Joint Committee on Enterprise, Trade and Employment díospóireacht -
Wednesday, 24 Jan 2024

Regulatory and Legislative Changes Required for the Transposition of the Adequate Minimum Wages Directive: Discussion

An Cathaoirleach

As members will know, if they are participating remotely, they are required to do so from within the Leinster House complex. Today we are examining the legislative changes needed for the transposition of Directive (EU) 2022/2041 on adequate minimum wages in the EU. It aims to improve working and living conditions in the EU by establishing a framework for adequacy of statutory minimum wages, promoting collective bargaining on wage setting, and enhancing the effective access of workers to the rights to minimum wage protection provided for under national legislation and-or collective agreements. The directive has to be transposed into national law by 15 November 2024.

Today I am pleased we have the opportunity to discuss this and related matters with representatives from the Irish Congress of Trade Unions: Mr. Owen Reidy, general secretary, and Mr. Ger Gibbons, social and policy legislative officer; and from IBEC: Ms Maeve McElwee, director of employer relations, and Ms Nichola Harkin, head of employment law services.

Before we start, I will mention, as we always do, parliamentary privilege and the practices of the Houses as regards references witnesses may make to another person in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to the Constitution and statute, by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed by me to discontinue their remarks. It is imperative they comply with any such direction.

The opening statements from all three organisations have been circulated to members. To commence our consideration of this matter, I invite Mr. Reidy to make an opening statement on behalf of the ICTU.

Mr. Owen Reidy

We appreciate the invitation to this hearing on the transposition of the adequate minimum wages directive. My colleague, Mr Ger Gibbons, and I look forward to engaging with the committee on what is necessary to fulfil Ireland's obligations in respect of the transposition of this especially important directive.

Congress has been centrally involved in the development and negotiation of this directive through our active participation in the European Trade Union Confederation, ETUC. We see this legislation as the most significant and progressive to emerge from the European Union in a generation and, if transposed and implemented as intended, to be potentially transformative and enormously beneficial for industrial relations in Ireland.

The aim of the directive is to improve "living [standards] and working conditions." It sets the "promotion of collective bargaining on wage-setting" as a fundamental way to achieve this. "Collective bargaining" is cited 34 times, hence its centrality to transposition and implementation.

To give effect to the directive properly we need to see a key fundamental change of culture. The Irish State has been, at best, a passive, disinterested bystander on collective bargaining and, at worst, has facilitated its denial to many. The directive now obliges the state to "promote collective bargaining". Therefore, the State and all its agencies need to become advocates and enablers of collective bargaining. An all-of-government approach is needed, with a clear and consistent policy focus.

Article 4 places several obligations on member states to promote collective bargaining. The aim is twofold here, both to facilitate the exercise of the right of workers to collective bargaining and to increase collective bargaining coverage. The member state is therefore obliged to promote the building and strengthening of the capacity of social partners to engage in collective bargaining; encourage meaningful and informed negotiations between the social partners on an equal footing, with access to appropriate information to conduct collective bargaining; protect workers engaging in collective bargaining and their trade union representatives from acts of discrimination in respect of their employment when participating in collective bargaining, or seeking to; and protect unions and employers engaging in collective bargaining from interference by each other in their establishment and functioning.

Trade union density, or membership, in Ireland currently stands at around 22%, just over one in five. Coverage, that is, the number covered by collective agreement, is around 34%. In stark contrast, density for employer representative bodies is 70%. The lower union density is not because workers do not wish to access collective bargaining. On the contrary, it is because of the inbuilt imbalance in Government policies. Representativeness and adequate representativeness are issues the State must address in transposition.

Unlike in many parts of Europe, workers in Ireland have no right to access and engage in collective bargaining. This is particularly acute and problematic in the private sector. When unions organise a group of workers in an employment, whether it is 30%, 60% or 90%, those workers have no right to engage in collective bargaining. Therefore, we must use the power of persuasion to persuade the employer it is a good thing to negotiate with a union or, should that fail, fall back on the persuasion of power and take industrial and-or strike action. Is this really the best Ireland can do in 2024? Transposition requires the State to address this inequity.

Research shows there is a powerful appetite among workers to access unions and collective bargaining. The 2021 "Union Voice in Ireland" paper by Professor John Geary and Dr. Maria Belizon of UCD found that 44% of all workers not in a union and 67% of young workers, those aged 16-24 years, want to join and take part in collective bargaining. Electoral support among those who profess to support each party represented on this committee supports collective bargaining. We conducted research two years ago through Ireland Thinks which showed that 69% of Fine Gael voters are well disposed to collective bargaining, 72% of Fianna Fáil, 80% of Sinn Féin, 83% of Labour, 87% of Green Party and as high as 98% of People Before Profit–Solidarity. That speaks volumes on where the electorate is at on this issue.

The directive provides the tools to address the power imbalance in State policy and to remove an employer's veto on the right of his or her workers to access collective bargaining with a union. The directive is very clear that collective bargaining takes place with unions, not other entities.

Recital 24 provides that included among the steps member states can take to promote collective bargaining are measures easing access of trade union representatives to workers. Given the enormous disparity in density statistics cited above, we must ensure this happens. If one of the aims is to increase coverage, this can only occur by an increase in collective bargaining in general but especially at sectoral level. For this to happen, workers who want this need access to unions and unions to workers. How can we have constructive, meaningful and informed negotiations on an equal footing where both parties have access to appropriate information to carry out their functions in respect of collective bargaining on wage setting if unions cannot access workers who want to engage in collective bargaining or if employers refuse to engage, despite the fact a union represents a portion of their workers?

We therefore need legislation that promotes collective bargaining in general but particularly at sectoral level; that provides a roadmap for unions to seek to engage in collective bargaining with an employer where it is not the traditional practice of the employer to engage, provided the union can verify it represents an agreed percentage of workers in each grade, group or category; that provides relevant penalties, following due process and procedures involving both the WRC and Labour Court, that encourage such employers to engage in collective bargaining; that protects trade union representatives from dismissal or unfavourable treatment at work due to their role; that provides that a designated trade union representative in each employment is provided by the employer with the comprehensive necessary means to conduct his or her functions, and I am happy to outline later what those look like; that provides that an employer will not penalise a worker on the grounds of trade union membership or activity; and that provides sufficient and dissuasive sanction equivalent to five years' remuneration should the worker be dismissed or subject to unfavourable treatment for trade union activity. We do this in the protected disclosures legislation, so why not for workplace representatives? We also need to seriously look at public procurement as a lever and tool to promote collective bargaining. Why should taxpayers' moneys go to firms that deny their workers access to collective bargaining, should they want it?

Regarding the provisions concerning statutory minimum wages such as the national minimum wage, NMW, we need to look at issues such as the procedures for setting an adequate NMW; the involvement of social partners in setting the NMW; variations such as reduced rates for younger workers and deductions; workers currently excluded, for example, apprentices; and enforcement, infringements and penalties.

We have much work to do to transpose the directive. We have urged the Department of Enterprise, Trade and Employment to commence discussions with the social partners next month.

Further to transposition we need to consider the suite of "enabling conditions" regarding collective bargaining and an action plan. We see the Doherty high-level group report forming part of such a first action plan. That report has yet to be fully legislated for and we urge the Department conclude that process without further delay. We would be happy to take any questions.

An Cathaoirleach

I invite Ms Elwee to make her opening remarks on behalf of IBEC.

Ms Maeve McElwee

I thank the Joint Oireachtas Committee on Enterprise, Trade and Employment. We welcome the invitation to discuss the regulatory and legislative changes required for transposition of the Adequate Minimum Wage Directive. The directive must be transposed into Irish law by 15 November 2024. In summary, it is IBEC’s view that there is little if any legislative changes required for the transposition of the directive.

There are three main aspects of the directive: provisions around promoting collective bargaining on wage-setting; provisions around the setting of minimum wage to ensure its adequacy; and provisions around enforcement and monitoring of the minimum wage to ensure effective access. We will address each of these aspects in turn. However, it is first important to note that the directive is without prejudice both to the full autonomy of the social partners and to the competence of member states in setting the level of minimum wages. Therefore, the directive does not set or guide member states towards any particular rate of minimum wage.

I will discuss promoting collective bargaining on wage-setting, which is in Article 4. Article 4 provides that member states must promote collective bargaining by strengthening the capacity of the social partners, encouraging meaningful negotiations on wages, protecting the right to collectively bargain and protecting trade unions and employer organisations against interference by each other. IBEC is satisfied that no legislative changes are required to transpose Article 4(1) due to the comprehensive suite of industrial relations legislation which already exists in Irish law. However, IBEC is of the view that non-legislative action could be taken to further build and promote the strengthening of the capacity of the social partners to engage in collective bargaining. In this regard, we note that the LEEF high-level working group on collective bargaining recommended that funds be made available from the national training fund to both employers and trade unions for training and upskilling in collective bargaining.

In addition, at Article 4(2), the directive provides that each member state in which the collective bargaining coverage rate is less than 80% shall provide for a framework of enabling conditions for collective bargaining and establish an action plan to promote collective bargaining. It is crucial to note that Article 4 does not set a target for collective bargaining coverage in Ireland. This is clear from recital 25, which confirms that “the threshold of 80% of collective bargaining coverage should only be construed as an indicator triggering the obligation to establish an action plan”.

The final report of the European Commission expert group on the transposition of the directive, known as the Commission report, further confirmed that the 80% threshold is not a mandatory target to be reached. The directive, therefore, imposes an obligation of effort, not of result. While it is clear that Ireland will be obliged to provide for a framework and establish an action plan to promote collective bargaining, legislative change is not required for this aspect of the directive to be transposed into Irish law. In the first instance, transposition of the directive does not require the action plan to be established by November 2024. In this regard, the Commission report noted that the directive does not set a specific deadline for the adoption of the action plan, but indicated that member states would be expected to establish them by end 2025 at the latest.

The Commission report confirms that the design of the framework is entirely up to member states. It further clarified that the action plan may be adopted by way of consulting with social partners, reaching an agreement with them or between the social partners following their joint request. It is IBEC’s view that it would be more appropriate, and likely more effective, for such framework and action plan to be established by way of agreement with the social partners or between the social partners themselves. While the action plan itself may result in legislative changes to our industrial relations legislation, in our view, neither the framework nor the action place in of themselves need to have their basis in legislation.

