Dáil Éireann díospóireacht -
Tuesday, 21 Nov 2000

Vol. 526 No. 3

Industrial Relations (Amendment) Bill, 2000 [ Seanad ] : Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Kelleher

I welcome the opportunity to debate this legislation. There is general agreement on it but I wish to refer to a number of issues. It is important that industrial relations are discussed in the prevailing climate. It is well recognised throughout the EU and further afield that industrial relations in Ireland have been a major contributory factor to the economic climate we now enjoy. There is prosperity, a reduction in taxation, low interest rates, increased spending and a reduction in unemployment and social issues have been addressed. Social issues still remain but at least the industrial relations process allows Government, unions and employers to come together and formulate national agreements, the latest of which is the Programme for Prosperity and Fairness.

As one looks back on recent years, it is important to acknowledge the need to be inclusive in negotiations. Bringing unions, employers and Government on board has been effective to date. However, some groups are seeking additional payments but that should be addressed under the PPF and the labour relations mechanisms which exist. I urge the ASTI, following its recent action, to come to the table and negotiate with the Labour Relations Commission using the industrial relations apparatus which is available.

In the late 1970s and early 1980s Ireland experienced inflation and wage demand which spiralled and brought the country to its knees. If it were not for the foresight and vision of the 1987 Administration and unions we would not be here now talking about the Celtic tiger or the Celtic snail. One of the guiding principles that should be adopted and encouraged is the involvement of the unions, employers and the State as a triumvirate to ensure there is broad agreement on the parameters for tax reduction, public spending and social inclusion.

The purpose of the legislation is to give new dispute settling powers to the Labour Court in cases where the employer has failed to follow agreed voluntary procedures, where negotiating procedures are not in place and collective bar gaining is not taking place and where there has been no recourse to industrial action by the trade union or employees involved. In the past the Labour Court did not have enough powers to bring about a settlement as outlined in the explanatory memorandum and for that reason the legislation is timely and welcome.

I am 32 years old and I believe we owe a great deal of gratitude to those who brought about industrial harmony from 1987 onwards. That must be acknowledged. I am concerned that with the passage of time there are people who do not remember the dark old days when a graduate left college and had two choices, to go on social welfare or get on an aeroplane. It is important to recognise that industrial harmony is one of the pillars on which the Celtic tiger is built. If that is forgotten economists and other experts are agreed that the process of economic development, social inclusiveness and reducing taxes could easily come to an end.

Section 2 prescribes the conditions under which the Labour Court can carry out an investigation and enables the court to investigate accepted bodies defined under section 6(3) of the Trade Union Act, 1941, that can carry out negotiations for the fixing of wages and other conditions of employment. There was a slight deficit up to now in this area of the industrial relations armoury and the Bill acknowledges and addresses that issue.

I hope centralised bargaining will continue where the Government and the social partners can come together and draw up an industrial plan. The announcement of the £40 billion national development plan demonstrates that we can plan well in advance for the future if there are good, positive industrial relations. A cohesive forward-thinking vision for Ireland is capable of being produced but if the PPF is undermined and disintegrates I fear the worst.

I am confident the Government has taken on board the concerns of the unions and employers in formulating the upcoming budget. However, there is concern among trade union representatives about inflation. People on fixed social welfare benefits are also concerned and they must be a priority.

The present industrial relations apparatus has served Ireland well and the legislation tightens certain areas which heretofore were difficult to address. The partnership approach has been successful and should continue to be supported by all involved. There will be confrontations, disputes and arguments but they should be addressed in the industrial relations process. Ireland's economy is booming and relations between unions and employers is one factor which is investigated by people who wish to invest in Ireland. That was a major factor in the huge inward investment here from 1987 onwards.

There is no doubt if negotiations and relations between the unions, employers and Government break down there will be a flight of capital and a lack of inward investment, which is another pillar on which the booming economy has been founded. We should be conscious of encouraging everybody to be inclusive in their approach to the industrial relations process.

The legislation is brief and it has been debated at length in the Seanad. I welcome it and wish it a speedy passage through the House. I hope the Bill when enacted will address the problems regarding dispute settling powers for the Labour Court and people will be able to use this mechanism to address their concerns.

Mr. Creed

I welcome the Bill which gives us an opportunity to reflect on what has been achieved through social partnership, the challenges that confront the present partnership agreement and how effective is existing industrial relations machinery. If one examines the level of discontent, some of which has already manifested itself in strike action while other groups appear to be rushing headlong in that direction, one must be concerned at the potential of the partnership arrangements to survive the current crises.

