Charles Flanagan
Ceist:11 Mr. Flanagan asked the Minister for Labour if he is supportive of employee share ownership schemes; the steps he intends to take to encourage and support such schemes; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Employee Share Ownership Schemes.
I have always encouraged the involvement of workers in the running of their companies and I welcome and support any initiative, including financial participation schemes, which help to meet this objective. Financial participation schemes can make a positive contribution to the development of employee involvement but, to be fully effective, such schemes should not exist in isolation but should form part of an overall approach by employers to employee involvement.
Financial participation schemes are well established in Irish industry with some 50,000 employees belonging to approved profit-sharing schemes. The Finance Bill provides for the continuation of tax concessions, though in modified form, and gives the necessary incentive for the developent of further schemes leading to better employee involvement and contributing to improved industrial relations generally.
The FIE-ICTU Joint Declaration on Employee Involvement in the Private Sector recognises that financial participation can play an important role in fostering employee involvement and is one of a broad range of initiatives put forward for consideration by employers in the context of developing an overall employee involvement strategy.
At EC level discussions are taking place on a draft EC recommendation on the promotion of employee participation in profits and enterprise results. This proposal, which is being accepted by Ireland, will be on the agenda of the Social Affairs Council in June for approval and adoption.
Would the Minister not agree that the announcement by the Minister for Finance in his Budget Statement that this scheme would be abolished caused dismay among workers and employers? Is he not aware that the employee share ownership scheme was welcomed by the FIE, employers, the CII and the ICTU? Would he not agree that it was a retrograde step to propose the abolition of this scheme as it will kill the major incentive which existed for employees to participate fully in the companies for which they work?
As I indicated in the reply, 50,000 workers are still involved in this scheme. As the House is aware, the Minister for Finance has modified his original proposal. I have details of that but I am sure there is no point in going into them now. The relief ceiling was reduced from £5,000 to £2,000. In general, the Minister for Finance wanted workers to get the benefit of this type of scheme while at the same time covering areas where the scheme was being used for other purposes.
Will the Minister agree that the Minister for Finance should modify his proposals further to bring them into line with EC recommendations for a greater share by employees in company profits?
Matters appertaining to finance are for another Minister.
I will bring the Deputy's suggestions to the attention of the Minister for Finance.