IBEC believes that Ireland is in a strong position with respect to preparation of the framework and action plan having done a significant amount of work already by way of the Labour Employer Economic Forum, LEEF, high-level working group on collective bargaining. IBEC notes that work is ongoing at LEEF to consider the recommendations made by this group and we believe that this work will be central to the development of Ireland’s action plan to promote collective bargaining.

Regarding the setting of minimum wage to ensure its adequacy with the aim of achieving decent living and working conditions, Articles 5 to 7, the directive requires member states with statutory minimum wages, like Ireland, to put in place clear and stable criteria for minimum wage setting. It is IBEC’s view that Ireland’s current minimum wage setting framework is already largely in compliance with the provisions of the directive. Member states are given discretion as to how to define the criteria used to set minimum wages but they must include at least the following elements: the purchasing power of statutory minimum wages taking into account the cost of living; the general level of wages and their distribution; the growth rate of wages; and long-term national productivity levels and developments.

Ireland’s statutory minimum wage is governed by the National Minimum Wage Act 2000, as amended. The Low Pay Commission is the consultative body tasked with making recommendations to the Minister regarding a national minimum hourly rate of pay that is designed to assist as many low paid workers as is reasonably practicable, is set at a rate that is both fair and sustainable, where adjustment is appropriate, is adjusted incrementally and, over time, is progressively increased.

In carrying out its functions, each year the Low Pay Commission examines the national minimum hourly rate of pay and makes a recommendation to the Minister. This recommendation must have regard to various factors including changes in earnings, income distribution, the level of unemployment and productivity, the need for job creation and the likely effect that any proposed order will have on levels of employment, the cost of living and national competitiveness. Every such recommendation is accompanied by a detailed report. IBEC submits that this framework is in line with the directive in providing clear and stable criteria for minimum wage setting. The criteria used by the Low Pay Commission is set by law, and although not using the exact language of the directive, takes into account the factors referenced. The directive provides that member states must use indicative values to guide their assessment of adequacy of statutory minimum wages. It further enables, but does not compel, member states to use indicative values such as 60% of the gross median wage and-or 50% of the gross average wage.

The Commission report confirms that there is no obligation to reach indicative reference values, but that member states should undertake efforts to do so. This proposed use of indicators and reference values is not currently specifically provided for under the 2000 Act. However, IBEC notes the Government decision in November 2022 that the minimum wage is to move to a living wage to be set at 60% of hourly median wages by January 2026. Since this decision, the Low Pay Commission has considered indicators and reference values in making its recommendations. IBEC, therefore, submits that even this provision within the directive, albeit not provided for in the 2000 Act is, in fact, a relevant feature of the Low Pay Commission’s assessment of the adequacy of the statutory minimum wage.

The directive provides that member states shall take the necessary measures to involve the social partners in the setting and updating of statutory minimum wages. Recital 26 indicates that social partners should be permitted to provide opinions, and to receive a reasoned response before any decisions are taken on wage-setting. The social partners are not provided with automatic nomination to the Low Pay Commission, although there are representatives of employers and employees on the Low Pay Commission. However, we are provided with opportunities to ensure that our views are considered by the Low Pay Commission by way of regular submissions to the Low Pay Commission during their decision-making process. The 2000 Act provides that when preparing a report on the updating of the national minimum wage, the Low Pay Commission shall consult with such persons, including representatives of employers and employees, as it thinks appropriate. The Minister might consider strengthening this provision to remove the Low Pay Commission’s discretion in this regard and to ensure that the Low Pay Commission must consult with, have regard to and respond to the views of the social partners when making a report to the Minister. Alternatively, as Article 7 does not require social partner involvement to be provided for in statute, the terms of reference for the Low Pay Commission could formalise its existing practice by explicitly providing that it must consult with the social partners when making a report to the Minister in the manner envisaged in recital 26.

On the provisions around enforcement and monitoring of minimum wage to ensure effective access, Article 8 requires that member states must provide for effective, proportionate and non-discriminatory inspections, and develop the capability of enforcement authorities to ensure effective access of workers to statutory minimum wage protection. The WRC inspectorate has extensive powers to inspect employers’ compliance with national minimum wage legislation. The 2000 Act and the Workplace Relations Act 2015 also provide effective and dissuasive sanctions including criminal prosecution, in addition to providing employees recourse through the WRC. It is IBEC’s view that our national legislation meets the requirements of the directive and that no further legislation will be required to transpose Article 8.

In conclusion, IBEC’s view is that little, if any, legislative change will be required to transpose the directive by November 2024.

An Cathaoirleach

I thank Ms McElwee. I will now invite members to contribute. We have a rota in place, as agreed by members. The first member to have indicated is Deputy O’Reilly. She has 14 minutes, as does everyone else who has indicated.

Deputy Louise O'Reilly

I thank the witnesses for coming in and for the evidence they have given us.

My first question is for Ms McElwee. In her submission she says we currently have "clear and stable criteria for minimum wage setting", and a good portion of her submission is taken up with lauding the minimum wage-setting mechanisms and so on that exist already. Yet in IBEC's open letter to the Taoiseach the very system that establishes the national minimum wage is called into question because the letter states that IBEC believes it should now be paused. How does Ms McElwee square that circle?

Ms Maeve McElwee

The open letter to the Taoiseach responds to the current economic situation and the challenge-----

Deputy Louise O'Reilly

Sorry. I refer specifically to the bit where IBEC says there should be a pause in further increases in the national minimum wage set under the mechanism that Ms McElwee lauds in her submission. I ask her to speak just to that bit.

Ms Maeve McElwee

Absolutely. The Low Pay Commission is responsible for that assessment of what is happening in the economy and makes its recommendation in July of each year, as the Deputy knows. That is based on the prevailing circumstances within the economy at the time of the recommendation that goes to the Government. The Low Pay Commission is an independent body and has the opportunity to consult, which we fully support, in setting the national minimum wage. That does not necessarily mean that in all circumstances, between the date of recommendation and the date of implementation, the economic environment may not change and, indeed, change substantially. From the employer's perspective, the purpose of the letter was to indicate that employers over the course of the next 12 months expect to find significant competitiveness challenges. They have implemented this year's recommendation. We are not seeking in any way to pause or move back from that but we are looking at adjusting a timeline to achieve a living wage as opposed to adjusting the national minimum wage. There are serious competitiveness challenges, and we see businesses going out of business daily, which clearly has an impact on employment for the employees-----

Deputy Louise O'Reilly

That does not make sense to me. IBEC lauds the mechanism that establishes the minimum wage and at the same time says, while using that mechanism, that its members wish to put it back. There is a massive contradiction in that, which I am sure Ms McElwee can see. I appreciate that she comes in here to represent IBEC's members and that they are very well organised, and we will get on to that in a while, but that does not make sense to me.

Ms Maeve McElwee

I do not necessarily see the contradiction in that. The challenge is not with the national minimum wage. I think what employers are finding is that there is a really significant uplift in costs arising from legislative provisions to which the Government has given effect over the course of the year. The minimum-----

Deputy Louise O'Reilly

I hear exactly what Ms McElwee says and I understand the increase in costs-----

Ms Maeve McElwee

The living wage is just one of those aspects.

Deputy Louise O'Reilly

-----but what I do not understand is why the burden of that should be shifted onto the lowest-paid workers in the State. What I take from her comments is that there is a contradiction in IBEC's position in that Mr. McCoy says one thing in his open letter to the Taoiseach and Ms McElwee says another thing here. IBEC defends the mechanisms for setting the national minimum wage and then says the national minimum wage, as set by those mechanisms, should now be paused. I do not accept that as a credible position but I appreciate that it is IBEC's position. When challenges are faced, they should not be put on the lowest-paid workers. The national minimum wage is there for a reason, and that is to protect those workers who are, by definition, the lowest-paid workers in the economy. We are not going to get any further on this, and I do have other questions and my time is short, so-----

Ms Maeve McElwee

I might try to answer because, clearly, I have not been able to square that circle for the Deputy. It is really important for us to say that the national minimum wage has been adjusted with a Government policy in mind which is to achieve a living wage and not the normal practice of the Low Pay Commission looking at an increase in the living wage, so there are two different issues there. Second, we are not looking to pause the current implementation of the national minimum wage. The national minimum wage legislation also requires that there be protection for employers in order that those who are operating in high-labour-cost, low-margin businesses are protected too.

Deputy Louise O'Reilly

I am aware of that, and IBEC's members can of course go to the Labour Court and argue their case. They do not do that, which tells a story in itself, but they can. They are protected, and nobody, by the way, in this room or any other room, is calling for those protections to be lifted from IBEC's members. Those protections are important and they exist. The fact that IBEC's members do not use them tells a story in itself, but they are there. I am not looking to have them taken away. What IBEC is looking to have taken away is the protection for low-paid workers. We will not get any further on this, and I-----

Ms Maeve McElwee

As regards the Deputy's assessment of the position, we have-----

Deputy Louise O'Reilly

That is my assessment and, with respect, this is my time and I have other questions I want to get to, if I may.

Mr. Reidy refers in his submission to a set of legislative changes, what I would loosely call and what Sinn Féin calls the right to organise. That is how we describe it. That is our campaign. That is what we say. It gives workers protection in legislation. As regards the scale of the work to be done, Mr. Reidy gives us the overall numbers as regards union density. Could he give us the breakdown between public and private in terms of density? If the legislative changes he talks about - I will give Ms McElwee a chance to comment on those as well - are brought in as required, does he think the capacity exists within the trade union movement? Can it be increased to get that density and that right to organise? It is not just about having the union card in your pocket; it is about having access to your union official and your union official having access to your workplace. As Mr. Reidy says, unions need access to workers and workers need access to unions. That fits with our philosophy as regards the right to organise. As regards increasing that density, how long is that-----

Mr. Owen Reidy

There are 2.6 million people at work in the Republic of Ireland today, the highest number ever. Things are obviously good, and that is really welcome. Take out about 300,000 self-employed people, or self-employed people with a question mark in some cases, and take out maybe another 400,000 public servants or just shy of that. We organise about 260,000 to 270,000 of those nearly 400,000 public servants, so the percentage density there is in the 60s to 70s, I would suggest. We organise about 260,000 to 270,000 private sector workers. We are looking at 1.8 million private sector workers, maybe, and we organise about 270,000 of them. I cited in our paper the UCD academic research on the desire for unionisation. What we would like to see, if we transpose the directive properly, is a gradual, incremental increase in density, going from 22% up each five-year term, each action plan, and a gradual, steady increase in coverage. Will we end up with 70% density and 90% coverage and be like Sweden in ten years' time? No, we will not. We are talking about a longer-term process here. Does the trade union movement have the capacity? Going back to the directive, the obligation is on the State to assist the social partners. As I said, the State has been, at best, a bystander and, at worst, a prohibitor. The State has to do a complete 180° shift here and be a promoter of and an advocate for collective bargaining for those workers who want it. We want volunteers, not conscripts. The day of the closed shop is long gone, and that is fine. There are enough people out there who want to be organised right across the political spectrum. People who vote for all parties and none seem to see it as a good thing, and I think there has been a change post Covid. There is a real opportunity here, and I think there is an opportunity to address some of the productivity issues that are of concern to employers. When we look at other member states that do these things better, proper, organised sectoral collective bargaining can address some of those issues and can take things like wages out of competition, which surely can be a good thing in the long term for both sides of the labour market.