Social partnership was originally conceived in the late 1980s and, as it embraced all the social partners, including the Government and the Opposition, it achieved economic stability and enabled us to step back from the brink of economic disaster upon which the country was poised at that stage. While we can see all around us the benefits which have flowed from it, there is a feeling that some have benefited more than others. Those who are not employed in the cutting edge of industrial technology and in high technology areas, such as information technology, biotechnology, pharmaceuticals etc. certainly feel their worth has been questioned in terms of the capacity of social partnership to deliver a meaningful wage to them.

It is not so much the level of wages which matters any longer as what those wages can achieve now for people as compared to what they could achieve a relatively short time ago. I refer specifically to the issue of housing. Taking the teachers' strike as an indication of this, the starting wage for teaching of £15,000 is not exorbitant and moves slowly up the wage scale as years pass. However, a relatively short number of years ago a teacher was rarely found on a local authority housing waiting list. Now teachers throughout the country and others in similar occupations – what would have been euphemistically referred to as permanent and pensionable posts – are being included on local authority waiting lists because they can no longer put a roof over their heads.

The Government stands indicted on its failure to make any meaningful intervention in the provision of housing for people on average incomes. The Minister of State is shaking his head but if he suggests the Government has made efforts, I point out to him the reality that, since the Government came to office, houses have doubled in price.

Mr. Treacy

That is the tiger economy.

Acting Chairman

I remind the Deputy that the debate is on industrial relations.

Mr. Creed

I will relate this point to industrial relations. If the Acting Chairman was listening to my introduction to the point about teachers' salaries, he would see it is related. My point is that many people, such as teachers, gardaí and nurses, who deliver an integral service to a functioning society, have been priced out of the housing market. That is fuelling the industrial unrest we see in areas outside the information technology, biotechnology and pharmaceutical areas of employment.

The Government will have to be more proactive. We have seen numerous instances of excessive profiteering in the building industry, where phase one goes on sale today and, in three weeks' time, phase two is sold off paper drawings for £30,000 more than the first phase but, because of the basic economic principles of supply and demand, these additional prices can be commanded. That is fuelling enormous discontent among professions integral to a successful economy.

I accept the difficulty the Government has in negotiating with the ASTI because it is outside the partnership arrangement. Perhaps on reflection, people will come to the conclusion that the steps taken by the ASTI may have been rather hasty. However, they are understandable. Looking at the overall ballot of teachers, including the INTO and the TUI, a majority would not have voted in favour of the partnership arrangement. Given that it is not the most militant group in society, significant straws in the wind are being shown which we would be foolish to neglect.

We could learn many lessons in an appropriate time if we were to look at what happened in the nursing profession and compare it with what may happen in the teaching area. We established a nursing commission and it proved to be the foundation for resolving the disputes in that area and came up with many worthwhile solutions. I urge the Government to establish a commission on education to examine the range of issues involved in the teachers' dispute, not just salary issues. It should involve the structure of the profession and the voluntary aspect to the delivery of teachers' duties.

We should try to head off a crisis which is coming down the tracks, namely, recruiting people into the teaching profession. For example, there is only one science graduate in the H. Dip. in UCC this year. That means there will be one new graduate teaching mathematics and science subjects next year. That will manifest itself in a few years in class and subject choice in secondary schools throughout the country. It will be too late then and we will be travelling the world looking for qualified teachers as we do now for nurses. We should take appropriate steps now to prevent the necessity for fire brigade action later.

A commission on education to examine the overall structure in teaching, the career oppor tunities it provides and the salary issue, which is integral, might in some way be the sweetener to enable the ASTI to get off a hook on which it has placed itself in terms of the strike action upon which it has embarked. The ASTI has never been known as the most militant of teaching unions and the fact that it has seen fit to take this course of action is something we should not ignore lightly.

The Bill is welcome in so far as it goes but it does not deal with the inadequacy of the industrial relations machinery to deal with strikes such as that by teachers with which the Government is now faced. It begs the question whether partnership requires a legal framework and whether representative bodies, such as the ICTU, which sign into an arrangement on behalf of their membership, should be legally bound by it. Likewise, if the social partners are to be legally bound by it, so too should the State in terms of the arrangements agreed upon. That might head off some of the current discontent on the part of those within and without the partnership arrangement.

Throughout the economy, from the train strike which is before the Labour Court – it appears there will be a two day stoppage – to Ryanair pilots going on strike, to Aer Lingus caterers and clerical staff—

Mr. Treacy

Thanks be to God they are going back to work.

