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Seanad Éireann debate -
Wednesday, 23 Sep 2009

Vol. 197 No. 1

Industrial Relations (Amendment) Bill 2009: Second Stage.

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

I welcome the Minister of State, Deputy Calleary.

I am pleased to bring the Industrial Relations (Amendment) Bill 2009 before this House for its consideration and, moreover, to have the debate on the Bill initiated in this House. I propose to offer some general observations on the rationale and general principles informing the content of this amending measure, and then to proceed to summarise the provisions of the Bill. I appreciate that Members will have a fuller opportunity to explore the provisions in more detail on Committee Stage, something to which I look forward.

In the context of the Towards 2016 Review and Transitional Agreement 2008-2009, the Government and the social partners had agreed to the implementation of a series of measures on aspects of employment rights and compliance. These included, in particular, the introduction of legislation to strengthen the arrangements for the making of employment regulation orders, EROs, and registered employment agreements, REAs, that have been features of our legal system for more than 60 years and to provide for their continued effective operation. I am pleased to say that this commitment is being met within the framework of this Bill.

The joint labour committee, JLC, and registered employment agreement systems have been the subject of a number of recent legal challenges that have gone to the High Court. As well as raising issues specific to particular EROs or REAs, these challenges also related to the constitutional propriety of the legislative provisions under which they were made. This Bill will provide for a number of amendments to the existing legislative framework surrounding the JLC and REA systems, including improved procedures and clear principles and policies to be taken into account by JLCs when formulating proposals for EROs. The Bill also provides that EROs and REAs will be given legal effect in future by ministerial order and that a perceived gap in the scope of parliamentary supervision will be filled by providing for Oireachtas scrutiny of these instruments.

Joint labour committees are independent bodies composed of representatives of employers and workers in a particular sector with a chairman who is appointed by the Minister. There are currently 13 JLCs in existence. The committees meet periodically to discuss and agree rates of pay and conditions of employment to apply to workers in a particular sector. JLCs operate in areas where collective bargaining is not well established and wages tend to be lower than other sectors of the economy, for example, in the hospitality sector, hairdressing, retail groceries and contract cleaning.

I am very conscious that many firms operating in sectors covered by EROs are experiencing considerable difficulties at present. I appreciate that these issues, along with the impact of strengthened arrangements for enforcement and inspection, have also been of concern to Members of this House and have been debated here in recent months in particular with my predecessor, the Minister of State, Deputy Kelleher. These difficulties have been to the fore throughout a series of meetings I have had since I took office as Minister of State with responsibility for labour affairs during which I have met representatives of employer organisations and of those employed in these sectors.

In my view the parties represented on a joint labour committee are best placed to address the impact of the economic crisis on employment levels and the viability of services in their sectors. They are the ones who must discuss and reflect on the new realities in the context of the downturn in the economy.

At national level the social partners have co-operated in developing a range of improvements designed to modernise the JLC system as envisaged under previous social partnership agreements. These reforms have facilitated the amalgamation and abolition by agreement of a number of JLCs, and the strengthening of their operational arrangements through the standardisation of the content of EROs. They have resulted in a closer alignment of the variation of EROs with the cycle of adjustments of the national minimum wage.

I am pleased to say this shared capacity for co-operation has also been demonstrated by the representatives who comprise the membership of particular JLCs. This is reflected in the agreements reached on the adjustment of the Sunday premium rate from double time to time plus one third that have already taken effect in hotels and catering establishments over recent weeks. That same realism has informed the successful efforts made by both sides within the agriculture and retail sectors to reach agreement on the deferral of increases in minimum rates that would otherwise have fallen due later this year.

It is exactly 100 years since bodies empowered to set minimum wages were first established in Britain and Ireland under the Trade Boards Act 1909. As part of the major reform of the Irish industrial relations pioneered by the then Minister for Industry and Commerce, Seán Lemass, in 1946, these bodies were given the new title of joint labour committees and their competence was expanded beyond the fixing of minimum wages only so as to cover the regulation of conditions of employment as well. Seán Lemass decided to amend the powers of the original trade boards and to transfer the supervisory and order-making functions that had been exercised by the Minister for Industry and Commerce in the years after the foundation of the State to the new, independent Labour Court. Under the provisions of the 1946 Act, when a JLC agrees terms and conditions, it makes proposals to the Labour Court on foot of which the Labour Court can make employment regulation orders, EROs.

Today I am proposing a change that will restore the position whereby the Minister makes the order giving effect to these proposals. At the same time, I am proposing to strengthen the manner in which the functions delegated to joint labour committees are supervised by the Labour Court and to ensure that the statute sets out a clear set of procedures and principles within which these delegated functions are to be discharged. I am also proposing that the standard legislative provision dealing with the laying of statutory instruments before the Houses of the Oireachtas will apply henceforth to these orders.

