I move: "That the Bill be now read a Second Time."
This Bill will help give effect to the Government commitment in the Programme for National Recovery to bring forward legislation to facilitate the development of worker participation at sub-board levels in State enterprises. The Bill also provides for the election of worker directors to two more State boards, Aer Rianta and the National Rehabilitation Board. In addition, the Bill provides for a number of amendments to the scheme of the Worker Participation (State Enterprises) Act, 1977.
The case for wider employee involvement has been advocated in different quarters for many years. There has been a longstanding consensus among political parties in this country in favour of extending what the European Commission termed the "democratic imperative" to representative arrangements in the workplace.
My party collegue, Gene Fitzgerald, MEP, when he was Minister for Labour published a Government discussion paper in 1980 on the subject of worker involvement. The Bill now before the House brings a long process of debate, trial and compromise an important stage further.
This Bill is also significant because it confirms this Government's endorsement of the usefulness of mechanisms of consensus in improving our industrial relations climate. It is possible to use legislation as a catalyst for a change. It can set a headline and help to encourage more concerted efforts on the part of management and employees at enterprise level. There has been a tendency on the part of those enterprises, both in the public and the private sector, who have pioneered new forms of employee involvement to keep their experience very much to themselves. I have spoken before of the need to shed more light on the new forms of work organisation and of co-operation which have been developed in this country. The promotion of this Bill has already been widely welcomed as a spur to such developments.
The Bill will support the development of worker involvement below the level of the board in a total of 39 State enterprises. A few of these have longstanding worker participation arrangements. Others have only recently taken the first steps to develop either new structures or consultative arrangements. I was pleased to be associated with the recent launch by two major State organisations, Aer Rianta and Telecom Éireann, of initiatives in this area which they have now publicly endorsed as part of their corporate philosophy. Other State enterprises have yet to consider joint consultation. This Bill should help them to take the first steps in the participative process.
The Bill gives employees the opportunity to initiate discussion on the implementation of worker participation in their organisation. Once a majority of employees or the unions which represent them request participation, it is up to the enterprise and to employee interests to devise between them mutually acceptable arrangements. The terms of the resulting arrangement will be contined in an agreement signed by both parties. While the Bill gives employees the right to initiate the participative process, this provision in no way interferes with the existing role of management. They remain free to bring forward their own proposals or to approach employee representatives about the development of a joint approach to participation at sub-board levels.
Flexibility in the adoption of new initiatives at company level is a key feature of the sub-board provisions in the Bill. Each enterprise and its employees will have the opportunity to develop a unique participative agreement which will reflect the interests and concerns they have in common. The Bill does not prescribe any particular type of vehicle for consultation or participation at company level. The enterprise and its employees can decide among themselves the type of arrangements to suit their situation.
I am hopeful that this flexibility will stimulate more innovative developments. We are familiar with participation councils in a number of bodies, but I would expect joint working parties on particular areas and other types of consultative machinery to be developed where this is preferred.
The Bill does not set out to limit the range of issues for consideration in each enterprise. The agenda will be decided jointly by the enterprise and its employees. In that way, the subject areas which are appropriate for participation in each particular enterprise can be identified at local level.
In a number of State enterprises the widespread use of consultative councils should enable a broad participative agenda to operate from the outset. In others, it may be that a more gradual build-up of subject areas can be expected. As confidence and trust develop between both sides, a broader range of areas may suggest themselves for inclusion in the participative process. Although flexibility is the keynote, some critical elements are essential to the evolution of participation and these are set out in section 6 of the Bill. Whatever kind of vehicle is used for sub-board participation, it should ensure the maximum appropriate disclosure of information about plans, performance and change.
Section 6 of the Bill requires the exchange of views as well as the exchange of clear and reliable information between the enterprise and its employees; the communication in good time to employees of information likely to have a significant effect on their interests; and the distribution to all employees of views and information arising from the participative process. These are the basic requirements. There are, of course, many issues on which management and unions could make progress for mutual benefit, by sharing information and joint discussion, leading to better decisions for all concerned.
Apart from sub-board participation, the Bill will extend and amend earlier worker participation legislation. The Worker Participation (State Enterprises) Act, 1977, provided board level representation for workers in seven State enterprises. They are Aer Lingus, Bord na Móna, B & I, CIE, ESB, Comhlucht Siúicre Éireann and NET. This Bill will designate two more State enterprises — Aer Rianta and the National Rehabilitation Board — for worker director arrangements.
Arising from a Committee Stage amendment which I tabled in the Seanad, this Bill incorporates the provisions for workers director elections in An Post and Bord Telecom Éireann, which were originally contained in the Postal and Telecommunications Services Act, 1983, in a single code. The consolidation of the statutory arrangements affecting these bodies follows upon requests from and consultations with the interests concerned.