Deputy Louise O'Reilly

Ms McElwee's submission states that little or no legislative change is required. That is at odds with what ICTU says. As regards the aspiration for union density, IBEC clearly represents a sector that is very heavily organised. It is not a trade union in the strictest sense of the word but it is a representative body, so its members are in the happy position of already being convinced of the benefits and the merits of collective action, as it were. Given the fact that they are already there and that they have already accepted that there is strength in numbers, does Ms McElwee see any conflict with what Mr. Reidy has outlined as regards the aspiration to increase trade union density and that it would be done, as was outlined, in a measured way but also in a progressive way? Mr. Reidy says legislative protection is required and, to put my cards on the table, I agree. I think we should legislate for the right to organise. That is really important. To build up that density is incredibly important. In Ms McElwee's submission, however, she says that the legislative changes are not required. What does she say to what Mr. Reidy has put forward?

In the submission it states legislative changes are not required. What does Ms McElwee say to Mr. Reidy?

Ms Maeve McElwee

The question put to us by the committee is whether legislative change is required to transpose the minimum wage directive. Our view is it is not. We can successfully and adequately transpose the directive without any significant need for a change to legislation. It is fair to say that IBEC has been proactive in engaging in advance of the directive coming through. We stepped up when the Tánaiste asked us to get involved in the high-level working group to look at how we would be able to transpose the directive and address the issues that will be required in the framework and the action plan. We have been working consistently. I have personally spent a lot of time trying to find ways in which we can gradually and consistently increase that trade union coverage. I do not think there is any inconsistency in the position. The question asked was whether we need any legislative change to transpose the directive by November of this year, or if there is any impediment standing in the way of that. We do not see any impediment. We believe that should be a straightforward path to transposition. We will continue to engage proactively around the framework that will be required.

Deputy Louise O'Reilly

The representatives of workers here have said that legislative protection is required. Whether or not it is required to absolutely implement the bare minimum of the directive is separate to that. Does IBEC have a view about those legislative protections? In my opinion, on the face of it there is nothing that any decent employer would fear. Would it be IBEC's position that it would support that legislative programme given, as Ms McElwee says, its position is that it is not necessary to transpose the minimum required in the directive?

Ms Maeve McElwee

A lot of that discussion, and where we probably need to spend a lot of time in developing the framework, is looking at what we can actually do and what legislation might be required to achieve that. We have already identified a number of areas where both legislative and maybe administrative opportunities can be taken in order to improve that density already. We see there are changes that maybe will be required within the framework, certainly to give effect to the recommendations from the labour-employer high-level group report. That is a bit of a mouthful.

Deputy Louise O'Reilly

It just trips off the tongue, that one.

Ms Maeve McElwee

To give effect to those we may need legislative change. However, it is reasonable to say we have a pretty robust Workplace Relations Commission, with which both IBEC and the trade unions have worked successfully. There are already significant protections for workers within that and within different pieces of legislation around activity and engagement with trade unions. We even have legislation under the unfair dismissals Acts. We have codes of practice on victimisation and all of the pieces of legislation address that. There is definitely legislation in place and those will be kept under review.

Deputy Louise O'Reilly

I am obviously aware of the legislation in place. I am familiar with much of it. The ICTU has put a fairly clear position on the legislative changes that it believes are required to protect workers. I do not necessarily hear any hostility from Ms McElwee in that regard, but it is obviously something that would require further discussion. My time is tight, so I will be quick with this one. Mr. Reidy referred to the directive being transposed and implemented as intended. That is the issue. Is it possible that this could be transposed wrong and in a way that will see no benefit to workers? Is that the danger?

Mr. Owen Reidy

If it is done in the minimalist way articulated by Ms McElwee, it will not be good. There is no legislation on the Irish Statue Book that vindicates Article 4 of the directive. There is no legislation that allows workers to exercise the right to collective bargaining. There is no legislation that requires the State to promote collective bargaining. There is no legislation that adequately protects workplace representatives engaging in collective bargaining. We cannot say our system is robust. Our system is weak and there is an imbalance in it. There is an impediment for workers in accessing collective bargaining. There is no such impediment for employers in accessing representation. That is what the directive needs to adjust. If it does not do that, it will be another failed workers' rights directive overseen by the Irish State, and we must not let that happen.

Deputy David Stanton

I thank the witnesses for appearing this morning, and for the work they do in this important area. I have looked at this and read it and put myself in the seat of someone out there who is tuning in to this event this morning. This is a public session and it is being televised as we all know. Collective bargaining is something that a lot of people do not understand. What is it? I will start by asking both groups to give their definitions of collective bargaining. I know what it is. We all know what it is, but there are people out there who do not. Will the witnesses clarify what it is, from their points of view?

Ms Maeve McElwee

The Deputy is testing me on my absolute recall of the definition within the legislation. We amended the 2015 industrial relations legislation to provide a definition of collective bargaining because it was absent from our previous pieces of legislation. Collective bargaining is where employees and employers have that opportunity to come together with the aim, through negotiations and engagements, to try to find a collectively agreed outcome.

Deputy David Stanton

Does Mr. Reidy agree with that definition?

Mr. Owen Reidy

To be precise, I would say that Article 3 in the directive is very clear and simple. It defines collective bargaining as negotiations between employers, or a number of employer groups, with trade unions, or a number or trade unions. It stresses trade unions. Collective bargaining is not defined as an employer negotiating with a works council set up by the employer, funded by the employer and trained by the employer. It is with a trade union that is independent of the employer. That is crucial. It is clunky terminology and I appreciate a lot of people ask what it is. It is essentially workers coming together in an independent trade union engaging with their employer or a group of employers on terms and conditions of employment, and trying to create a mutually satisfactory outcome.

Deputy David Stanton

As I said, we often bandy terminology about in these committees and people listening ask what it means. I thank the witnesses for that. I think Mr. Reidy is obviously promoting the trade union involvement in a strong way. That is his role and I get that. I think we have come a long way in Ireland in respect of relations between employers and workers and trade unions. My sense is that it is now a mature relationship. People sit down in a business-like manner and discuss these things, and there is no banging the table on either side. I think in one way that is what has led us to where we are as a strong, high-wage economy. Would the witnesses also agree when it is said that this directive is a major policy shift from the European Commission?

I have a few other questions I want to ask. This morning we are asking about the legislative changes we need to make as a Legislature. IBEC's point of view is that we do not need too many. We can sit down and work it out. It would be ideal if that could be done because legislation can be quite binding and can sometimes bring forward unforeseen consequences. Mr. Reidy seems to indicate that we need strong legislation, which is clear-cut and focused. He also spoke about how the Doherty high-level group report needs to be fully legislated for. Will he give an indication of what he means by that? What parts of it have not been legislated for and what do we need to work on?

Mr. Owen Reidy

I will take those in order and I will be succinct. The Deputy says that I advocate collective bargaining with trade unions because I am from the trade union movement. That is the definition of collective bargaining. It is with trade unions, not with anyone else. It is with employers, not with anyone else. That is clear in the directive, which reasserts that. It is a policy shift. It is not a policy shift that Ireland should be wary or fearful of. It struck me that of the 13 Irish MEPs, 12 of them, from all political parties and none, supported this directive. The 13th was just not there on the day, and I imagine he probably would have supported it. The negotiations are over. The Commission, the Council, the Parliament, BusinessEurope and the ETUC were all involved. This is the outcome, it is now about implementation. It is not a second cut for people to take out things they do not like. However, it is a policy shift and it creates the need for a serious culture shift and an all-of-government approach. The Deputy asked about the legislation. We do need it, and I suggest we can do it in line with, as per the directive, "national practice". We have, for example, seriously robust legislation to protect health and safety representatives, which is good and important. We probably do not utilise it as much as we should, quite frankly.

We have no legislation to protect workplace trade union representatives or to facilitate them in carrying out their functions and we should have that. We could mirror that in the information and consultation legislation. We could mirror the protections for workers and workplace representatives if they are dismissed by way of trade union activity under the protected disclosures legislation.

Deputy David Stanton

I apologise for interrupting. Does it happen frequently in practice? Are people dismissed because of trade union activity?

Mr. Owen Reidy

Yes.

Deputy David Stanton

I ask Mr. Reidy to give examples of that, if not now then perhaps in writing.

Mr. Owen Reidy

I am not going to name people or companies, obviously.

Deputy David Stanton

I do not want Mr. Reidy to do so.

Mr. Owen Reidy

I worked in SIPTU for 18 years and we work very well with some employers but with a minority of employers there are multiple examples where we have tried to organise workplaces and the employer would insist on not having a union under any circumstances. They will use sophisticated tactics to isolate, marginalise, undermine and ultimately dismiss the person they see as the leader to try to cut the head off the snake so it falls apart. I have had much experience of that. It is very cheap to do that in Ireland because under unfair dismissals legislation, a worker gets one month's pay plus their loss of earnings. Therefore, if they find another job even if they have been found to have been dismissed, they can only get one month's pay. We are saying that for protected disclosures if whistleblowers are sacked, they can get up to five years' pay. Why should a workplace representative not get that? That legislative change can be done in line with national practice.