The Irish system of registered employment agreements, REAs, has been in force since 1946 and reflects the European tradition of labour law support for autonomous collective bargaining. In most other EU countries similar provisions apply in employment law facilitating the general enforceability of certain collective agreements, through either legislation or other administrative measures. Collective agreements can be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it registers the agreement. The effect of this is to make the provisions of the agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not a party to the agreement. In line with the arrangements I have already mentioned in the case of employment regulations orders, I am proposing an amendment that will ensure that henceforth such orders confirming the terms of a new or varied agreement will be made by the Minister rather than simply under the authority of the Labour Court.

The Bill also provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990. Access to the dispute settling agencies — Labour Relations Commission, Labour Court and Rights Commissioner Service — is governed by the definition of "worker" in section 23. At present, vocational education committee officers do not have access to these agencies, as they are specifically excluded from the definition of "worker". Up to now these officers have been served by a scheme of conciliation and arbitration, but they now wish to be able to access the dispute-settling agencies like workers generally. This amendment would allow officers of VECs, other than teachers, access to the dispute-settling agencies. Teachers in VECs would continue to be served by a scheme of conciliation and arbitration.

I also intend to follow the evolving best practice in parliamentary procedure with regard to the use of delegated powers by deleting the provision that had enabled the Government to amend the definition of worker simply by order. This will ensure that future changes in the definition of worker will be made only by means of primary legislation. To avoid any doubt in this regard, a ministerial order of 1998, giving local authority staff access to the dispute-settling agencies, is also being confirmed by a proposed amendment of the statute.

In addition to proceeding with legislative proposals to strengthen the existing JLC system and the operation of REAs as outlined in this Bill, I am also considering introducing an "inability to pay" mechanism so as to rebalance the existing statutory wage-fixing mechanisms. The current demands of both trade unions and employers to modernise and streamline the JLC system and to strengthen the legal status of REAs should be complemented by the introduction of an amendment to alleviate the serious difficulties that employers in some sectors currently experience under both systems. My officials are engaged in consultations with the social partners on this proposed addition to the Bill. I intend to bring forward an amendment to the Bill on Committee Stage in light of the outcome of these consultations.

Section 1 provides for the Short Title, collective citation, construction and commencement provisions of the Bill. Section 2 provides for the definitions associated with the Bill. Section 3 provides for a new definition of "registered employment agreement" to differentiate those made before the commencement of this Act, which were registered by the Labour Court, and those made after the commencement of the Act, which will be confirmed by ministerial order.

Section 4 provides for the confirmation by order of a registered employment agreement by the Minister. Following receipt of a copy of an agreement, the Minister shall make an order confirming the terms of the agreement. The standard legislative provision dealing with the laying of the order before the Houses of the Oireachtas by the Minister will apply. Section 4 also provides that the introduction of the new procedure will not detract from the validity of an existing REA made before the commencement of this Act. Sections 5 and 6 provide for the same procedure as under section 4 in respect of an order to vary an agreement or to cancel an agreement respectively.

Section 7 provides for a new definition of "employment regulation order" to differentiate between those made by the Labour Court before the commencement of this Act and those made by ministerial order after the commencement of this Act.

Section 8 provides for the "principles and policies" to which a joint labour committee must have regard when formulating proposals to submit to the Labour Court for employment regulation orders. In this context, a JLC must have regard to the following: the legitimate interests of the workers; the legitimate interests of the employers; the prevailing economic circumstances; the prevailing employment circumstances of the workers; the prevailing commercial circumstances of the employers; and the terms of any national agreement relating to pay and conditions, for the time being in force. Section 8 also provides that where an employment regulation order has been in force for less than six months, a joint labour committee may submit proposals for revoking or amending the order where it is satisfied that the order contains an error, or exceptional circumstances exist which warrant the revocation or amendment.

Section 9 provides for the making of an ERO by the Minister. Following adoption of a proposal for an ERO by the Labour Court, the proposals will be forwarded to the Minister who shall make an order giving effect to the proposals. The standard legislative provision dealing with the laying of the order before the Houses of the Oireachtas by the Minister will apply. Section 9 also provides that the introduction of the new procedure will not detract from the validity of an existing ERO made before the commencement of the Act.

Section 10 provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990 to allow officers of VECs, other than teachers, access to the dispute-settling agencies. Section 10 also provides for the deletion of sections 23(2), 23(5) and 23(6) of the 1990 Act. Section 23(5) provides that the Government may by order amend the definition of "worker" in section 23(1) and may by order revoke or amend any such order. Section 23(6) deals with the laying of such orders before the Houses of the Oireachtas. The effect of these amendments is to remove the power to make changes in the definition of worker by ministerial order and to ensure, in line with the decision in the case of Mulcreevy v. the Minister for Environment and Local Government, that future changes in the definition of worker will be made by primary legislation.

