Apologies have been received from Deputies Pat Breen, Thomas Byrne, Lucinda Creighton, Brendan Howlin, Noel Treacy and Joanna Tuffy and Senators Paschal Donohoe, Rónán Mullen and Phil Prendergast.
Working Time Directive: Discussion
We know that Deputy Creighton is busy.
I am glad to know that everybody is busy. Item No. 1 is a discussion on the working time directive with a strong delegation.
I must now state the usual privilege notice and it is not meant to be intimidating. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I welcome the delegates, Mr. David Hughes from the Irish Nurses and Midwives Organisation, INMO, Ms Esther Lynch from the Irish Congress of Trade Unions, ICTU, Mr. John Carty from Mandate, Mr. Tom O’Driscoll from SIPTU, Mr. Brendan McGinty and Mr. Loughlin Deegan from IBEC, and Mr. Kevin Callinan from IMPACT.
The issue under discussion today is the working time directive and its implications for this country, the economy, the workforce and the public and private sectors, the degree to which it is being implemented throughout Europe, the impact it has had on our European colleagues and the implications for the workforce and the delivery of services here. The European Commission launched a review of it in March and has engaged with the social partners in the meantime. The Commission proposes a fundamental examination of the direction to assess its ability to deal with current and future challenges and has highlighted key issues such as working hours, on-call time and flexibility.
This is an opportunity to hear directly from the social partners regarding the review, prior to any full public consultation which may be launched. Many people have brought to our attention in recent years various aspects of the working time directive. It is only fair to everybody that there is a debate and there will be a longer debate. The usual procedure is that a short opening statement is made. I presume many people will want to speak therefore we will keep the opening statements as short as possible. Mr. McGinty has to attend another meeting.
Mr. Brendan McGinty
I have to attend another committee meeting.
It is two for one. It is well organised. I ask him to proceed. There will then be a question and answer session.
Is any other committee reviewing the working time directive?
No, not that we are aware of. The directive is the responsibility of this committee.
Mr. Brendan McGinty
I thank the committee for the opportunity to address it today. We can circulate a copy of our presentation to the committee. In my opening remarks I intend to summarise some of the key issues. We will consider the operation and effect of the working time directive.
From a business perspective there are two key dimensions. One is the operation of the regulations, as comprehended by the directive, and the second is related to our domestic implementation of the directive in terms of the legislative framework in Ireland to give effect to the provisions. When we consider some of the principle European Union issues, they concern matters such as those who are on call and the implications of some of the cases which have arisen at a European level are particularly challenging. We also take into account the accrual of annual leave for those on long-term absence or sick leave and general concerns about the inflexibility of the directive, in terms of dealing with what is now a very different work environment for most people.
On the domestic front, in regard to the Organisation of Working Time Act 1997 our view is that we have adopted some of the most stringent implementation measures in the European Union in terms of giving effect to the directive. For example, Ireland is not among the 14 member states that have invoked national or sectoral opt-outs from the 48 hour working week. A range of issues arise in respect of the complexity associated with record keeping requirements of employers and a range of issues are associated with how particular entitlements are calculated, not least public holiday pay.
I will deal with the European dimension first and put the primary focus on that. One of the things with which most employers are struggling is the absence of legal clarity on interpretation of aspects of the directive, in particular regarding on-call time, and they also have difficulties with implementation more generally. In recent years we have seen a general reduction in working time across the European Union from approximately 39 hours per week in 1990 to 37.8 in 2006. As we all know, in this country and further afield there has been a progressive individualisation of work schedules which require much greater flexibility in how working time and life is organised. Therefore, the need for regulation in this area at a European level is diminishing.
It is worth pointing out that one of the core provisions or fundamental principles underpinning the directive is the protection of the health and safety of workers, which remains the primary basis for the legislation. The Commission has recognised that the inflexibility of that type of regulation can have a negative effect on employers and business in terms of responding to market challenges. That has created a particular burden for business which is a real issue for all of us.
In the context of some of the particular issues, I will deal with on-call time. The provisions of the directive require that, for an individual to be considered working, the worker must be working at the employer's disposal and carrying on his or her activities or duties according to his or her role. There have been rulings in the Delias and Jaeger cases. In the Jaeger judgment, which has serious implications for health services, it was found that time spent by a doctor on call was working time, even where he or she was permitted to sleep at times when he or she was not required to work. In the Delias case, if in doubt the employee is to be considered to be working, regardless of the economic implications for the employer. Given the complexity of these cases, there is a need for member states to have much greater flexibility in terms of how they regulate matters such as on-call time.
Another very difficult issue which has arisen is the accrual of annual leave while on long-term sick leave. This arises from the Schulz-Hoff and Stringer cases on which the European Court of Justice ruled. The effect of the cases is that employees who are absent from work on long-term periods of sick leave must accrue paid annual leave during those periods of sick leave. For obvious reasons, that means there is a disproportionately beneficial effect for a small number of employees and a disproportionately expensive cost to employers. It creates pressure on employers to terminate the employment of employees who are sick and discourages the provision of long-term income protection measures where they are legitimate and appropriate. There needs to be a fundamental recognition that rest breaks and leave are designed to provide a rest from work and not a rest from leave.
Those judgments are contrary to recital 2 of the directive which refers to the need to avoid imposing unnecessary administrative burdens or holding back the creation and development of SMEs, in particular.
