Select Committee on Enterprise and Economic Strategy debate -
Tuesday, 8 Feb 1994

SECTION 11.

Mr. R. Bruton

I move amendment No. 15:

In page 10, between lines 46 and 47, to insert the following subsection:

"(2) Before any order or regulation is made under this Act, the Minister shall publish a statement outlining the likely costs to both an employer and an employee of complying with any requirements specified by the regulation, and the Minister shall cause to have this statement laid before the Oireachtas at the same time as the order is laid.".

The Government has clearly signalled that it wishes to be sensitive to the possible effect on employment costs of any new legislation. The Minister has convincingly argued that the extra costs caused under this legislation may not be substantial. However, it is important that we provide some system to proof legislation for its cost on employment. There should be an onus on Ministers, before they introduce regulations to implement this Act or set out regulations under which different terms of the Act are to be interpreted, that they at least publish a statement of the likely cost to both employer and employee of complying with the Act's requirements.

It is a common complaint that there is excessive regulation and form filling in complying with tax and other regulations. In the last buget we saw the Minister reduce the number of forms by consolidating them into one. Presumably that was a recognition of the cost of compliance with its multiplicity of forms. This amendment would be a useful amendment for Ministers to bear in mind when they introduce legislation — even though the motivation is good — so that they will ensure that there are no hidden pitfalls that will create costs and eventually damage both our ability to create employment and our ability to compete with other countries. This would be a sensible course of action.

We like to be fair and to take the side of individuals, but we must also be aware that every right we confer becomes a duty for somebody else. We should at least look at the scale of the costs involved. I would like the Minister, when she lays the regulations before the House, to make a statement of likely costs and satisfy the House that they will not be excessively onerous.

Mr. Kemmy

In my experience the greatest single expenditure in cases brought before the Employment Appeals Tribunal is on legal costs. What was originally intended to be a forum for, on the one side, employers and personnel managers and, on the other side, workers and trade union representatives has largely been taken over by barristers and solicitors.

We discussed the capping issue with regard to the last amendment. If the fees of barristers and solicitors could be capped it would be a great saving of expenditure in this area. The tribunal was set up as a forum — not necessarily an informal one — through which workers and employers could resolve their differences. It has now become more legalistic and more expensive. That has been my experience and I have brought more cases before the Employment Appeal Tribunals than anybody in the country. It has become a bonanza for the legal profession. More workers are encouraged, sometimes unnecessarily, to go to legal representatives when the case could be handled with a high degree of competence by a trade union official.

I understand the Deputy's point and concern about funding is important. However, he omits the greatest single item of expenditure, which is the legal costs involved and the increasing encroachment by the legal profession into a structure which was intended to be an industrial and not a legal forum.

Mr. R. Bruton

I am not omitting that. I am saying that there should be a statement of the likely cost to both employer and employee of complying with the requirements. That, under section 8, would include the Minister's regulation in relation to award of costs and expenses by the tribunal in relation to appeals and payments. My amendment would incorporate what the Deputy has said. The Minister would be obliged to state to the House the costs on employers and the legal costs of employees when bringing their cases.

Mr. Rabbitte

Deputy Kemmy has raised an interesting point. At the time of the original legislation the then Minister for Labour, Deputy B. Ahern, left it open that we could discuss this question at a future stage. Some of us advised at the time that the Employment Appeals Tribunal was likely to go the way of its counterpart in Northern Ireland, where it has become almost exclusively the preserve of the legal profession. I do not know what the constitutional implications are of preventing lawyers functioning qua lawyers at the Employment Appeals Tribunal. I was at the Employment Appeals Tribunal recently and I had the experience of not just being confronted by a senior counsel and two solicitors but by a second firm of solicitors keeping a watching brief for a party they thought might be injured or for whom the case might have implications.

I never cease to be fascinated that employers, who in the main seem to be quite confident about making major planning and investment decisions, are absolutely confused and mesmerised when it comes to industrial relations, and that they retain lawyers to the extent and at the cost they do in what are simple cases. Perhaps I should put it on record that I was not being paid. I say that because I was wondering what Deputy Lawlor was whispering to the chairman.

Mr. Lawlor

What I was asking was how did the politicians get in there also.

Mr. Rabbitte

Deputy Kemmy has made an important point. It has virtually been taken over and it is a serious additional cost on employers. They seem to be happy to pay the cost because it seems to be an area in which they are unsure. It is regrettable as it could have been left to the voluntary system of industrial relations which is in place.

Mr. Kemmy

That was the intention originally.

Mr. Rabbitte

It was. The employers have their organisation and the trade unions have theirs and why we ought to have made it such an expensive process I am not sure. I do not know, however, if it is constitutionally permissible to send those fellows back to the Four Courts.