Moreover, the Industrial Relations Act 1990 (Definition of "Worker") Order 1998 amended the definition of "worker" in section 23(1) of the Industrial Relations Act of 1990 in order to give officers of local authorities, including health boards, access to the Labour Relations Commission, Labour Court and rights commissioners. Since it is considered unsafe to rely on changes made to statute by secondary legislation, it is now proposed to make the amendment in primary legislation. The definition of "local authority" contained in section 23(2) of the 1990 Act should be deleted in consequence.

Section 11 provides for improved procedures to be followed when formulating proposals for an ERO. The current legislation merely requires that, when proposals for the making of an ERO are being forwarded to the Labour Court, the JLC chairman must submit a report to the court on the circumstances surrounding their adoption by the JLC. The Bill provides that, in future, the chairman of the JLC shall forward to the Labour Court, in addition to a report on the circumstances surrounding their adoption, copies of all written submissions and any other documentation considered by the JLC in formulating its proposals. The Labour Court will consider the material forwarded to it in considering the JLC's proposals and may hold a hearing where there are objections to the proposals.

Section 12 provides that the term of office of a chairman of a JLC shall not exceed five years and he or she shall cease to hold office on attaining the age of 65. An existing JLC chairman shall hold office for no longer than three years following enactment. Section 13 provides for consequential amendments to the Employment Permits Act 2006 and the Organisation of Working Time Act 1997.

As I mentioned, the statutory minimum terms and conditions applicable to workers in vulnerable sectors covered by EROs, along with our system of universally applicable, legally enforceable collective agreements represented by REAs, together have their origin in the provisions of the Industrial Relations Act 1946. Senators will be aware that these provisions have taken on new significance in the light of recent controversy about the European directive on the posting of workers and the implications of the recent European Court of Justice rulings in cases such as Laval and Rüffert. I commend the recent report by the Oireachtas Joint Committee on European Affairs on the Lisbon treaty and workers' rights for confirming that the disputes which gave rise to those cases could not have happened in Ireland. Since EROs and REAs have been enshrined in our domestic legislation and now qualify — along with our national minimum wage — as core employment standards under the EU directive, they are automatically applicable to and can be enforced against contractors based outside Ireland. These instruments ensure foreign service providers cannot undermine the competitive position of Irish contractors or displace Irish workers.

The overall purpose of this Bill, together with the Employment Law Compliance Bill, which has completed Second Stage in Dáil Éireann and is now awaiting further consideration on Committee and remaining Stages before coming to the Seanad, is to secure greatly increased public confidence in the system of compliance and to strengthen and uphold the established employment rights bodies against legal challenge. With the publication of this Bill and this debate, the Government is continuing to meet commitments on core elements of the range of employment rights measures agreed with the social partners and is again demonstrating the benefit of structured social dialogue as an enabler of economic and social progress. I commend the Bill to the House.

I welcome the Minister of State to the House and thank him and his officials for their help to members of the Opposition prior to the introduction of this Bill.

There are a number of issues I would like to address in my contribution. I am glad the Minister of State, in the context of the upcoming referendum on the Lisbon treaty, referred in the last part of his speech to the Laval judgment. Some rather spurious allegations have been placed on posters throughout the country about the potential impact of a "Yes" vote on the minimum wage. We have known for some time that the Lisbon treaty has nothing to do with our ability to determine our own national minimum wage but it is important those bogus arguments be blown out of the water. In this regard I concur with what the Minister of State said in his contribution.

This Bill is relatively small legislation which addresses a number of specific issues that have arisen over recent years. That is one of the primary reasons we in Fine Gael have some difficulties with it. We feel it is an opportunity for the Government to address the way the JLC structure operates and we regret it has failed to use this opportunity to introduce uniform measures throughout the country. However, I will deal with that later. I have no difficulty with the extension, as mentioned in the Minister of State's contribution, of the definition of "worker" to include VEC staff. The current position which pertains as a result of a Labour Court decision with regard to county council and HSE employees is now enshrined in primary legislation, which is welcome.

The Bill has been introduced on foot of an impending High Court case, probably to be heard in the early months of next year, which follows on from a number of similar cases over recent years, including one involving the Irish Hotels Federation and the Burke case in 1979 in which Mr. Justice Henchy pointed out that there may be a constitutional difficulty with the arrangement resulting from the 1946 legislation, to which the Minister of State referred, whereby the final decision on EROs and REAs rested with the Labour Court rather than the Oireachtas and the Minister with responsibility for labour. I have no difficulty with correcting that anomaly, but I question the fact it has taken 30 years to follow up on the judgment of Mr. Justice Henchy when I was one year old in 1979. It is welcome none the less.

I will spell out clearly the Fine Gael Party's position on JLCs. We are adamant that their role in protecting the most vulnerable workers in our economy should be upheld. Often, people covered by JLCs are among the lowest paid and, as the Minister of State said, many of them are not members of trade unions. In addition, many are younger or migrant workers. It is important the JLC structure of protection remains in place in some form into the future. It is also important to point out that the JLC system as it currently stands does not just refer to wages and direct payments but also to the conditions under which people work. Fine Gael has a clear position on protecting the lowest paid people in our economy.