Mr. Creed

—to Aer Lingus pilots, groups are queuing up to take industrial action. It appears the Government in response to these issues is introducing legislation which will not have one iota of an effect on any of those disputes or the capacity to resolve them. In terms of those outside the partnership arrangement, a mechanism will have to be found to resolve this dispute and it will take negotiation. While both sides may shout at each other, the only losers in any dispute will be consumers, students in schools, public transport users and air transport users. The Government will have to begin negotiations with these groups to bring about a resolution to these problems.

Housing is a huge issue in terms of unrest because people see that something their predecessors in the same profession were comfortably able to attain is now well beyond their grasp. Given current levels of inflation and the concentration of tax relief by the Government in previous budgets to excessively favour those on high incomes, that level of discontent and distrust is understandable. I urge the Government to focus future tax reliefs on those who are feeling the financial squeeze, particularly due to house prices. The Government should also examine the existing industrial relations machinery to see if there is a case for a legal framework for partnership, so that if ICTU, the farmers or IBEC sign up to such an agreement they would be honour bound by it. It should not be something that people can walk away from once a chill wind comes.

How adequate, or inadequate, is the industrial relations machinery for dealing with groups that are currently outside its terms? The current difficulties highlight the inadequacy of the machinery. For example, we cannot talk to the ASTI because, if we did, it would invite others in similar circumstances to step outside the terms of the agreement. Does that mean, however, that we must continue to ignore all ASTI members on strike, as well as all the students studying for examinations who are most immediately and seriously affected?

It is evident that the industrial relations machinery is not adequate and that should be acknowledged. While the Bill deals with an inadequacy, it does not deal with the real issues causing industrial unrest. In so far as it sets out to solve a specific problem, however, it probably provides an adequate framework for doing that alone.

I am sure we will return to the debate in more detail on Committee Stage.

Mr. C. Lenihan

I am glad of the opportunity to speak on this much neglected but important Bill. As the Member opposite indicated, the legislation allows us the time and space to reflect on the interesting industrial relations environment in which we find ourselves. The Bill will go a long way towards helping the voluntary character of what is involved. I was intrigued by the previous speaker's suggestion of some form of legal framework within which to incorporate the understandings, compromises and agreements arrived at through the partnership process. It is important, however, not to think purely in terms of that process. Some years ago I was the first to criticise opponents of the partnership process, not least those on the Fine Gael benches, including Deputy John Bruton who was one of its foremost critics in Opposition. Although I am not suggesting that I agreed with them, there was some validity to the criticisms proposed by some opponents of the process. One of the most startling facts that is rarely referred to in debates is that 1.2 million people in the workforce are not members of trade unions. Some 500,000 workers, however, are represented by trade unions both in the public and private sectors. In the context of the Bill, the figures amply illustrate the need for some form of protection for employees or employers who, in the event of an irreconcilable dispute, when there is a need for intervention and agreement, find themselves in enterprises that are not covered by a collective agreement on pay and conditions. It is good to see that both the ICTU and IBEC have agreed that this should happen.

I doubt that the provisions of the Bill will be invoked too often. We have seen some spectacular cases, however, not least the baggage handling dispute at Dublin Airport, which involved an illegal picket outside the framework for legal intervention. Where there is no voluntary approach for resolving a dispute, the legislation will, I hope, allow the Labour Court to become involved, as well as making mandatory regulations for resolving such disputes. That is a healthy situation. I was disillusioned by the behaviour of trade unions concerning the baggage handling dispute at Dublin Airport some time ago. I felt that an illegal action had been allowed to occur and, in effect, the State was powerless to do anything for commuters whose travel plans had been disrupted.

Apart from the legislation, we also need to examine the task force that was set up to deal with industrial action, including strikes, in essential services. We should be striving to avoid all strikes and lock-outs concerning essential services so that they can be maintained. Most people would be horrified at the thought that emergency hospital care could be discontinued, yet that is technically possible within our legislative provisions for industrial relations. It has happened in other countries but thankfully it has not happened here to date. It is a technical possibility, though, and should be acted upon. It is imperative for the State to ensure the continuation of essential services for citizens, which some would regard as a basic right, irrespective of the state of play that can sometimes develop in the ongoing industrial relations war.

