Industrial Relations (Amendment) (No. 3) Bill 2011: Committee Stage

I remind members to turn off their mobile telephones as they interfere with the broadcasting and recording of proceedings. The list of the grouped amendments has been circulated to members. There are approximately 100 amendments. The Minister will have to leave at 4 p.m., when the Minister of State, Deputy Sean Sherlock, will take over.

Sections 1 to 4, inclusive, agreed to.
SECTION 5

Amendments Nos. 1 to 13, inclusive, and Nos. 29 and 30 are related. Is it agreed to discuss them together? Agreed.

I move amendment No. 1:

In page 5, lines 1 and 2, to delete "substantially".

The speedy passing of this Bill is in the interests of everybody. There is general concern that there has been a time lag with it, given that the Second Stage was concluded in December. It is now six months later. If all Stages are not concluded by the summer recess, it will probably be another year or two before the infrastructure is set up. As a result, many workers will not be properly looked after and will not have a floor put under their wages. There is much evidence to show there has been a decrease in wages so I am anxious that we get through this process and have this Bill, hopefully amended, passed as soon as possible to establish a wage standard for everybody who is working for a low income.

The amendment seeks to delete the word "substantially". It is important that trade unions have an opportunity to represent their workers. If it is the view that the word "substantially" could prevent trade unions from representing workers in these discussions and agreements, it will cause a difficulty. If people are not represented by a trade union, how will they get a joint labour committee, JLC, rate? That is the first amendment. Will I discuss each of them?

Yes. We are discussing them together.

Amendment No. 9 seeks to delete "the desirability of agreeing and maintaining" and substituting "the agreeing and maintaining of". The word "desirability" reduces the strength of the sentence. In my view, the strength of the provision is that the court shall have regard to the following: maintaining established arrangements for collective bargaining and agreeing and maintaining fair, substantial rates of remuneration. They are stronger defences of workers' wages.

Amendment No. 13 proposes the deletion, from page 6, of all words from lines 9 to 12. The relevant provision refers to "the general level of wages in comparable sectors" and I propose to delete the phrase, "including where the sector in question is in competition with enterprises outside the State, the general level of wages in such comparable sectors in other relevant jurisdictions". This is one of the key parts of the legislation because it has the potential to reduce significantly wages in a sector of society that already is experiencing low wages. My party operates throughout the island of Ireland and seeks the bringing to one particular level of both wage rates and the economy. Sinn Féin believes the best way to do this would be for the Administration in Dublin to work with the Administration in Stormont in developing such wage rates throughout the island. However, although a cafe in Cork is not in competition with a cafe in Coleraine, the wage rate in the sector in the latter could reduce the wages for the workers in Cork. There is a misapprehension that workers in such sectors in Ireland have quite high wages but I believe the sectors covered by these agreements earn wages that are lower than the European average. Consequently, I consider amendment No. 13 to be extremely important.

Does Deputy O'Dea wish to hear the Minister first?

As the Minister has tabled amendments, it is in order for him to speak first.

First, I will deal briefly with the amendments tabled by Deputy Tóibín. In amendment No. 1, he proposes removing the word, "substantially" from the clause pertaining to the agreement. The position is that section 5 amends section 27 of the 1946 Act by laying down new procedures governing registered employment agreements, REAs. In this context, the Labour Court must satisfy itself that the parties to an agreement are substantially representative of the workers and employers to which the agreement applies before the court will register that agreement. The amendment proposes to remove the substantial element from this requirement. The requirement to be substantially representative of the parties to a collective agreement has been in the Industrial Relations Acts since 1946. However, the Act of 1946 does not provide a statutory definition of the phrase "substantially representative" nor does the Act provide any guidance as to how it is to be measured. The Duffy Walsh report recommended that in the cases of REAs, the 1946 Act be amended to make it clear the extent to which parties are to be regarded as representative should be measured by the degree to which they will be affected by the agreement, if registered. In this context, the Bill provides that the court will be required to have particular regard to the number of workers represented by the trade union party and the number of workers employed by the employer or by employers represented by trade unions of employers. Consequently, the word "substantially" goes to the heart of the matter in that the bloc of people on both sides making the agreement, which will apply to the entire sector, must be substantially representative of the workforces involved. This goes to the heart of the nature of such REAs in that to be valid, they must represent the broad range of people working in the sector as otherwise, a minority effectively would be seeking to negotiate the conditions for the entire sector. The Deputy also raised the issue as to whether the word "substantially" would be considered to be a barrier to trade unions. It is not considered to be a barrier to trade unions but is more likely to be a test of the cohesiveness of the employer organisations, which have seen substantial fragmentation, and this has been the background to this provision. Only two significant sectoral REAs are in operation, namely, in respect of construction and electrical contracting, and in each case there are well-established trade unions, despite continuing reduction in their membership. Consequently, this issue does not really pertain to the union side at all but to ensuring that those who put together the agreement on the employer side represent a substantial number as otherwise, a minority would be dictating the effective conditions.

Amendment No. 9 relates to the point at which the Bill goes into the various criteria that must be established and section 5 seeks to set out detailed principles and policies that do not exist in the Act of 1946 and to which the Labour Court must have regard before registering an employment agreement. The additional principles and policies will apply only where an employment agreement relates to more than one employer. At present, there are more than 70 REAs on the register maintained by the Labour Court, approximately 50 of which are specific to individual employments and were registered because the parties wished them to be binding in law. In future, it will be simpler and easier for a single employer agreement to be registered than one which relates to a number of employers or to an entire sector. The new principles and policies include the desirability of agreeing and maintaining fair and sustainable rates of remuneration in the sector. It is not considered that the amendment proposed by Sinn Féin to change this text to "the agreeing and maintaining" of fair and sustainable rates of remuneration in the sector in question adds anything to the principles set down by this provision. In this context, looking at the desirability essentially is a test of examining the criteria and obviously, none of these are absolute, in that every one of them cannot be fulfilled in every respect and consequently, the desirability is what one considers. As it is a qualifying clause, the Labour Court must consider this principle and the word, "desirability" simply frames it whereby it is one of the issues to take into account but is not an absolute. In no case is any one of them absolute in its application.

Amendment No. 13 also has been tabled by Deputy Tóibín. It pertains to the proposed new section 5(3A)(m), in which the Deputy is concerned the present wording would undermine existing wages. While I also have tabled an amendment to this provision, as the Deputy is aware section 5 sets out more detailed principles and policies then currently exist in the Act. As stated previously, the additional principles and policies will apply only where an employment agreement relates to more than one employer. The new principles and policies include the general wages in comparable sectors including, where the sector in question is in competition with enterprises outside the State, the general wages in such comparable sectors in other jurisdictions. The Sinn Féin amendment proposes to remove the reference to wage competition in respect of enterprises and sectors that are outside the State. Amendments to sections 5 and 12 in respect of REAs and employment regulation orders, EROs, respectively, have been tabled separately by me, as Minister, to ensure that comparisons of minimum wages would take account of differences in price levels between European Union member states, reflecting purchasing powers for household consumption expenditure. In other words, there are a number of factors. First, they must be in competition with the sector and consequently, the sector in Ireland must be in competition with the country. Moreover, it is being confined to other member states and my amendments take into account both the general level of wages and the costs of living. I believe my proposed amendment deals with some of the concerns expressed by Deputy Tóibín but still allows the assessment of wages to be one of the factors in assessing the appropriate level of wages. That is reasonable, in my view.

I turn to our amendments Nos. 2, 3, 29 and 30. The new subsections being introduced by means of amendment No. 3 and the consequential amendment No. 2 address two complementary objectives. The primary objective is to provide for more explicit ordering of the priority ranking of the principles and policies to be taken into account by the Labour Court in considering an application for the registration of an employment agreement proposed by the signatory parties to such an agreement where these parties are substantially representative of the workers and employers in the sectors concerned. In the course of the Second Stage debate in January, it was made clear that I would bring further amendments following further, more detailed consultation with the social partners and other interests affected, to address a number of areas in which Deputies had raised concerns, including those provisions dealing with the principles and policies applying to the framing of REAs and EROs. In this regard, priority considerations that have been identified are: the representativeness of the parties; the common good or public interest objectives in establishing harmonious industrial relations between workers and employers; and the avoidance of industrial unrest. In other words, these are the primary objectives.

The proposed amendment does not alter the detail of the principles and policies listed that were previously in paragraphs(b) to (m), inclusive, under section (3A) of the Bill, as introduced, other than to identify these criteria as secondary to the priority considerations identified at the new section (3A). The second feature of this amendment is to introduce greater clarity as regards the conduct of comparisons with wages in other jurisdictions. The differentiation introduced between the criteria inparagraphs (j) and (k) provides for greater clarity and ensures that comparisons with the general level of wages in other member states of the EU must have regard to the cost of living in the member states concerned. Although particular attention had been given to providing that, having regard to the rates paid in other jurisdictions, wage comparisons should only be conducted on the basis of a fair and reasonable assessment, the Parliamentary Counsel’s advice was that the specific concerns raised in this regard could best be addressed by specifying instead, first, the cost of living and, second, a restriction of the field of comparison only to EU member states with which firms covered by JLCs and REAs can be found to be in competition should be included as factors setting wages.

The terms of the proposed amendment reflect the intention to ensure that comparisons of minimum wages would take account of differences in price levels between EU member states reflecting purchasing power parities for household consumption expenditure. The amendment seeks to address the concerns voiced by trade unions, and also by Deputy O'Dea during the Second Stage debate, who urged that wage comparisons should not be used to undermine the purchasing power of workers and that the range of comparable jurisdictions should be tightened so as to exclude those outside Europe. Accordingly, comparisons are only applicable where firms covered by JLCs and REAs can be found to be in competition with enterprises in other EU member states.

The EU has developed a model of economic and social development which extends beyond the diversity of national situations and is based on common values and principles, in particular the objective, affirmed in the treaty, of promoting, hand in hand, economic and social progress. EU member states have already ratified a large number of ILO conventions, relating in particular to core labour standards, labour inspection, labour administration, employment social security and wages. Most EU member states currently have statutory or otherwise legally binding or general applicable minimum wages in place. The impact of a national minimum wage on both demand and supply can differ markedly across member states, depending on the level set as well as on other labour market policies and institutions. The thrust of EU employment policy is that wage floors need to be sufficiently adjustable with the social partners actively engaged in ensuring that wage settlements reflect overall economic developments.

The other amendments in my name are amendments No. 29 and 30. In regard to amendment No. 29, it is considered that this subsection might usefully contain a cross reference to the new section 27(3A)(a), to provide that the court may cancel the registration of an agreement where the parties have ceased to be representative within the meaning of section (3A)(a) of the Industrial Relations Act. I refer to amendment No. 30, where this subsection does not apply to an agreement to which a single employer is party. Sub-paragraph (ii) of paragraph (a) of the subsection is intended to provide that where there are a number of employer parties, those employers are representative of employers generally in the sector to which the agreement relates. This would arise where two or more employers or an employers’ organisation, which is not a trade union of employers, are party to an agreement.

I wish to formally move all the motions in the group, which the Chairman has to hand.

The Deputy cannot move them formally yet. He can discuss them and move them at a later stage.

Okay. I also wish to reserve the right to move them on Report Stage in the event the Minister does not accept them.

To clarify, we will now discuss amendments Nos. 1 to 13, inclusive, and amendments Nos. 29 and 30. We will move them individually as we come to them. I note what the Deputy stated.

I am deputising today for Deputy John Halligan. Amendment No. 5 is intended to delete lines 19 and 20 and substitute the following: "trade unions who organise workers in the sector". This is to be more definitive about the rights of unionised workers and the unions concerned rather than the more general formulation offered. Amendments Nos. 6 and 7 are along the same lines, namely, seeking more definition in regard not only to the number of workers employed by the employer but those employed and engaged by the employer.

I refer to page 6, or amendments Nos. 10 to 12, inclusive. This is important and relates back to the many discussions in the course of various treaties of the European Union with regard to service directives and so on. Essentially, what we want here is a much tighter situation, to benefit workers and guard rights and conditions of employment and wages. We believe the formulation the Minister has offered, particularly in paragraph (m), is far too loose and is subject to abuse by employers across the European Union in particular. We seek, therefore, not only the general level of wages in comparable sectors, which the Minister has included, but also the level of social security and public services available in the state in question. The point is that even if wages were lower in jurisdictions other than this one, that might be compensated for by the fact that social and public services were on a much higher level and were available to workers in comparable sectors. Therefore, a simple comparison of the general level of wages does not tell the entire story by any means and it could be used to disadvantage workers in jurisdictions where they would not have the same possible benefits in other areas - the social wages, as we used to call them. We also believe that in regard to the question of competitiveness and the levels of employment and unemployment, these formulations can be used to undermine the idea of a decent wage and decent conditions.

I thank the Minister for taking on board my suggestion on Second Stage. I am not sure if he has achieved what he wanted to achieve, which is to confine the comparable sectors to sectors within the EU. In the wording of amendment No. 3, subsection (3B)(j) basically states that one can compare wages here to “the general level of wages in comparable sectors”. It does not refer to comparable sectors within the EU. The next paragraph (k) goes on to say that where the comparable sector is within the EU, the cost of living will be taken into account. It is possible to interpret that as saying that “comparable sectors” means such sectors anywhere, but that the cost of living must be taken into account only when the comparable sectors are in the EU. That would be a serious lacuna in the legislation.

I appreciate the Minister's intention and thank him for taking the suggestion on board. He should, however, ask his officials to examine that point to ensure that there is not a gaping loophole in the heart of the legalisation. Somebody might interpret it in a way we do not intend them to. As people will know, if this matter is ever litigated before the courts, what we say here is irrelevant; they do not even look at what we say here. It does not come into the equation.

Deputy Tóibín's amendment No. 8 seeks to change the wording "the desirability of maintaining", in page 5, line 30, and substituting "the maintaining of". I do not have strong feelings about it one way or the other, but it seems to me that the wording proposed by Deputy Tóibín would be preferable to what is in the Bill. The Minister is basically saying that in order to register an REA, the Labour Court must be satisfied as to the desirability of maintaining established arrangements for collective bargaining, of avoiding industrial unrest, and of maintaining fair and sustainable rates of remuneration. It would certainly send out a better message if we could take out that reference to desirability and use the phraseology in Deputy Tóibín's amendments Nos. 8 and 9.

We want to maintain established arrangements for collective bargaining and we are obliged to try to avoid industrial unrest. We want to maintain fair and sustainable rates of remuneration for workers at all levels. Therefore, rather than present something that shows these things as optional extras which are great to achieve, the wording should reflect the fact they are our absolute objectives. It is somewhat ironic that in the Minister's amendment No. 3, subsection (3A) states:

The Court shall not register an agreement under subsection (3) unless it is satisfied that-----

(a) the parties to the agreement are substantially representative of the workers and employers in the sector in question.

As initially drafted, the legislation stated that the court should only have regard to that. However, it has been tightened up considerably in the amendment to say that an agreement cannot be registered unless the court is satisfied as to that.

What Deputy Tóibín is trying to achieve on those matters was essentially achieved by the Minister's amendment which has tightened up the section quite considerably. It is not just a question of saying "If it's not desirable, we'll leave it out", but rather "If you can't do it, you can't register the agreement". I ask the Minister to look carefully at that and also examine my earlier suggestion that there may be a loophole in the legislation.

I strongly support Deputy Halligan's amendment No. 12. I have tabled a similar amendment on REAs which we will get a chance to discuss in a later section.