Based on an initial examination of the cost of implementing those judgments in the Irish context, we estimate there is a cost to the entire economy of approximately €90 million in a full year as a result of those decisions alone. That burden is not acceptable in the current environment. Of that €90 million, some €25 million of it would be payable by public sector employers. That is a serious issue.
Likewise, in the context of particular issues that have arisen in terms of our domestic legislation, it is worth pointing out that a real problem has been the complexity of the working time legislation. To demonstrate that point, the National Employment Rights Authority, NERA, will attest to the fact that in terms of the period to March 2010, the rate of compliance by employers under the National Minimum Wage Act was 94%; 98% under the Protection of Young Persons Act; and 88% under the Payment of Wages Act but under the working time legislation the figure is approximately 50%. What does that tell us? It is not saying that employers are out to circumvent the law. The complexity associated with trying to comply with the law is the real problem. As we are aware, under our legislation employers are subject to a potential criminal offence, and fines.
An issue we are coming up against at a practical level is that many employers in trying to be compliant are having to micro-manage the issue of record keeping and working time, often in circumstances where the employees do not want it and do not see the value of it and where they acknowledge that they are not being denied their breaks but yet are being required by the law to record them.
Those are some of the primary issues that arise. One of the concepts we espouse is the notion that instead of the full responsibility being put on the employer in this regard, within reason, some effort should be made to share the responsibility of compliance with the Act. Only where the employer fails to address the fact that an employee has failed to receive his or her entitlements under the Act should the penalties provided for be applied.
To that end, one of the issues we find is very much to the fore is the problem of dealing with workers who work set hours. We have come across very difficult cases involving, say, people in clerical administrative roles where there is no clocking in system who are resisting the notion of employers introducing recording systems to record breaks and hours of work. The administrative burden is such that it is now counter intuitive to the notion of protection of health and safety. It is time consuming, and we suggest the evidence is that an employee is not any better off than he or she was before the record filling requirement was pursued.
We propose that an exemption should be put in place that would protect the rights of employees but reduce the administrative burden on employers. One of the proposals we make in that regard is that a special statement of break entitlements would be introduced to get around the administrative burden. That would record somebody's working hours, specify their normal break times, specify the mechanism to be used on any day on which a break is missed as to how that might be rectified, and specify a mechanism to be followed if they work longer than the specified hours. That would be signed by the employer and the employee. That statement could be revised but, ultimately, it would be accepted by NERA and by the State generally as acceptance of and compliance with the regulations.
We have also particular difficulties with the way public holiday entitlements under the legislation, which ultimately derives its authority from the directive, are being administered and applied. In the paper we have set out some real difficulties in that regard. In one case a real challenge arises from differences of interpretation of entitlement and we have shown, in respect of five different employees for the same public holiday, that there are five different levels of public holiday entitlement. The reality is that no standard software system has been put in place that can provide an employer with absolute certainty that they are absolutely compliant with the public holiday requirements under the working time legislation. That is an extraordinary state of affairs and it demonstrates the scale of the burden employers are suffering.
As far as we are concerned there is a simple solution to that problem which would avoid potential discrimination, and a discriminatory issue arises because our assessment is that people who work a smaller number of longer shifts do better than somebody who does a longer number of shorter shifts. The perfect solution to that problem is an easy administrative approach whereby a statutory instrument is introduced to standardise the entitlement for everyone so that a day's pay is set down as one fifth of a working week. That is not about eliminating anyone's entitlements. It is about a practical approach to the way we administer the burden of compliance associated with the directive.
We also have significant issues about standard interpretation of such issues. For example, the Labour Court has acknowledged in one case that where an employee normally works a set pattern and where that pattern involves a different number of working hours on different days, the amount payable for a public holiday would depend on the last shift worked yet we have other cases in which the court has taken a view that the right approach is to average out shift lengths where employees have different shift lengths during the week. Employers in those circumstances, therefore, are having to navigate the maze of what is right and appropriate and that is not in the interests of legal compliance with the legislation here, as ordained by the European directive, nor is it in the interests of the conduct of good industrial relations and having clarity of company policies with staff.
Those are some of the principal issues we believe require some significant debate. We welcome the opportunity to discuss them and congratulate the members on taking the time to give this issue their attention. We are open to having a constructive discussion with the committee.
I call Ms Esther Lynch of the Irish Congress of Trade Unions, ICTU.
Ms Esther Lynch
I thank the Chairman and members of the committee for giving us the chance to meet them during their discussion on this question. I realise we have ten minutes and if it is appropriate I want to share that time with my colleagues. I will make some brief initial remarks.
From our point of view the legislation at EU and national level is working quite well. Contrary to what Mr. McGinty has said, there is nothing wrong with the basic rules underpinning the legislation but some serious issues arise, particularly in the context of the recession, and we would like to bring some of those to the members' attention.
Without doubt, and as Mr. McGinty stated, employers are putting a great deal of pressure on workers to work much longer hours for the same or less pay. We get many reports and phone calls from people who tell us they have been asked to work an extra hour at the beginning or the end of the day and for it to be off the record; they are asked not to mention it. That is played out in terms of what Mr. McGinty said about NERA in that there is a good deal of non-compliance with keeping records. We are hearing that the reason for that is that employers put a great deal of pressure to work longer hours for the same week's pay.