The Deputy asked about the Doherty report. My predecessor, Patricia King, and Maeve McElwee worked very closely and very hard on it. It is a very good and important report, but it has not been legislated for. The Department of Enterprise, Trade and Employment has been dragging its heels. That report was signed off by Cabinet in September 2022. We are now coming into February 2024. It is to take away the vehicle that employers have for joint labour committees. It is to provide for a mechanism of what is called good faith engagement. It is fairly simple legislation. Our legal adviser gave the Department of Enterprise, Trade and Employment draft legislation it could use. We have a meeting tomorrow with the Ministers and we will see where we are at. We see that report forming the action plan. First, there is the transposition of the directive. Second, there is the framework of enabling conditions. The third part of that jigsaw is the action plan. The Doherty report was concluded before the text of the directive was concluded. It cannot presuppose that that is the transposition of the directive, albeit some people might like that.

Deputy David Stanton

I will come back to Mr. Reidy with one further question.

In the IBEC submission, Ms McElwee referred to the 2002 Act and preparing a report the updating of the NMW. She said, "The Minister might consider strengthening this provision to remove the LPC’s discretion in this regard and to ensure that the LPC must consult with, have regard to and respond to the views of the social partners when making a report to the Minister". I ask her to expand on that with examples of what she means.

Ms Maeve McElwee

This related to examining what legislation might be needed in advance of the transposition of the directive. Clearly, the directive indicates that social partner engagement on the establishment of a national minimum wage is a requirement and something that should be enabled. However, we are saying that we already have quite considerable engagement. While the Low Pay Commission does not have directly elected employer or trade union representatives, it has independently appointed persons who have both employer and employee backgrounds and perspectives that they can bring to the introduction of a change to the national minimum wage. However, it has been the practice of the Low Pay Commission to hold both public consultations and also, on request or sometimes at the request of the Low Pay Commission, to meet with social partners who request to engage to be able to put forward a position, to share concerns or a specific economic background to any of the decisions that the Low Pay Commission is making. From our perspective, we are saying that it does not really require legislative change. However, we could potentially look at strengthening the already pretty robust engagement that the social partners have with the Low Pay Commission.

Deputy David Stanton

Ms McElwee said that the high-level working group, the LEEF, recommended that funds be made available from the National Training Fund to both employers and trade unions for training and upskilling in collective bargaining. Has IBEC got any assistance from the National Training Fund in this regard to date? I ask her to expand on that and outline what level of funding she is talking about.

Ms Maeve McElwee

Unfortunately, one of the key issues on which IBEC has been engaging with Government has been access to the National Training Fund. It is a real disappointment that we did not manage to get access to the National Training Fund to which employers are contributing very substantially. It would be useful to be able to implement some training on collective bargaining, what that means, how companies should engage and how employees engage. On all sides it can only be to the advantage of implementing the directive that people are upskilled in this area. It is important to point out that we have a very professional HR section within our business communities. Even where direct engagement takes place, in many different organisations that is already very professional, highly engaged direct engagement. In many of those sectors it results in the types of pay and terms of conditions that are significantly above average. Even where we do not have a tradition of collective bargaining in some sectors, it is not to say that there is no engagement with workers on their terms and conditions and no consideration of what is happening at a broader level than just the level of the workplace in terms of putting those very attractive terms and conditions in place.

Deputy David Stanton

My final question is for Mr. Reidy. His submission refers to the need to seriously look at public procurement as a lever and tool to promote collective bargaining. He asked why taxpayers' money should go to firms which deny their workers access to collective bargaining should they want it. That is interesting because it implies there should be a methodology in place to ascertain whether or not workers want collective bargaining. Is that what he means by that? I ask him to expand on the overall pronouncement about public procurement.

Mr. Owen Reidy

I am happy to. I should say that the directive does not tell us that we have to go further than existing public procurement, but it does not prohibit us which is the point we are trying to make. The point about "should they want it" relates to the point I was making earlier about volunteers not conscripts. The UCD research by Geary and Belizon clearly showed that 44% of workers not in a union want one. In the private sector that is probably about 900,000 workers which is very significant. Among 16- to 24-year-olds, the next generation of workers, it is two thirds. Ireland is unique in that there is an institutional impediment for workers who wish to access collective bargaining via a trade union. It is exclusively in the gift of the private sector employer. As I mentioned in the submission, whether we organise 20%, 50% or 90% of a workplace, the employer effectively says "Yes" or "No". We use our power of persuasion to try to persuade them to engage. If they do not do that, we have to resort to a strike. We can go to the WRC and the Labour Court and get a piece of paper that is binding on us after a year that says the employer should engage with the union, but it is not binding on the employer; the employer can literally drop that.

If the State is required to be an enabler and promoter of collective bargaining, why does the State not use public procurement as a lever to do that? It is not telling employers they must have collective bargaining to be involved in public procurement. It is telling them they must be able to demonstrate they have not denied their workers access to collective bargaining should they wish to have it. It is a positive as opposed to a negative.

Deputy David Stanton

I ask Ms McElwee to give the final word on that and I will stop then.

Ms Maeve McElwee

It is really important that we separate the issue of preventing people from joining a trade union from the whole issue of rights to collective bargaining. People are perfectly entitled to join a trade union. They may join a trade union freely and at will. We actually do not see that. We do not see it in many European countries; it is not just here in Ireland. Density in trade union membership internationally is actually quite low except in some of the Nordic countries. There is absolutely no impediment to anybody joining a trade union and using that collective activity to lobby for more collective bargaining. In discussing the transposition of this directive, it is really important that we recognise that there is absolutely no reason why somebody would not join a trade union if they wish to. I do not doubt that there may be unfortunate circumstances.

As Mr. Reidy said, people who actively engage in trade union business are discriminated against. However, I would point out that there are no, or very few, cases. That goes to the question Deputy O'Reilly asked me, namely, why are there no cases of employers exercising their ability under the national minimum wage Act to say they cannot afford to pay the national minimum wage. It is because, if they do, they cannot continue their business because no supplier or creditor is going to continue to engage with them if they publicly say that. As we have said to this committee on many occasions, that provision is null and void. It is of no assistance. I understand that there are no cases but it is because they cannot take a case without further jeopardising the employment and the business.

Deputy David Stanton

I thank Ms McElwee.

Senator Róisín Garvey

I thank the ICTU and IBEC for coming in. I want to focus on something has not come up yet and falls between two stools. There are 309,000 SMEs, 281,000 microbusinesses that have between nought and nine employees. I have deep concerns about them falling between everybody else's motivations and focus. There are workers who are owners. Generally in Ireland and in this committee, we seem to have a narrative that there are the workers and the employers and they are somehow polarised. That does not serve any of the small microbusinesses to which I refer because many small businesses are the workers. We have to look at them and realise their importance. They probably have about 1 million of the jobs. Where I come from in County Clare, 70% of jobs are micro businesses. They are the backbone of our towns and villages that are not dying a death. I would love to see much more discussion through ICTU and IBEC around what we are doing for small businesses. Recently, many of them have been closing down for different reasons, with the new minimum wage coming in. Nobody opposes the need to increase the minimum wage but I do not hear IBEC or ICTU or anybody fighting for some other supports to keep these small worker-led businesses open. Everybody wants to pay the minimum wage. I have friends who have small businesses. Nobody denies the fact that we need to raise the minimum wage but we need to look at the nuance there between multinationals making huge profits, for example, and a small business with tight margins that probably will close because of the increase in minimum wage if we do not give it supports.

I would love to see collective bargaining being used to support small businesses dealing with this minimum wage increase. I do not hear ICTU talking about that at all. Also, with IBEC, building a better, sustainable future, supporting and delivering for business success is really good. However, has IBEC been talking to The Irish SME Association, ISME or the local enterprise offices, LEOs? We had them in here before us. I do not see anybody taking care of small businesses. The LEOs do some work but only for businesses that export, which many small businesses are not going to do. The Green for Micro initiative is happening but its targets are low. Huge numbers of small businesses have ridiculous costs and struggle, even with funding in place that we got through various ministers. Over the past three years I got funding for Green for Micro and other grants but small business do not know about these. LEOs are busy running such things as social media workshops. How is IBEC getting on with ISME and small firms associations? It has been in the news recently. I foresaw it in September when I met the Minister, Deputy Simon Coveney, who tried to give me a list of things we need to do to try to keep small businesses open. I do not know whose job it is. It seems to be everybody's job and nobody's job to protect small businesses.

In regard to workers' rights, for all those workers who work in small businesses, part of their rights is that we keep those businesses open, instead of being polarising and saying, "We have to increase minimum wage for the poor workers". Many of those workers in small places, for example, where I come from, are the employers as well. We have to get more nuanced about this if we want to protect small businesses.

If we are talking about climate resilience or sustainable futures, small businesses are where it is at because big businesses fall apart, their goods get stuck in the Red Sea because of war. The reality is that we are going to be downsizing and looking more to what we can get locally, within our country. We saw what happened with Brexit, with Ukraine and we now see what is happening with the war in the Red Sea. We should be championing the smallest businesses. They are the most reliable. They will not shut down and relocate to India or China. I have seen this happen in County Clare. We lost hundreds of jobs to big business, but it has always been about the big guys for many of our State agencies and even the unions. The small businesses are getting lost in it all. What do IBEC and ICTU think is most the important issue? While we discuss minimum wage and collective bargaining, what are we doing to take the huge threats facing small businesses seriously? We have all foreseen it. Every discussion has to include small businesses. It is not about the workers versus the employer necessarily, especially not in small businesses.

Ms Maeve McElwee

I am happy to pick that up because Senator Garvey is right. We would very much see it as our job as representatives of businesses here in Ireland, and Irish based businesses, to support all businesses. The Small Firms Association is an association within the IBEC house. While typically known as having a membership of larger businesses, the broad base of our membership is made up of small- and medium-sized enterprises. Those regional enterprises are extraordinarily important to the vibrancy of our economy.

The key reason we have written to the Taoiseach this week is to talk about the challenges those businesses are facing. We have been as clear as we can possibly be. Employers are not opposed to the legislation that is being introduced. They all have merit. They all place real importance on having a vibrant, well regulated labour market. However, the timing and the lack of co-ordination around them has been most problematic. That is why we are calling for a pause - not a rollback or a removal - so that we can look and see what those costs are. We asked the Government to produce its regulatory impact assessment of the overarching cost of all of these scattergun pieces of legislation that have come at us at the same time, and what the impact is on business and the Government's assessment of that. We are calling for the Government to publish that report which we know it has been undertaking. That will be critical.