In legislation we try to make things as clear as possible, but it is not black and white to use words like "substantially". In various European countries they use terms such as "50% or higher", which can remove many mistaken judgment calls. For example, I got a substantial vote in the last general election, as did the person behind me but they did not get elected. Therefore, what can one take as being "substantial"? I would rather see a figure used as they do in European legislation. I will leave the actual figure up to the committee.

In amendment No. 3, subsection (3A)(a)(ii) refers to “the number of workers employed by the employer or the number of workers employed by employers represented by a trade union of employers”. There are approximately 2,500 electrical contractors, small operators, who are not part of any employers’ union, yet they are not being considered in this legislation. Amendment No. 3, at subsection (3A)(a), states that “the parties to the agreement are substantially representative of the workers and employers in the sector in question...”. However, some 2,500 of the country’s approximately 4,000 electrical contractors are not being considered in this legislation. Perhaps the Minister might also consider including those small contractors who may be employing one or two individuals but are not part of a representative body.

Amendment No. 5, tabled by Deputy Halligan, proposes to delete the words "the numbers of workers represented by the trade union party" and substitute "the trade unions who organise workers in the sector". The purpose of this section is that when considering whether it is appropriate to register an agreement under section 3, other than an agreement applying to a single employer, the court has to have regard to whether the parties to the agreement are substantially representative of the workers and of the employers in the sector in question. The court will have particular regard to the number of workers represented by the trade union party and the number of workers employed by the employer, or the number of workers employed by the employers represented by a trade union of employers.

Deputy Halligan's amendment would replace the term "the number of workers represented by a trade union party" with "the trade unions who organise workers in the sector". Mechanisms such as the REA allow for the legal extension of voluntarily negotiated collective agreements throughout a particular sector. The extension of collective agreements is widespread in almost all EU member states. Only in six member states - Cyprus, Denmark, Italy, Malta, Sweden and the United Kingdom - is there no legal procedure for extending agreements.

For the 21 EU member states where it is legally possible to extend collective bargaining agreements, such extensions are normally conditional on arrangements for establishing the consent of the parties and their representative status as specific conditions or thresholds that must be met before a collective agreement can be extended throughout the sector.

The requirement that the signatory parties be substantially representative of the employers and workers affected originated in section 27 of the Industrial Relations Act 1946. That criteria has been further refined in this Bill in light of the recommendation in the Duffy Walsh report. In establishing the representativeness of a trade union party to an REA, the Labour Court should have regard to the number of workers represented by the trade union. This will enable the Labour Court to have regard to the stance of other unions that may not subscribe to the agreement, and to take non-organised employees into account also.

The essence of this is that to make this apply universally, the Labour Court must establish that the level of representation within the overall group affected is adequate. That is why the phraseology is thus, rather than as suggested by Deputy Halligan.

Deputy Halligan's amendments Nos. 6 and 7 seek to insert "and engaged" after "employed", in page 5, lines 21 and 23. This is the same point. The amendment seeks to replace at line 21 the term "employed by the employer" with "employed and engaged by the employer". The requirement that the signatory parties be substantially representative of the employers and workers affected originated in section 26. That criteria has been further refined in this Bill in light of the recommendation of the Duffy Walsh report. The original provisions regarding the representative of the parties to an agreement had given rise to controversy, especially in scenarios where a group of employers might constitute a minority of the total number of relevant employers but could nonetheless employ the majority of the workers normally employed within the relevant sector. It is appropriate to focus on the number of workers in the particular class type of group that are employed by the employer subscribing to the agreement affecting that category. This is the predominant way used in EU countries to establish whether the provisions of collective agreement should have application throughout the sector. I am not sure that "and engaged" as provided for in Deputy Higgins' amendment adds anything to what is already provided.

Amendment No. 7 seeks the same change in a different section. Amendments Nos. 10 and 11 are related. They seek to delete the desirability of maintaining competitiveness in the sector in question and the levels of employment and unemployment in the sector in question. Section 5 provides for the principles and policies that the Labour Court must have regard to when considering whether it is appropriate to register an employment agreement, including the desirability of maintaining competitiveness in the sector in question. The proposed amendment seeks to remove the specific principle of maintaining competitiveness in the particular sector for the Labour Court's consideration. Section 5 sets out more detailed principles and policies that currently exist in the 1946 Act. One of the main purposes of this Bill is to make the long established minimum wage setting mechanisms more responsive to changing economic circumstances. This will eliminate rigidities that are considered to have had a negative impact on competitiveness and jobs in the affected sectors. The sectors and occupations where the greatest job losses have occurred in the economy generally coincide with the sectors where the minimum wage sector agreements are most prevalent, including in the construction, retail and wholesale sectors. While demand in those sectors is clearly a key factor, labour costs represent a relatively high proportion of total output costs in these locally traded sectors. The benefits of retaining these sectoral wage setting mechanisms cannot be outweighed by the economic and competitiveness penalties incurred as a consequence of a lack of responsiveness, coherence and precision in the REAs.

The same applies in terms of the levels of employment and unemployment. Essentially, once one establishes the principles that need to be looked at in determining what should be the wage rate, account must be taken of the costs and benefits of the approach. A list - we already have a comprehensive one - could not ignore competitiveness and the level of unemployment as factors which need to be looked at. While no one of these factors is decisive they represent a range of factors. It should not be forgotten that the reason these agreements were struck down in the first instance was because of delegated authority, which did not include policies and principles which would be examined.

Amendment No. 12 is similar to Deputy Tóibín's amendment. We have provided for the general level of wages in comparable sectors, including where the sector in question is in competition with enterprises outside the State and the general level of wages in such comparable sectors in other jurisdictions. The proposed amendments would change this. The Office of the Attorney General has advised that a specific reference in the Bill to a fair and reasonable assessment of only one of a set of criteria to be taken into account when formulating proposals for EROs and registering employment agreements might suggest that the remaining criteria need not be assessed in a fair and reasonable manner. Accordingly, it is proposed to amend the existing provision in the Bill to allow for the assessment of the general level of wages in comparable sectors and, where enterprise is in the sector in question or in competition with enterprises in another member state, the general level of wages in such enterprises, taking into account the costs of living in the member state concerned.

Amendments to section 5 in respect of REAs and to section 12 in respect of EROs are proposed separately to ensure that comparisons of minimum wages would take account of differences in price levels between member states, reflecting purchasing power parities for household consumption expenditure. I understand the point Deputy Higgins' makes in terms of looking at wider issues. However, those are issues that may be more relevant to the establishment of the minimum wage as opposed to these wages which essentially are add-ons to the existing minimum wage. That is the basis on which this list was drawn up.

Deputy O'Dea made the point that there is a deficiency in the formulation for which we have provided in that if one is competing with a country that is not a member state the silence could be a gap. We will ensure that there is no such gap. My understanding is that the requirement would be to look at the general level of wages in comparable sectors in Ireland or, where there is competition, such competition in respect of another member state would be considered. What is suggested by the Deputy is not the intention. I will have this confirmed with the Parliamentary Counsel.

Deputy Lawlor asked whether we should pin down a figure of X%. The view was that the Labour Court would be best placed to make such a judgment and that in this regard it would need to look at a range of factors other than a particular percentage. The view was that giving it that discretion to apply judgment would be better. The Deputy made this point himself when expressing the view that small operators are not being considered in the legislation. The truth is that they are being considered in this legislation because the Labour Court will be required to look at the extent to which those who are making the agreement are representative of the overall sector. In other words, it will ensure the small operators are not left out. It must consider whether the scale of their operations are sufficient to render the agreement not representative of the overall sector. It will also have to look at the other criteria. This has been drafted in a manner which provides for flexibility and a clear direction from the Oireachtas as regards the type of issues that need to be considered. It should be said that a later amendment provides for a challenge of an REA in certain circumstances by people who are outside of it, if there have been big changes that would affect their position.

Deputy O'Dea revisited the issue raised by Deputy Tóibín in regard to whether including the desirability of this, that or the other is bad drafting. I will seek the view of the Parliamentary Counsel on this issue. The Bill provides that the Labour Court must make a judgment on, for example, whether the parties are substantially representative. The first test involves a number of priority issues. It must then consider certain principles. Using the phrase "desirability of" is the same as saying it must look at the impact of X of the agreement on harmonious relations, the avoidance of industrial disputes, competitiveness, employment levels and so on. A phrase of that nature is used throughout the list. These are criteria which the Labour Court must assess. I do not believe the requirement that it must, in looking at the overall validity of the agreement, weigh up the desirability of maintaining good industrial relations is an unreasonable requirement. We will certainly ask the Parliamentary Counsel to look at whether this phraseology is unnecessary. My understanding is that it is to show it must be weighed up.

This amendment is important because the section changes the nature of trade union recognition in the process.

Amendment put and declared lost.

I move amendment No. 2:

In page 5, line 8, to delete "subsection (3A)" and substitute "subsections (3A) and (3B)".

Amendment put and declared carried.

I move amendment No. 3:

In page 5, to delete lines 9 to 47 and in page 6, to delete lines 1 to 12 and substitute the following:

"(c) by inserting the following subsections after subsection (3):

"(3A) The Court shall not register an agreement under subsection (3) unless it is satisfied that—

(a) the parties to the agreement are substantially representative of the workers and employers in the sector in question, and in satisfying itself in that regard the Court shall take into consideration—

(i) the number of workers represented by the trade union party, and

(ii) the number of workers employed by the employer or the number of workers employed by employers represented by a trade union of employers, in the class, type or group of workers to which the agreement is expressed to apply, and

(b) registration of the agreement is likely to promote—

(i) harmonious relations between workers and employers, and

(ii) the avoidance of industrial unrest.

(3B) When considering whether it is appropriate to register an agreement under subsection (3), other than an agreement applying to a single employer, the Court shall have regard to the following:

(a) that the agreement will be binding on all workers and employers in the sector in question;

(b) the desirability of maintaining established arrangements for collective bargaining;

(c) the benefits of consultation between worker and employer representatives at enterprise and sectoral level;

(d) the experience of registration and variation of employment agreements in the sector in question;

(e) the potential impact on employment levels in the sector in question of registering an employment agreement;

(f) the desirability of agreeing and maintaining fair and sustainable rates of remuneration in the sector in question;

(g) the desirability of maintaining competitiveness in the sector in question;

(h) the levels of employment and unemployment in the sector in question;

(i) the terms of any relevant national agreement relating to pay and conditions for the time being in existence;

(j) the general level of wages in comparable sectors;

(k) where enterprises in the sector in question are in competition with enterprises in another Member State, the general level of wages in the enterprises in that other Member State taking into account the cost of living in the Member State concerned.”.”.

Amendment put and declared carried.
Amendments Nos. 4 to 13, inclusive, not moved.

Amendments Nos. 14, 15, 27, 28, 31, 32, 60, 63, and 82 to 84, inclusive, are related and may be taken by agreement. Is that agreed? Agreed.

I move amendment No. 14:

In page 6, lines 22 and 23, to delete all words from and including "and" in line 22 down to and including "so," in line 23.

These amendments are similar so it is probably not necessary to speak to each one. The reason I seek to amend this section is to prevent a Minister - not the current one but perhaps a future Minister - deciding he or she does not like the determinations made by this process and discounting them and not proceeding with their delivery.

Amendment No. 15 is in the same vein as amendment No. 14. I do not want to take up the time of the committee but I want to ensure we do not skip the amendment which differs from the others. Amendments Nos. 27, 28, 31, 32, 60 and 63 are all similar.

I can come back to Deputy Tóibín after he has examined the others.

Amendments Nos. 82 and 83 are in my name and deal specifically with employment regulation orders, but the same principle applies to registered employment agreements. To look at the history of why we are here, the High Court ruled the joint labour committee system was unconstitutional for a number of reasons, but basically because there was no overall list of guidelines by which joint labour committees operated they were substantially making laws and exercising powers properly within the province of the Oireachtas and the Government.

The previous Government prepared a Bill in 2009 but did not manage to bring it before the Dáil prior to the general election, and two Private Members' Bills have been introduced by Deputy Tóibín and me in the meantime. What we and the Government envisage to correct this defect is to give the Minister the right to sign off once the Labour Court comes to a decision. We included the usual provision that from the time the Minister signs off if a motion is not tabled before the Dáil to annul it within 21 days it automatically becomes law and stands. What the Government proposes goes much further than this.

Under the Bill, if the court adopts a proposal for an employment regulation order it will go before the Minister. The Minister must be satisfied that sections 42(a) and (b) have been complied with. These are procedural provisions with regard to lodging documents and the Labour Court is well qualified to decide whether the proper procedure has been followed. Of course the Minister is entitled to examine this to ensure the proper procedure has been followed and decide if it has not been followed that it cannot be accepted. This is fair enough. However, the provision continues to state the Minister can also decide, regardless of whether procedure has been followed perfectly, to refuse to ratify an employment regulation order, or when an employment regulation order is being reviewed to get rid of it, if he or she considers it appropriate to do so. This is a substantial extension of what was contained in the Bill published in 2009, what Deputy Tóibín and I envisaged and what has been understood to be the case until now.

The Labour Court is the expert in this area and decides whether proper procedure is followed. The Minister and the Department can examine it to ensure proper procedure has been followed, but what I envisaged and what was envisaged by those to whom these orders will apply is that once this happens the Minister will sign off on it - unless there is a glaring defect on the face of it which would be most unusual - and if it is not annulled within 21 days by resolution of the House it will come into effect. However, the legislation effectively states that regardless of how necessary and good the order is and no matter how much the workers need to be represented - which is why the joint labour committee system existed in the first place - the Minister at a whim, and I am not speaking about this Minister in particular but whoever holds the portfolio, can decide against it. Of course, it goes on to say that when the Minister decides not to bother with it, he or she is obliged to inform the Labour Court in writing. It reminds me of the old hue and cry that consistently arises when a case goes to the Director of Public Prosecutions, DPP, and he decides to prosecute or not to prosecute. There is a constant demand that the DPP should give reasons for the decision. The reason is very simple in every case. When he decides not to prosecute, it is because he does not think there is enough evidence to warrant a conviction and when he does, it is because he thinks there is. Basically, the provision gives the Minister of the day, and again I cast no aspersion on the current Minister, virtualcarte blanche to refuse to accept an ERO and abolish the entire structure.

Another section of the Bill proposes that each ERO to be set up as a result of this legislation is to be reviewed. The Duffy Walsh committee recommended that it be reviewed every five years, to give an element of stability, but this legislation provides that it will be reviewed at least every five years. That means that in future any Minister, after all the procedures have been followed and met, can simply say he or she does not consider it appropriate and is entitled under this section of the legislation not to ratify it if he or she considers it inappropriate, and the whole system can be virtually wiped out at the stroke of a pen. That is going too far. I have been speaking to people from the Mandate trade union who feel strongly about this. They did not realise that this was the net effect of the legislation. Whoever has been liaising with them from the Government or the Houses has obviously convinced the union about some of the good aspects of the Bill, from their point of view, but they appear to have held back a great deal. This is one of the things the union members were stupified to hear. I expect that Deputies on the Government side of the House will be hearing from those unions, particularly the Mandate trade union, very shortly. The union had no realisation that the Bill went this far.

Can the Minister say why he considers it necessary to go this far? Second, will he reconsider it? The selling job to the trade unions was, to some extent, a false prospectus and they are absolutely gobsmacked. I have been trying to explain it to them but now, since it is coming into focus, we have had a chance to talk properly about it. When I went through the wording and explained it to them, they were stunned.

I call Deputy Tóibín. Amendment No. 84 is also included in this group.