The Bill goes some way towards resolving disputes that might otherwise be irreconcilable due to the inability of invoking formal structures for resolution. In the past few years four landmark disputes have occurred, which say so much about industrial relations procedures and tell their own stories. They are the nurses' dispute, the baggage handlers' dispute, to which I have referred, the train drivers' dispute and the current teachers' dispute. The baggage handlers and train drivers are unique in the sense that they can take disputes outside the legislative framework and apparently go unpunished while continuing to disrupt the economy. The nurses and teachers disputes raise different issues concerning the perception that public sector pay rates are falling behind those in the private sector.

Interestingly enough, when Mr. Charlie Lennon gave an interview to The Sunday Tribune, he could not identify a specific issue other than the 30% the secondary teachers were seeking. He spoke volubly about the costs his members faced in seeking to obtain mortgages, but this problem is not unique to teachers. Almost everybody in society finds it hard to get a loan to purchase their home. As the previous speaker said, it is a very serious problem, but not one that is unique to public sector workers. It affects private sector workers also.

Public sector employees sometimes have a misconception of the levels of pay that operate in the private sector. They seem to feel that anybody who works in private industry is making huge gains. Of course, surveys by the Small Firms Association have suggested that over the past few years there have been increases of 8% for those working in the private sector, particularly with smaller companies. Such workers do not have the security of tenure that people in the public sector enjoy, however.

If one examines the post-1987 partnership process, one will find that teachers have done extraordinarily well, as have civil servants in the public sector generally. At a time when the economy was not at its strongest, public sector workers had their pay increases maintained, albeit on an incremental basis. That is the reality concerning public sector workers and the figures are there to prove it. The public sector has done very well out of the partnership process. It can be argued that they have done disproportionately well if one looks at the corresponding gains in the private sector. In the past year or two, certain segments in the private sector may have gained exponentially because of an acute skills shortage in the economy. If one is lucky enough to be in the kind of private sector employment which is experiencing skills shortages, one is in a position to make an exponential gain.

A shortage of skilled workers, coupled with a lack of proper roads and housing, is not a justification for a massive pay increase in the public sector. It is a recipe for something else, perhaps radical action in all those areas to provide housing and infrastructure. Eaten bread is soon forgotten. The extent to which pay and conditions in the public sector were maintained through the bad years leading in to the good years has been forgotten. It has also been forgotten by the participants in the teachers' dispute that the benchmarking body is the vehicle through which there can be a restructuring of the teaching profession in terms of pay.

There is a problem, which partly reflects the success of the trade unions, which have always preferred to accept incremental increases, rather than opt for profit sharing or bigger gains which could be made in separating segments of workers. Instead of accepting a general increase, trade unions in the civil and public service in particular could be better off in promoting merit pay, the idea that those with a lifelong commitment to the service should receive bonuses and increments equivalent to those payable in the private sector when they do their job well and are properly assessed under a benchmarking system. The benchmarking body will do precisely this.

In the nurses dispute, when a huge increase was sought, ordinary nurses who were of the view that their status had been reduced for much the same reasons as teachers – the price of housing and the fact that in their perception people whom they knew were doing much better in the private sector – seemed to realise at the end of the day that through the many recommendations of the Commission on Nursing and the creation of new grades and opportunities they could move away from the culture of the long service increment, the idea that one has to wait 20 to 30 years before reaching the top of one's scale or being promoted late in life, when one is not as enthusiastic, to a pensionable position which carries a very large salary at the end of one's days having been forced to live through a period when a smaller salary applied. This is killing the civil and public service by discouraging young people with talent and ability from joining.

It is important to state that our teachers are among the highest paid in Europe. They are not lowly paid. Because our standard of living has risen so high, particularly in relation to housing, they have found it very difficult to keep pace with events.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I sincerely thank Deputies for their contributions to which I listened with great interest. The Bill is the result of an agreed approach by IBEC, the ICTU, Departments and agencies on how to deal with disputes where negotiating arrangements are not in place. Such a consensus has eluded the social partners for many years and successive Governments had rightly resisted the temptation to impose a solution in the absence of a common approach between employers and trade unions. It is in keeping with the best tradition of social partnership that representatives of IBEC and the ICTU have succeeded in devising a balanced formula that takes account of the different views brought to the table.

Whether we call the parties who devised this approach a high level group or a committee is neither here nor there. The parties primarily concerned with disputes, over the right to bargain, have agreed on a process which they are prepared to operate. They have asked us to underpin this with legislation. That is what we are doing in the Bill. It is wise that the application in practice of the legislation will be monitored by the parties during the next few years. They are committed to this. What has emerged is significant. For the first time we have a procedure which cannot be ignored by a recalcitrant employer. At the end of the process such an employer must comply with an enforcement order from the Circuit Court.

