I move: "That the Bill be now read a Second Time."
I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and thank him for coming to the House for the debate on this Bill. I also welcome the opportunity to introduce this important Bill. In addition, I welcome the people with a real interest in this matter in the Visitors Gallery, particularly representatives from the Services Industrial Professional and Technical Union, SIPTU, the National Union of Journalists, NUJ, and Irish Actors Equity, among others. I thank the Minister of State at the Department of Justice and Equality, Deputy Aodhán Ó Ríordáin, who met us earlier and is a strong supporter of the legislation.
The Bill arises from a long-standing Labour Party commitment to ensure protection of the right to collectively bargain for freelance workers, including journalists, actors and others, who perform their work on a self-employed or contract for services basis. Under competition law, self-employed persons are considered to be separate, independent economic undertakings. If the Competition Act 2002 were to be applied with full force and effect to trade unions and their members, as the explanatory memorandum to the Bill suggests, trade unions would revert to their old common law status as unlawful combinations and trade union leaders would be prosecuted as parties to a criminal conspiracy. Clearly, that is not the case, but the objective of the Bill is to seek to exempt certain groups of workers from an over-rigid application of the Competition Act. At present, if one self-employed person combines with others to set prices for their services, the risk under the current competition law is that they could be accused of an illegal, anti-competitive practice. At its most extreme, freelance journalists in a newsroom would be barred from bargaining collectively with their common employer about their wages.
The Acting Chairman, Senator Paschal Mooney, today raised with me, as did others, the fact that minimum rates were being set by some unions for freelance workers and that they continued to apply. However, the reality is that the Competition Act 2002, as interpreted and applied by the Competition and Consumer Protection Commission, formerly the Competition Authority, has had a chilling effect - as union representatives have informed me - on those unions that represent freelance workers. It leaves freelancers vulnerable. Employers can use the 2002 Act and its interpretation by the Competition Authority to avoid the bargaining of minimum pay rates with unions for freelance workers. The European Court of Justice recently held, however, that a worker was not genuinely freelance or independent of his or her employer if the worker acted under the direction of the employer as regards freedom to choose time, place and content of work and, in reality, formed an integral economic unit within the employer's undertaking. As a result, this category of worker is entitled to bargain collectively. This was the European Court of Justice's decision in 2014 in FNV Kunsten Informatie en Media v. the Netherlands. Arguably, this case has a direct impact on Irish competition law and is helpful in providing support for the principle being put forward in the Bill. The commitment to introduce a Bill such as this is also contained in the Labour Party document, Standing Up for Working People, published last week. The Bill shows the seriousness of our intent to act on the reforms within the document.
I will describe further the historical background to the Bill and its origins before discussing its provisions in more detail. The historical issue is described in the explanatory memorandum. The application of the Competition Act to freelancers has been an issue of contention for some time and a matter of serious concern to the trade union movement. I should declare a professional interest as I advised a number of trade unions on this issue some years ago in my capacity as a barrister. In 2004 the then Competition Authority ruled, in applying the Competition Act 2002, that a collective agreement between Irish Actors Equity and the Institute of Advertising Practitioners in Ireland in respect of voice-overs provided by freelancers was a breach of section 4 of the 2002 Act on the basis that each actor was a separate business undertaking and it was, therefore, unlawful for them to collectively fix prices for voice-over services. I am told this ruling went on to affect all those engaged in acting in visual commercials. It has had a chilling effect and could affect many others such as journalists, photographers, writers, musicians, models, bricklayers and other skilled tradespeople in the construction industry and other professionals. The Dutch case from 2014 to which I refer related to musicians, namely, orchestra members who were ostensibly self-employed musicians but whom the court found potentially to be false self-employed or bogus. In other words, they were, in effect, employees. The competition ruling also had an impact on representative bodies such as the Irish Medical Organisation, IMO. That is the issue with which a further section of the Bill is concerned.
In 2006 the then Deputy Michael D. Higgins published the Competition (Trade Union Membership) Bill which would have permitted collective agreements between individuals who engaged for gain under a contract personally to do work or provide services. This issue was then pursued by unions in national agreement and partnership negotiations and a previous Government in the programme entitled, Towards 2016, made a commitment to deal with the matter in respect of both freelance workers and representative bodies by way of amending legislation. I understand the EU-IMF memorandum of understanding then posed an obstacle by providing that there was a need to ensure no further exemptions to the competition law framework would be granted unless entirely consistent with the goals of the EU-IMF programme and the needs of the economy. In 2012 Deputy Emmet Stagg published the Competition (Amendment) Bill 2012, on which the Bill before the House is based. It had the same aim of former Deputy Michael D. Higgins's earlier Bill, but the correspondence from the EU-IMF and the correspondence between the EU-IMF and the Irish Congress of Trade Unions, ICTU, in 2012 were grounds for a reason not to proceed with this type of amending legislation.
Obviously, matters have moved on, but the issue remains a live one for many freelance workers in various fields and the unions that represent them. Happily, we have emerged from the programme; we are in a phase of economic recovery and now have the 2014 judgment of the European Court of Justice.
In that judgment the Dutch domestic law was very much equivalent to our existing Competition Act 2002 and I argue that the decision has a very direct relevance to the law in Ireland. In January of 2015 ICTU wrote to what is now the Competition and Consumer Protection Commission asking it to reconsider its position on the 2004 interpretation in the light of the judgment of the European Court of Justice. I understand it did not agree to reconsider at that point. However, the decision does pave the way for a Bill of this nature to be brought forward.
Before I turn to the specific provisions of the Bill, it is important to say there is a serious issue about consumer protection. Any exemption from the normal application of competition law must be narrowly drawn to ensure consumers are not put to any detriment. It is a knotty business to distinguish between self-employed contractors, on the one hand, and employees, on the other. We are all conscious that atypical employment involving people who are not obviously either self-employed or employees is a growing phenomenon and that people often describe themselves as, or are described as, self-employed for a variety of reasons such as tax, PRSI or pension purposes. The decision of the European Court of Justice states we must look behind that description to see what is the reality, which is very helpful for a Bill of this nature.
I will now turn to the provisions of the Bill. Section 2 is the core section which will provide the protection of which I speak for freelance workers as represented by their trade unions. The Bill provides a definition that "where an individual engages for gain under a contract with an undertaking personally to do any work or provide any services", a trade union should be able to negotiate effectively on his or her behalf on his or her terms and conditions. This is a new litmus test for what constitutes an undertaking or an individual to whom the Competition Act 2002 applies. A core point in section 2 is to enable trade unions to organise and negotiate collectively on behalf of those individuals who enter into, or work under, contracts personally to do or provide any work or services. The emphasis is on the word "personally". This will protect those freelancers who currently face this legal uncertainty. It will also prohibit self-employed individuals from price fixing against consumer interests and it will retain the core public interest principle of the Competition Act 2002. The exemption from the application of the Competition Act would apply only to contracts with undertakings, not with consumers. This is a key component of the Bill.
Section 3 is designed for a different purpose to allow for collective negotiation and bargaining regarding terms and conditions of a scheme whereby services are provided for the public by members of a trade or so on. It covers issues such as negotiations with the IMO. However, I believe the core part of the Bill is section 2. It is important to adopt the Bill and, in particular, section 2, as it will end the unfair and anomalous situation where many vulnerable workers are denied the protection of collective bargaining rights on the basis of what is an overly rigid interpretation of competition law, an interpretation which arguably goes against the decision of the European Court of Justice. I urge colleagues to support the Bill.