Yes. When we started this process we initiated a discussion about the fact that approximately 200,000 people are earning average wages of €18,000, which is quite low by anybody's standards. Many people who are really suffering, the working poor as they are called, have indicated that this process is very slow in getting a replacement up and running to protect wages and that wages are decreasing as a result across the economy. Throughout the legislation there is a proviso that at any time in the future the Minister can basically negate the entire process again. When the Minister signs off on it, he or she gives their imprimatur to the legislation. That, in itself, should meet the constitutional requirements of the legislation. The Minister should ensure that the House has the ability to affect the policy of future Ministers when it comes to ensuring proper workers' rights, pay and conditions.

Deputy O'Dea and Deputy Tóibín basically raise the question of whether this is creating a whimsical power for the Minister that could frustrate the process. Obviously that is not the intention. Deputy O'Dea cited the approach in the 2009 Bill but since the High Court judgment in which this was struck down, the bar has been raised considerably further so what was drafted in the 2009 Bill was not deemed adequate by the Office of the Attorney General in seeking to create something that would be robust from attack. To refer back to the Henchy judgment, and I realise I am tangling with a lawyer in this, it talked about an unelected body functioning behind closed doors and that, essentially, the Oireachtas and Government had delegated to a group the power to make decisions which it described as most fundamental and far reaching in nature. We have sought to repair that frailty.

Obviously, part of that is the policies and principles, because there had to be a proper ground on which the Labour Court and JLCs would establish the basis on which the order is being developed. However, we also need to show that elected persons, embodied in the Minister and the Oireachtas, play a role to make this robust from attack. That is where this originates. This is not an attempt by me to set up an elaborate procedure for evaluating these issues and then, when all the work is done, to pull the legs out from under the stool. That is not the intention. The intention is to ensure that when that work is done, the Minister has the appropriate powers. These are not simply rubber-stamping powers, where ministerial oversight would be a box ticking procedure as to whether this, that and the other was done. The Minister will have genuine oversight, not merely rubber-stamping the Labour Court's work. The legal advice is that this is the correct way to ensure that this process can be defended and robust against the type of legal attack that successfully overturned it in the past. There are these stages with the ministerial oversight, which is not a mere rubber stamp, and the Oireachtas oversight whereby it is laid before the Oireachtas, which has the opportunity to nullify it if it wishes.

The notification of the court in writing is to ensure that Ministers must be upfront in the exercise of their right so there is proper accountability to Deputies on the Opposition benches, who will be able to find out why the Minister overturned the body of work put together by the JLC, REA or the Labour Court, according to how it was developed. It was a very strong legal judgment that knocked the system down. As a consequence, the buttresses we are erecting to make it robust must be put in place very carefully.

Those are the elements of this. It is ministerial oversight that is not mere rubber-stamping, Oireachtas oversight and the proper principles and policies, as judged by the bodies that are clearly the experts in this area. I assure the Deputies this is not an attempt to establish a way of pulling the rug out from under properly constructed agreements. It is a way of ensuring that we cannot subsequently have challenges in the courts, as we have seen in the past, that overturn them.

If one gives a future Minister the power to do something, a future Minister will use it. The Minister says a future Minister will have to be accountable to the Oireachtas. A future Minister is likely to have a majority in the Dáil and can make an ideological decision against a process. The inclusion of this significantly weakens workers' rights into the future.

While I accept fully the Minister's bona fides, the difficulty is that he keeps talking about intention, whereas members are making legislation that must be interpreted by the courts without regard to what was the Minister's intention and without regard to whatever debate takes place here. The Bill provides that the Minister for Jobs, Enterprise and Employment can refuse to sanction an employment regulation order, ERO, or a registered employment agreement, REA, that has gone through all the procedures, has been accepted by the Labour Court and has been put together, where he or she considers it appropriate to so do. When an ERO is sanctioned or when it is reviewed at any time in the future, it goes through the usual procedures but the Minister can refuse to continue it, if he or she considers it appropriate to so do. The Minister mentioned the previous absence of oversight and how this was part of the constitutional problem. While that is correct, oversight now has been put in place. For the first time ever, such an arrangement must go before both Houses of the Oireachtas and anyone can table a motion within 21 days. For the first time ever, it must go to the Minister and for the first time ever, the Minister must consider whether proper procedures have been followed. In effect, he or she can second-guess the Labour Court. While this constitutes a substantial amount of oversight that was not in place previously, even if the Department considers that it is not sufficient and wishes, to use the Shakespearean phrase, to "make assurance doubly sure", one can go a little further than provided for in the earlier part of the section and can give some oversight. Oversight is one thing butcarte blanche is another. In this case, while there is oversight, it is oversight that ultimately translates into carte blanche. I ask the Department to reconsider the wording in this regard. Whatever are the good intentions and whatever the High Court judgment contained, this is using a sledgehammer to crack a nut. I appeal to the departmental officials to have another look at this provision between now and Report Stage.

While I have no problem in re-examining this provision, my understanding is that a future Oireachtas can of course overturn a delegated power. I am setting up a delegated power and putting in place a procedure by which these agreements will be put in place. It of course is possible that the Oireachtas might turn it over or a Minister who is elected might do so. However, the point is that the courts overturned it because it lacked such buttresses. It lacked both ministerial and parliamentary oversight and this is the reason it was struck down by the courts. I am providing for ministerial and Oireachtas oversight but they cannot be meaningless in the sense the Minister can do nothing but agree to whatever is set out or can only tick boxes in respect of certain procedures. The Minister must have some sort of substantive oversight that does not constitute rubber-stamping. This obviously is where the difference in legal opinion lies. I have been informed the appropriate way is to have a Minister who has a power and it should not simply be about ticking boxes but must be a real power. Obviously, it must be an accountable power and consequently there must be notification. Thereafter, if the agreement is going ahead, the Oireachtas could make a decision to annul the order, despite all the work. There is the possibility that a majority elected in the future would overturn orders that were coming up or whatever. However, this is the condition of making robust this delegated authority. I refer to these additional stages in the process that were not there in the past, which led to the collapse of the system in the John Grace case, and that is what I am repairing.

However, to be fair to Deputy O'Dea, he has in the past raised points that deserve reflection and consequently, I will reflect on this provision between now and Report Stage. However, I do not wish to give the impression that this drafting has come out of nowhere. This has been put together to defend the process against the attack it suffered in the past.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 15 not moved.
Section 5, as amended, agreed to.
SECTION 6

Amendments Nos. 16 to 24, inclusive, are related and may be discussed together. Is that agreed? Agreed.

I move amendment No. 16:

In page 7, line 13, after "shall" where it firstly occurs to insert the following:

"within 6 weeks of receipt of an application under subsection (1)".

As the Chairman noted, this is a set of related amendments. Section 6 of the Industrial Relations (Amendment) (No. 3) Bill, as presented, provided for an amendment of the Act of 1946 to reflect the recommendations of the Duffy Walsh report concerning the introduction of a time-bound process by which the terms of an REA may be varied by the Labour Court in exceptional circumstances without obtaining the consent of all parties to the agreement. The amendment, which is based on a recommendation in the Duffy Walsh report, is intended to facilitate more rapid adjustment to changing economic circumstances and the imperative of maintaining employment. The last review of the agreed programme for financial support with the EU-IMF-ECB provided, in respect of the progress of the Bill through the Oireachtas, for an amendment to the provision at section 6 of the Industrial Relations (Amendment) (No. 3) Bill, as presented, to ensure the process for granting of a variation to an REA is conducted in a timely manner, which will improve the responsiveness to economic shocks. The purpose of these nine interrelated amendments is to speed up the variation of the REA by setting specified time limits to each stage of the process as agreed with the EU-IMF-ECB in the context of the memorandum of understanding. Consequently, this series of amendments is setting out time limits, such as within six weeks, within four weeks and so on.

This is a welcome improvement to the Bill.

This also makes sense to me.

Amendment agreed to.

I move amendment No. 17:

In page 7, line 16, to delete "(3) After considering an application under subsection (2)" and substitute the following:

"(3) Not later than 4 weeks after considering an application under subsection (2)".

Amendment agreed to.

I move amendment No. 18:

In page 7, line 18, to delete "subsection (3A)" and substitute "subsections (3A) and (3B)".

Amendment agreed to.

I move amendment No. 19:

In page 7, line 19, to delete "may" and substitute "shall".

Amendment agreed to.

I move amendment No. 20:

In page 7, line 29, to delete "investigation" and substitute "conciliation".

Amendment agreed to.

I move amendment No. 21:

In page 7, lines 31 to 33, to delete all words from and including "where" in line 31 down to and including "Court" in line 33 and substitute the following:

"where the parties to the dispute have failed to arrive at a settlement of the dispute through conciliation, the Commission shall, within 6 weeks of referral of the dispute, forward a report to the Court".

Amendment agreed to.

I move amendment No. 22:

In page 7, line 41, to delete "shall issue a recommendation" and substitute the following:

"shall, within 6 weeks of receipt of the report, issue a recommendation".

Amendment agreed to.

I move amendment No. 23:

In page 7, line 52, to delete "subsection (3A)" and substitute "subsections (3A) and (3B)".

Amendment agreed to.

I move amendment No. 24:

In page 7, line 52, to page 8, line 1, to delete "the Court may, as it thinks fit" and substitute the following:

"the Court may, within 6 weeks of receipt of the application, as it thinks fit".

Amendment agreed to.

Amendments Nos. 25 and 26 are related and may be discussed together.

I move amendment No. 25:

In page 8, between lines 2 and 3, to insert the following:

"(10) (a) An employer to whom a registered employment agreement applies who is not a party to the agreement may, subject to this subsection, apply to the Court to vary the agreement in its application to any worker or workers to whom it applies.

(b) The Court shall not hear an application under paragraph (a) unless the applicant satisfies the Court that since the date on which the employment agreement was registered or last varied under this section there has been a substantial adverse change in the economic circumstances of the sector to which it relates.

(c) Where the Court is satisfied pursuant to paragraph (b) it shall notify the parties to the agreement of the application.

(d) The Court shall, within 6 weeks of notification of the parties pursuant to paragraph (c), hear all persons appearing to the Court to be interested and desiring to be heard, and where it is satisfied that it is appropriate to do so having regard to subsections (3A)(b) and (3B) of section 27, the Court shall, not later than 4 weeks after hearing the relevant persons, as it thinks fit, refuse the application or make an order varying the agreement in such manner as it thinks proper.

(e) An employer may not make an application under paragraph (a) in respect of a registered employment agreement until at least 12 months after—

(i) the date on which the agreement was registered or last varied under this section, or

(ii) the date on which any previous application under paragraph (a) in respect of the agreement was refused by the Court, whichever is the later.”.

Under the Industrial Relations Acts, there is a legal requirement that employers within a sector covered by an REA, which may not belong to the employers' organisation that signed the original collective agreement, must nonetheless apply the minimum standards prescribed by the REA. The making of the terms of an REA enforceable, even in respect of employers that were not party to the original sector-level collective agreement that was registered by the Labour Court, is justified by the overriding public interest in maintaining harmonious industrial relations in the sector, especially having regard to the substantial representativeness of the signatory parties and the requirement that the reasonableness of the universal application of the agreement must be approved by the Labour Court. In the light of recent legal challenges to the statutory wage fixing mechanisms, the Attorney General's advice is that to maintain their universal applicability, additional safeguards should be introduced to protect the position of employers that are not party to the original sector-level collective agreement, especially as regards the variation of such agreements. An amendment to section 6 of the Bill is proposed to enable those employers that have not been party to the original agreement to seek a variation of an REA in certain limited circumstances. The proposed amendment provides that the applicant must satisfy the Labour Court that there has been a substantial adverse change in the economic circumstances of the sector to which an REA relates since it was registered or last varied before the court can consider any application to vary it. Moreover, as a further protective measure, no such request may be made within 12 months of the initial registration or last variation of the REA.

This goes back to the point Deputy Lawlor raised, namely, that where there is a body of employers who are outside yet bound by the agreement, the advice of the Attorney General is that in these circumstances, as outlined, there must be a chance for them to challenge it. Again, the reason is we need to show that the justification which requires them to apply certain wage rates or conditions is being done in the public interest. The Attorney General has advised this is a type of countervailing right we must extend.

Like Deputy Lawlor, I had representations from the Association of Electrical Contractors, who made some very good points, particularly in regard to the some of the smaller unrepresented operators who could suddenly find themselves bound by an agreement entered into by other people who are unrepresentative of the sector in general. Generally speaking, these are larger employers who can afford to pay higher wage rates, etc, because they are the people who are getting the big jobs.

Will the Minister clarify if what he is proposing is that any employer who is bound by an REA can apply to the Labour Court to vary the terms in so far as they relate to him or her, provided he or she can prove that a substantial adverse change occurred in the economic circumstances of the particular sector since the REA was first agreed?

Yes, or, in other words, that such employers can challenge it. Obviously, they could apply under the inability to pay clause, in which case they would have to open up all the accounts, in addition to the various conditions they would have to meet, which we will come to later. They can challenge the applicability on a sectoral basis but only where there has been a substantial adverse change in economic circumstances. No such request may be made within 12 months.

It applies to the sector as a whole, not merely their own.

It is the sector as a whole, not the inability to pay clause.

I would be very cautious about this, for a number of reasons. First, if it is the case that an individual employer can apply to a court to vary the agreement in its application to any worker or workers, the whole idea of the process is to put a floor with regard to the wages of lower earners. If I am correct, it makes a change, therefore, whereby some of the workers within a particular industry will get a lower wage. Second, if that is the case, it has a negative effect on the workers themselves but also gives an unfair and perhaps uncompetitive advantage to the particular business in its commercial interaction with its competitors.

In addition, if it is an economy-wide change, in reality it should not have a specific effect on an individual employer. If there has been a particular business-specific change, what kind of proof would be necessary for the particular business to show this? Would the business be forced to bring its books before the court so that a determination can be made that the expressed difficulty is real rather than merely communicated?

The reading of the phraseology in question may be somewhat misleading for the Deputy. It states that: "An employer to whom a registered employment agreement applies who is not party to the agreement may, subject to this subsection, apply to the Court to vary the agreement in its application to any worker or workers to whom it applies". That does not mean the employer can seek the variation in respect of one group of workers - his or her group. This is a challenge to the entire agreement. It does not state the employer has the power to claim it should not apply to subcontractors who are outside the agreement, thereby allowing the others go on without them. This is a requirement. In other words, the employer can apply to the Labour Court to reconsider the whole agreement. That is all that is given here.

That term, "worker or workers to whom it applies", is merely a catch-call phrase describing the agreement. It is not like the inability to pay case which appears later on, where employers might say they are a group of subcontractors who are outside the agreement and that it should not apply to them. That is not the power being given here. Simply, the group or representative outside can apply to question the entire agreement but must show there has been a substantial adverse change in their economic circumstances and that they cannot act as required within 12 months. It is slightly different from the situation the Deputy described.

Nevertheless, I formally oppose this. It is a facilitation of the race to the bottom. This is the troika agenda, facilitating employers to overthrow a level of decent wages and conditions that have been set, that were fought for over a long time, were won and implemented. It provides a loophole under which any employer can seek to overturn that situation and worsen wages and conditions. Whether it applies to an individual employer's workers or the workforce as a whole, it is equally repugnant.

Is this as a result of a push by the troika?

No, this came from dealing with the High Court ruling which stated that it had imposed a regulation without proper due process that would demonstrate it was fair and in the public interest. We are obliged to construct a process that is demonstrably fair and in the public interest. It starts with showing the agreement is substantially representative, that it looks at various criteria, has had proper political oversight and that there is opportunity for a person on the outside, who might believe he or she has been treated oppressively, to challenge the agreement, in certain circumstances.