As Deputy Gilmore noted, the only avenue open to a trade union is under section 20 of the Industrial Relations Act, 1969. While the trade union must undertake to accept the Labour Court's recommendation in advance, no such obligation rests with the employer. Deputy Rabbitte underscored that there are limits set by case law and the Constitution in this area. While I accept that the legislation may not serve as a panacea for all disputes, it does respect the voluntarist tradition which enjoyed cross-party support from those who contributed to the debate, including Deputies Creed and Lenihan. The legislation provides an avenue for workers to have their cases heard and their grievances or claims for pay and conditions aired. Uniquely, a mechanism is being introduced which allows claims on pay and conditions to be processed to a legally binding award in the event of a refusal by an employer to engage in agreed procedures or where an employer does so in bad faith. In place of the blank wall of section 20 where the employer chooses to ignore the Labour Court recommendation, it provides a route which employees can exploit.

A number of Deputies referred to the pressures and tensions in the economy which have led some to call into question the partnership approach. There are major problems ahead, despite the progress made in the past decade. The challenge of managing our new economy is considerable for all – Government, Parliament and the public alike – but one thing is clear: the way to address problems about the delivery of social services and the development of infrastructure is not by returning to the old ways of doing business, but by deepening the partnership approach involving shifts in attitudes, behaviour and culture. We have achieved our present progress by adopting new approaches and processes, by changing the way we did things in the past. This is as true for the matter before us today as it is of the treatment of more macro issues of maintaining our competitiveness in a global environment.

Deputies also referred to pay and inflation. This is a cause of concern for us all. A large component of our inflation problem is caused by factors over which we have no control, namely, oil and the value of the euro. Both of these external pressures are likely to moderate and the outlook is for a significant reduction in the rate of inflation next year. The Government will not be relying solely on the abatement of pressure from these external factors. The national budget next month gives us the opportunity to help bring inflation back under control. We will avail of that opportunity. Moreover, within the past few days, there has been a progress report on discussions between the employers and the ICTU on the problems caused by inflation. I welcome the progress made. There is clear evidence of the desire to resolve the difficulties which have arisen, to reinforce the operation of the Programme for Prosperity and Fairness and to strengthen social partnership.

Deputy Naughten raised the issue of the rights of foreign workers. During Question Time on 12 October in response to a parliamentary question from the same Deputy on the Employment Agency Act, 1971, the issue of the rights of foreign workers in Ireland under our employment legislation was raised. The House was assured that foreign workers receive the same protection as Irish workers under employee protection legislation. If anyone is aware of any discrimination against non-nationals in the workplace in so far as employment legislation is concerned, I urge them to come forward with this information. Such breaches of employment rights legislation will be fully investigated by the Department of Enterprise, Trade and Employment.

On the various comments on the Aer Lingus dispute, it should be remembered that Aer Lingus encountered very difficult trading problems in recent years. It was necessary for management to address these difficulties to secure the future of the company. The Cahill plan was accepted with difficulty by the various groupings within the Aer Lingus workforce. Management has acknowledged that legitimate claims exist. These claims are under discussion. We are pleased that clerical officers have this evening accepted the recommendations of the Labour Relations Commission.

The ILDA dispute to which Deputies Ring and Broughan referred imposed unnecessary hardship on the travelling public. The issue of representation had been the subject of a High Court judgment in April which found against the ILDA. This judgment was the subject of an appeal hearing in the Supreme Court last week and judgment was reserved.

My colleague, the Minister of State, Deputy Tom Kitt, stated that he deliberately refrained from bringing forward legislation that was opposed by either trade unions or employers. The formula of the high level group reaffirms the consensus that exists on all sides to voluntarism as the preferred approach to dispute resolution. I am pleased Deputy Rabbitte agrees with the voluntarist nature of our industrial relations machinery and I agree with his remark that unless there is a very good reason "he is not in favour of further or ongoing legislative intervention". The consensus approach we now have on a mechanism for processing pay and conditions to legally binding conclusion in situations where the voluntary process fails is a good reason.

What ICTU and IBEC have agreed and asked the Minister of State, Deputy Tom Kitt, to give effect to in this legislation is a fall-back mechanism which addresses a procedural deficit that can arise, and has arisen, in a small number of cases where an employer refuses to engage in the voluntary process. I hope the remaining Stages of the Bill can be swiftly processed by the House and I thank Members for their co-operation.

Question put and agreed to.