We are also concerned about employers looking for excessive flexibility. Increasingly, workers do not know the hours they will be working next week. My colleague from Mandate, Mr. John Carty, will describe some appalling cases where people are asked to work shift work and night work and they do not know from one week to the next the hours they will work. That has a serious impact on a worker's health. There is a great deal of stress involved with irregular working but it also means that somebody cannot take up a second job. The mean aspect of that is that sometimes a person cannot sign on for social welfare. An employer is looking for excessive flexibility where the worker is available to them for an entire week but in one or two hour intervals. We are concerned about Mr. McGinty's proposal to look to pay somebody a day's pay regardless of how long they worked. I do not understand the implications of that.
We are also concerned that there is an attempt to ignore EU rules. Members will recall we attended a meeting to discuss the Charter of Fundamental Rights and, importantly, Article 31 of it clearly states: "Every worker has a right to working conditions that respect his or her health, safety and dignity" and also "that every worker has the right to the limitation of maximum working hours, to daily and weekly rest and to an annual period of paid leave." That is what we all signed up for. One of the reasons the trade unions campaigned for the treaty was on the basis of the charter and the rights provided for in it. We cannot now pretend that those rights do not exist simply because they apply to workers. Also, we cannot pretend that those entitlements are suddenly subject to competitiveness requirements, as is suggested by the employers' body representative.
I am interested that IBEC also raised issues regarding the European Court of Justice, ECJ, cases and the conclusions in those cases, which are being ignored. In ECJ cases where the decisions are favourable to workers, there is a growing tendency to pretend that the ECJ did not make such decisions or to pretend that they do not matter. I have set out in my statement the advice IBEC gives its members, on its web page, to ignore a ruling from the ECJ. IBEC states: "IBEC's legal advice is that employers in the private sector cannot be obliged to apply the ECJ decision at this time. That refers directly to the case mentioned by Mr. Brendan McGinty, which provides that people are entitled to two weeks annual leave. It is a concern that IBEC is doing this, but it is even more of a concern that the Oireachtas has been entirely inactive on this. This ECJ case was heard more than a year and a half ago and nothing has been done to give workers in Ireland the entitlement their colleagues in other European countries have. Colleagues from the health sector will talk about the on-call situation.
It is a concern that IBEC has been consistently lobbying to have the obligation to maintain working time records removed. The consequences of that would be severe not only on health and safety grounds but how would a worker be able to prove that he or she was not paid the minimum wage if the employer said that he or she has no working time record for the worker? How can a worker be expected to prove the hours that he or she has worked? It strikes me as extraordinary that an employer would not want to know how many hours his or her employees worked because surely an employee's pay is based on whether the employee turned up for work. I do not understand why employers consistently say they are unable, or it is too complicated, to keep a record of employees' working times. I will ask my colleague, Mr. David Hughes, to talk about the health sector.
Mr. David Hughes
I thank the committee for this opportunity to address it. In general, the operation of the Organisation of Working Time Act has not created major problems from the point of view of the Irish Nurses and Midwives Organisation. That is largely because we engage in collective bargaining. Many issues relating to hours of work are matters ultimately for agreement. The operation of the Organisation of Working Time Act has been useful in guiding collective bargaining and issues that have arisen have by and large been resolved through collective bargaining. An important feature of the Act is the right to engage in collective bargaining and that should continue to be the position.
An ongoing issue that arises is the question of opt-outs from the requirements of the directive. The fact that many countries have been able to opt out from those is an issue which the Commission, if it revises the legislation, needs to examine. In terms of the borders between various European states, particularly between Ireland and Northern Ireland, some competitive advantage may well be gained from the opt-out from the provisions of the directive that has been availed of in this respect. It is time to end the operation of those opt-outs.
The other form of opt-out clause contained in the existing legislation relates to particular categories of workers. While that has not been hugely problematic to us because we enjoy the right to engage in collective bargaining, where employees do not have that right, it could be an issue, because certain categories of worker are subjected to opt-out provisions under sections 11 to 13 of the Organisation of Working Time Act. In employments where employees do not have the right to engage in collective bargaining, that may lead to abuses, but by and large where that right exists, that has been a matter that can be agreed.
An issue that arises in this regard is the question of employees having a continuous rest period of 11 hours. We believe that the Labour Relations Commission's code of practice calls it wrongly in this respect. It allows an employee who, for example, is working up to 8.30 p.m. and then goes on-call and is called into work at 11.30 p.m. to not have a continuous rest period of 11 hours before that employee's next shift starts because the three hours that employee was off is deducted from the 11 hours and, consequently, that employee would get a shorter break. Therefore, such an employee does not necessarily get a continuous rest period of 11 hours. That provision should be tightened up. The directive provides for a rest period of 11 continuous hours, but it has been interpreted, and is allowed to be interpreted, under the code of practice as a broken period of 11 hours. The intention there was quite clear.
The primary reason for the introduction of the directive and the Organisation of Working Time Act were health and safety reasons. In terms of health care, the concern is the health and safety not only of the nurse or other health professionals but of the patient. It is not in our interests as a society to have tired health workers. They cannot operate effectively if they are too tired to do the job. Therefore, provision in this respect has to be legislated for and we believe the working time directive is correct in providing for an 11-hour break between the starting and finishing times.