Essentially, this has been seen as part of reframing the process in a way that would be robust to challenge. This did not at all come from the motivation the Deputy suggested, namely, a race to the bottom. The entire objective is to demonstrate that this is something which is in the public interest, that we are registering these agreements because they are in the public interest, in order to facilitate harmony, industrial peace and all the other factors listed, and that they are substantially representative of the groups involved. This is a further piece of protection of the process.

It is in the employer's interest, the boss's interest, not the public interest.

No. The court will consider the application. A group that is outside the agreement can make an application to the court but the court remains the party that makes the call. This measure does not tell the court it can throw the agreement out or ignore it. It merely gives the employer the right to have the court look at the application of the agreement because there has been a big dislocation, or whatever.

It gives employers a second bite at the cherry. If the agreement is not sufficient for them they can have another bite at the cherry. The employer concerned is hardly likely to apply for an increase in wages or better conditions for his or her workers; it will be the opposite.

This refers to an employer who is outside the agreement, in other words, one who has been obliged by the terms of the agreement but who was not party to the making of it.

They talk to each other all the time and work together.

This is being put in place to make the system legally robust. In other words, there must be the right to make a challenge of this nature. That is what we were advised. It did not come from the troika or from employer interests but was legal advice from the Attorney General. In order to make the law robust this type of provision was necessary. We received legal advice from the Attorney General that this sort of provision was necessary to make this section robust.

I wish to make an observation about this section. It relates to subcontractors who are not within the State and therefore not subject to registered employment agreements. Obviously, the section will put subcontractors who are within the State at a serious disadvantage compared to subcontractors from Northern Ireland, in particular. I am sure Deputy Tóibín is aware that the wage rate in Northern Ireland is much lower than the rate here. What jurisdiction do we have to provide through the courts for fair competition among subcontractors?

They are covered. The posting of workers directive applies to them. The obligations in question apply to anyone who is working in Ireland.

It is not happening. It has not happened for the past couple of years. I refer to major contracts like the one to develop the second terminal at Dublin Airport. One of the main contractors on that huge project subcontracted to a number of companies from Northern Ireland which were much more competitive because they were paying their workers lower wages.

They did not apply the wage-----

Yes, they did not apply the registered employment agreement. It covered the contractor but not the subcontractor.

There is no doubt that contractors from the North of Ireland sometimes have a competitive advantage when they operate in the South of Ireland. It is important for the Minister and his Government colleagues to work with the Stormont Administration to ensure all works carried out in this jurisdiction are carried out on a level playing field. I am in favour of an all-Ireland economy, all-Ireland tendering and all-Ireland work. People from Kerry and Derry should be able to work in any part of Ireland. If they do not do so on a level playing field, it creates major difficulties in certain regions, which is unfair.

That is why what we are doing is so important. We are making sure the registered employment agreement system, which allows us to apply these rates to anyone working in the Republic, is robust from challenge, regardless of where the worker comes from. I have been informed that instances like that mentioned by Deputy Lawlor would be actionable if they were brought to the attention of the National Employment Rights Authority. The authority would pursue such a breach, which would be actionable under the relevant provisions.

I would like to comment on the wording of the proposed new section 28(10)(a), as proposed in the Minister’s amendment. It is certainly true to say that this will give the employer a chance to come back in. It will give the employer a second crack at it. It seems to me that any employer who wishes to challenge a registered employment agreement has a pretty big mountain to climb. He is not just coming in on his own behalf. He is coming in to get the whole registered employment agreement, as it applies to everybody, overturned. The Minister said there seems to be some confusion in the wording on whether that is the position, or whether people can come in off their own bat, which of course is not intended. The confusion is in the wording. The proposed new section 28(10)(a) could be made much clearer so that it reflects what is intended. For example, this amendment provides that an employer can “apply to the Court to vary the agreement in its application to any worker or workers”. Why is the phrase “worker or workers” used? There is no such thing as a registered employment agreement that applies to just one worker. This amendment gives the impression that people can come in and make individual cases.

That is a fair point. I will have it checked by the office of the chief parliamentary counsel. It caused confusion for Deputy Tóibín too. I can see why it would cause confusion. It sounds like the sort of catch-all phrase that is used has just been dropped in. The manner in which it is phrased is ambiguous. We will get that checked. The original 1946 Act provides that an application may be made "to vary it in its application to any worker or workers to whom it applies".

Amendment put and declared carried.

I move amendment No. 26:

In page 8, line 3, to delete "(10)(a) Where, after the commencement” and substitute “(11)(a) Where, after the commencement”.

Amendment agreed to.
Amendments Nos. 27 and 28 not moved.
Section 6, as amended, agreed to.
SECTION 7

I move amendment No. 29:

In page 9, line 17, after "satisfied" to insert ", having regard to section 27(3A)(a),”.

Amendment agreed to.

I move amendment No. 30:

In page 9, line 18, to delete "employer" and substitute "employers".

Amendment agreed to.
Amendments Nos. 31 and 32 not moved.
Section 7, as amended, agreed to.
SECTION 8

I move amendment No. 33:

In page 10, lines 16 to 18, to delete all words from and including "if" in line 16 down to and including "circumstances," in line 18.

We have given this issue a fairly good airing already.

This amendment would involve the deletion of the proposed new section 32(4)(c), which would allow “the Minister, if the Minister considers it appropriate to make the application having regard to all the circumstances” to apply for a court order. Section 8 of this Bill inserts a new section 32(4) into the 1946 Act to provide for a new straightforward enforcement mechanism to secure compliance with a registered employment agreement, instead of resorting to criminal prosecution. This section provides that a complaint about non-compliance by an employer with an order of the Labour Court for compliance with a registered employment agreement may be brought before the Circuit Court by, or on behalf of, the worker concerned or by the Minister if he or she considers it appropriate to do so. It further provides that the Circuit Court shall “make an order directing the employer to comply with the terms of the [Labour Court] order”. The amendment proposed by the Deputy would remove the possibility of the Minister taking a case to the Circuit Court. This is a standard provision in a range of employment rights legislation dealing with failures by employers to comply with Labour Court orders, including the National Minimum Wage Act 2000 and, most recently, the Protection of Employees (Temporary Agency Work) Act 2012.

If an employee takes a case and gets an order but that order is ultimately not complied with, the final sanction is for the matter to be taken into the Circuit Court to get an order from that court. Such an order can be legally enforced, of course. Up to now, an employee who wanted to pursue such a line of action could complain in the first instance to the National Employment Rights Authority, which could represent that employee. I am proposing this amendment because of the fact that recourse to the National Employment Rights Authority is no longer automatic. That is what I am objecting to. In his High Court judgment, Mr. Justice Henchy said that the existence of a criminal sanction was one of the reasons he was encouraged to consider the legislation unconstitutional.

The Duffy Walsh report recommended that there should be automatic reference to NERA who could bring, as an alternative to a criminal prosecution, a civil procedure. A criminal prosecution was not excluded but it is excluded now as a result of a High Court judgment. However, the report recommended that a person would have an automatic reference to NERA who then can represent a person before a rights commissioner, the Labour Court or, ultimately, the Circuit Court. The legislation is now saying that one has no automatic right to have NERA representation. NERA will only represent a person if the Minister, who is NERA in this case, considers it appropriate to do so. It is a very significant step backwards, particularly when we talk about employees. A lot of these employees are immigrants, work part-time and are generally employees from the lower wage bracket who would not be as well educated as people in the higher wage bracket. To withdraw automatic access to NERA from them is a step back.

I heard what the Deputy has said. My understanding is that there is an automatic right to NERA here but with a qualification on whether NERA will, in every case, proceed to the Circuit Court. Deputy O'Dea tabled an innovative amendment that would oblige NERA, in all cases, to proceed to the court in the event that the others do not.

No. I will make my point clearer in later amendments. We can proceed.

Section 8(a) provides that the Circuit Court shall, on application to it and without hearing the employer or any evidence make an order directing the employer to comply. The provision gives the Circuit Court the power to make an order forcing the employer to comply and the application can be made by a worker, a trade union or the Minister. The Deputy’s amendment is trying to say that the Minister must do it, regardless of whether it is appropriate or not.

No. It is unfortunate that my amendment comes at this stage in the Bill. I have tabled amendments on the redress procedure for later in the Bill and I will make my point more cogently then.

If the Deputy agrees to leave his amendment until Report Stage I will report back to him on the point that he raised. We are examining the enforcement ability of employment rights generally and whether we need to introduce more and better systems to ensure the enforcement ability of judgments made in favour of workers. We are not trying to introduce those changes in the Bill but we are examining them at present.

We will talk about them later.

The topic will be discussed later. Is the amendment withdrawn?

Amendment, by leave, withdrawn.

Amendments Nos. 34 and 87 are related and may be discussed together by agreement.

I move amendment No. 34:

In page 10, lines 38 and 39, to delete all words from and including "at" in line 38 down to and including "1981," in line 39 and substitute the following:

"at the rate specified for the time being in section 26 of the Debtors (Ireland) Act 1840,".

The reference in the Industrial Relations Bill as presented had referred to the rate of interest to be paid on compensation due "at the rate referred to in section 22 of the Courts Act 1981". I understand that the more common provision in other similar statutes is the proposed reference to "at the rate specified for the time being in section 26 of the Debtors (Ireland) Act 1840,". What is proposed in the two related amendments is that the provisions in the Bill should follow the formula most recently adopted in section 4(3) of the Second Schedule to the Criminal Justice Act 2011 (No. 22 of 2011) which contains a similar provision. I can read the provision if the committee needs me to. It quotes a different source for the rate of interest to be used.

Is the rate of interest in the amendment in the initial text? Will it make a material difference to the workers concerned?

No, it is the standard provision. It is just the one that is used.

It is different. Obviously it is not the exact same.

It states:

(3) In an order under this paragraph providing for the payment of compensation, the Circuit Court may, if in all the circumstances it considers it appropriate to do so, direct the employer concerned to pay to the employee concerned interest on the compensation (at the rate per annum standing specified for the time being in section 26 of the Debtors (Ireland) Act 1840) for each day or part of a day beginning 28 days after the day on which the determination of the Labour Court is communicated to the parties and ending on the day immediately before the day on which the order of the Circuit Court is made.

Obviously the 1840 interest rate is the one that is regularly adjusted. I cannot state the current rate but I can find out for the Deputy.

If it is going to be changed then I am interested in knowing what it is.

I think that we used the wrong rate and had used an inappropriate reference point. I will forward the two rates to the Deputy.

Amendment agreed to.

I move amendment No. 35:

In page 10, line 47, after "profession," to insert "trade,".

This is a technical amendment.

Amendment agreed to.
Section 8, as amended, agreed to.
SECTION 9

Amendments Nos. 36, 37 and 89 are related and may be discussed together by agreement.

I move amendment No. 36:

In page 11, line 11, after "period," to insert the following:

"within limits which have been set by the parties to the agreement,".—

Amendment No. 89 deals with an exemption from an obligation to pay a statutory minimum remuneration and we want the longer period of 24 months, within which that could stand, to be reduced to 12 months.

My amendment is the same. Its purpose being that while an exemption can be understood and it may be necessary for an individual business. We do not want the legislation to push businesses over the edge. A period of 24 months is too long and allows competitive advantage and the workers would not gain the protections involved.

Section 9 inserts a new section after section 33 and amends the 1946 Act and provides that where a registered employment agreement, REA, so provides an employer in financial difficulty may apply to the Labour Court seeking temporary exemption from the requirement to pay the rates of remuneration in the agreement. Section 33A(2) provides that the maximum period of an exemption will be 24 months and must be for a minimum of 3 months. The proposal appears to be intended to leave it to the discretion of the parties to an REA to determine the time limits for any exemption to remain in force. While the inability to pay provision in respect of REAs are substantially the same as those proposed in relation to EROs, it is important to stress that the REA inability to pay mechanism would only apply where the REA permits it to apply. It will be a matter for the Labour Court to determine on the basis of its consideration of an application for an exemption the appropriate length of an exemption.

Sinn Féin's amendment would reduce the exemption to 12 months. While the maximum period of 12 months would be consistent to the inability to pay provision of the National Minimum Wage Act, one of the reasons put forward by employers for the national minimum wage provision never being used is that the maximum period for which it can be availed of is too short. Accordingly, a 24 month maximum period is considered to be a more appropriate timeframe. Moreover, the last review of the agreed programme for financial support with the EU-IMF-ECB provided, in regard to the progress of the Bill through the Oireachtas, that the authorities will present amendments to the Dáil, in particular to provide that the inability to pay exemption will allow two consecutive exemptions within the overall two year time limit where it is necessary to safeguard employment. The changes agreed with the troika on an inability to pay exemption, to allow for two consecutive applications for exemptions, are provided in the Government amendment to sections 9 and 14.

Amendment put and declared lost.

I move amendment No. 37:

In page 11, line 12, to delete "24 months" and substitute "12 months".

Amendment put and declared lost.

Amendments Nos. 38 and 90 are related and may be discussed together, by agreement.

I move amendment No. 38:

In page 11, to delete lines 15 to 19 and substitute the following:

"(3) (a ) Subject to paragraph (b ) the Court shall not grant an exemption to an employer under subsection (1) if the employer has been granted an exemption in respect of the same worker or workers under that subsection within the previous 5 years.

(b ) Where an exemption under subsection (1) has been granted for a period of less than 24 months, an employer or employer’s representative with the employer’s consent may, prior to the date on which the exemption is due to expire, apply to the Court to extend the period of the exemption for an additional period.

(c ) Where an application is made under paragraph (b ) the Court shall not extend the period of the exemption for more than 24 months from the date on which the exemption was granted.

(d ) Where the period of the exemption has been extended by the Court under paragraph (b ), the Court shall not further extend the period.”.

The last review of the agreed programme for financial support with the EU-IMF-ECB provided in regard to progress of the Bill through the Oireachtas that the authorities will present an amendment to the Dáil, in particular to provide that the inability to pay exemption will allow two consecutive exemptions within the overall two year time limit where this is necessary to safeguard employment. The changes agreed with the troika in regard to an inability to pay exemption, to allow for two consecutive applications for exemptions, are provided in amendments to sections 9 and 14 of the Bill.

The purpose of amendment No. 38 is to provide that the Labour Court may enable an employer to qualify for up to two consecutive exemptions from the statutory pay terms of an REA where financial difficulties in an enterprise persist after the expiry of a shorter time limit than the maximum period under the legislation. Two consecutive exemptions will, accordingly, be permitted within the overall two year time limit rather than a single one under the Bill, as introduced, where this is a necessary safeguard to employment.

The original text reads:

The Court shall not grant an exemption to an employer under subsection (1) if the employer has been granted an exemption in respect of the same worker or workers under that subsection within the previous 5 years.

Therefore, this is a change to allow for a second exemption within the five years. I accept the amendment is for exemptions of less than 24 months but in reality it is a further reduction of the standards achieved by the workers in the REA. It is important not to allow for exemptions to be used with impunity as they can be exploited. While all of us want businesses to be able to function - it is important that they function - I am not sure that businesses that do not pay their employees properly should be allowed to function. If within a five year period, say 40 months, a business was functioning for more than three years outside of the determination of the REA, I would be strongly opposed to that.

My understanding is that the exemption cannot go up to 40 months. If a business was granted a nine month exemption it can go up to 24 in aggregate but not to 40 months, as the Deputy suggests.

Is it a total of 24 months within the five years?

Amendment agreed to.

Amendments Nos. 39 and 40 are related and may be discussed together, by agreement.