Senator Róisín Garvey

I only have 20 seconds left, but I want to hear from ICTU.

Mr. Owen Reidy

Senator Garvey made a very important point. Small businesses are an important part of fabric of community life in cities, towns and villages. There is a real opportunity in this directive for small businesses. There is an opportunity for the Government as well. If the Government promotes sectoral bargaining at sector level - I am not talking about union X and small business Y, but at sector level - there is an opportunity to take wages out of competition, to create a level playing pitch. It requires the employers, small business representatives and others, and the State, to take an enlightened and progressive approach.

As recently as yesterday, I was on a national radio show challenging Ms Elwee's colleague, Danny McCoy. I made the point that productivity is important for everyone. It is not just a concern for the employers. It is a concern for workers too. There is an opportunity in this directive to address productivity issues for small businesses at a sectoral level, to try to take wages out of competition, to not create a "them and us", and to not be against workers or against business. If people look at this in the round, there are opportunities in this for everyone.

Senator Marie Sherlock

I thank IBEC and ICTU for attending this hearing today. I wish to ask about IBEC's support for collective bargaining. I heard what Ms McElwee said earlier. Specifically in regard to collective bargaining at enterprise level, does IBEC recognise that it is surely better to work issues out at enterprise level as opposed to at a social partner level or a sectoral level? I was looking at IBEC's submissions to the Low Pay Commission and it made a strong argument and a call for regional variations in the minimum wage because of the different costs of living. Does that not speak to a view that wages and conditions should be negotiated at enterprise level and not at a national level or sectoral level?

Ms Maeve McElwee

The position that IBEC has always had around engagement has been that the most productive and best engagement will always be as close to the level of the organisation as possible, whether it is around pay and conditions or disputes that arise. If those issues can be settled at local level and you can reach agreement with the people you are working with day in, day out, understand their needs and try to meet them, balanced with what the organisation requires, that, in many ways, is what has been most effective. There are different traditions within our voluntarist industrial relations framework and some aspects have worked very well through direct engagement and others have worked very well through collective trade union representation. We engage equally with both. We have always understood the importance of both traditions and what they bring to our industrial relations environment.

Senator Marie Sherlock

To pick up on that point about issues being best and ideally worked out at local level, unions tell us that quite a number of companies are actively and openly hostile to trade unions coming into the workplace. We have seen workers who within a few weeks of coming into a workplace go to a trade union and are warned not to do so because it is not good for them. On a second warning, they are kicked out. Others have been victimised over a period because they want to try to set up a trade union. Is IBEC comfortable with that? I am conscious that within IBEC, there are members who engage with unions on collective bargaining. There are other members that do not. Is Ms McElwee comfortable with the notion that companies out there are openly hostile to trade unions that are merely trying to go in and negotiate terms and conditions at the most appropriate level, that is, at enterprise level?

Ms Maeve McElwee

I certainly recognise that not every organisation is open to embracing collective bargaining. I do not necessarily have a level of discomfort with the fact that some organisations choose not to collectively bargain and others do. What is critically important is that we see a respectful engagement either way, whether an organisation wishes to engage directly or engages through collective bargaining. We would obviously never expect or support any victimisation or witch-hunts of particular individuals within an organisation. We do not see many examples of that arising, as we have said, or of people taking cases of that nature. It is, however, absolutely a fact that some employers prefer to engage directly and our legislation and industrial relations framework provide for that.

Senator Marie Sherlock

We have heard from the trade union movement that the legislation does not provide for that. Surely if our collective interest here is to see collective bargaining take place in a respectful manner at enterprise level, we would remove those barriers and any potential for victimisation of workers who want to form a union within the workplace.

Ms Maeve McElwee

IBEC has a robust industrial relations framework. There is nothing to prevent an employer deciding to collectively bargain. There is also the provision that people can choose not to do so. There have been some successful examples of direct engagement. It is important to be able to use that tradition well because it has served us very well to ensure we have strong processes to prevent any victimisation in respect of trade union activity.

Senator Marie Sherlock

I will ask one more question of IBEC before I move to the Irish Congress of Trade Unions, ICTU, with regard to the response to the legislative changes that the congress has spoken about clearly. I note that in its submission, IBEC noted that: "While the action plan itself may result in legislative changes to our industrial relations legislation, in our view, neither the framework nor the action place in of themselves need to have their basis in legislation." Do we have a sense here that we are dancing on the head of a pin? IBEC is saying we do not need legislative change for the transposition of the directive and the framework but there may be legislative changes for something else.

Ms Maeve McElwee

Yes.

Senator Marie Sherlock

Ms McElwee has spoken about the amount of time IBEC has spent on this issue in recent years and we have had the high-level group. Why is IBEC dragging its heels? Why not just come to the table and engage with the legislation that needs to be enacted as opposed to dragging this out for years? Why would we have a situation whereby IBEC takes a piecemeal approach and says "No" to legislative changes for the transposition-----

An Cathaoirleach

The Senator may wish to ask a question of ICTU.

Senator Marie Sherlock

I will.

An Cathaoirleach

The Senator has only a minute left.

Senator Marie Sherlock

I want to be clear as to the sequencing of the legislative changes that IBEC envisages.

Ms Maeve McElwee

It is important to say first that we have not dragged our heels on any aspect of coming to the table in this regard. I hope the congress agrees with that. We have stepped up and engaged fully and in good faith to bring this forward. The question I am asked is whether we need to have the legislation in place to transpose the directive and the answer is that we do not. Have we made recommendations that will change how we address and look at collective bargaining? Yes, we have. We recognise that some of the issues we are working through in some of the Labour Employer Economic Forum, LEEF, subgroups will require administrative change. We have outlined those changes. The Government has come back to say that some of our recommendations will require changes to legislation. It has to look at that issue and the interaction with other pieces of legislation and come back to us. Rest assured that there is no heel dragging on the IBEC side. We are happy to engage on the recommendations that we supported and helped to draft. None of that legislation is required to be in place before the transposition. That transposition can still go ahead and the legislation will follow. We are certainly not putting any impediment in the way of the Government coming forward to look at how it can make the legislation happen so we can move the recommendations forward.

Senator Marie Sherlock

I have a final question.

An Cathaoirleach

The Senator's time is up.

Deputy Mick Barry

I will start by checking on some statistics that were raised Mr. Reidy in his introduction. They related to the level of support for collective bargaining among the supporters of various political parties. I want to check I have those statistics right. Fine Gael is at 69%.

Mr. Owen Reidy

It is 69% of Fine Gael voters.

Deputy Mick Barry

That is 69% of Fine Gael voters.

Mr. Owen Reidy

That percentage of people are positively disposed towards collective bargaining.

Deputy Mick Barry

The Fianna Fáil percentage is 72%.

Mr. Owen Reidy

That is correct.

Deputy Mick Barry

Is some party on 80%?

Mr. Owen Reidy

That is Sinn Féin.

Deputy Mick Barry

What is the percentage for the Labour Party?

Mr. Owen Reidy

It is 83%. The Green Party is at 87% and People Before Profit-Solidarity is at 96%.

Deputy Mick Barry

People Before Profit-Solidarity shows 96% support.

Mr. Owen Reidy

I do not know what happened to the other 4%.

Deputy Mick Barry

We will do a bit of work and aim to get that figure up to 100%. Recital 24 of the directive talks about providing ease of access for trade union representatives to workplaces. This is an issue on which it would be interesting to get more information. I have spoken to union representatives who tried to access some of the large and best-known retail shops in the country. I have spoken to people who tried to access construction sites. Will the ICTU representatives give us a flavour of some of the problems and issues that are faced by trade union representatives when it comes to accessing workplaces?

Mr. Owen Reidy

The directive uses the phrase "may include". In our view, given the inadequate level of representativeness in Ireland when there is a strong desire for trade unions among workers, that "may" must become "must". We need to deal with that issue.

Deputy Mick Barry

Can Mr. Reidy give me an example of the types of things that happen, day to day?

Mr. Owen Reidy

I can. Colleagues of mine have been threatened with arrest by the Garda for handing out leaflets and things like that.

Deputy Mick Barry

Where did that happen?

Mr. Owen Reidy

I am not going to give specific examples. I have worked for the congress for seven years and worked for SIPTU for 18 years before that. There have been countless examples where those kinds of situations have arisen in the private sector. They are way out of line. Workers need access, physically and digitally, to trade unions. There are obviously issues around the general data protection regulation, GDPR, in the European Union, and we have to try to address and deal with that. However, we think we need a suite of legislation that gives designated trade union representatives who are in employment the necessary means to discharge their duty. That means reasonable time off to do their roles, adequate time off for training, a pro rata reduction in performance targets, access to office communications facilities and access to workers who are new recruits for the purposes of induction. We want them to be seen as dedicated and specific people in the workplace.

Deputy Mick Barry

I am on the clock here. We will be fully supportive of legislative change on that, and also increased union organisation in the workplace because I think that organisation on the ground is the key, and legislation is a key back-up.

On the issue of union busting, would Mr. Reidy say that this is becoming a bigger or smaller issue in society?

Mr. Owen Reidy

I would say it is becoming a bigger issue. The directive cites it in recital 13, where the decline in trade union density across the European Union since 2008 is talked about. They say it is happening for a number of reasons, and they highlight sophisticated union-busting practices across the European Union. Ireland is not immune to that.

Deputy Mick Barry

That would tally with feedback I have received from my contacts in various workplaces in Cork and across the country. The directive speaks about a protection from dismissal at work - that is particularly relevant for trade union representatives - and it speaks about using public procurement as a lever against anti-union and union-busting strategies.

The point was made that we rarely hear of cases. We heard of a case here in the last year, a very high-profile case, which was the case of the Murphy Four. It was the case of four fitters and welders who, between them, had more than 50 years' experience working for Murphy International Limited at the Rusal aluminium plant in Limerick. They were clearly sacked and lost their jobs for trade union activity. The facts of the case speak to that. With regard to public procurement, that company got multiple-----

An Cathaoirleach

In fairness, as much as I like the campaign they have run - I know the members involved in that - the Deputy should not mention specific cases here.

Deputy Mick Barry

Okay, well let us put it this way. We have seen several examples - one that I have referred to recently may well be one of them - where the State has provided lucrative contracts for companies that are involved in union-busting activities. My final question to the trade union representatives is this: do they think there is an issue in this State with the State providing contracts for companies that are involved in union-busting activity?