It is appropriate that the directive allows for that period to be averaged over four months in terms of the exempted categories, however, averaging it over a longer period, as has been advocated, is not appropriate because it would become meaningless and it would mean hours could be concentrated on particular parts of the year and then averaged over 12 months. Therefore, the four month averaging period is the appropriate one and there is scope under collective bargaining to extend that to six months. We believe what is provided in this respect in the directive is adequate and it should not be extended.
The non-implementation of ECJ judgments is probably one of the issues the committee should examine. There is no defence for employers or the employers' representative body issuing a letter to the effect that employers do not have to implement European Court of Justice decisions, particularly when it covers in that letter emanations of the State and states that the courts will ultimately decide whether they have to do that, when we all know that the directive has direct effect on emanations of the State. Therefore, the European Court of Justice judgments are no less significant than any other judgment in terms of Organisation of Working Act and they should be honoured.
I wish to pick up on one or two points the delegate from the employers' representative body made. The suggestion that an employer would apply one fifth of a weekly wage to people for a public holiday is utter nonsense. If an employee is working a 12-hour shift, he or she would not get that public holiday as the employee would have to come into work for the remaining hours if he or she is to get only one fifth of their weekly wage for that work. If an employee was working 12 hour shifts and that number of hours was divided by five, the employee would end up with an eight hour public holiday and he or she would have to come into work on the public holiday. That was never the intention. It is not the case in any other country in the world that people have to work up their time.
There are different calculations based on the different hours of work, but we would say they are probably more favourable from an employer's point of view than that of a worker and they should be left as they are because they deal with workers based on what they do. It is based on their normal working day. The intention of the law is clear, that a public holiday is a paid day off, and it is one's normal day that is relevant. We strongly advocate that this would be the case.
On the question of the European Court of Justice judgment on the equivalent of sick leave or annual leave during periods of paid sick leave, we believe that this is appropriate. Workers on sick leave often find they have greatly reduced incomes if their entitlements are only social welfare benefit. The suggestion that an employee would not accrue annual leave in a situation where he or she is likely to return to work is unfair. People should not be doubly penalised by losing income because they are sick and then also lose holidays because they are sick. Therefore, the judgments of the European Court of Justice are correct in that respect. To argue that they are unfair is not correct. We believe it is appropriate that those judgments are honoured. They are fair. They have been dealt with by rights commissioners and the Labour Court in any issues that are in dispute and, therefore, the legislation does not need to be amended. If the working time directive is to be reviewed, the review should protect provisions in place and put an end to the opt-outs from its provisions. Other than that, there are very few major problems with the organisation of working time directive and separation in this country which cannot be resolved through strong collective bargaining.
Mr. John Carthy
Mandate is of the view that there is a certain amount of excessive flexibility at present, particularly in the area of retail. This can be curtailed through effective collective bargaining. Where the latter does not exist, however, insecurity and unpredictability can develop. Insecurity arises where the 15, 18 or 20-hour contracts of certain employees can be flexed up to the equivalent full-time that obtain in a particular store. Employees' hours can then be cut back again, sometimes for legitimate business reasons but also at the whim of particular managers. Unpredictability arises where employees who are hired to work 20 hours over a 7-day period do not know on what days or at what time they will be obliged to work.
The position is further exacerbated by what the European Foundation for the Improvement of Living and Working Conditions regards as the best example of the 24-hour society in the EU, namely, the opening of supermarkets on a 24-hour basis. A significant number of workers in the retail sector are employed on a part-time basis. Their hours can be flexed up and they do not know from one day to the next whether they will be asked to work mornings, afternoons, evenings or, in some cases, nights.
Let us examine the position of a new employee — a 19 year old female — in the retail sector. She might be able to comply with the requirements relating to the job she was fortunate enough to obtain. Ten years later, however, she might have a family. As various studies show, even in these enlightened times the majority of family and household tasks still fall to the female in any particular arrangement. In such circumstances, the female employee to whom I refer — who would now be 29 years of age — is obliged to organise school runs, child minding, etc. Her efforts will be impeded by the unpredictability of the casualisation of working hours in the retail and other sectors. This can lead to unnecessary stress.
A further point relates to the impact on the part-time worker who wants to maximise his or her potential within a particular labour market. He or she may wish to take up a second part-time job in order to create the equivalent of a full-time income for himself or herself. An obstacle exists in this regard, however, because an employee cannot indicate to a second employer the hours during which he or she will be available for work. What second employer would take on an employee who dictates the hours during which he or she will work? All of this is under the control of the primary employer. One way to circumvent this obstacle would be to make any additional hours in the first workplace available to existing staff before further employees are hired. There may be legitimate business reasons this cannot be done. However, it should be the case that the hours to which I refer should be offered to existing employees in the first instance.
I thank Mr. Carthy. I will involve everyone in the discussion as quickly as possible. We will take comments from a number of members before returning to our guests.
I thank the delegation for attending. I served as Minister for Public Enterprise when many of these matters were discussed in Europe. When the Labour Party fell out of love with Fianna Fáil in 1994 and coalesced with Fine Gael and the Democratic Left, Eithne FitzGerald, as Minister of State at the then Department of Enterprise and Employment, took responsibility for this area. Ms Fitzgerald was a very fine Minister of State with responsibility for labour affairs.