This Bill gave the Government an opportunity to correct the anomalies that exist under the current JLC system. Our system stems from the introduction in 1909 of trade boards across Britain and Ireland, as well as the old age pension and a number of other measures, by the Liberal Government. This was reformed by the then Minister, Seán Lemass, in 1946, as mentioned by the Minister of State, when the trade boards were replaced by JLCs. It is important to note that in the UK the trade boards do not exist any more. When minimum wage legislation was introduced in 1997, the old system of the trade boards had already been dismantled. It is regrettable the Government has failed in this opportunity to ensure we have uniform treatment of workers and employers in different sectors of the economy. It is not acceptable that in certain sectors of the economy a separate JLC will operate in Cork, Dublin or elsewhere in determining wage rates. The Government has missed an opportunity to propose a uniform mechanism throughout the country.

I made an observation when reading some of the Minister of State's comments. I do not wish to attack him personally. I am delighted he has been made a Minister of State because he brings to the job a clean pair of hands and he has good ideas. However, he mentioned shortly after his appointment that he would consider a significant reform of how JLCs operate at present. Despite this, in his first Bill it seems he is passing up this opportunity. The current method of operation of JLCs is that four representatives of employers and four of employees sit in committee, with an independent chair, as the Minister of State pointed out. However, the independent chairperson has a casting vote. In most situations in which a vote is called, the employers will be on one side and the employees on the other, and Fine Gael believes the chairperson should not have a casting vote. There should be real agreement between employees and employers and the Labour Court can then make its decision. It places the role of the independent chairperson in question if he or she were to cast a vote on the ultimate outcome of the deliberations of the committee.

The Minister of State referred to the inability to pay a clause that exists under the minimum wage legislation. Such a clause is not contained in the Bill under discussion but the Minister of State indicated that such a clause is being considered and will be introduced as a Government amendment on Committee Stage. In the current economic depression it is imperative that such a clause would be included in this legislation. I would welcome its inclusion, provided employers can show clearly that they have an inability to pay under the current economic circumstances.

It is worth noting the JLC mechanisms in the catering and hotel sectors, as the Minister of State mentioned, have ensured the Sunday premium rate has been reduced from double time to time plus one third. I welcome that because, economically, it is more sustainable in the current climate. I also welcome it from a practical point of view because the previous Sunday premium rate was having a detrimental impact on services provided at weekends and on bank holidays in small and large towns throughout the country. The current premium rate is more in line with what can be sustained into the future.

The Minister of State mentioned agreements reached in the agricultural sector and other sectors in recent months to postpone increases in payments under the JLC system to workers in those sectors. That mechanism was too slow. We have been in an economic downturn for a considerable number of months, yet in May of this year increases under decisions of JLCs across the country were still being paid while employers were experiencing economic hardship arising from our current economic difficulties. The system, as it currently operates, is too slow.

I welcome the Minister of State's announcement concerning an inability to pay a clause. However, this Bill represents a missed opportunity to introduce a more fundamental reform to ensure the protection of the weakest and most vulnerable workers in our economy, the sustainability of existing jobs and the creation of jobs in those sectors in the future.

I welcome this Bill and the opening comments of the Minister of State with responsibility for labour affairs in introducing it. In the context of a point raised by the previous Opposition spokesperson, we must be clear that part of the necessity for this legislation, in the first instance, has been the ongoing legal situation. As a Member of this House and when I was a Member of the other House, I criticised the fact that too often impending court decisions or actual court decisions have made us revisit legislation which in the first instance we did not get right. An attempt has been made with several Bills to introduce a shell of enabling legislation, the meat of which came through by secondary sources, mainly through ministerial order. I especially welcome the Minister of State's comments in not only addressing the anomaly that exists in the primary legislation that we are amending but his intention to allow further amendments to this legislation, by way of ministerial order, which will involve the Houses in a right and proper way. I believe we will avoid such mistakes in the future. That is the first ground for the introduction of this legislation.

This Bill is part of a suite of measures, one of which, the Employment Law Compliance Act, is in place. The Government announced, through the social partners, its intention to draft other legislation which will result in creating a clearer picture in terms of this area. On that ground, I hope the main Opposition party will revisit its position. This is necessary amending legislation. It should be addressed in the spirit of trying to bring about these changes to the law as quickly as possible.

We are talking about a system that has largely suited us well. The existence of the joint labour committees is evidenced by one of the most recent decisions concerning the hospitality sector, the addressing of premium rate for Sunday work. We have missed the opportunity to have a debate on the wider issue of the prevalence of commercial activity on Sundays, but given the nature of the need to stimulate any economic activity, that is a debate that has passed us by. We have become an Americanised economy and the need to have people working seven days a week almost 24 hours a day is something we have built into our economic model. Severe competitive pressures existed in regard to the premium rate for Sunday work in the hospitality sector. The joint labour committee has reached a sound and wise decision in the constraints of the economic circumstances in which we find ourselves. It is a system that works and it is informed by how employment regulation orders and registered employment agreements are reached. It is important that we can use the existing structure, modulated to the extent that it needs to be, and build on the sound aspects of social partnership, of which we probably need more at this stage in our economic history than we did at any other time.