Mr. Owen Reidy

Apart from the example the Deputy has cited, I cannot cite a range of others. However, we need to be proactive. The directive requires the State to promote and be an enabler of collective bargaining, for it to take a positive approach, and to say that if a company wants to be involved in public procurement, it has to be able to demonstrate and prove to us that it has not denied its employees the right to organise in a union, should they so wish. Ms McElwee made the point that people can join a union in Ireland. Of course they can but people want to join a union so that they get access to collective bargaining. They do not just join it for the craic. It is for a purpose. Employers still have the right in Irish law, and because of the public policy of successive Governments, to deny workers that right. Public procurement is a key lever if the State is to step up and honour the directive and to use it as a tool to promote collective bargaining. It is not to force or compel workers to join a union but to facilitate those workers who wish to, so that an employer can demonstrate that he or she has not denied his or her workers access to collective bargaining, if that is what they wish. It should be used as a lever.

Deputy Mick Barry

I totally agree. I will leave it at that.

Deputy Matt Shanahan

I thank our guests for their presence here this morning. I have owned and operated a private business for many years, and I have to say that when I sit here and listen to some of the commentary, I wonder if I am living in the same country as other people. Whether anybody has acknowledged it here or not, we currently have full employment. In large part, workers have far more access and more rights now than employers have.

I will point out that in the recent round of pay bargaining, the cost of employment, particularly at the low pay end, has added €3,000 in general to the cost of low pay employers' PRSI. It has gone up now by almost €2,000 for employees on a wage under €440, and €2,500 on a wage over €440. On top of that, there is a range of additional leave entitlements, additional bureaucracy, statutory sick pay and other extensions to entitlements. We are killing the small business sector in this country. A lot of them who are tuning in here today will not understand what this conversation is about because they feel totally excluded from it.

I would say to Mr. Reidy that in his discussions about the need to transpose unions, he has not at any point referenced the existing pay gap between the public and private sector in this country. We are an outlier, other than the PIGS countries in Europe, in terms of the pay disparity. Mr. Reidy will know well the CSO report that was produced in October 2023, which highlights the pay disparity gap for small companies. It is €433, a difference of 62% between the average public sector pay and private sector pay for a medium company, and a disparity of €302 per week for a company employing between 50 and 250 people. For those in excess of 250, the large SMEs, they are closer to FDI and the public sector but there is a still a 9% pay disparity there between what we are paying the public sector. I ask what reforms we have delivered with regard to all of this. Deputy Brendan Howlin did a reform report back in 2014 on how public pay should be graduated. We have not addressed that. I do not see the reform that is there, and I think this is becoming a real bone of contention with regard to collective bargaining.

Just to tell the witnesses where wages are going, I spoke to a builder in recent days. He told me that he is paying his general operatives €22 per hour. That is the general unskilled labour rate. Even at that, he is struggling to recruit people, so that is the environment we are currently in.

Ms McElwee spoke about the high-level working group in LEEF, and how it is informing policy. I have asked a number of times that ISME be brought onto that working group because I do not feel that the voice of small business is being properly represented with regard to collective bargaining and the public pay talks.

I am highlighting the pay disparity with the public sector. I do not think the witnesses can speak about equity and fairness and be a representative of employer and employee rights without addressing that. I will also point out that our public sector pay bill for 400,000 workers is approaching €22 billion, I understand. That is, more or less, the same amount of money as we are taking in excess corporation tax at the moment. We are coming in for a reset in this country's economy, and I wonder when we are finished with all of this collective bargaining, what is it going to deliver?

I want to read something into the record that I got from a restaurateur yesterday. He is employing probably about 30 people. He has two restaurants in the south east, and I will not say where. This is what he sent to me as a quick note. He is very frustrated.

The cost of doing business has now become exorbitant. A relentless increase in red tape, wages, employer PSRI, auto enrolment, sick pay, extra bank holidays which nobody wanted, nothing on the credit side for my business. The energy subsidy scheme was a drop in the ocean. My electricity went up 123% and 109% year on year in two restaurants. My margin has gone from around 9% to less than 1% in two years. This year, there is an expected rise in costs of €100,000 per €1 million in revenue according to the Restaurant Association of Ireland.

He continued:

I am not going to invest anything in my business for the foreseeable future. I have to go to the bank now for a loan just for cash flow. I will not employ as many seasonal employees this year as before because it now costs too much. I have now turned to using QR codes, reduced operating hours and reduced menus, and I have order and pay at the table so that I can avoid wage costs. I have no problem with badly-run businesses going to the wall but the problem is that well-run businesses are closing down now.

That is the background in terms of the framing. I read the IBEC submission, and I would just ask Ms McElwee to report on two points. My own personal sense is that we need to work within the legislation that we have. It more than does enough at this present time. Although what Ms McElwee is looking for might advance the position of trade unions, I am not sure it is going to advance the competitiveness of Ireland Inc.

Ms McElwee said in her submission:

The Commission report confirms that the design of the framework is entirely up to member states. It further clarified that the action plan may be adopted by way of consulting with social partners, reaching an agreement with them or between the social partners following their joint request.

Ms McElwee might elaborate on that. In the second part, she said that the Minister "might consider strengthening" the provision of the 2000 Act with respect to updating the national minimum wage to remove the Low Pay Commission's discretion in this regard, "and to ensure that the LPC must consult with, have regard to and respond to the views of the social partners when making a report to the Minister".

Could Ms McElwee respond to that?

Ms Maeve McElwee

All the points raised by the Deputy are all the points of concern we have. Naturally we are talking about the minimum wage because of the adequate minimum wage directive but it is all of the legislation that has been imposed that is imposing that cost on what is the lifeblood of lots of our regions. It is the enterprise economy that is the bellwether canary in the coal mine. We are seeing the impact of high labour costs in low-margin businesses. When they leave our regions, they no longer provide the tourism and the substance of the towns and villages that thrive with bigger employers. Regarding the Deputy's questions, what the directive is looking for us to do as social partners is to engage and look at a framework that we believe can promote collective bargaining but this must be within the framework of having a thriving economy that actually supports long-term sustainable employment and good, sustainable, well-regulated employment.

The Deputy's second question concerned the Low Pay Commission. Again, it is about addressing the issue for the directive to make sure that social partners are involved in that consultation around the adequate minimum wage aspect of the directive. We are saying that it does not necessarily need legislation. We could legislate for it but as social partners, given the amount of consultation that has already taken place, we would be very satisfied if it was simply formalised that we have access to the Low Pay Commission as a representative body to be able to put our views forward.

Mr. Owen Reidy

First, it is a legal obligation for us to transpose this directive. We are members of the European Union and need to act as full members of it and transpose the directive regardless of whether people disagree with the content. Second, trade unions and workers are a-----

Deputy Matt Shanahan

I did not object to transposing the directive. I said-----

Mr. Owen Reidy

The Deputy said no new legislation-----

Deputy Matt Shanahan

-----legislation-----

Mr. Owen Reidy

I think the directive clearly requires new legislation because the State does not promote collective bargaining currently and it needs to as per the directive. The second thing is that workers and unions are acutely aware of competitiveness and support entrepreneurship and competitiveness. Productivity is a key issue for us as it is for employers but let me set out a couple of facts. Employers in this State pay PRSI that is less than half of their European peers. Most of the changes the Government has brought in around sick pay and things like that are modestly trying to bring us up to the European average. What workers say to us is that we pay European taxes - 98% of the value of taxes in other wealthy European countries - but we are not getting European services.

Regarding the last thing the Deputy said about the public sector, I would suggest that he is making my argument. Pay might be higher in the public sector. Why? It is because it is more organised and there is collective bargaining. I would like to see pay in the private sector being higher but supported by productivity. You cannot get blood from a stone. I appreciate that but we do not want to do that.

Deputy Matt Shanahan

Mr. Reidy obviously did not take account of that restaurateur and the point he is making. He is going out of business because his business can no longer compete. I do not know where Mr. Reidy thinks these jobs are going to be taken up at a higher level. There will not be employers there to provide that type of employment.

Mr. Owen Reidy

If the hospitality sector took the leap as the contract cleaning and private security sectors have done to say it will sit down with trade unions in a joint labour committee, those issues could be dealt with across the industry.

Deputy Matt Shanahan

Regarding their access to discretionary spend, people do not have the money to go where Mr. Reidy wants to go. It is not possible for them.

An Cathaoirleach

We will move on to the final two slots in this round. Sinn Féin has one and Fine Gael has one - Deputies O'Reilly and Bruton.

Deputy Richard Bruton

On a point of order, does the same person get in twice before-----

An Cathaoirleach

It goes on party slots and times.

Deputy Louise O'Reilly

I am happy if Deputy Bruton wishes to go ahead.

Deputy Richard Bruton

I have been here since the start of the meeting so I just-----

Deputy Louise O'Reilly

That is fine.

Deputy Richard Bruton

You can see that there are very diverse opinions in the committee. In a full employment economy, the reality is that we do have huge pressure on finding a living wage for people who are trying to survive in an expensive world but there is also huge pressure on low-margin businesses with high employment content trying to survive in that equally difficult world. We are trying to grapple with that. We have been presented with two visions - IBEC offering a vision of what ICTU describes as the State being a bystander content with the machinery for resolution, which has been very well developed, and no need for significant legislation, while ICTU says we need a change of culture and more enforceable legal provisions, penalties, designated union representatives, redundancy provisions and so on. Could Ms McElwee tell me what would be so wrong with ICTU's vision? What would be the practical impacts of it? Does she see merits in any of the elements of what is being proposed by ICTU? We have successfully developed sectors that have not had recognised trade unions for collective bargaining. Does Mr. Reidy see any downsides in moving from what has been very much a voluntary model to ICTU's vision of a statutory model? These are companies that have come in with a very different view of how to run things, particularly in very fast-moving sectors. Does Mr. Reidy see any merit in curtailing the extent to which we go down the legal road with penalties and enforceability? It is a very different culture. I would like to hear from both sides whether we can forge some common ground.