I have always regarded the organisation of working time directive — which is now part of our domestic law — and the minimum wage mechanism as being the cornerstones of good trade union legislation. I would be concerned to ensure that IBEC and the trade unions would have reason to believe in the two items of domestic legislation relating to this area. Many people voted in favour of various European treaties as a result of the existence of the legislation to which I refer. This occurred at a time when Europe was falling out of favour with others.
Reference was made to the National Employment Rights Authority, NERA. As I understand it, the latter is impinging not upon the operation of the Organisation of Working Time Act but rather upon the joint labour councils, JLCs, which lay down the working conditions relating to various professions. Members of my party had an axe to grind in respect of this matter with regard to Sunday working hours. In that context, one rate of pay applied in Dublin while a different rate applied elsewhere. How did such a situation come to pass in view of the existence of the Organisation of Working Time Act?
The JLCs are tasked with examining various professions, etc. I had occasion to visit two or three small restaurants in rural areas outside Athlone in which students from the locality, who are studying in UCD or UCG, were employed. One of the restaurants was obliged to close because the owner could not pay the appropriate rates. Said restaurant served a very good Sunday lunch. NERA stated that the owner had been obliged to pay a young female student an enormous rate for working there on Sundays. Has this problem been resolved by the JLCs? If it has not been resolved, then it should be because there is no doubt that the situation which obtained regarding rates of pay for Sunday work in restaurants in rural areas, when compared with the going rate which applied in Dublin, was extremely discriminatory. It is odd that there were two different rates of pay.
What is NERA's position in the context of the Organisation of Working Time Act? Does a separate JLC edict apply and should consideration be given to this? If a level of flexibility that will not curtail workers' rights under the law can be introduced, then it should be considered. As already stated, however, the Organisation of Working Time Act and the minimum wage legislation are two cornerstones when it comes to the involvement of ordinary folk in European affairs. The provisions of these mechanisms should be adhered to at all times, if possible.
Mr. Alan Kelly, MEP
I welcome our guests. Listening to the points of view they put forward, they reflect the debate that has been occurring in Europe in recent times. Intense lobbying has taken place in respect of this issue. The trade unions are of the view that the organisation of working time directive is working well but in recessionary times, however, people are concerned about abuse, particularly in the areas of shift work in factories and the bypassing of administration. Businesses and other employers are seriously concerned with regard to the administrative burdens being place upon them. There is a degree of sympathy with this position.
I am aware that a process is currently in train but, from my knowledge of it, I do not expect anything to change in the immediate future. I am not sure if much needs to be changed. However, there may be a major issue which arises domestically and which must be addressed.
The European Parliament recently took a decision — the relevant vote was won by 16 votes — to the effect that independent lorry drivers should only work the same hours as everyone else. In my opinion, that decision was correct.
Ireland's decision not to choose the opt-out was also correct. The argument that our near neighbours have decided to avail of it, and thereby gain a competitive advantage, does not take away from the fact that we made the right decision. That should be acknowledged.
I take the point that Ireland chooses to implement many directives without digesting them. I previously sat on the Joint Committee on European Scrutiny and we should scrutinise directives a great deal more before they are implemented, although this directive is not a good example. The fact that it was implemented thoroughly and properly was the right decision.
With regard to the 48 hours-four months issue, I come down in favour of it being the right balance. Anything less stringent would not strike the right balance and it would be open to abuse.
While I have sympathy regarding the administrative work required, it is absolutely necessary in this day and age because there have been many examples of employees being requested to ignore certain rules and regulations. The level of record keeping necessary is about right in order that everything is regularised and workers know the hours they have worked and what they are entitled to.
There are issues relating to judgments. I was concerned about IBEC's comments on a number of European Court of Justice rulings because there is an issue in our own courts regarding the implementation of the rulings.
Regarding the issue of workers working part time, we must look at demographics across Europe. There is a change in demographics regarding people working part time given the economic situation in which we find ourselves. Many workers have to, or choose to, take a second job. The process by which this is being managed relating to how employers are dealing with that is an issue of concern because many employees are unable to take up second jobs due to flexibility issues. Social welfare payments are also being denied because they have to work in a certain way for their employers who are not being flexible enough. That needs to be addressed.
There is a huge communication process in the implementation of the directive that has been missed. This should be brought to the attention of everyone but the communications have been weak. This was highlighted publicly recently.
We need to get on with it and we need to implement the decisions because I do not see much change during this phase.
I welcome the delegations. I am happy to have this useful discussion because I am a committed European. I believe we have derived great benefits from Europe but some issues are better dealt with through subsidiarity, which provides that we can make decisions closer to home. There are areas, therefore, that should be not centralised at European level. It is interesting that Mr. McGinty referred to stringent implementation because that is down to the way we have implemented this directive, not the EU.
Senator Carty touched on the opening hours of shops. These have not been centralised. Each country, city and region can make its own decision regarding opening hours. That is right and I also believe the same should apply to a large chunk of the directive.
The creation of jobs in Europe is one of the major challenges facing us and every time we put new restrictions on working hours, we deprive somebody of a job. Jobs do not exist that would otherwise exist in certain cases. In general, those who represent workers will say their job is protect the workers but they are also there to protect those who are not yet working and who do not have jobs. Trade in Europe sometimes has to take second place to industry, yet in 6 million outlets in Europe, 31 million people are employed. There is huge potential to increase employment in these outlets but each time restrictions are put in place – and very often we do this at national level – some jobs cannot exist at certain wages.