I noted the Minister of State's reference to the former Minister and former Taoiseach, Seán Lemass, in his role in the 1946 legislation. We are approaching the 50th anniversary of probably his best political achievement, while working with T. K. Whitaker, namely, the formulation of the economic plan which took Ireland from being a doldrum economic State and gave it a new economic future. A recent forum was held on Seán Lemass's contribution. It focused very much on the theme that the economic climate at the end of the 1950s has parallels with the current economic climate. We need to look at how we can readjust our economic parameters to make sure the leap we need to make can be taken in the most effective and most competitive way possible.

The context of getting that competitive balance right and giving entrants to the labour force equal opportunities and a fair means of engaging their labour is something we as legislators need to get right. The Minister of State in his early weeks of taking office raised the question of a debate on the minimum wage. It is right to have debate on such an issue at any time. He got a negative media reaction to raising that issue. Our minimum wage affects a very small proportion of our labour force, some 2%. While it is a high rate in terms of other European countries and our economic competitors, it has been set in the context of our having a cost of living that is higher than that in those countries. Even while we are in a deflationary situation, the public mood and public debate is informed by the fact that while we have wage rates that are exaggerated throughout our economy, a tolerance for changing the rates, especially at the lowest level, cannot be seen until the wages at the highest level begin to be tackled. We in this House and in the political system have a role to play in that respect. We have not done it very effectively in the 18 months during which our economic circumstances have changed. In terms of the upcoming budget, we need to be realistic about who gets paid what before we can talk about what those paid the least receive. I hope the debate as it proceeds will progress along those lines.

Another important aspect of the Minister of State's speech, as mentioned by Senator Phelan, is the context of Irish industrial relations and labour legislation as opposed to other European countries and the use of spurious argument in the debate on the referendum on the Lisbon treaty in regard to whether we have good industrial standards in this country and whether they will be affected by a positive vote on the Lisbon treaty. It is clear from the Minister of State's contribution, and augmented by Senator Phelan, that that is not the case. We do provide a measure of protection in our labour law system that goes beyond what exists in other European countries and this will be maintained through legislation such as this.

It is hoped, rather than the downward pressure of lowest common denominators some of the opponents of the European Union and Lisbon treaty argue, this will be part of our contribution towards strengthening those standards in Europe. The experience of Ireland in other aspects of employment law, namely, women and equality and upward wage rates, would seem to confirm that when we were lagging behind in many areas we were forced to meet higher standards and where we have higher standards, equally we, as good members of the European Union, should be making our argument for better European standards in this area.

Some of the spurious arguments relate to the minimum wage. The Cóir poster, which is appalling, claims a minimum wage of €1.84 will pertain if people vote "Yes" in the referendum on the Lisbon treaty. The Bill, though slight in content, is part of a package of measures that will result in improvements in this area. It will build on the strength of the existing infrastructure and will remove any doubt about the role of this and the other House in terms of ensuring any further changes, in particular in regard to definitions, how the constitution of the JLCs are made and how we will further change EROs and REAs in the future, will be such that there should be no legal doubt that we are doing our work in a proper manner and, as a result, are bringing about better legislation.

I wish to share time with Senator Mullen.

Is that agreed? Agreed.

I welcome the Minister of State to the House and thank him for the opportunity to speak on this Bill. Our world changed last year and not for the better. The financial crisis is not understood in this country. While I am aware we will have an opportunity to speak about the economy in approximately half an hour I want at this stage to touch on how our world has changed. The crisis affects everything. Many of the topics upon which the Minister of State touched, which appeared normal and assumed criteria in the past, no longer apply to the same extent. We no longer have that luxury. We now have to borrow €400 million every week and I do not know whether we will be able to continue to do that. We must cut expenses and find a way to become more competitive.

I touch on these issues having just read the National Competitiveness Council document on the competitiveness of our nation. I do not believe this matter is understood. I would like to touch on this subject in so far as it relates to this particular issue. Approximately six or eight months ago, Senator Ross and I were contacted by O'Briens Sandwich Bars who wished to employ people on a Sunday and could not do so because they could not afford the rates of pay agreed between employers and the unions. They found that although there were people who were willing to work at the rate they were willing to pay, they could not employ them on that rate because they would be in breach of the ERO regulations. While this may have made sense three or five years ago — I do not believe it did — it no longer makes sense. The Minister of State mentioned that some of these figures have been adjusted.