I move amendment No. 39:

In page 11, line 38, after "business" to insert the following:

", including information on payments to directors and companies associated with directors over the previous 3 years,".

It is important that the court has a strong level of information at hand in order to make its determination. We saw recently in cases affecting the Oireachtas that it is possible for business people to take moneys from their companies just in advance of particular events. It is important that businesses should not be able to exploit or use their own accounts to show a lower level of commercial functionality than is the case. By including this information, the real health of the business will be more transparent to the court.

I support that view. We had a recent experience of a very nasty industrial relations dispute involving Irish Cement workers in Limerick. I was one of those who tried to negotiate a settlement. An issue that emerged during the course of the dispute was that the non-executive directors' fees for last year exceeded the amount of money it would have taken to settle the strike. The strike continued for three to four weeks where the workers stood outside in all types of weather trying to pursue money they had earned and which had been promised to them and which the management, unreasonably, was withholding. I accept that the section states that an application under subsection (4) shall be accompanied by such information, particulars and documentation as the court may reasonably require to make a determination. Something on those lines should be specifically included. I say that from my experience of that particular industrial dispute.

I am advised that the amendment is not considered necessary. Section 33A (5)(b ) provides that the employer will be required to submit to the court such information, particulars and documentation as the court may reasonably require for the purpose of determining whether an exemption should be granted, in particular such information about the employer, his or her business and the potential impact of an exemption, as the court may direct. I would have thought the court would, as a matter of course, examine whether payments were made to directors or associated companies if there was any suggestion that the company was filtering money away to create the impression that it had a need. In view of the concern raised I will check whether there is a need to provide for that information. I would have thought it was self-evident that the Labour Court would ask whether there was any way in which the money had been taken out of the company to give the impression that it was in a more enfeebled position. In view of the point raised I will have it checked but I am informed it is unnecessary and that what is being provided for is a general power. We are not circumscribing the documentation the Labour Court may seek.

I would hope it would be unnecessary. I accept the Minister's point but I consider it would be beneficial to the whole process if the amendment was included.

Amendment put and declared lost.

I move amendment No. 40:

In page 11, between lines 39 and 40, to insert the following:

"(c ) failure to disclose information that would have an affect on the decision of the court will rule the application void.”.

This amendment is slightly different. Failure to disclose information that would have an affect on the decision of the court would rule the application void.

We are living at a time when workers' rights have been reduced considerably by a minority of employers who have used the system to try to prevent workers achieving their full rights. Failure to disclose information that would have an affect on the decision of the court would rule the application by the employer void.

The employer will be required to submit such information as the court requests. The Deputy is envisaging a situation where the employer would refuse to disclose information. In that event I am sure the court would not support the employer's application if there was a frailty, or is the Deputy considering a situation where information was withheld and then subsequently comes to light?

Yes. In a case where an application was made and two or three months down the line it arises there was not clarity as to the particulars of the employer, it does not make sense for the application for the exemption to continue.

The Labour Court can suspend the exemption.

Yes. How does the Minister foresee the Labour Court suspending an exemption? Is it the case that an employee would be able to identify information that was not included by the employer and then go to the Labour Court to seek suspension of the exemption, or would it be written into law that it is, by default, void if information is not properly disclosed?

We have anti-abuse provisions but we do not have them in this section. We will check that for the Deputy. Scanning the section I do not see where it provides for the situation outlined by the Deputy where the court would revoke it because it has come to light that certain information was inaccurate. I will come back to the Deputy on that.

I take it the Minister will put forward a suggestion on this on Report Stage and that we will be able to discuss a similar amendment on that Stage.

Exactly, if the Deputy tables the amendment for Report Stage, I will have an answer on that.

We can proceed in that manner. We will withdraw the amendment.

It is being withdrawn and will be retabled for Report Stage.

Amendment, by leave, withdrawn.

Amendments Nos. 41 and 46 are alternative to each other and will be discussed together by agreement.

I move amendment No. 41:

In page 11, line 43, after "parties." to insert the following:

"Trade unions and representative employer bodies in the sector concerned shall have a right to be present and to have their submissions taken into account by the Court.".

This amendment relates to the insertion of a new section 33A into the Act of 1946 providing for the exemption from obligation to pay the rate of remuneration provided by a registered employment agreement and the amendments seek that the trade unions as a whole in the sector and the employers' organisations as a whole in the sector have the right to make submissions here and for those submissions to be taken into account. That should be accepted because of the impact a decision could have on the sector as a whole.

Section 9 inserts a new section 33 in the 1946 Act providing that where an registered employment agreement so provides an employer in financial difficulty may apply to the Labour Court seeking temporary exemption from the requirement to pay the rates of remuneration in the agreement.  Section 33A(6) provides that on receiving an application the Labour Court shall convene a hearing of the parties to the application and give its decision on the application.  This proposed amendment would give a right of audience to employer and trade union parties to the agreement to be present at the hearing and have their submissions taken into account.

The new section 33A inserted in the 1946 Act provides that in considering whether to grant an exemption to an employer to pay the terms in a registered employment agreement the Labour Court will be required to have regard to a number of factors, including whether if an exemption was granted it would have an adverse effect on employment levels and distort competition in the sector to the detriment of employers not party to the application who are subject to the registered employment agreement and any other matters the court considers relevant. These factors would allow the Labour Court to seek the views of employer and trade union parties to the agreement. Accordingly, while there may be merit to the objective of this amendment it is considered unnecessary.

Subsection (6) states that "On receiving the application [this is for an exemption] ... the Court shall convene a hearing of parties to the application". Would that not be the employers and the trade union? They would be the parties to the application, would they not?

The application is to be made by an employer, therefore, it is one employer, but the Minister should accept this amendment because any decision can have an effect on the sector as a whole. It is reasonable that the sector as a whole, particularly the trade union representing workers in the sector as a whole, should have a say in that matter.

I agree. I wonder if my interpretation of the sector is correct that they are automatically brought in as one of the parties to the application. It envisages that there are at least two parties to the application. Clearly an employer applies for an exemption and the people on the other side of that would be the trade unions representing the workers, or is my interpretation incorrect?

The way it is phrased is that the Labour Court can take the views of employer and trade union parties into account but this is an individual application in which the court must satisfy itself that the financial material being submitted by the company is such that it warrants an inability to pay. I do not think that implies that representative bodies on either side would have a right to be present in the examination of such material but having their point of view presented is something the Labour Court can take into account. They would be making their submissions but the issue in the amendment is that the Deputy is seeking a right for them to be present, which I take to be a right to be party to the entire proceeding of assessing the case being submitted, the financial case and so on. That is the reason the way it is phrased is not acceptable.

Is the amendment being pressed?

Amendment put and declared lost.

Amendment No. 42 is in the name of the Minister. Amendments Nos. 43, 91 and 92 are related. Amendment No. 44 is also related and is an alternative to amendment No. 43. Amendment No. 93 is also related and is an alternative to amendment No. 92. It is proposed to discuss amendments Nos. 42 to 44, inclusive, and 91 to 93, inclusive, together by agreement.

I move amendment No. 42:

In page 11, to delete lines 44 to 54 and substitute the following:

"(7) Subject to subsection (8) the Court shall not grant an exemption under subsection (1) unless it is satisfied that—

(a) where the employer makes an application he or she has entered into an agreement with—

(i) the majority of the workers,

(ii) the representative of the majority of the workers, or

(iii) a trade union representing the majority of the workers,

in respect of whom the exemption is sought, whereby the workers, the representative of the workers or the trade union, consents to the employer making the application, and to abide by any decision on the application that the Court may make, and

(b) the employer’s business is experiencing severe economic difficulties.”.

Section 9 inserts a new section 33 into the 1946 Act providing that where an registered employment agreement so provides an employer in financial difficulty may apply to the Labour Court seeking temporary exemption from the requirement to pay the rates of remuneration in the agreement. An application for an exemption may be made by an employer in the first instance where the employer has entered into an agreement with the majority of the workforce or representatives of the majority of the workforce and second, where the employer has informed the workers concerned of the financial difficulties of the business and where, notwithstanding the absence of an agreement with the majority of the workforce, the Labour Court is satisfied that the employer cannot maintain the terms of the registered employment agreement, and compliance with the terms of the registered employment agreement would result in considerable lay-offs and adverse effects on the survival of the employer's business.

The effect of this amendment would be to delete subsection (8) of section 33A of the 1946 Act that deals with the criteria that have to be considered by the Labour Court in the absence of an agreement with the majority of the workforce. The criteria are that the employer has informed the workers concerned of the financial difficulties of the business and has attempted to reach agreement with the workers concerned; the employer is unable to maintain the terms of the REA, registered employment agreement; and a requirement on the employer to comply with the REA would result in a substantial risk that a significant number of workers concerned would be laid off or made redundant or that the sustainability of the employer's business would be significantly adversely affected. The basis for claiming an exemption on grounds of inability to pay will be less restrictive than the equivalent measure under the national minimum wage which has never been used to date. While the objective of the provisions in the Act of 2000 was that the relief sought by an employer would be available in cases where a majority of employees so agree, the new provision covers situations where a majority of employees may not necessarily agree but where it can be proved to the satisfaction of the Labour Court that there is a genuine, albeit temporary, inability to pay and that appropriate safeguards can be assured.

I am satisfied there are sufficient safeguards contained in the Bill to ensure that only genuine exemption applications will succeed.

We are dealing with amendment No. 43 which is related to amendment No. 42.

This is a puzzle. Subsection (8) of the new section 33A of the Act of 1946 seems to directly contradict subsection (7). The spirit of subsection (7) is that the court should not grant an exemption from the obligation to pay the agreed rates of remuneration provided by registered employment agreement unless the employer has an agreement with the majority of the workers, the representative of the majority of the workers or a trade union representing the majority of the workers. However, subsection (8) then more or less nullifies this:

Notwithstanding subsection (7), where the Court is not satisfied that the majority of the workers or their representatives consent to an application under that subsection, the Court may grant an exemption under subsection (1),

The court may grant the exemption anyway, simply on the basis that the employer has told the story to the workers concerned. I ask the Minister to explain.

I am not sure I understand the point being made by the Deputy in this case.

The Minister is amending the Bill as published in page 11 by deleting lines 44 to 54 and substituting them largely with something quite similar. The effect of this is that the court shall not give an exemption unless it is satisfied that the employer has made an agreement with the workers and then subsection (8) states as I quoted, that where the court is not satisfied that the majority of the workers or representatives consent, the court may grant an exemption anyway, provided some other conditions are met.

We are providing for the court being able to make an exemption anyhow where it believes there is a genuine threat to employment, notwithstanding that there has not been an agreement with the majority of the workforce. If the Labour Court believes there will be adverse effects on employment, it can grant the exemption.

What is the point of subsection (7) of the new section 33A, when subsection (8) just takes it away again?

The purpose is that even where the majority of the workforce are in favour of an inability to pay clause, the Labour Court must still satisfy itself that the firm is in severe difficulty. In other words, it is not sufficient that the workers agree to an exemption on the basis of inability to pay. The Labour Court must also be satisfied that this is justified.

I do not think that is the case. Subsection (8) is where the court is not satisfied - in other words, the court believes that where the majority of workers do not consent to an application it may still grant the exemption.

There are two sections. One case is where there is no agreement and the court may still grant an exemption if it believes there is a threat to jobs, subject to the various conditions.

Yes, that is subsection (8).

The other is that even if there is a majority, the court will not grant an exemption unless it is satisfied the employer's business is experiencing severe economic difficulties. Even if the employer in subsection (7) has got the consent of the majority of the workforce, the Labour Court must still go on to the next point and satisfy itself that the business is experiencing severe economic difficulties. Having consent is not enough. Subsection (8) deals with the point where there is no agreement but the court is satisfied that there is a genuine threat. These are the two separate provisions.

With respect, if I interpret Deputy Higgins correctly, he makes the point that the first paragraph states the court cannot grant an exemption unless the majority of the workers agree and in the second paragraph it is stated that the court may do so.

No. The first paragraph states that the court shall not grant an exemption unless it is satisfied and so on and people agree and the employer's business is experiencing severe economic difficulties. There are two tests. The court will not grant it unless it is satisfied of both things, that it has the majority of the workforce and it has established that the business is experiencing severe economic difficulties. This is one test. The court will not grant the exemption simply on the basis of just one or the other test; it must be on both. In the event there is no agreement by workers, the court may, in certain circumstances, grant the exemption under the inability to pay on the basis of a threat.

The confusion was caused by the fact that in the original version the provision regarding the employer's business experiencing economic difficulty does not appear. Is this the case?

In the original Bill, in subsection (7), there is no reference to the severe difficulties, the second part of the test as the Minister put it.

Yes, the Deputy is correct.

It did not, therefore, make sense.

It is a double; the court must be satisfied of both and this is what the amendment provides for, the replacement of the existing subsection (7). The provisions are less stringent when an agreement is in place and where there is no agreement, the court applies more stringent rules.

Amendment agreed to.

I move amendment No. 43:

In page 12, to delete lines 1 to 27.

Amendment put and declared lost.

I move amendment No. 44:

In page 12, line 3, to delete "or their representatives" and substitute the following:

", their representatives or a trade union representing the majority of the workers".

Amendment agreed to.

I move amendment No. 45:

In page 13, line 9, before "specify" to insert the following:

"specify an hourly rate of pay which is less than that previously agreed by the parties to the agreement and, in any case, shall not"

The purpose of this amendment is unclear.

I think it is unclear to both sides.

Section 9 inserts a new section 33A into Part III of the 1946 Act providing that where an REA so provides, an employer in financial difficulty may apply to the Labour Court seeking temporary exemption from the requirement to pay the rates of remuneration in the agreement. The amendment appears to propose that an exemption granted by the Labour Court in respect of an REA could not specify an hourly rate that is less than that contained in the REA agreed by the parties to the agreement. Such an amendment would defeat the entire purpose of the inability to pay provision. The Bill already provides that an exemption shall not specify an hourly rate that is less than the hourly rate fixed under the national minimum wage, which is the appropriate floor.

Amendment, by leave, withdrawn.
Amendment No. 46 not moved.
Section 9, as amended, agreed to.
NEW SECTION

Amendments Nos. 47 and 48 are related and will be discussed together.

I move amendment No. 47:

In page 13, before section 10, but in Part 2, to insert the following new section:

"10.—The employer of any worker to whom a registered employment agreement applies shall maintain such records as are necessary to allow monitoring of the employer's compliance with his or her legal obligations to workers.".

One of the purposes of the legislation is to minimise red tape on business and to reduce the bookkeeping and record-keeping requirements to a minimum. I am concerned that the legislation places a statutory obligation on the employer to maintain sufficient records so that if an employee ever seeks to vindicate his or her rights, there would be sufficient documentation to prove the case one way or another.

Section 51 of the Industrial Relations Act 1990 already provides for the record-keeping requirements of employers in respect of REAs. Section 51 states:

(1) The employer of any workers to whom a registered employment agreement applies shall keep such records as are necessary to show that the registered employment agreement is being complied with and shall retain the records for three years.

(2) If an employer fails to comply with a provision ofsubsection (1) he shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500.

(3) If any employer required by this section to keep records keeps or causes to be kept, or produces or causes to be produced or knowingly allows to be produced to an inspector, any record which is false in a material respect knowing it to be false, he shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,000 or imprisonment for a period not exceeding three months or to both.

Therefore the amendment is unnecessary.