Mr. Owen Reidy

I appreciate the question. It is quite a thoughtful one. We are not suggesting that we are turning the world on its head by moving from voluntary to statutory. I want to stress that point because the directive talks about doing things in line with national practice. Whether it is health and safety legislation, information and consultation or protective disclosures, I have highlighted that we can do it without turning the world on its head. The point I would make is that when we talk about our system being voluntary, it is a case of for whom it is voluntary for who. It is voluntary for the employer to say that if we organise 90% of the workplace, it will or will not talk to a union but it is not voluntary for the workers. As I say, we must use the power of persuasion, which we sometimes do, and we must enlighten employers by saying that it makes sense to talk. Sometimes we do not talk, and we are left with having to force a strike, which is not the way we should be going in 2024. I want to stress that we are not talking about turning the voluntary system on its head. There are sectors of our economy that are not unionised where employers operate and offer good pay and conditions of employment and treat their workers very well. I have no issue with that. My concern is if workers wish to have access to collective bargaining, they should not be denied it as long as we can get over an agreed threshold. We are not talking about having collective bargaining in a company with 100 employees when we have four members. That is ridiculous. We are not advocating for that. That is a waste of our time and everyone's time. I am trying to be clear and nuanced. We are not trying to turn the world on its head and we are not trying to force employers to do certain things. We are trying to create the conditions where if their workers wish to have access to collective bargaining, the employers do not unilaterally deny them that. Do I think that if we transpose this directive, in 50 years time we will have 100% trade union density? No, I do not. We are not suggesting that but there are workers in various parts of the economy, and the UCD study shows this, who wish to have it. What we are saying is that the employers in those companies should take a more enlightened approach - a partnership approach - to work with us and use the mechanisms of the State. The directive clearly requires the State to do more.

Ms Maeve McElwee

The Deputy's question is a really interesting one and one with which we are strongly engaged. I think there are merits in some of the points ICTU is putting forward, which is why we have been engaging around the transposition of this directive. However, I do not want to jump ahead into things that are actually for social partner engagement with the Government through debate here. That is for the action plan. The directive clearly says it does not have to be transposed by virtue of legislation. It can be in line with national practice.

Deputy Richard Bruton

My question is more about what IBEC sees as the downside of ICTU's vision. It is a change in culture and a coaxing with some element of stick as well as carrot.

Ms Maeve McElwee

It is a large change in culture and a large change in culture in an environment where both the traditions of direct engagement and collective bargaining have sat side by side in our industrial relations framework for many years and have been very successful.

Through the high-level working group, we have made proposals on good faith engagement and putting employers to the test by telling them to open the doors, have conversations with the trade unions, give the unions the opportunity to build that relationship with them, see whether both sides can take those opportunities, and move that forward-----

Deputy Richard Bruton

Is that happening extensively?

Ms Maeve McElwee

Part of what we hope to bring into the framework is to give employers opportunities to open doors and see that this is not something they should be overly concerned about and that they should be able to sit down with people, given that they are the employers’ workers, and have that conversation. It is an opportunity to explore whether the relationship can be built further, which is an important first step. We do not want to throw out all of our industrial relations system in one go – that would be chaotic and challenging – but this gives us an opportunity. We have included provisions in our recommendations about building. We are promoting those with our employer base. IBEC has always said it is important to have a strong social partner at tripartite level with whom we can engage.

Anecdotally, after briefing employers on the recommendations in the high-level working group report, employers told us they were in collective bargaining environments and that they had union recognition but that they could not get enough people to join the union to ensure it provided a sufficient level of representation. There are different perspectives to this story. If it is the case that many people are pushing hard to be unionised, we would see more people taking up individual union membership to promote that. I am not saying the numbers are not there, but we are not seeing that activity. From our perspective, there is a place for accepted bodies and direct engagement, and there is absolutely a place for collective bargaining. We are trying to help employers who are open to the conversation to open the door and get it happening. As Ms Patricia King told me, it is for the union to come to that space and try to agree a middle ground with employers that affords everyone the space to work collectively and positively.

Deputy Louise O'Reilly

I suppose we should all spare a thought for those poor employers who are only dying for their workers to join trade unions but the workers will not. That is in no way, shape or form my experience, and I have fairly extensive experience in the industrial relations arena, as does my father. I did not ring him or otherwise contact him, but I can say that was not his experience either. I am not disputing that someone told Ms McElwee that, but if it is happening, I would suggest it is only happening in a tiny portion, as the statistics provided by ICTU this morning would flatly contradict that assertion. In my experience, as backed up by the statistics, the majority of workers will join a trade union if given the opportunity. Even in a time of full employment, if the atmosphere is hostile or there is a firm belief, be it written down or not, that engaging in trade union activity will lead to someone suffering a penalty, it is understandable that workers will be nervous. The employers who spoke to Ms McElwee will, following the transposition of this directive, have the opportunity to join the Government and trade unions in promoting collective bargaining, and we will all be talking about it then. That might be a good opportunity and a good day for those employers.

I will return to the issue of small businesses and sectoral bargaining. No one in this or any other room wants to put people out of business, but the fact remains that the get-out clause in the National Minimum Wage Act is not being used. Bizarrely, the point was made that the SFA is not represented at this meeting, but it is clearly under IBEC’s umbrella. Perhaps people need to do a little more research before they come to committee meetings. That might be helpful.

Small businesses operate in a different environment than larger ones. They do not have big HR offices. They might be supported by their representative organisations, but they do not necessarily have those kinds of capability. This directive is for all workers, though. What are the views of both groups? I will start with Mr. Reidy. What is the impact on small businesses? No one wants to put people out of work, least of all trade unions, but what is his view on small businesses?

Mr. Owen Reidy

The directive is clear. It speaks about promoting the right to exercise collective bargaining, particularly at sectoral level. Small businesses would fit into the sectoral level while large and medium firms would engage more directly. In this economy, we would be better off if we had what we call co-ordinated bargaining, whereby there is some bargaining at local level in the businesses that have relationships with trade unions and there is bargaining at sectoral level. There are industries that have not taken up that opportunity, of which the hospitality sector is one. There is a joint labour committee, yet the sector refuses to engage. Engaging would be a positive for the sector. Bar a few, the contract cleaning and security employers engage in joint labour committees and they see it as beneficial.

The directive is about adequate wages and it sees collective bargaining as the key to that. We all understand how small businesses are important to the fabric of community life and so on. I do not see the directive as being a Trojan horse to force mandatory trade union recognition in small businesses that have five employees, for example. We are not interested in that. Those small businesses would be best served in their respective sectors, with their representatives engaging with the other side of the labour market – organised labour – on questions of productivity and challenging issues. Taking wages out of competition creates a win-win.

It is not down to IBEC and ICTU, but to this and future Governments to treat this directive properly and promote collective bargaining in a way that is right, sensitive and progressive in the interests of all.

Ms Maeve McElwee

To address the Deputy’s first point, that was my direct experience from two member companies.

Deputy Louise O'Reilly

I did not suggest it was not.

Ms Maeve McElwee

They were in a pro-union environment. Perhaps I should have mentioned how it is enshrined in our unfair dismissals legislation that, if it is found that someone was dismissed on the basis of trade union activity, he or she will get two years’ remuneration plus reinstatement. There are significant penalties in such a situation.

I agree with the Deputy that the adequate minimum wage directive applies to all businesses and workers, so there is no challenge in that respect, as the transposition will show. We have mechanisms in place to examine adequate minimum wages and consider how they are applying. Ireland will always have a national competence around addressing what that adequate minimum wage should be within the confines of our economy.

We would be supportive of reform of some of the joint labour committee system in terms of, for example, sectoral bargaining, but it is important to note some of the reasons for the joint labour committees not working well. Small businesses compete with much larger ones, and a 12% increase in the national wage minimum wage in a small retail business has a disproportionate impact versus a very large retailer, which also severely feels the impact of the rise, because of the relative impacts throughout the business. Nevertheless, to try to put everything into one joint labour committee, from the smallest microenterprises to the largest enterprises, presents challenges. It is in this context we have seen some of the impacts of the joint labour committees. Even within sectoral bargaining, we need to be careful about how the sector bargains and what the unintended consequences might be. We need to consider how we go about these steps within the framework, examine the plan and move forward carefully.

Deputy Louise O'Reilly

In the model outlined by Mr. Reidy, there would be broader coverage for larger companies, direct bargaining for some and sectoral bargaining for others. Notwithstanding the issues with the JLC and other mechanisms, does Ms McElwee see that model as forming part of the work of transposing the directive to ensure it functions or will IBEC be advancing a different model?

Ms Maeve McElwee

I do not see it as part of the transposition of the directive. The directive will be transposed in November this year. The social partners will certainly be having conversations on all those issues as part of a framework and what that framework should, could and reasonably will include in the coming years in order that we have a stable business environment and an economy that functions well. Having strong, stable and sustainable employment is critical to being able to facilitate some of the statutory entitlements that have been afforded to many workers.

Senator Marie Sherlock

My questions are directed to the ICTU. Mr. Reidy made a powerful point in respect of public procurement. It is important to state it is not just about the State contracts but also organisations that are in receipt of continual State funding, such as in the childcare or nursing home sectors. Rather than just looking at the private sector, we must also consider publicly funded services that have traditionally been hostile to trade union activity. It is clear from the ICTU submission that the right to organise and of access to workplaces is needed to promote collective bargaining. What does the ICTU consider to be the key components of that right of access to workplaces? It may be that, in the minds of some employers, there is a great fear in respect of what that would entail. In reality, it is quite simple and straightforward. If would be useful for the committee if Mr. Reidy were to set that out.

Mr. Owen Reidy

It is a challenge to set it out definitively as, in advance of discussions on the transposition, we are working through what it would look like. Obviously, GDPR is an issue in the European Union. Employers cannot just give out employees' details. There are issues in that regard. When it was in government, the New Zealand Labour Party had a model that involved fair play agreements. If the Labour Party gets into government in the UK after the next election, it will do something similar. We are considering things like that. It is about giving workers physical and digital access to unions. A relatively short Bill on the protection of employees' trade union membership and associated provisions could address the issue.

There would have to be a significant proportion of an agreed threshold of members in a given employment to trigger this type of thing, but we think a designated representative should have the facilities to discharge his or her job. What does that include? It includes access to communicate digitally with his or her colleagues about trade union work, as well as things like physical and digital noticeboards, reasonable time off for training and facilities for trade union representatives.