We pass regulations and rules to legitimise agreements made between employers and employees. I am concerned we are still living in the past and do not recognise that the employment regulation orders in place are far too difficult to maintain. The Joint Committee on Enterprise, Trade and Employment met yesterday with a deputation from the newsagents and independent grocers who said they could employ more people but could not pay the agreed rates and as such would be in breach of the regulations. It is time to acknowledge that the EROs were good in the past but that that is no longer the case.

I have made the point in the past that some jobs do not exist at a certain rate. I was involved in the supermarket business. There was a time when we were able to employ people to pack bags for customers or to take their trolleys to their cars. They were not highly paid jobs but they were the first step on the ladder. In later years, we were unable to do that. I am not suggesting they were great jobs. Mr. Bill Cullen's book, It’s a Long Way from Penny Apples, a book everybody should read, tells how when he started work in a garage his job was cleaning windscreens and so on and how when times were tough and people were being let go he was kept on because he was enthusiastic about his job. We must be careful to ensure we do not, with the best will in the world, put in place restrictions or legitimise agreements between employers and employees that in effect hinder or stifle the opportunity to create jobs that may be first steps on the ladder.

I am concerned that consumers are not taken into account in this legislation. Long before the Minister of State was born, back in the late 1960s or early 1970s, I fought a case in the Supreme Court against early closing legislation that had been enacted in 1938. That legislation stated that if employers and employees in a certain business agreed on certain closing times or early opening hours they had to apply to everybody. That legislation was in operation from 1938 to 1969 when I found a loophole in it and challenged it in the courts. I mention this because it relates to two groups, employers and employees, who entered into an agreement which was in their interests but ignored the interests of the consumer. The same is happening here.

A few months ago, when in Dundalk to say goodbye to some staff who had worked for years in a supermarket that was closing, I suggested to some of the butchers that they might find work in Newry and they told me they would not work there because they would be paid only one third of what they earned in Dundalk. I am not suggesting this is based on any agreement between unions and employers. However, if we remain uncompetitive we will lose business, be it to Northern Ireland or somewhere else. We will lose the jobs we would have had ourselves. If we institutionalise by agreements between employers and employees that apply to everybody else, there is a danger we will become even more uncompetitive than we are.

Senator Boyle referred to our high minimum wage rates and almost excused them by saying that the cost of living here is high, which is chicken and egg. Our cost of living is high because of high rates, which are to a certain extent institutionalised by the agreements we are speaking about. One of the chief arguments used by employers who challenged the pay deals in court was that they were not sanctioned by the Oireachtas. This Bill will address that issue.

It should be noted that this legislation is an example of how the Oireachtas controls the national minimum wage and the sectoral pay rates agreed through registered employment agreements and employment regulation orders. I am concerned that while such arrangements may be the right approach to take in the long term, in a time of crisis such as this — unfortunately, as a nation we have not recognised its full extent — the priority must be to take action to contain employment costs and make ourselves more competitive. These types of agreements between employers and employees are fine when they apply only to the parties concerned, but a more general application is not the correct approach to take. Therefore, I question the entire objective of what we are seeking to achieve in this legislation.

Ba mhaith liom fáilte a chur roimh an Aire Stáit. Gabhaim leithscéal leis toisc nach bhfuil mé ach ag teacht agus ag imeacht, mar táim ag freastal ar chomchoiste ag a bhfuil Conradh na Gaeilge i láthair. I welcome the Minister of State, Deputy Calleary.

The background of the Bill is the uncertainty regarding the status of registered employment agreements and employment regulation orders, both of which set wage levels and often other obligations such as those relating to sick pay, pensions and overtime in a particular industry. The wage levels thus agreed are referred to as the joint labour court or JLC rates. This mechanism, dating from the 1940s, was effectively an embryonic means of setting a minimum wage for particular categories of workers. It is interesting to note that the equivalent system in the United Kingdom was abolished in 1993 by the Conservative Government with the support of the trade unions which were of the view that such arrangements hindered collective bargaining. Given that these agreements set a level of pay in excess of the minimum wage, they are understandably resented by employers. It was for this reason that in 2008 their constitutionality and human rights aspect were challenged in the courts, with mixed success.

The Government promises to rectify the situation by way of this legislation which obliges the Minister to confirm the decisions of the various joint labour committees and the Labour Court and proposes that such decisions be put before the Houses of the Oireachtas which will have the power to annul them. IBEC has proposed an amendment to the effect that businesses be given a mechanism to opt out of JLC rates, similar to the opt-out clause afforded under the minimum wage legislation. According to a briefing from William Fry, the Minister of State, Deputy Calleary, in bringing forward this legislation, reiterated his previous comments that it may be timely to consider bringing the JLC and REA systems into line with the procedures already established under the National Minimum Wage Act 2000 which allows employers to submit inability to pay claims to the court in order to obtain a temporary exemption from the minimum wage obligation. In other words, there was an indication that something along the lines of the IBEC proposal would be introduced. The Minister of State may be able to enlighten me as to his intentions in this regard, but no such provision is included in the Bill presented to us today. Obviously, the unions will oppose any such provision and we must be mindful of the requirements of social partnership.