In respect of amendment No. 48, section 49(1) of the Industrial Relations Act 1946 already provides for the record-keeping requirements of employers in respect of EROs and states:

(1) The employer of any workers to whom an employment regulation order applies shall keep such records as are necessary to show whether or not the provisions of this Part are being complied with as respects them, and the records shall be retained by the employer for three years.

I will take a look at that legislation and in the meantime I take the Minister's word.

Amendment, by leave, withdrawn.
Section 10 agreed to.
SECTION 11
Amendment No. 48 not moved.

Amendments Nos. 49 and 53 are related and will be discussed together.

I move amendment No. 49:

In page 14, line 8, to delete "at least".

The Duffy Walsh report recommended that when employment regulation orders in different sectors were established, a review should take place every five years. The legislation provides that a review would take place at least every five years. I am attracted by the suggestion in the Duffy Walsh report. There must be a reasonable amount of stability and certainty for people who are at the bottom of the pay scale. Hundreds of thousands of them work in this sector. If they go through the procedure to get an ERO established successfully, the least they can expect is that it would remain in existence for a reasonable length of time. The wording "at least once every five years" could mean anything and they could be reviewed every year or more regularly in theory. They are reviewed in circumstances where the Minister of the day can decide to scrap the ERO if he or she decides it appropriate to do so. For the purposes of some continuity, stability and certainty for vulnerable workers in this sector we should delete the term "at least". I see no compelling need for it.

For me the purpose of the Bill is to maintain proper wages for workers in highly vulnerable sectors and also to allow businesses to operate, grow and develop. This section deals with review. There are very important subsections under which a review should be undertaken, but it stops at subsection (h) without referring to a significant part of the reason for us being here, which is to maintain fair and sustainable rates of remuneration appropriate to the sector in question. If we are to ask people to review this, it is important to ask them to review under that category also.

Deputy O'Dea's amendment proposes to delete "at least" before "every five years". Section 11 inserts a new section 41A after section 41 of the 1946 Act to provide that the Labour Court will, following the commencement of this Act and at least once every five years thereafter, conduct a review of all establishment orders in respect of existing joint labour committees. Following such review the Labour Court may recommend that: a JLC be abolished; a JLC be amalgamated with another JLC; or that the establishment order for a JLC be amended. The effect of the amendment would be to remove the possibility of undertaking such a review within five years of the previous one having been undertaken. This is considered to be too restrictive and would remove the possibility of a review being undertaken in circumstances where such a review would be appropriate. The Duffy Walsh report recommended a review at least once every five years to ensure the JLC would remain relevant. Certainty is not the only issue to be provided for here, which is what Deputy O'Dea suggests in that it should be like an election in the US where one has a four year term regardless. The point Deputy Walsh made is that if the JLC has ceased to be relevant there would be the opportunity for a review. This is at the discretion of the Labour Court which can decide that circumstances are such that a review is appropriate earlier than the five year interval. It is a flexibility that is hard to deny. That formulation is reasonable, provided the purpose outlined by Duffy Walsh remains relevant.

The Sinn Féin amendment proposes to add an additional criteria to the list, that of maintaining of fair and sustainable rates of remuneration appropriate to the sector in question. It is considered that such a criterion is more appropriate to be taken into account in the formulation of proposals for an employment regulation order rather than for the existence for a joint labour committee covering a particular sector. Such a criterion is already provided for in section 12 of the Bill in the list of principles and policies that a JLC will have regard to in future when formulating proposals for employment regulation orders. In other words, it deals with whether the sectoral allocations remain relevant. It does not deal with the order which embodies the pay rates and that is why it is not in the list.

If this is the intention, a review every five years is good enough for Duffy Walsh. If the Minister considers there should be some flexibility in the event of circumstances arising where a review could take place earlier, why not include that in the Bill rather than a provision which gives the right to review any time the Minister wishes?

No, it is the Labour Court.

Yes, the Labour Court.

The Bill provides that at least once every five years the court shall carry out a review and that it can do so earlier if it considers it necessary, but it will not do it earlier unless it considers it necessary. That gives the court discretion. The Deputy proposes to delete the words "at least".

That is not to say-----

The Deputy says that the court should carry out a review once every five years regardless of what happens in the interval.

One can include a provision to provide for a review if exceptional circumstances arise, even though less than five years has elapsed since the last review.

The Labour Court determines a work programme based on what is a priority. It looks at what is in its environment and would only bring it forward for an earlier review if it considered something serious had occurred. I will reconsider it for Report Stage but I do not think there is a world of difference between the formulation of words and what would happen in practice. It merely allows flexibility. In the normal course of events, they would only be reviewed every five years but it allows an element of flexibility which is sensible.

Amendment, by leave, withdrawn.

Amendments Nos. 50 to 52, inclusive, 55 to 59, inclusive, and 61, 62, 64 and 65 are related and may be discussed together, by agreement.

I move amendment No. 50:

In page 14, between lines 10 and 11, to insert the following:

"(2) Before carrying out a review under subsection (1), the Court shall publish in the prescribed manner a notice setting out-

(a ) that the Court proposes to carry out a review of a joint labour committee, and

(b ) that submissions in respect of the review may, before a date specified in the notice, be made to the Court in writing setting out the grounds on which the joint labour committee concerned should be retained, abolished or amalgamated with another joint labour committee,

and the Court shall consider any submissions made in accordance with paragraph (b ) and carry out the review within 6 weeks of the date specified in the notice for receipt of submissions.”.

Section 11 of the Bill amends the Act of 1946 to provide that the Labour Court will, following the commencement of this Act and at regular five year intervals thereafter, conduct a review of each joint labour committee. The Duffy Walsh report had recommended that reviews of the establishment orders of existing JLCs be undertaken periodically in order to ensure that the range of establishments to which they apply remains appropriate and that any necessary amendments might be made to the establishment orders by which they were created. The purpose of this amendment is to ensure that the procedures for the conduct of a review of the establishment order for an existing JLC should be analogous to the public inquiry procedure into an application for a new establishment order setting up a JLC as provided under section 38 of the 1946 Act. This follows from a suggestion made in the course of consultations on the Bill and it was noted that consistency in such procedures will serve to give all stakeholders, especially trade unions and employer organisations, a formal voice in the review process.

The amendments are all consequential on the adoption of amendment No. 50.

Amendment agreed to.

I move amendment No. 51:

In page 14, line 11, to delete "(2) When carrying out" and substitute "(3) When carrying out".

Amendment agreed to.

I move amendment No. 52:

In page 15, line 14, to delete "justified." and substitute the following:

"justified;

(i ) any submissions made in accordance with subsection (2)(b ).”.

Amendment agreed to.

I move amendment No. 53:

In page 15, between lines 14 and 15, to insert the following:

"(i ) maintaining of fair and sustainable rates of remuneration appropriate to the sector in question.”.

Amendment put and declared lost.

With your permission, may I ask Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Seán Sherlock to take over?

I move amendment No. 54:

In page 15, to delete lines 15 to 23 and substitute the following:

"(4) Following a review under subsection (1) -

(a ) where the Court is satisfied that to do so would promote harmonious relations between workers and employers and assist in the avoidance of industrial unrest, the Court may recommend that-

(i) the joint labour committee is maintained in its current form,

(ii) the joint labour committee is amalgamated with another joint labour committee, or

(iii) the establishment order pursuant to which the joint labour committee was established is amended,

or

(b ) where the Court is satisfied that it is no longer appropriate to maintain a joint labour committee the Court may recommend that the joint labour committee is abolished.”.

Section 11 inserts a new section 41A, after section 41 of the 1946 Act, to provide that the Labour Court will, following the commencement of this Act and at regular five year intervals thereafter, conduct a review of all establishment orders in respect of existing joint labour committees. The purpose of this amendment is to provide for a more explicit ordering of the priority ranking of the principles and policies to be taken into account by the Labour Court in carrying out these periodic reviews of a joint labour committee. In this regard, priority considerations are the "common good" or public interest objectives of establishing harmonious industrial relations between workers and employers and the avoidance of industrial unrest. As regards the outcome of the review process, the amendment also specifies that the Labour Court may recommend retention of the JLC in its current form as well as recommending in favour of an amendment of the existing establishment order or the amalgamation of the JLC with another JLC or its abolition.

Amendment agreed to.

I move amendment No. 55:

In page 15, line 24, to delete "(4) Where the Court" and substitute "(5) Where the Court".

Amendment agreed to.

I move amendment No. 56:

In page 15, line 25, to delete "subsection (3)" and substitute "subsection (4)".

Amendment agreed to.

I move amendment No. 57:

In page 15, line 27, to delete "(5) As soon as practicable" and substitute "(6) As soon as practicable".

Amendment agreed to.

I move amendment No. 58:

In page 15, line 28, to delete "subsection (4)" and substitute "subsection (5)".

Amendment agreed to.

I move amendment No. 59:

In page 15, line 30, to delete "subsection (2)" and substitute "subsection (3)".

Amendment agreed to.
Amendment No. 60 not moved.

I move amendment No. 61:

In page 15, line 33, to delete "(6) Where the Minister" and substitute "(7) Where the Minister".

Amendment agreed to.

I move amendment No. 62:

In page 15, lines 33 and 34, to delete "subsection (2)" and substitute "subsection (3)".

Amendment agreed to.
Amendment No. 63 not moved.

I move amendment No. 64:

In page 15, line 43, to delete "(7) An order under subsection (5)" and substitute "(8) An order under subsection (6)".

Amendment agreed to.

I move amendment No. 65:

In page 16, line 1, to delete "(8) Every order under subsection (5)" and substitute "(9) Every order under subsection (6)".

Amendment agreed to.
Section 11, as amended, agreed to.
SECTION 12

Amendments Nos. 66, 79 and 80 are related and amendment No. 80 is an alternative to amendment No. 79. Therefore, amendments Nos. 66, 79 and 80 may be discussed together.

I move amendment No. 66:

In page 16, to delete lines 12 to 15 and substitute the following:

"42A.-(1) Subject to this section and section 42B, a joint labour committee may, where it is satisfied that such proposals would promote harmonious relations between workers and employers and avoid industrial unrest, submit proposals for an employment regulation order to the Court.".

Section 12 sets out,inter alia, the principles and policies that should guide the formulation of joint labour committees of proposals on the fixing of remuneration and conditions of employment and the regulation of the joint labour committee decision-making process. The purpose of this amendment is to provide for a more explicit ordering of the priority ranking of the principles and policies to be taken into account by a joint labour committee in considering proposals for the making or variation of an employment regulation order. In this regard, the priority considerations that should inform the deliberations of a JLC in deciding whether to propose an ERO are the public interest objectives of establishing harmonious industrial relations between workers and employers and the avoidance of industrial unrest.

With regard to priorities, it is important the priority of the maintenance of fair and sustainable rates of remuneration in the sector in question is added at this point in the legislation. As I stated in regard to a earlier amendment the objective of this legislation should be to put in a floor with regard to wages which are already low. It is important that this priority is understood at this point in the legislation.

Amendment agreed to.

Amendments Nos. 67 and 68 are related and will be discussed together by agreement.

I move amendment No. 67:

In page 16, lines 37 to 39, to delete all words from and including "not" in line 37 down to and including "concerned" in line 39 and substitute the following:

"higher rates of remuneration based on skill levels and length of service in the sector or enterprise concerned".

Amendment No. 67 relates to proposals by Joint Labour Committees regarding remuneration and conditions of employment. This amendment seeks to remove a rather restrictive clause in relation to the amount of hourly rates of remuneration based on length of service in the sector or enterprise concerned and to insert the more positive proposal that the Joint Labour Committee proposals may provide for a minimum hourly rate of remuneration and to include of "higher rates of remuneration based on skill levels and length of service in the sector or enterprise concerned". That is more positive and fairer to the workers concerned. It is also a more flexible proposal than that provided for in the Bill as drafted.

Is that not what is already proposed in the Bill?

I think so. Perhaps the Minister of State would like to respond to Deputy Higgins.

Section 12 provides for a number of amendments that are required to the legislative provisions relating to the operation of joint labour committees. It accordingly inserts into the 1946 Act a new section 42A, which includes at section 42A(4) a provision that the JLC may make proposals to fix a minimum hourly rate of remuneration and not more than two higher hourly rates of remuneration based on length of service in the sector or enterprise concerned for all or any such workers.

This amendment proposes to provide that skill levels in addition to length of service be also taken into account in setting pay rates. A Government amendment to section 12, amendment No. 68, provides that proposals for EROs may provide for a minimum hourly rate of remuneration and not more than two higher hourly rates of remuneration based on length of service in the sector or enterprise concerned, as well as the standards and skills recognised for the sector concerned.

Amendment put and declared lost.

I move amendment No. 68:

In page 16, line 39, after "concerned," to insert the following:

"or the attainment of recognised standards or skills in the sector concerned,".

Amendment agreed to.

Amendments Nos. 69 and 70 are related and will be discussed together by agreement.

I move amendment No. 69:

In page 16, to delete lines 41 to 46 and in page 17, to delete lines 1 to 16.

These determinations will create a subsection of workers who will work on a reduced wage. It is stated at line 11 that they shall be remunerated at an hourly rate reduced to the percentage set out in sections 14, 15 and 16 of the Act for the category of worker concerned and that those sections shall apply with the necessary modifications as if such workers were employees for the purpose of the Act.

Section 14 states that the court may in accordance with this section exempt an employer from obligations to pay the statutory minimum remuneration in respect of a worker or number of workers. I would see this as undesirable in that these individuals will not be covered properly by the ERAs.

The Bill provides that employees under the age of 18 years, first time entrants to employment and persons who having entered employment before the age of 18 years undergo during normal working hours a course of study, etc. will be remunerated at a reduced rate. I am seeking to insert into the Bill a time limit in that regard. We cannot provide that people will be categorised as traineessaecula saeculorum. The logic of that is obvious. I believe that the Government should reconsider that provision which clearly is a loophole which unscrupulous employers could exploit. Using indefinite training as justification for reduced rates of remuneration for people who are already in low paid employment is wrong. This should not be permitted in any legislation.

Section 42A(5) clarifies the relationship between the adult wage rates that may be proposed by a JLC and the sub-minimum rates under EROs expressed as the same fixed percentages of the minimum hourly rate of remuneration as set out in sections 14, 15 and 16 of the National Minimum Wage Act 2000 in respect of employees aged under 18 years, first time job entrants and employees undergoing training. In future, JLCs will be permitted to set out a basic adult rate and two supplementary minimum rates. This will subsequently reduce the number of rates while acknowledging the freedom of JLCs to establish two higher hourly rates based on length of service in the sector or enterprise concerned or the attainment of recognised standards or skills. Sub-minimum rates expressed as fixed percentages of the adult basic rate will apply as in the case of the national minimum wage to employees aged under 18 years, first time job entrants and employees undergoing training. All other rates of pay will be agreed at firm level. The effect of the proposed Sinn Féin amendment would be to remove the "sub-minima" elements from the scope of proposals for remuneration from a JLC with only the adult rates remaining.