Deputy O'Rourke referred to the difficulty of Sunday trading, particularly in restaurants, and some large restaurants and chains have had to close down because of restrictions. However, they did not emanate from Europe. There may have been a directive from Europe but we put many of the restrictions into operation ourselves. It is important to recognise that every time we introduce restrictions coming from Europe and impose a stringent implementation, we probably deprive a section of people who might otherwise get jobs.
I can understand the benefit and why we are proud of having a high minimum wage but some jobs do not exist at that wage which would exist otherwise. Mr. Kelly mentioned that agreement has not been reached in Europe on this and there have been difficult discussions in recent times in the European Parliament and at the European Council. I urge us in thinking this through to make sure the objective takes into account the creation of jobs. Jobs will exist under certain conditions at certain wages which do not exist under other conditions and wages. We must attempt to keep that balance when we take these into account.
I welcome everybody. As I understand it, our purpose is to review the working time directive. It is in place and, therefore, the net question is whether it should be in place or whether it should be amended. The directive sets minimum standards in many areas. After that, the general principle is the protection of the health and well-being of employees but business and industry should be recognised also because without both of them, we would not have jobs. I am bothered that when directives are set out, they are interpreted differently throughout Europe and the more we extend the membership of the Union, the more variation there is. I would like to ask those who represent employers and employees whether we should establish a set of basic principles to protect workers' rights and our position in Europe because the worst thing that can happen is a variation in the interpretation of the directive, which would make us uncompetitive in a European context. If we apply the rules more stringently than some of our colleagues in other European countries, we become uncompetitive.
There is a general feeling that people are getting away with it whereas the purpose of the directive is to protect the health and well-being of individuals. This matter has to be debated properly and we must take it seriously. One of the main issues facing Europe is where we go in applying directives fairly. I am in favour of more local bargaining and people sitting around a table to understand each other's problems. One cannot apply the same solution in some cases. An industry could go through a difficult patch and people may be willing to job share and so on. Such measures were not available in the late 1980s and 1990s. We should not just pass over this and allow it continue the way it is. Can we not examine it in the context of its application across Europe? Is it being applied in a more liberal way that makes us less competitive? I do not know. I would like to hear views. Is it making us less competitive? Where are we in the league table of protection of people's rights? That type of discussion should take place.
I welcome Mr. Alan Kelly, MEP, to the committee. This is an area where national parliaments should work with members of the European Parliament in debating this issue along with those who represent different viewpoints, whether employers or employees. I would not like to see this being nodded through, as though we had done our bit and reviewed it, but have nothing concrete come out of it. It is far too serious a matter for that.
There are wide differences since this was first fleshed out and times have changed considerably. However, there are basic principles that should be established and those basic principles should be the same throughout Europe, whether in Romania, Great Britain or Ireland, and the application of the rules should not change from one country to another. For example, some countries have a tradition of a siesta and so on. As Europe expands, more traditions come into play and some of these take on a different meaning. In Ireland, because it was a Catholic country and we rested on the Sabbath, we did not work on Sundays. That may not apply to other religious beliefs. These are the sort of traditions that have built up over time. Leaving religion aside, what is the difference if I take Friday or Saturday off? Either is a rest day. Do I have a five day week? What days should I work in the week? There are many issues such as these which must be faced up to. Some businesses provide a service on a Sunday, perhaps in entertainment. For other businesses it is more convenient to work from Monday to Friday.
This is an opportunity for us to work together and to try to flesh out the basic principles that all of us can agree. There must be room for people, nationally or locally, to negotiate and to find solutions to individual problems rather than banging the table on a particular point because somebody in Europe said it has to be that way?
That is my contribution at this point. This is an ideal opportunity for us to have a look at the way we do our business and how people are employed. Are we certain we are doing things that protect people's basic rights?
I was interested in what Mr. Alan Kelly, MEP, had to say about the debate in Europe. This is just one of a number of things that are happening at a pivotal time. There has been a progression in Europe. Part of what we are proud is that we run good social provision throughout the EU. This goes back to the First World War, when the notion of the working day being limited to eight hours was introduced in France, and continues right up to some of the more excessive innovations in France with the ever-shortening working week and the early retirement age.
Some of the progress is now coming home to roost because we simply cannot afford it. Member states of the EU have run up enormous debt in order to protect something that is no longer affordable. I say this as an employer who has enjoyed the fact that the National Employment Rights Authority has imposed better work practices on me, and whose staff enjoy those practices. I run a small business aside from my work here as a Senator.
I have no problem with the minimum wage, even though I am on the Border and compete with people doing the exact same job for less across the Border. The minimum wage has improved my relations with my staff. Flexibility from them has improved because they are not put to the pin of their collars to earn every last cent. I did not hear Ms Esther Lynch say this, but I think staff are very often willing to demonstrate flexibility because they know it will improve overall security. In many instances there is a kind of collegiality between employer and employee that benefits the sustainability of individual businesses. That is a story that has been told right across the State. Things are not just as angst-ridden in many cases as is sometimes claimed. Of course there are, on the margins, many instances where abuse happens and where employers take advantage of the vulnerability of their staffs. I fully acknowledge that. However, much more is going on in the mainstream that needs to be acknowledged.