More significant for the future development of board level participation in our State enterprises is a new general provision contained in section 24(2) of the Bill. This will allow the Minister for Labour to extend worker director elections to further State enterprises without recourse to primary legislation. Under the provision, the Minister may by affirmative order designate additional State enterprises for board level participation after consultation with other interested Ministers. This will get over the problem which required special legislative provisions to be made in the case of the establishment of An Post and Telecom Éireann.
The original seven State enterprises designated in the 1977 Act were all commercial enterprises. The formula adopted in that Act gave one-third of all positions on the board to elected worker directors and was specifically devised to cater for commercial boards. As this Bill designates a non-commercial enterprise — the National Rehabilitation Board — for worker director elections, some adjustment to the original formula is required.
What is needed above all is an approach which is responsive to the requirements of the type of board which operates in the non-commercial sphere. Worker directors are only one of a variety of representational appointments which may be required to be accommodated on such boards. In appointing worker directors in the non-commercial enterprise sector, it is important not to upset the essential balance which should obtain among the diversity of interests usually represented on these boards. The optimum number of board members will also be a practical consideration if a cohesive and effective board is to be maintained.
The relative importance of considerations such as these will vary from enterprise to enterprise and no one formula for board level participation will be suitable in all instances. Accordingly, section 21 of the Bill permits the Minister for Labour to vary, by order, the number of worker directors below the one-third provision. The Bill requires, however, that at least two worker directors should be appointed to any board.
These are the main features of the Bill. There are also a number of other amendments to the 1977 Act which I will mention briefly. Indeed, some of these points were highlighted in the Seanad debate. Section 9 of the Bill empowers the Minister for Labour to extend the vote in worker director elections to employees in the subsidiaries of State enterprises. The provision allows for extension of the franchise by ministerial order after consultation with other Ministers concerned.
The mechanism for initiating action by the Minister for Labour provided at section 9 (3) of the Bill is the result of an amendment which I introduced on Committee Stage in the Seanad. The amendment takes account of concerns, particularly in relation to the position of overseas subsidiaries, expressed to me both outside that House and in the course of the Second State debate. I am satisfied that the text now before the House deals in an effective way with the difficulties which were raised.
The new text gives representatives of employees an equal say with the State enterprise in initiating any proposal for extending the vote to subsidiaries. The original text had left the enterprise with an exclusive right of application to the Minister and required only that the views of employee representatives in the State enterprise should accompany that application.
A number of Senators expressed concern about the definition of employee proposed in the Bill. Under the original Act, only whole-time workers could participate in worker director elections. The Bill broadens the definition to include employees working a minimum of 18 hours per week. This is a catching up exercise and brings the definition of employee, for the purposes of worker participation, into line with that provided in other legislation.
It has been represented to me, both in the Seanad and by trade union interests, that this definition does not take account of concerns relating to part-time employees on low hours of work. I have recently received a detailed submission from the Irish Congress of Trade Unions which is seeking the implementation of a package of measures relating to the position of part-time workers. Should the Government be persuaded of the need to make such changes, then the position with regard to the status of part-time workers under a number of Acts would have to be addressed by amending legislation. I do not consider that the matter is appropriate for resolutions in the context of this Bill.
I am extending the terms of office of worker directors from three to four years. This increase in the term of office is the result of requests from both the worker directors themselves and from the boards of some designated State enterprises.
The Bill also requires that worker directors who relinquish their employment will at the same time cease to hold board membership. This provision will ensure that employees are represented at board level by one of their number. It does away with the possibility of a worker director who retires, resigns, or perhaps takes up employment with a competitor, continuing to represent the workers at board level in his or her previous employment. The extension of the term of office of worker directors to four years also points to the need for a provision of this kind.
I am heartened by the level of interest shown in this Bill. There is a new momentum behind the promotion of employee involvement. There is a growing sense of common purpose on the part of the enterprise and its employees. There is a shared interest in keeping the business open, in maintaining or increasing the demand for services or product and in developing the business so that it continues to meet the market demands.
In today's competitive environment, organisational effectiveness is not easily achieved. The task of running a successful State enterprise requires the joint effort of both management and employees. This involves sharing information about the enterprise and engaging in meaningful consultation about the options for increased efficiency in the future.
Participation will not do away with unpalatable decisions but it should, through information and consultation, allow a wider range of options to be considered before decisions are taken. It is also to be expected that a decision taken on that basis is less likely to encounter the opposition and resentment which employees feel about a bolt from the blue.
This legislation gives strong support to the development of worker participation in our State enterprises. I am confident that all concerned will have the foresight to implement arrangements for the good of both employees and the enterprise and, ultimately, the consumers of the services and products of our public enterprises.
I commend the Bill to the House.