees in establishing effective and efficient information and consultation arrangements.
The Bill introduces a new era of information and consultation in Ireland and marks an important development in the history of Irish industrial relations. It is another landmark in strengthening the consensus approach to industrial relations issues we have developed here since 1987 and represents an opportunity to foster and deepen customised partnership-style approaches to anticipating and managing change. In Ireland, we have seen the benefits of partnership at nationaI level. Our social partnership model has been a crucial element in the economic success we have achieved over the past decade. We now want to meet the challenge of embedding partnership and making it a reality for workers and employers at enterprise level. This Bill represents an important step in this direction.
Information and consultation of employees and the development of a greater sense of partnership at enterprise level are vital components of an adaptive workplace. Research both at home and abroad demonstrates the tangible benefits that effective and meaningful information and consultation arrangements can bring to both the business and the individual. Creating opportunities for effective dialogue leads to considerable satisfaction and a sense of value for employees as they input into organisational thinking. It is my firm belief that over time this Bill will increasingly have a considerable impact on the quality of interactions that take place in the workplace. In modem society organisations are undergoing continuous change driven by a complex combination of factors. It has been shown that effective information and consultation arrangements can help organisations improve their capacity to anticipate and manage change and I am convinced that it can lead to improved organisational performance and competitiveness.
I will introduce a small number of amendments on Committee Stage and I look forward to discussing those with the House. In the event that Members wish to bring forward amendments, I would welcome that and will give them careful consideration. I appreciate that Members of this House tabled amendments to the first Bill on health and safety that I introduced, and they resulted in a considerably strengthened Act. I welcome the input of Members. I hope it will be possible to reach a level of consensus with somewhat less difficulty than has been the case in the process we have undergone heretofore.