One of the reasons this debate is interesting — it is probably similar to that going on around retirement age, pension provision and so on — is that we are at a really critical juncture in terms of the social provision Europe can afford. Some very serious calls will have to be made, nationally and on a collective basis across the European Union, about exactly what standards can be afforded by the Union and whether social provision is impacting so badly on competitiveness that we are costing ourselves jobs. It is a very delicate balance. It is easy to be put in one camp or the other as a denier of rights, complete free marketeer or whatever. That is not where I am trying to go with this. I am just trying to identify how tricky this issue is when taken with a whole range of others. The core issue is whether, as a European trade zone and political entity, we can afford to build debt to provide welfare. The contrary of that is that we must continue to provide strong minimum standards to ensure the health and safety of our workers during their working lives and into their retirements.
That is a fairly good appraisal of the situation. As Mr. Alan Kelly, MEP, has said, I have attended some of the meetings that have taken place in Brussels and have got a flavour of the general thrust of the debate. The issues are as both our guests have pointed out and as the Members have referred to. It is a very finely balanced situation. It is necessary to have due regard to the kind of economic climate in which we are at present, both from the point of view of the workforce and the employers. Both are vulnerable in that kind of situation. More especially, both are vulnerable to competition, whether from countries within the EU who do not apply the same principled approach to directives or from outside the EU.
There is another issue to which we have referred many times. When the Celtic tiger began to wane we often thought about the high performance areas and promoted the knowledge based economy. That is essential and is part and parcel of what the workforce will have to address in the future. Without it we will not move on. However, to exclude all commercial activity and the retail and manufacturing sectors, which are hugely important areas for the generation of employment, would be a serious error.
This debate is taking place throughout the EU, as we know from some of our colleagues in Italy and France who took part in meetings in Brussels. In this debate we are trying to take on board the views of both the employers and the workforce and trying to influence them in a positive way, based on the experience of what we have seen and recognising that we are in tough times. However, tough times should not be seen as a means of undermining all the progress achieved so far. Unfortunately, in the straitened circumstances in which we find ourselves we must examine the issues carefully, take a careful and balanced view and try to do the best we can for everybody concerned.
Mr. Brendan McGinty
I will deal with a number of the points that were raised. In the context of the international debate the point made by Deputy Barrett that we must be aware of what is happening elsewhere is pertinent. We know, for example, that countries outside of the European Union do not have these requirements. That might seem to be a general point, but it is extremely salient. Why is it more salient in the case of Ireland than it might be to other of our European partners? We all know that we are entirely reliant on our capacity to export from 85% to 90% of everything we produce and do not have a domestic market as large as most of the other larger European economies. Therefore, our capacity to compete internationally and to attract investment from both within the European Union and further afield is hugely important. This is more important for us than for most other European countries, given our size and scale. Therefore the part of the directive dealing with the international aspect is hugely important.
Our concern is that the effect of some of the European judgments over the medium and longer term will be to undermine our capacity to foster sustainable employment. This concern arises at a time when we are all focused on the fact that the one goal on which we can fashion a common cause is the opportunity for sustainable growth delivery and sustainable employment. Unfortunately, we face into the potential reality of a period of jobless growth, assuming we can concretise the shallow roots of recovery that are appearing in certain parts of our economy. That is a huge issue in terms of how we approach this.
A comment was made about European Court of Justice judgments and our lack of compliance. As far as we are concerned, Irish employers are fully compliant with the tenor and thrust of the Organisation of Working Time Act as it is currently laid down and with regard to how sick leave and annual leave are provided for in our domestic legislation. In the event of a future change in the legislation, our advice to members will change.
On the issue of records, the issue is not that there should not be a requirement to keep records. Of course there should be a requirement to keep records. That is a matter of good policy and sound practice. What we take issue with is the extent of the burden being placed upon business and individuals as a result of decisions taken in this jurisdiction on how to go about this. That is the fundamental issue. The concern we have highlighted, particularly with regard to some of the European judgments, is that record keeping ultimately should be about getting the balance right between what is appropriate for somebody who is absent while sick, versus the health and safety requirement under the directive. Our concern is that the whole focus has changed and the record keeping has become an objective in itself which goes far beyond the health and safety requirements and principles set out in the directive. I agree with the point made by Deputy Barrett that we need a debate about the principles by which we should be guided in this regard, because we seem to have lost our way and moved away from the founding principles of this directive and steered our boat in favour of a higher level of administrative burden being placed on Irish workers and employers than exists in other European states, as attested to by the fact that we are not one of the 14 who have taken the route of the opt-out.
Mr. Tom O’Driscoll
Deputy Barrett raised the issue of competitiveness. Promoting healthy working hours is not just the right thing to do, but serves as an effective competitive strategy. I would like to draw the committee members' attention to a study that was carried out by the Chartered Institute of Personnel and Development, CIPD, in Britain in 2003 — the Living to Work survey. The CIPD is not under the umbrella of the TUC. However, the survey demonstrated that one in four workers reported negative impact on health and that two out of five reported a negative impact on relationships. The most interesting finding was that most workers reported a negative impact on performance. Therefore, work organisations and businesses can benefit through increased productivity, reduced rates of absenteeism and reduced staff turnover. Senator Dearey gave a graphic example of collegiality and higher morale where workers are treated well. I respect him for paying a living wage. That example goes to show that if employers treat workers well, they will perform for those employers.