There is an historical issue relating to property rights. The presence of trade union representatives on employers' property and that kind of thing would have to be worked through. If we are to square this circle on increasing collective bargaining coverage by increasing collective bargaining, however, we need to know what workers and those who wish to join want and think. We need to address access. It is the one issue on which we will need help from employers. They will have practical views regarding what will or will not work. Under the New Zealand legislation, for example, workers have three hours paid time to engage with a trade union, whether that is in the place of employment, the local town hall or whatever. I am not saying that is the model to follow, but it is an example of what has been provided in a western First World country. We are working it through. I appreciate it is a particularly challenging and thorny issue for employers and employer representatives. We have to get it right, however. We need rights for workers who are members of trade unions engaging in trade union activity. We need specific rights for trade union representatives to discharge their duties.

However, we need to square the circle in respect of how to address the issue of access. How can we have meaningful and informed negotiations with access to appropriate information on an equal footing, as per the directive, if we do not know what the workers want? I refer to workers, in reality, being prevented from exercising their right to collective bargaining. I am not referring to the right to join a trade union. There is a constitutional right in that regard and it is grand. The veto private sector employers can exercise renders this ineffective. We need to remove that veto. That would not turn the voluntarist model on its head. Rather, it would adjust and modernise it. Crucially, it would vindicate our obligations under the directive. The State has to be a promoter of collective bargaining. Can anyone really suggest the State is fulfilling that role? Through the years, there have been Ministers and parties that have been interested in collective bargaining, not just Ministers from parties of the centre left, but also from other parties, including Fine Gael and Fianna Fáil, or from none. Has the State actually been an active promoter of collective bargaining? No, it has not. Is there any legislation currently in place that requires it to be such an active promoter? No, there is not. There are several issues to be addressed.

As regards the access issue, I do not have a definitive suite of measures. It is an issue on which I hope IBEC will work with us. We need to hear its concerns and issues. It is incumbent on us to come up with solutions to overcome that. We need to do it. Avoiding it is not an option. It will not be fixed and we will not vindicate the directive properly if we avoid, obfuscate or ignore.

Senator Marie Sherlock

As regards the roadmap to which Mr. Reidy referred, I would be interested to hear his thoughts on the timing in that regard. The directive is only one of several changes that will come in this year or in the coming years. I ask him to address the issue of timing. There is the high-level group and the directive.

Mr. Owen Reidy

Along with IBEC and some of the other employer representatives, ICTU is involved in the LEEF subcommittee on employment rights. We have a meeting tomorrow with the Minister, Deputy Coveney, and the Minister of State, Deputy Richmond, and this issue is on the agenda. I wrote to the Minister, Deputy Coveney, yesterday, making the point that the directive must be implemented in November, we need to start discussions in February and we need meetings with his officials each month, at least, to do this. We believe there is a lot to be done. IBEC believes there is little to be done. I am not sure what the two Ministers at the Department of Enterprise, Trade and Employment to whom I referred believe right now. We will see. The directive must be implemented by November.

Based on its track record, Ireland is not very good at implementing directives by the designated time. I see us having to discuss a requirement for a framework of enabling conditions and whether we want them done by law or by agreement. We have an open mind on that. Instinctively, I would say it should be done by law, but we are open to persuasion.

The third leg of the stool, which is required to happen every five years and has to happen by the end of 2025, is the action plan. That is where we see the report of the Doherty high-level group fitting in. There are some very good things in it. Other things need to be included. We believe the transposition requires new legislation, amendments to existing legislation and, crucially, a change in public policy and mindset. There is also the framework of enabling conditions. The third leg of the stool, which is equally important, is the action plan, which has to be reviewed every five years. That is the timeline. We need to see incremental improvement in density and coverage, That is how we will judge it. Merely saying there is an onus on effort, not an outcome, is a defeatist way of approaching this. I am not suggesting we will get 80% collective bargaining coverage in Ireland in the next five, ten, 15 or 20 years, but we need to aspire to that kind of thing. The countries that have a higher coverage and higher density do better on all metrics. We should aspire to that.

Senator Marie Sherlock

I thank Mr. Reidy.

Deputy Louise O'Reilly

I will briefly touch on the issue of public procurement and procurement being used as a mechanism to drive or support workers' rights. All present have heard of cases relating to this issue. In light of the Cathaoirleach's warning, I will not name the cases specifically. One such case involved a cleaning company that provided services in a Department. Another involved a very large food company that provided food services to a large State agency. Neither of those companies recognised or in any way engaged with trade unions. The trade unions attempted to bring them to the Labour Court or the LRC, now known as the WRC, as would be the normal run of events. All the while, however, State money was funding their legal advice and legal advisers and possibly their membership fees of any representative group. They were refusing to engage with the third-party machinery of the State that was funding them.

In the case of one of these companies, my understanding is that its only client and customer at that stage was the State. I will ask my questions to the witnesses from both organisations before us, beginning with Ms McElwee. Is it appropriate for those companies that benefit greatly from State contracts to then turn their back on State machinery and refuse to engage? Can and should public procurement be used as a mechanism to support and drive workers' rights?

Ms Maeve McElwee

On the first aspect of the question, I am not familiar with the issues to which Deputy O'Reilly has referred. The individual circumstances of the case may be that there were reasons the company chose the route it did. In our membership-----

Deputy Louise O'Reilly

Sorry, just on this, the main reason was that the company did not have to. This was made clear to the people on the trade union side. There was absolutely no requirement on the company to engage at the WRC, despite the fact there was quite decent density among the workers and it was clearly the will of the workers to engage at the WRC. Notwithstanding the individual circumstances, there are times when unions and employers do not agree; of course they do not. The employer thinks it has a very good reason not to agree and equally so does the union, but they take it to the Labour Court or the WRC and thrash it out. We are discussing employers who do not do so. I cannot envisage an industrial dispute, such as there was in this case, that would not be appropriate to bring to the third-party machinery. Taking all of this into consideration, I am asking whether, in general, the witnesses believe it is unacceptable for those employers in receipt of large and very lucrative State contracts to deal with the State for those contracts and to refuse to deal with the State through the Labour Court and other third-party mechanisms.

Ms Maeve McElwee

It is very difficult to give Deputy O'Reilly a direct answer on this, unfortunately. What is very important is that employers comply with the legislation that applies to them and operate in the structures and procedures agreed in their organisations.

With regard to public procurement, one of the issues in today's discussion is that we are somewhat jumping ahead in terms of the issue we are here to discuss, which is whether legislation is needed to transpose the directive. Our view, as we have already said, is that we do not need to initiate any more legislation to transpose the directive. This does not preclude us from continuing engagement at social partnership level on what the framework for promoting collective bargaining might be. I am somewhat-----

Deputy Louise O'Reilly

Sorry, just-----

Ms Maeve McElwee

This is getting to the point on public procurement. I am somewhat surprised that my colleagues in congress would say they expect to see it in legislation. I would expect that through social partnership we might get around the table and negotiate collectively on how we would see some of this framework coming together rather than having a legislative base in which employers would ask what is for them to negotiate.

Deputy Louise O'Reilly

Part of the role of the Government is to promote-----

Ms Maeve McElwee

I do not see any reason this would not be a topic that would have to be part of any social partnership discussion around what that framework might look like.

Deputy Louise O'Reilly

I am specifically referring to the role of the Government in the directive with regard to promoting collective bargaining. Obviously, words are great and sitting around the table and having a chat is absolutely brilliant, but the power of the State's spending could be a very important actor in furthering the promotion of the collective bargaining aim of the directive. In terms of this, and strictly within the confines of the directive, does Ms McElwee see a role for the State and State procurement in driving this particular onus on the Government? This is with regard to using its money and not inconsiderable buying power. In many instances the State is the sole purchaser for some of these companies. Should it use this to fulfil its obligations to promote collective bargaining?

Ms Maeve McElwee

Unfortunately, that is not a question for me. It is a question for the Government as to how it uses its State spending-----

Deputy Louise O'Reilly

I am asking Ms McElwee for her view.

Ms Maeve McElwee

As an IBEC representative I have to say it is not an IBEC position. It is a Government position that needs to be taken on this. Certainly, as a social partner we will be happy to engage in this conversation when the conversation on the framework for promoting collective bargaining comes up. It is a Government position and I could not state an IBEC position advancing what the Government might say around it.

Deputy Louise O'Reilly

Let us see whether Mr. Reidy has a position on behalf of congress.

Mr. Owen Reidy

I have a very clear one. Deputy O'Reilly asked two questions. She asked whether it is appropriate for companies in receipt of public procurement and taxpayers' moneys to avoid the institutions of the State. No, it is not appropriate. I hope that, after we transpose the directive, it will be much more than not appropriate. I hope it will be illegal. I hope that if they choose to do it, they will be excluded from taxpayers' money and seeking public procurement for a period until they reflect on it.

The second issue is that what we are speaking about is that the State is obliged under the directive to promote collective bargaining. Public procurement is referenced in Article 9. We are saying the State should take it a step further and say we should use public procurement as one of the many tools we have to support collective bargaining. Olaf Scholz, the Chancellor in a coalition government is doing so in Germany this year, I believe. We do not suggest for one minute that a company that does not engage with a union should be excluded from public procurement. We are turning it around. We are saying that a company has to be able to demonstrate it has not prevented its workers from accessing collective bargaining through a union should they wish to do so. If it is able to show this then, as I said to the other Deputies, there are many employers in the State who treat their workers well where there is not a union and that is fine.

This is about companies having a positive discrimination whereby they can say they have a right to bid for public procurement because they can show they deal with a union or they have never prevented their staff when they have wished to access collective bargaining through a trade union. This is the issue. Can the State do this? Of course it can. I hope it does so and I hope it does many other things to promote collective bargaining. There has to be a carrot but we have not had enough stick, quite frankly. The carrot only goes so far. It is voluntary for one party and not for the other.

Deputy Louise O'Reilly

Exactly.

Mr. Owen Reidy

In our collective agreements everywhere we are organised, quite rightly it is in the collective agreement that we go to the WRC or the Labour Court before taking strike action. It should be the same for those employers.

An Cathaoirleach

This concludes our consideration of the matter today. I thank everybody and all of the representatives for assisting the committee in its consideration of this important matter. This concludes the committee's business in public session for today. I propose we now go into private session. Is that agreed? Agreed.

The joint committee went into private session at 11.37 a.m. and adjourned at 11.53 a.m. until 9.30 a.m. on Wednesday, 21 February 2024.