We are all aware that the extent of the economic difficulties we face is forcing us to question some of our most cherished assumptions. It is beyond dispute that all public policy in this area, as in many others, should start from the point that the dignity of the person must be the highest priority in all initiatives we propose and support. It is beyond dispute that when wages are too low, the dignity of the person is at risk and there is potential for abuse and exploitation. Historically, we are very aware of the suffering of people on low wages and such suffering remains in evidence in many parts of the world where people endure outrageous working conditions in return for a pittance that barely keeps body and soul together and is entirely insufficient to support families. On the other hand, recent experience in this State shows how wages that are too high can damage competitiveness, a consequence that will ultimately be to our social detriment.

While we all wish to see workers not only survive but thrive in terms of the wages they receive for the good work they do, we are also aware that high employment costs can have a negative impact, particularly in the very competitive and dangerous situation in which we currently find ourselves. That is why we should discuss and give careful consideration to the IBEC amendment. If we are minded to advocate such a change, whereby businesses would have a mechanism to opt out of JLC rate agreements in the same manner in which they can do so under the minimum wages legislation, I am confident there would be a beneficial effect for many of the businesses which provide employment throughout the State. For example, I am aware of a restaurant in a tourist location in County Clare which has opted not to offer Sunday lunch because of the astronomical staff costs involved. The closure of business premises and the associated loss of employment or services to communities is a far more detrimental outcome than any difficulties associated with a mechanism allowing employers to make the case that they should only pay a portion of JLC rates.

It is important that employers and employees know about their rights and obligations. Many employers are unaware of what they are required to do and consequently tend to get caught for arrears. On the other hand, many staff, especially young, foreign or non-unionised workers, are unaware of their rights. A potential solution might be to issue a booklet with the necessary information as each new PPS number is ascribed. The number of inspectors working for the National Employment Rights Authority is very small. This is something that should be reviewed once the recruitment freeze in the public sector is lifted.

Section 10 of the Bill which amends section 23 of the Industrial Relations Act allows officers of VECs, other than teachers, to access dispute settlement agencies, including the Labour Relations Commission and the Labour Court. This is welcome. Section 11 provides that in deciding whether to accept the recommendation of a joint labour committee, the Labour Court will have access to all submissions made by interested parties to the committee, not just the report of the chairman, as is currently the case. This too will be of assistance to both employers and employees. Mar achoimre ghairid, tá sé tábhachtach go mbeidh muid praiticiúil agus go dtuigeann muid go bhfuil sé práinneach go mbeadh cóimheá idir ceart an duine tuarastal ceart a fháil dá chuid oibre, de réir dínit an duine sin, agus ag an am chéanna go dtuigeann muid gur ceart, má tá rátaí ró-ard á íoc, go mbeidh áiteanna á dhúnadh agus nach mbeadh sin ar mhaithe le leas an phobail, na heacnamaíochta ná na tíre. Mar sin, ba chóir dúinn ar a laghad plé a dhéanamh faoi leasú a thabharfadh deis do dhaoine gnó, ráta níos lú a íoc i gcásanna áirithe, mar a tharlaíonn leis an phá íosta. Freisin, ba chóir dúinn a chinntiú go bhfuil dóthain eolais ar fáil do dhaoine, idir fostóirí agus fostaithe maidir lena cearta agus dualgaisí. B'fhiú é nuair atá uimhir PPS á eisiú go mbeadh leabhrán ann a míneodh do ghach duine cad iad a gcearta agus a ndualgais atá rompu i gcásanna mar seo.

I too welcome the Minister of State, Deputy Calleary, as he presents this important legislation to the House. The issue of workers' rights has been extensively debated in the last year. The combination of the most challenging economic crisis we have ever faced and the forthcoming Lisbon treaty referendum has succeeded in placing it centre stage. In addition, several legal challenges have put the existing legislation under the spotlight. The purpose of the Bill is to strengthen the existing scheme for making both employment regulation orders and registered employment agreements. It has come about because of High Court challenges to the operation of EROs and REAs.

Both REAs and EROs represent minimum pay systems for certain categories of workers. Following several legal challenges, this legislation is being introduced to deal with the flaws in the system. New measures introduced by the Bill will see clear and transparent policies taken into account by joint labour committees when setting out proposals for EROs. The legislation enables joint labour committees to take account of the economic and commercial circumstances of employers when setting out proposals for EROs. This is extremely important given the financial pressures facing all small businesses at present. The legislation also sets out a series of principles that must be taken into consideration by a joint labour committee when submitting its proposals to the Labour Court. This includes the legitimate interests of the workers and employers as well as the economic circumstances of the employers and the workers. At present, there are 67 REAs maintained by the Labour Court — only four of these have wage rates that have been updated in the last four years.