On amendment No. 70, section 12 provides for a number of amendments that are required to the legislative provisions relating to the formulation of proposals for employment regulation orders by joint labour committees, including in relation to the principles and policies that should guide the formulation of such proposals on the fixing of remuneration and conditions of employment. In this context, section 12 inserts into the 1946 Act a new section 42A(5) which clarifies the relationship between the adult wages rate that may be proposed by a JLC and the sub-minimum rates under EROs expressed as the same fixed percentage of the minimum hourly rate of remuneration as set out in sections 14, 15 and 16 of the National Minimum Wage Act 2000 in respect of employees aged under 18 years, first time job entrants and employees undergoing training. Specifically, subsection (5)(d) provides that proposals for EROs shall provide that a worker who has attained the age of 18 years and during normal working hours undergoes a course of study or training prescribed in regulations made by the Minister under section 16 of the National Minimum Wage Act 2000 shall be remunerated at an hourly rate reduced to the percentage set out in sections 14, 15 and 16 of that Act. The National Minimum Wage Act 2000 (Prescribed Courses of Study or Training) Regulations 2000 sets down the comprehensive criteria a course of study or training must satisfy for the purposes of section 16 of the National Minimum Wage Act 2000. The criteria include that the duration of the course is for a minimum period of three calendar months, that the training enables the acquisition of skills and-or knowledge expected to enhance the work performance of the employee at the end of the course, and assessment and certification procedures. In addition, a separate amendment proposed by the Minister will provide that proposals for employment regulation orders, EROs, may provide for a minimum hourly rate of remuneration and not more than two higher hourly rates of remuneration based on the standards and skills recognised for the sector concerned as well as the length of service in the sector or enterprise concerned which was contained in the published Bill.

I did not comprehend that lengthy explanation. It appears that the proposals for some minimum rates or whatever one wants to call them apply to people entering employment for the first time having attained the age of 18 years or who, having entered into employment before attaining the age of 18 years, continue in employment on attaining that age or people who fall into the category referred to by the Minister under the minimum wage Act, etc. We could discuss this here for the rest of the evening but, in fairness, it should be re-examined by the Minister of State between now and Report Stage. The Minister's explanation only covers the last paragraph but the last paragraph is an alternative to somebody who comes in under the first three.

To be helpful, there are criteria in the National Minimum Wage Act 2000 in regard to study or training courses.

I understand all of that but what about a person who falls under the new section 42A(5)(c) which states, “having entered into employment before attaining the age of 18 years continues in employment on attaining that age, or”. I would appreciate it if the Minister would examine that between now and Report Stage.

We can come back to that, Chairman.

Is amendment No. 69 being pressed?

Amendment put and declared lost.

I move amendment No. 70:

In page 17, between lines 16 and 17, to insert the following:

"(6) Such reduced hourly rate, as that which would apply to a worker to whom subsection (5)(d) applies, shall only be permitted where, such worker is given access to a course of study or training, within an appropriate period to achieve skills commensurate with a higher remuneration rate.”.

How stands the amendment?

I will withdraw it pending the Minister coming back to me between now and Report Stage.

Amendment, by leave, withdrawn.

Amendment No. 71 is in the name of Deputy O'Dea. Amendments Nos. 71, 72 and 76 are related and may be discussed together by agreement.

I move amendment No. 71:

In page 17, line 19, to delete "shall have regard to" and substitute "must take account of".

Section 12(42A)(6) states: "When formulating proposals to submit to the [Labour] Court under subsection (1), a joint labour committee shall have regard to the following matters:". I am saying the court must take account of those matters which include the legitimate interests of employers and workers likely to be affected, the legitimate financial and commercial interests of the employers, the desirability of agreeing and maintaining efficient and sustainable work practices, etc. It is a change in the formulation in that rather than the court having regard to the matters it must take them into account. When I look at it now in the cold light of dawn, as it were, the wording possibly amounts to the same thing. It is probably different people's views. If the Minister of State is not disposed to consider it I will not fall out with him.

That desirability issue was discussed previously and therefore there is no need for additional discussion on it.

I am glad that I am not getting on the wrong side of Deputy Willie O'Dea. By way of explanation, section 12 inserts a new section 42A into the Act of 1946 to establish the principles and policies to which a joint labour committee, JLC, must have regard when formulating proposals to submit to the Labour Court for employment regulation orders, EROs. These principles and policies are set out in section 42A(6)(a) to (d) of the Bill. This amendment proposes to require a JLC to take account of rather than have regard to such principles and policies. On the advice of the Attorney General, the Government has agreed that the catalogue of principles and policies contained in sections 5, 11 and 12 should be developed to provide for a more explicit ordering of their priority ranking, and Government amendments are proposed. In this regard, when formulating proposals for EROs, a priority consideration for a JLC is that the terms of the recommendation would promote harmonious relations between workers and employers and avoid industrial unrest.

The Minister has put forward separate amendments to these sections to deal with the necessity for providing for a hierarchy of principles in this regard. Such a hierarchy of principles is needed not least in anticipation of further legal challenge to address tensions between constitutional issues, that is, freedom of contract and property rights on the one hand and the common good, that is, harmonious industrial relations on the other.

Amendment, by leave, withdrawn.
Amendment No. 72 not moved.

Amendment No. 73 is in the name of the Minister. Amendments Nos. 74 and 75 are alternatives to amendment No. 73, therefore, amendments Nos. 73 to 75, inclusive, may be discussed together by agreement. By way of clarification for Deputy Tóibín and Deputy Halligan, if amendment No. 73 is agreed, amendments Nos. 74 and 75 cannot be moved.

I move amendment No. 73:

In page 17, to delete lines 45 to 51 and in page 18, to delete lines 1 to 10 and substitute the following:

"(b) the general level of wages in comparable sectors;

(c) where enterprises in the sector in question are in competition with enterprises in another Member State, the general level of wages in the enterprises in that other Member State taking into account the cost of living in the Member State concerned;

(d) the national minimum hourly rate of pay declared by order for the time being in force under section 11 of the National Minimum Wage Act 2000, and the appropriateness or otherwise of fixing a statutory minimum hourly rate of pay above that rate; and

(e) the terms of any relevant national agreement relating to pay and conditions for the time being in existence.”.

Section 12 as presented inserts a new section 42A into the Act of 1946 to establish the principles and policies to which a JLC must have regard when formulating proposals to submit to the Labour Court for employment regulation orders, EROs. Section 42A(6) as presented provides that a JLC must have regard to, among other factors, the general level of wages in comparable sectors, including, where appropriate, the general level of wages in such comparable sectors in other relevant jurisdictions. The objective of amendment No. 73 is to ensure that comparisons of minimum wages for the purposes of framing EROs would take account of differences in price levels between European Union member states reflecting purchasing power parities for household consumption expenditure.

While particular attention had been given to providing that wage comparisons, having regard to the rates paid in other jurisdictions, should only be conducted on the basis of a "fair and reasonable assessment", the parliamentary counsel's advice in respect of the provisions in sections 5 and 12 was that the specific concerns raised in this regard could best be addressed by specifying instead, first, the cost of living and, second, a restriction of the field of comparison to only those EU member states with which firms covered by JLCs and registered employment agreements, REAs, can be found to be in competition, and that they should be included as factors to be assessed in setting wages.

A similar provision as regards wage comparisons has been addressed already in subsection 3B(k) inserted by amendment No. 3, which I understand has been agreed. Accordingly, comparisons are only applicable where firms covered by JLCs can be found to be in competition with enterprises in other EU member states. The European Union has developed a model of economic and social development which extends beyond the diversity of national situations and is based on common values and principles, in particular, the objective affirmed in the treaty of promoting hand in hand economic and social progress.

EU member states have already ratified a large number of ILO conventions relating in particular to core labour standards, labour inspection, labour administration, employment, social security and wages. Most EU member states currently have statutory or otherwise legally binding or generally applicable minimum wages in place. The impact of a national minimum wage on both demand and supply can differ markedly across member states depending on the level set as well as other labour market policies and institutions. The thrust of EU employment policy is that wage floors need to be sufficiently adjustable with the social partners actively engaged in ensuring wage settlements reflect overall economic developments.

We touched on this issue earlier. I want to draw the attention of the Minister of State to the fact that in the retail and hospitality sectors, and elsewhere, Irish wages are below the EU average. There is no doubt in my mind that some effort to refer wages locally to other jurisdictions will have a negative effect on these wages. It is possibly one of the aspects of the legislation that will do most damage to a section in society that is already badly paid. In this regard I will push for acceptance of amendment No. 74.

This has been a highly controversial issue for many years at different times in the European Union, with regard to posted workers and to services supplied across state boundaries. There has been a very strong agenda by powerful employers to push a race to the bottom by trying to get lower rates and conditions for workers more generally applied. During one of the referendums on the Lisbon treaty we debated this quite considerably. The formulation of the Bill is far too open to abuse from the point of view of employers in this regard. We propose the criteria should involve a fair and reasonable assessment of wages with regard to purchasing power and the level of social security and public services available in the state. I made this point earlier so I will not labour it now. The general conditions on a wider scale that workers might enjoy in countries or jurisdictions that would be compared must be taken into account. Simply restricting it to wages is far too limiting and could be to the disadvantage of workers in this State who do not have access to the same health services, or other services such as child care, that might exist in the jurisdiction where this type of comparison would apply.

I believe the issue was also raised with regard to an earlier amendment as we debated this particular issue. If I am not mistaken the Minister, Deputy Bruton, gave an undertaking to examine it. We feel taking the cost of living into account and restricting the field of comparison to only those EU member states with firms covered by JLCs and REAs is an equitable way forward. I am trying to understand the Deputy's point in respect of employers but, respectfully, I did not quite understand the point made on how they are given a greater role.

The point is that a comparison between jurisdictions should not be narrowed down to simply one or two key issues such as the level of wages. The ability of workers to live a decent life is also affected by other factors in a jurisdiction such as the type of public services they enjoy, the type of social welfare they might have, and the type of health care and child care available. To restrict it to wages does not compare like with like. There could be lower wages in a jurisdiction but better services for workers outside of this than is the case in this jurisdiction. However, applying more narrow criteria than this is proposed.

The Deputy proposes to apply more qualitative criteria to the process.

The Government feels the criteria are well met and that the JLCs sit above the national minimum wage in any sense. I do not think we should look for increased criteria above the level of wages. This is the Government's view on the matter.

Amendment put.
The Committee divided: Tá, 7; Níl, 3.

  • Conaghan, Michael.
  • English, Damien.
  • Griffin, Brendan.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
  • Sherlock, Sean.

Níl

  • Higgins, Joe.
  • O’Dea, Willie.
  • Tóibín, Peadar.
Amendment declared carried.
Amendments Nos. 74 and 75 not moved.

I move amendment No. 76:

In page 18, between lines 10 and 11, to insert the following:

"(e) the impact on working poverty and adequate income.”.

Amendment put and declared lost.

As amendment No. 78 is alternate to amendment No. 77, amendments Nos. 77 and 78 will be discussed together by agreement. To clarify, amendment No. 78 cannot be moved if amendment No. 77 is agreed to.

I move amendment No. 77:

In page 18, lines 15 to 24, to delete all words from and including "but" in line 15 down to and including "redundancy" in line 24.

This relates to the joint labour committee having regard to certain matters when formulating proposals to submit to the court. Under the issue of consideration of remuneration, this provision institutionalises the attack on premia for Sunday time, for example, which has been the subject of much recent controversy. Basically, it is an attack upon very low-paid workers generally and on workers who depend on matters such as Sunday premia, extra time for antisocial hours etc., to bring up their wages from what often are very low levels. This amendment seeks to exclude the proposed provision for exclusions of these crucial issues. Because Deputy Tóibín's amendment deals with the same issue, albeit in a slightly better way, I will withdraw this amendment to enable his amendment to go forward.

Amendment, by leave, withdrawn.

I move amendment No. 78:

In page 18, line 15, to delete "but does not include" and substitute "including".

I agree with the views expressed by Deputy Higgins. This is probably the most difficult part of this legislation for people to get their heads around. I reiterate this is about those who on average earn €18,000 per year, which is significantly lower than the average industrial wage and is significantly lower than the average wage in Leinster House. These wages are very low and this is about the working poor. Sunday workers are proportionately more likely to be women and are proportionately more likely to be very low-paid individuals. Consequently, changes in this regard will have a highly negative effect on their ability to pay their way through life and to be able to pay for food, clothing, housing, heating etc. My understanding is the previous formation of the joint labour committee, JLC, allowed for a significant larger premium but under the provisions of this legislation, this amount would be reduced. The Minister of State should explain how, as a committee, members can do their best for the individuals under discussion, that is, those who are the working poor.

In support of that point, as Deputy Tóibín noted, this deals with those who are at the very bottom of the wage pile. It relates to those for whom, in many cases, it hardly would be worth their while to work without the Sunday premium. My understanding is that at present, the Sunday premium generally is time plus one-third, which is not a fortune. I refer to the complete myth regarding interference through the removal of the Sunday premium and its replacement with a form of discretionary system that will be underpinned by regulation. Essentially, the intention of this provision is to reduce the wages someone can earn for working on a Sunday. This was tried in the United Kingdom, where the theory was it would have huge effects on employment. The theory was it literally would have employers out on the streets with handbills advertising jobs but this did not happen. It did not create a single additional job in the United Kingdom. Sunday is special and always has been treated as such. Moreover, many people do not enjoy the Sunday premium at present because they are rostered to work on a Sunday in any event. We are talking about people at the very bottom of the wage scale and interference with the Sunday premium of time and a third which is subject to income tax, the universal social charge, etc. It is a bridge too far. We have to look at the economy as a whole here and at demand in the economy. People on very low wages spend all their wages. They have to because they are barely living from week to week. If they had more to spend they would certainly spend it. If one reduces those low wages, one takes that spending power out of the economy, money that is guaranteed to be spent in the economy. EU Commission data dating from 2008 - out of date on the wrong side, in my view - shows that labour costs in Ireland in these sectors, those covered by JLCs, were 6% below the EU 15 average. We are talking now about a greater gap, one that has widened since 2008. I do not understand why there was not greater protest from the trade unions and representatives of the workers when the Sunday premium was abolished, as it has been, literally. There was time and a third for people who worked on a Sunday, for very low wages. That is not unreasonable. The Government and, in particular, the Labour Party in Government should reconsider its attitude on this issue.

The stark political reality in regard to the national minimum wage is that this Government restored it. We brought many people back into a wage that, arguably, is more of a living wage than those who served in previous mandate sought to have available given that it reduced their rights and entitlements. We must take that into account as well.

I refer to the amendments and to section 42A(7). This amendment provides for a new commonsense or straightforward definition of remuneration for the purposes of formulating proposals for EROs so that such proposals may no longer include pay or time off from work in lieu of public holidays; compensation pursuant to section 14 of the Organisation of Working Time Act 1997, resulting for required work on a Sunday, a section that will continue to apply separately and should not be duplicated in any ERO; payments in lieu of notice; or payments referrable to a worker's redundancy. This amendment would include these provisions in the definition of remuneration. This definition is provided in order to comply with the Government's decision that in future JLCs will no longer set Sunday premium rates or any other conditions of employment already covered by universal standards provided for in existing legislation. In particular, provision for a Sunday premium will be removed from the scope of EROs while preserving workers' entitlements under section 14 of the Organisation of Working Time Act 1997. In this context, it is proposed to complement the removal of the Sunday premium from the purview of JLCs with a direction to the Labour Relations Commission to devise a code of practice for Sunday working. The proposed code would provide guidance to employers, employees and their representatives, in sections covered by EROs, on arrangements that may be put in place to comply with the options as specified at section 14 of the Organisation of Working Time Act 1997. The code of practice will subsequently be given formal status by means of a ministerial order.

The Government giveth and the Government taketh away. Although the Government made an important decision on the minimum wage, if this proceeds it will be a material change to extremely low-paid workers' livelihoods and standards. I appeal to the Minister of State to accept the amendments we propose.

This is a despicable attack that has been orchestrated by employers in certain sectors. We heard scare stories that simply did not stand up when that controversy was going on during the past two years. People claimed that small enterprises had to close because of the Sunday premium. This does not stand up.