Mrs. O'Rourke

That brings us into another field.

Mr. McCormack

We have covered a lot in the Bill relating to the protection of employees' rights and we are now on the last amendment. We are now asking what will be the potential cost to the employer of going before the Employment Appeals Tribunal or a procedure of that type. Of course we have to take this into account. Employers have many costs and there is a lot of discouragement to employing people because of the tax structure, PRSI and other factors. Therefore, we want to be careful not to impose another layer of potential expense on the employer. From that point of view the costs should be clearly established.

Deputy Kemmy and Deputy Rabbitte rightly said that a lot of this work could be done through better staff relations in a company between the employer and the employee rather than going to the level where other people take the decisions. These people have to brief themselves on what is going on and have to be briefed by people who are on opposite sides of the case. I do not see all that being necessary if matters are handled correctly at employer and employee level.

Perhaps what Deputy Lawlor was suggesting to the chairman was that himself and Deputy Rabbitte will shortly be up for being abolished in another context and that they should get on with the job.

Mr. Lawlor

Big saving there.

Mrs. O'Rourke

Talk about terms of employment.

Mr. McCormack

I would say that they should do what Galway Corporation did last night and live up to their responsibilities.

Mrs. O'Rourke

Did it bite the bullet?

Mr. McCormack

We did.

Mrs. O'Rourke

Good. Returning to what Deputy Bruton said, he is right, in saying that the Minister for Finance has stipulated that the finance and revenue implications are all to be on one form now. It was a matter of annoyance rather than cost to people that they had to fill out a number of forms. We all spoke about that at our various parliamentary party meetings. Therefore, that worthy measure was brought in to allay frustration and annoyance and, indeed, there were other measures to simplify the system for small and large businesses.

In dealing with this legislation from the beginning I have put forward the view that it will not give rise to any significant costs for employers. I have kept that in mind all along. This is simply legislation requiring simple information to be exchanged between an employer and employee — basic information on terms of employment — a practice which any good employers will already be observing and which does not have any real cost implications.

I would not accuse Deputy Bruton of following a fashionable route, but it has become fashionable to say that requirements of the Social Chapter will be costly and to point to what the UK, by its own measure, got away with. However, in researching this legislation or any previous or coming labour legislation, I found that the UK had the equivalent in force before us and in some cases has more stringent legislation. Yet they pat themselves on the back and beat their breasts saying that they have escaped all of what they would call the ills of Brussels in that respect when they are not.

Even if I were to say that it would take five minutes to fill in a form or to outline a form for an employee and put a cost on that, the employers would clearly not agree. They would estimate a bigger cost, would claim it as another burden on them and seek more tax concessions to overcome it. We would then be going down the road of causing confrontation. The purpose of this Bill is to avoid confrontation. This Bill is about good practice, good relationships, decency between people, and clear information. It is not a costly measure; rather it is a measure of good practice. It would be impractical and imprecise of me or of officials to put a cost, approximate or otherwise, on what is simple measure.

With regard to the general tenor of the remarks about the Employment Appeals Tribunal, I would find myself in sympathy with many of them. It has become an industry in itself. It was designed to be fair, speedy and reasonable or cheap. It is fair, although it is not speedy and reasonable. I have had several meetings with its chairman and the board and we are bringing forward a document we have put together to seek to obviate some of the extended delays which have occurred. I share the concern about costs and about the plethora and proliferation of legal attendees concerned with the case in hand and those watching for what might be precedent in another case.

I often see Deputy Rabbitte and Deputy Kemmy there on business for their constituents, freely giving their time. I see so many people there in the mornings in the hallway as I am going in and out and I wonder where is it all going to end. I have met the chairman and the board. We have discussed the issue and I hope we are on the way to trimming down and reducing the time lag in appeals. It appears to me that all legislation is a chance for further litigation.

Mr. McCormack

I agree with the Minister when she says that the Bill is a measure about good work practices. The expense will arise for the employer when the good work practices breakdown and the relationship between employer and employee breaks down. From the point of view, while I have been defending the right of the worker, I would have sympathy as regards the cost that may be involved for the employer at this stage. The purpose of the amendment was to draw attention to that and to see how it could be controlled.

Employers have their money invested in their business and need to get a return from it. I was in a meat factory in Gort during the week. The owner had built up his business from almost nothing. He originally sold meat on a small scale and now he employs 200 people. He pays an insurance bill which runs well into three figures. There is a great onus on us not to add to the cost of the employer when defending a case at an employment tribunal or elsewhere. There should be some means of spelling out what the cost might be to an employer.