Official statistics show remarkable differences in productivity per hour worked. For example, the UK, which is one of the countries in the EU with the longest working hours, is ranked lowest on the productivity scale. Therefore, far from being a brake on competitiveness, the working time directive, if used to its optimum, can be a competitive strategy. The Nordic countries are a classic example of high regulation in the area of working time and very competitive economies.
Senator Quinn made an interesting point and suggested the issue is really about job creation. We are always calling for more jobs to be created and that call is the core element of political campaigning currently. However, I must inform Senator Quinn that the working time directive means longer hours, not more jobs. It means longer hours for existing workers. Therefore, not having regulated working time is an obstacle to job creation.
President Barroso stated, "If globalisation puts pressure on our competitiveness, our response should never be to lower our standards." We should be conscious of this when talking about the health and safety of workers. The preamble to the directive also states quite clearly that it should not be subordinated to purely economic considerations. That said, we are prepared to work. There are creative ways of dealing with the directive to ensure that far from being an obstacle to competitiveness it can enhance competitiveness.
Mr. Kevin Callinan
I am inclined to agree with Mr. Kelly's assessment of the dialogue that has been taking place at the broader European level. However, from a trade union perspective, we are inclined to argue that the communication from the Commission has muddied the waters. The fact is there have been problems with the implementation of the directive. These problems relate to three areas, the issue of on-call, the individual opt-out and the reference period.
Mr. O'Driscoll was correct to direct us towards what President Barroso said and I was going to mention that myself. His statement is the way we need to go. If the directive was being properly observed right across the European Union, we would not have the debate or argument about an individual member state having a competitive advantage over another. When we look beyond the European Union, it is important to consider what President Barroso has said and to consider the kind of vision we have in terms of a social Europe. Specifically, my union is a public service union affiliated to the European Federation of Public Service Unions, and I have made available to the committee secretariat the position paper for circulation to members. We represent hundreds if not thousands of people who are employed in residential care as social care workers who, as part of their normal routine, are required to do what are called sleepovers, for which they are not paid, other than a very paltry nominal allowance on top of their working week. These are the kind of issues we need to face up to. Senator Dearey emphasised jobs. No one on the trade union side will demur from the importance of jobs and the need to create them and a job-creation environment. However, the answer to our problems, whether at national or European level, is to try to reach collective agreements and understandings on these issues. That is the way we need to take things forward. I thank the committee for the opportunity to contribute to the meeting.
Ms Esther Lynch
It is a reflection on our lives that we think working on a Sunday is the exact same as working on a Monday. Working a Saturday night is probably not the same as working a Monday morning and this idea that all hours are the same and that they should all be treated the same is not accurate. I have read some research, which I tried to locate and which I will go out of my way to find for the Deputy, which shows that if people are required to work on a Sunday, there is an impact on their health in the long term. I questioned this finding because I thought this sounded suspicious but on further examination, I discovered there was a negative impact if all the family did not share the day off. If all the family are working on a Sunday, then working on a Sunday is exactly the same as working on a Monday, but if one's children are off on a Sunday and, as a mother, one cannot be there to make a Sunday meal, that means something and there is a difference. It might be no difference to the guy running the shop but it is a difference to a mother not being able to make Sunday dinner.
I hope the committee considers our proposal to put workers more in control of their working time so that a worker could request a change in his or her working hours, there would be an obligation on the employer to consider that request and only if there was a sound business reason not to grant the request would the employer be allowed refuse it. This is not just about Mr. X running his shop but also about trying to create a just and fair society full of healthy, happy, competitive workers and a simple adjustment such as allowing people to be able to have one Sunday in four at home. As my colleagues have said, we need to get back to the basics which is that this is about health and safety and about how long a worker can safely work. It is also a case of how much one is paid to work. The directive is actually about how many hours a worker works and it is not linked to pay. I thank the committee members and we are happy to circulate any further information.
Often when one tries to open up a discussion, one can be misinterpreted. I know the delegation did not mean to misinterpret what I said but I just stated some facts as distinct from supporting the facts. That is important in an open discussion such as this. There is no point in having a directive that sets out to achieve certain things, a number of member states ignore it and, as a result, we are made the patsies in terms of being less competitive. That is the point I was making. I am all in favour of health and safety. I was an employer and I think I was the first among small companies to introduce profit-sharing, which I completely support and for which I will always argue in favour. The point I was trying to make is we are living in a different world. As Europe expands and different cultures and traditions come into play, these things have to be looked at in a broader sense. I am all in favour of local discussions and local bargaining once we agree on basic principles that are adhered to by all member states. That is my point.
This was an interesting discussion which will be used as a reference in the course of our discussions both within the committee and with our colleagues in the European Union. The point was made by many about the application of the rules within the various member states. This directive impacts on us all, regardless of whether we like it. Some member states originally proposed having very short working lifetimes and longer holidays. We would all love that but, unfortunately, we might not be able to aspire to that in the current climate. The situation is changing but we should not throw everything out because of the need to change. We should try to do what we can to make our own employment and employing sectors as effective as possible in the current climate. I thank our guests for an interesting discussion and we will be in touch in due course with our report.
Sitting suspended at 3.25 p.m. and resumed at 3.27 p.m.