The Government should not use the restoration of a pittance of a minimum wage, after the disgraceful act by the previous Government in cutting it, to try to give an alibi with regard to this issue.

What is happening here is that the Sunday premium is being eliminated. Essentially, that is the position. At present there is an agreed rate for Sunday working, of time and a third. That guaranteed rate, agreed with the workers in the various sectors involved, is being replaced by a sort of guide, or something that is supposed to serve as a guide for employers. If an employee, many of whom are low-paid immigrant workers, believes an employer is not fully following the guide, which will not be binding in any way in the first place, he or she is perfectly entitled to take a case to the rights commissioner and appeal to the Labour Court. If he or she gets an order from the Labour Court, he or she must go to the Circuit Court where there are people with wigs and gowns looking for the thing to be enforced.

Is the Minister of State telling us the wages of these workers are going to go up as a result of what the Government is doing? Surely it is the intention that wages will go down; that must be the intention otherwise why not leave the situation as it is? The Minister, Deputy Bruton, already boasted, he has got rid of the Sunday premium. All I ask the Minister of State, Deputy Sherlock, to do, as a Labour Party Minister of State and member of the Government which, in my view, and in spite of the history, rightfully restored the minimum wage - which is not very high anyway - is to reconsider. I ask him to take this point back to the Cabinet and ask the Members to reconsider it. The sky will not fall in. I do not believe that one job will be lost. If he wants to have an argument about the technicalities of the minimum wage I will go into that with him, but I do not want to waste time today. I feel strongly about this. The people I represent, many of whom voted for me previously but who, on the last occasion, voted for the Minister of State's party, also feel very strongly about it.

I ask him to reconsider, in general. I am not being politically confrontational about this. I know many of those people, the circumstances in which they are working, the pitiful wages on which they are supposed to survive from week to week. Many are barely surviving. They spend all their money, their wages, in the economy. Any diminution of their wages, therefore, is a direct attack on purchasing power in the economy and will cost jobs.

To reiterate, section 14 of the Organisation of Working Time Act 1997 provides protection. If we are talking about the status of the EROs, what is their status post July and post the High Court? One must ask oneself that question. What we are seeking to do through this legislation is to give a protection through the proposed code which at least provides guidance in respect of sectors covered by the EROs on arrangements that could be put in place to comply with section 14 of that very same Act.

I refer to those workers who would have had certain premia prior to July. The question we must ask ourselves is where the evidence is of people bringing cases to rights commissioners post July, where they would have recourse to do so? We have to find a mechanism here and we believe strongly that the LRC approach, with the Organisation of Working Time Act 1997, provides the best way forward in terms of the protection of those workers.

Is the amendment being pressed?

Question put: "That the words proposed to be deleted stand."
The Committee divided: Tá, 3; Níl, 7.

  • Higgins, Joe.
  • O’Dea, Willie.
  • Tóibín, Peadar.

Níl

  • Conaghan, Michael.
  • English, Damien.
  • Griffin, Brendan.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
  • Sherlock, Sean.
Amendment declared lost.
Question declared carried.

If amendment No. 79 is agreed, amendment No. 80 cannot be moved.

I move amendment No. 79:

In page 19, to delete lines 13 to 31 and substitute the following:

"(7) When making a recommendation under subsection (6), the Court shall—

(a) be satisfied that the terms of the recommendation would promote harmonious relations between workers and employers and avoid industrial unrest, and

(b) have regard to the following:

(i) the representations made by the parties at the hearing;

(ii) any relevant code of practice for the purposes of the Industrial Relations Act 1990;

(iii) the economic and commercial circumstances in relation to the sector to which the joint labour committee relates;

(iv) the rates of remuneration and conditions of employment of workers in similar employment sectors, including workers in a sector to which another joint labour committee relates;

(v) the merits of the dispute and the terms upon which it should be settled.".

Amendment put and declared carried.
Amendment No. 80 not moved.

I move amendment No. 81:

In page 19, to delete lines 44 to 47 and substitute the following:

"equal division of votes the chairman shall cast his or her vote having regard to the recommendation of the Court.".

This amendment provides for the removal of the reference in section 9 of the Bill to the chairman of a joint labour committee having "a second or casting vote" in the circumstances envisaged in the proposed new section 42B(9). The intention of the amendment is to clarify the purpose of the section and to improve the drafting of the Bill. The general policy objective of the new provision is that the chairman of a joint labour committee will be a non-voting member of the committee other than in circumstances in which the procedure set out in the new section is exhausted and the employer and the working members of the joint labour committee agree on the implementation of the labour court recommendation in question. It is proposed that in such circumstances, the chairman will be allowed to cast a single vote, having regard to the recommendation of the Labour Court, but not "a second or casting vote" as provided for in the new section 42B(9). Essentially, this amendment has been tabled to make a correction.

Amendment agreed to.

I move amendment No. 82:

In page 21, lines 7 and 8, to delete all words from and including "and" in line 7 down to and including "so," in line 8.

Amendment put and declared lost.

If amendment No. 83 is agreed, it will not be permissible for amendment No. 84 to be moved.

I move amendment No. 83:

In page 21, to delete lines 11 to 22.

Amendment put and declared lost.
Amendment No. 84 not moved.
Section 12, as amended, agreed to.
SECTION 13

As amendments Nos. 85, 86 and 88 are related, they may be discussed together.

I move amendment No. 85:

In page 21, line 45, after "worker," to insert "or the Minister,".

I will explain the thinking behind this amendment. Up to now, a worker in this sector with a grievance used to have to go to NERA, which would take up his or her case, if requested, and potentially bring a criminal prosecution. The High Court has cast doubt on the constitutionality of that in the context of the absence of overall controls, etc. The Duffy Walsh report suggested that in addition to being able to bring a criminal prosecution, NERA should also have the option of representing the employee in civil proceedings before the rights commissioner, etc. This legislation is providing for that option. Criminal prosecution is no longer an option, as far as I know, as a result of the High Court decision.

Although this Bill provides that NERA can represent the employee, the situation will change quite substantially in the sense that the employee will no longer have an automatic right to be represented by NERA. Previously, there was no question or doubt about it. Employees were sometimes represented by trade unions. On other occasions, employees would for some reason choose to represent themselves or be represented by a family member. Perhaps a solicitor would take on the case on a voluntary basis. Generally, complaints could be made to NERA. While that will still be possible, I am concerned that an automatic response will no longer be received from NERA. This legislation provides that when a person wants NERA to represent him or her, it will do so only if the Minister, the Department or the NERA administration consider it reasonable that they should do so. That is a fundamental change.

I will compare the options a worker will have if this legislation is passed to the options a worker had under the Industrial Relations Act 1946. Under that legislation, workers who felt aggrieved could go to NERA if they felt their employers were not fulfilling their obligations. NERA could prosecute the employer successfully. The amount of money involved would usually be small because those involved are generally paid low wages. If that system was felt to be too stringent, severe or draconian, it could have been changed to ensure that employees could be represented by NERA in civil or non-criminal proceedings, as laid out in the Bill. If NERA will have the right to refuse one if it thinks it is unreasonable that one is not bringing the case oneself, that will be a fundamental change. We have spoken about the type of employee who will be affected. They are people who are on low wages. A lot of them are people who, without casting aspersions on them, are not the best educated. They are also quite poor. If they cannot get a trade union to represent them they are now expected to represent themselves through a rights commissioner. An employer can lodge an appeal with the rights commissioner and then the person must represent themselves again, perhaps for a fairly small amount of money, before the Labour Court on appeal. If the Labour Court appeal is in the worker's favour the employer can simply say, "I do not give a toss and I am not going to pay that". The only option then is for the employee to go to the Circuit Court to require an order from the Circuit Court judge. It might be a very small amount of money but it could be a lot for the poor worker. It could be a relatively small sum of money in the greater scheme of things but to expect somebody, on their own, to do all of this without automatic recourse to NERA, as they have at the moment, is blatantly unfair.

This morning the Minister, Deputy Bruton, said that the Government is considering a new system whereby employees can vindicate their rights and he promised to examine the amendment again in that context. I do not know whether the Government intends to bring about the situation that I am talking about and I want to hear his comments on it.

I have an open mind on the Deputy's comments but I also have regard for the Minister's comments on encompassing some of these issues on workplace relations and future legislation. I shall try to be helpful and approach the matter pragmatically having regard for the arguments made. I suggest that we examine the issue again at Report Stage and a specific view can be given then.

With regard to NERA, the Deputy wants to create the maximum leeway for workers and he gave prescriptive examples. Perhaps we can examine it again at a further stage.

I withdraw my amendment on that basis.

Amendment, by leave, withdrawn.

I move amendment No. 86:

In page 21, line 49, after "worker." to insert the following:

"However, before a complaint is presented to a rights commissioner, the employer must be notified of the contravention in writing and be given a period of 14 days to respond and if possible, rectify the issue.".

My amendment deals with a slightly different matter. The Minister's reply could deal with what I propose. When a complaint is presented to a rights commissioner the employer must be notified of the matter in writing and given a period of 14 days to respond. It is a fast-track system to weed out some of the complaints and to stop them going before the rights commissioner but still get the matter resolved. This will not happen in every case but the measure would weed out a certain amount of cases and lighten the load placed on the rights commissioner service and, subsequently, the Labour Court.

We should examine all three of the amendments and their nuances. They deal with issues that are pertinent to complaints lodged with rights commissioners and we will examine them again at Report Stage in that context.

Amendment, by leave, withdrawn.

I move amendment No. 87:

In page 26, lines 6 to 8, to delete all words from and including "referred" in line 6 down to and including "after" in line 8 and substitute the following:

"specified for the time being in section 26 of the Debtors (Ireland) Act 1840, for each day or part of a day beginning 6 weeks after".

Amendment agreed to.
Amendment No. 88 not moved.
Section 13, as amended, agreed to.
SECTION 14

I move amendment No. 89:

In page 27, line 30, to delete "24 months" and substitute "12 months".

Question, "That the words proposed to be deleted stand," put and declared carried.
Amendment declared lost.

I move amendment No. 90:

In page 27, to delete lines 33 to 37 and substitute the following:

"(3) (a) Subject to paragraph (b) the Court shall not grant an exemption to an employer under subsection (1) if the employer has been granted an exemption in respect of the same worker or workers under that subsection within the previous 5 years.

(b) Where an exemption under subsection (1) has been granted for a period of less than 24 months, an employer or employer’s representative with the employer’s consent may, prior to the date on which the exemption is due to expire, apply to the Court to extend the period of the exemption for an additional period.

(c) Where an application is made under paragraph (b) the Court shall not extend the period of the exemption for more than 24 months from the date on which the exemption was granted.

(d) Where the period of the exemption has been extended by the Court under paragraph (b), the Court shall not further extend the period.”.

Amendment agreed to.

I move amendment No. 91:

In page 28, to delete lines 10 to 20 and substitute the following:

"(7) Subject to subsection (8) the Court shall not grant an exemption under subsection (1) unless it is satisfied that—

(a) where the employer makes an application he or she has entered into an agreement with—

(i) the majority of the workers,

(ii) the representative of the majority of the workers, or

(iii) a trade union representing the majority of the workers, in respect of whom the exemption is sought, whereby the workers, the representative of the workers or the trade union, consents to the employer making the application, and to abide by any decision on the application that the Court may make, and

(b) the employer’s business is experiencing severe economic difficulties.”.

Amendment agreed to.

I move amendment No. 92:

In page 28, to delete lines 21 to 46.

Question, "That the words proposed to be deleted stand," put and declared carried.
Amendment declared lost.

I move amendment No. 93:

In page 28, line 23, to delete "or their representatives" and substitute the following:

", their representatives or a trade union representing the majority of the workers".

Amendment agreed to.
Section 14, as amended, agreed to.
SECTION 15

I move amendment No. 94:

In page 30, to delete lines 21 to 24.

In the interest of being helpful, I shall withdraw my amendment.

Amendment, by leave, withdrawn.
Section 15 agreed to.
Section 16 agreed to.
SECTION 17

Amendments Nos. 95 to 99, inclusive, are related and may be discussed together by agreement.

I move amendment No. 95:

In page 30, paragraph (a)(i), line 40, to delete “subparagraph (xxvi)” and substitute “subparagraph (xxvii)”.

Section 17 amends the Protection of Employees (Employers' Insolvency) Act 1984 to ensure that payments due to a worker, due to decisions of a rights commissioner or a determination of the Labour Court made under this Act, shall be treated as debts for the purposes of employees' rights on the insolvency of their employer. It adds to a long list of debts in Acts that are covered by section 6(2)(a) of the 1984 Act. Since the publication of the Bill the Property Services Regulation Bill 2011 was enacted which contained a similar amendment to the 1984 Act. Accordingly, as a consequence of the Property Services Regulation Act 2011, section 6(2)(a)(xxvi) of the Protection of Employees (Employers’ Insolvency) Act 1984 was introduced and has necessitated a consequential adjustment of the numbering of the subsections listed in section 17 of this Bill. It is a technical amendment.

Amendment agreed to.

I move amendment No. 96:

In page 30, paragraph (a)(ii), line 42, to delete “subparagraph (xxvii)” and substitute “subparagraph (xxviii)”.

Amendment agreed to.

I move amendment No. 97:

In page 30, paragraph (a)(iii), line 45, to delete “subparagraph (xxvii)” and substitute “subparagraph (xxviii)”.

Amendment agreed to.

I move amendment No. 98:

In page 31, line 1, to delete "(xxviii) any amount which" and substitute "(xxix) any amount which".

Amendment agreed to.

I move amendment No. 99:

In page 31, lines 8 to 13, to delete paragraphs (b) to (d) and substitute the following:

"(b) in subsection (2)(b), by the substitution of “, (xxviii) or (xxix)” for “or (xxviii)”,

(c) in subsection (2)(c), by the substitution of “, (xxviii) or (xxix)” for “or (xxviii)”, and

(d) in subsection (9), in the definition of “relevant date”, by the substitution of “, (xxviii) or (xxix)” for “or (xxviii)”.”.

Amendment agreed to.
Section 17, as amended, agreed to.
Section 18 agreed to.
NEW SECTION

I move amendment No. 100:

In page 32, after line 15, to insert the following:

"19.—An employer who is in receipt of an exemption from a Registered Employment Agreement or an Employment Regulation Order shall not be eligible to tender for a public procurement contract.".

This amendment proposes a safeguard against unfair competition in terms of utilising a situation where an employer has gained an advantage that can be used to put downward pressure on wages and conditions in the particular industries affected. We tabled the section in order to protect the wage levels and conditions of workers from coming under sustained pressure as a result of exemptions being wrongly used or in such a way that they could be used.

The amendment proposes the addition of a new section 19 that would result in a firm, in receipt of an exemption to pay the REA or ERO rates, from tendering for a public procurement contract as has been espoused. There are already protections in the Bill to address the concerns that the amendment seeks to deal with. First, as regards REAs, it will be a matter for the parties to the REA to determine whether an REA should have a provision for an ability and inability to pay clause. Second, in respect of EROs and REAs, the Labour Court will be required to take into account whether, if granted, the exemption would have an adverse affect on employment levels and distort competition in the sector to the detriment of employers not party to the application but subject to the ERO or REA.

Amendment put and declared lost.
Question, "That the Title be the Title to the Bill", put and declared carried.

I thank the Minister and Minister of State for their work today, members for their work during the past four hours and the officials for their time.

When is it proposed to take Report Stage?

Provisionally on 5 July 2012.

When is it expected that the legislation will be completed through both Houses?

It is proposed that the Bill will come before the Seanad on 18 July 2012.

Before the summer recess.

Bill reported with amendments.