One of the reasons this legislation is being introduced is that both EROs and REAs have their own limitations. They can be complex and in many instances can be obsolete as they often set wage rates similar to the national minimum wage. A recent industrial relations journal found that 80% of joint labour committees' rates, which govern EROs, were only 10% above the national minimum wage, which is currently €8.65 per hour. Also, these agreements can be complex and time consuming to negotiate. Another anomaly is that joint labour committees predate the introduction of the minimum wage in 2000. In the past, JLCs have been criticised for being selective and not covering many areas of low paid work. In a recent survey, the overall majority of trade unions and independent members still believe JLCs are necessary.

Given the extent and the scale of the economic problems we are now facing, small and medium sized businesses are finding it very difficult to survive. Business people face huge pressures. Competitiveness is key to our economic recovery. Some people have used the current financial climate to suggest it will result in a race to the bottom for employers. I do not believe that is correct. The issue of workers' rights has been grossly misrepresented by some people in the debate on the Lisbon treaty. Nobody who cares about workers' rights can honestly call for a "No" vote in the referendum. If anything, the Lisbon treaty realigns the Union's fundamental law in favour of workers. In my view, there are two big winners if the treaty is implemented — national parliaments, whose powers are greatly increased, and workers, whose interests get robust treaty protection. I urge people not to believe the statement on posters displayed throughout the country claiming the minimum wage will be €1.84 per hour. That will not and cannot happen. The Members of this Parliament cannot allow it to happen.

The Charter of Fundamental Rights contains a host of other new protections for workers' rights, which will be given treaty status for the first time if the treaty is ratified. They include a right to information and consultation with the employer, Article 27, a right of collective bargaining and action, Article 28, protection in the event of unjustified dismissal, Article 30, the right to fair and just working conditions, Article 31, and rights surrounding parental leave, among others, in Article 33. In terms of increased protection of workers' rights, consider, for example, the Lisbon treaty's "horizontal social" clause. For the first time, the Union would be obliged to consider the social consequences of decisions in making its policies. This is entirely new in the Union's basic law. Economic or free trade considerations will have to be weighed against workers' rights considerations if the treaty is implemented. How can the "No" campaign oppose that?

In addition to the treaty's advances in this area, our European partners have all endorsed, at the Government's request, a solemn declaration on the importance the EU attaches to workers' rights. This sets out in a single place the importance the European Union attaches to a social Europe. Growth and competition are not ends in themselves but are the means to achieving the social market economy which we, as Europeans and Irish citizens, support. The claim that the EU could introduce a minimum wage of €1.84 is simply false. The national minimum wage and the sectoral pay rates agreed through REAs and EROs are the key assets in our national legislation which ensure there can be no race to the bottom.

I welcome many sections of the Minister's speech, particularly the reference to the shared capacity for co-operation which has been demonstrated by the representatives who comprise the membership of particular JLCs. This is an important part of the legislation. Under section 10, the Government may, by order, amend the definition of "worker" in section 23(1). It can effect those amendments through ministerial order. I also welcome the provisions relating to workers in VECs. The Bill proposes to introduce an inability to pay mechanism. The Government has decided to bring forward a mechanism to enable employers to seek a temporary exemption from the strict application of the EROs and REAs under certain conditions. There were many meetings with the Minister's predecessor at parliamentary level dealing with the difficulty employers had employing people on Sundays and so forth.

I welcome the Minister of State, Deputy Dara Calleary, and wish him well with his portfolio, which deals with labour relations, the labour market and labour in general. I wish to comment on a point Senator Carty raised about the Lisbon treaty referendum, the "No" campaign and its posters claiming there will be a minimum wage of €1.84 per hour. It is unbelievable that people would, in this day and age, use posters in a campaign to claim that the minimum wage will be reduced to €1.84 per hour if the treaty is passed. That is absolute balderdash and is unsubstantiated in any way.

I welcome the legislation. The Minister outlined the various issues it covers. I also welcome the decision to reduce the rate from double time for weekend work to time and one third. Our tourism industry is very important but it has become very uncompetitive. As Senator Quinn said, it is something of a chicken and egg situation. We have a high minimum wage and a high wage economy. How does one go about rectifying and reducing that to compete with other economies? High minimum wages are required to pay for the provision of goods and services so people on the lower rung of the ladder are not disadvantaged.

Our tourism is very important but when one visits countries such as Spain, Portugal and Italy and compares the cost of services, eating out, groceries and so forth with the costs in this country, one can see a huge difference. We cannot compete with the likes of Spain and Portugal in terms of the cost of food and eating out. It is therefore a help that the Minister has reduced the overtime rate on Sundays from double time to time and one third. However, there is another issue the Minister should consider and it relates to pensions. Undoubtedly, people who work at weekends deserve to be rewarded for working unsociable hours. We have contributory and non-contributory pensions. A new pension should be introduced for those who work unsocial hours and weekends. Under the new pension scheme, such employees should pay a different rate of PRSI. The Government should consider this proposal as it would benefit those who work unsocial hours.

Debate adjourned.
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