Mr. R. Bruton

This amendment is seeking factual information from the Department when it sponsors legislation. The Department has nothing to fear from making such a statement. The Minister is probably correct in saying this is an inexpensive piece of legislation. In that case it is only right that the House should know that, so that our debates about the cost of employment will be properly informed. She is right in saying one often hears ill-informed debates about the costs of different employee protection measures. There is an onus on the Department to fill those information gaps and satisfy itself that possible cost occurring from legislation are minimised.

We have spoken here about the legal costs of going to the tribunal. If the amount a person can be awarded is to be capped at four weeks' compensation it becomes prohibitive for that person to take what may be a justifiable case. When the Department sets out regulations, it is only right that it should bring all this into the open. The Department should be conscious of and inform the public of the possible costs involved.

My amendment seeks to make better information available. That can only improve the regulations we promulgate. It may be fashionable to complain about the burdens of labour law but the onus is on the Minister and her Department to enter that debate and show that the legislation being brought forward is not burdensome and is acceptable. The Minister suggested that any indication of costs would be disputed and become contentious. If the Minister discussed the various provisions with the social partners and got agreement on the different items, there would not be a dispute about an estimate of the likely costs involved.

I support the principle enunciated by the amendment. There should be an onus on any Government Department bringing in measures such as this to look at both sides of the question. It should see if the employee can effectively and cheaply enforce his case where it is genuine and it should ensure that excessive and unnecessary bureaucratic are not imposed on the employer by these regulations. It would be a healthy development if the Minister was willing to say this is a good idea and that in future legislation we should attempt to incorporate a provision of this type. That could remove much of the steam from ill-informed debates on labour protection measures.

Mr. McCormack

I wish to correct what I said earlier. I said the businessman in Gort paid a three figure sum but it was a six figure sum.

Chairman

He would be getting off lightly if he only paid a three figure sum.

Mr. McCormack

Those are the burdens being placed on employers because of the high costs of claims and other items related to their employees. That is separate from the Bill; I wanted to correct my statement because it was on the record.

Mrs. O'Rourke

Deputy McCormack wants to condone bad practice in terms of the cost of going to the tribunal and of appeals. We spoke of how that has gone out of kilter. If an employee has occasion to bring a case to the tribunal or the rights commissioner, and the case goes against the employer, then the employer has engaged in bad employment practice and I would not seek to condone the employer's actions or ameliorate his or her lot. If the practice was found to be faulty the employer should not have been engaged in such practice.

Deputy Bruton spoke about the need to fill information gaps. At the beginning of the discussion on the legislation, I said we would be willing to make a sample information sheet available. The health boards have made a sample health and safety statement available to small firms. I will ask the information unit in the Department to bring out a simplified version of the Bill, as has been done with every Bill when it is finished here. I gave a commitment to prepare a sample statement of the terms of employment. We will give that freely to employers and employees who want it. That will largely fill the information gap.

The suggestion seems to be that we put a price tag on good behaviour and standard practice between employers and employees. People would dispute such a price tag anyway. One person might fill in such a form quickly, another might be slower. To put a price on filling in a form seems to me to bring bureaucracy to a mad level. I think that is what is envisaged in the amendment.

I would never condone helping to ameliorate costs incurred for not fulfilling one's duties. It would be imprecise to set the price of filling out a form and I think it could not be done. The Department is doing much to simplify the Bill through publishing a small booklet to explain it for employers and employees and by issuing a sample sheet outlining the factual information an employer must give to an employee.

Mr. McCormack

I do not condone employers guilty of anything mentioned by the Minister. I expect an employer to fulfil his duties correctly. I fear that if one goes to the commissioner or the tribunal, extra costs may be incurred in cases where the employer might not be guilty. The case will involve representations by many legal people, making a statement about matters on which the employer or employee might have greater knowledge.

Mrs. O'Rourke

The case will go to the rights commissioner first. That is informal and free.

Chairman

Is the amendment being pressed?

Mr. R. Bruton

Before addressing that question I have a comment to make. The Minister is being disingenuous. She will specify by regulation the representation of the parties to such appeals, which brings in the issue of whether they are to be represented by counsel or other legal representation. She will be introducing items which will impose costs.

I want to see reasonableness play a part in such decisions. The best way to ensure that such reasonableness is open and fair is by putting an onus on the Department to publish the likely costs of the decisions it makes, for example, on the representations at tribunals. I am pressing the amendment.

Amendment put and declared lost.

Section 11 agreed to.

Setions 12 to 14, inclusive, agreed to.

Title agreed to.

Report of Select Committee.

Chairman

I propose the following draft report:

The Select Committee has considered the Terms of Employment (Information) Bill, 1993, and has made amendments thereto. The Bill, as amended, is reported to the Dáil.

Report agreed to.

Ordered to report to the Dáil accordingly.

The Select Committee adjourned at 12.35 p.m.