That Seanad Éireann approves the following Order in draft:—
Worker Participation (State Enterprises) Order, 1978,
a copy of which Order in draft was laid before Seanad Éireann on 15 June 1978.
Vol. 89 No. 15
That Seanad Éireann approves the following Order in draft:—
Worker Participation (State Enterprises) Order, 1978,
a copy of which Order in draft was laid before Seanad Éireann on 15 June 1978.
It will be recalled that on 29 March 1977, when the Second Stage of the Worker Participation Bill was being moved in Seanad Éireann, the House was told that it was not possible at that time to determine, in advance, the sizes of the reconstituted State boards in question. The view was that it would not be appropriate, at that stage, to prescribe board sizes in the Bill as it could limit the discretion of the Government Ministers concerned. It was felt to be desirable and appropriate that the Ministers should have discretion in determing the size of the boards to take account of the appointments to the boards of members elected by employees. The solution adopted was to allow the new board sizes to be prescribed at a later stage by affirmative order.
For that purpose, section 23 of the Act empowers the Minister for Labour, after consultation with the Minister for Finance and other appropriate Ministers, to prescribe by order—in relation to each of the State bodies designated in the Act—the number of members or directors of the reconstituted boards, including the number of employees to be appointed following an election by the workforce. Where the total number is a multiple of three, elected representatives must constitute one-third; otherwise the proportion of elected representatives must be rounded upwards to the number which is next above one-third.
Under the terms of section 4 (4) of the Act, a draft of any order to be made under section 23 requires the prior approval of the Oireachtas by way of affirmative resolution of each House. The intention behind that provision was to ensure that there would be no diminution of the authority or responsibility of the Oireachtas in determining the appropriate size of the State boards concerned.
The present order, which has been laid before the House in draft, is designed to comply with the requirements of section 23 of the Act in so far as five of the seven State bodies are concerned—Bord na Móna, British and Irish Steam Packet Company Limited, Comhlucht Siúicre Éireann Teoranta, Electricity Supply Board and Nítrigin Éireann Teoranta. The effect of the proposed order is that, as from the date on which it is made, the size of the boards of the five bodies will be fixed at 12 members, of which four—that is to say, one-third of the total—will be elected by the workers for appointment under the Act. As the maximum size of the existing boards is seven—except in the case of the Sugar Company where it is ten—the overall increase in board sizes will be five of which four will be reserved for members elected by the employees; the increase in the Sugar Company will be two.
I have not included Aer Lingus Teoranta or Córas Iompair Éireann in the draft order because consultations in these bodies have not reached a stage where decisions on board sizes would be appropriate. When consultations have concluded I shall be pleased to bring forward the relative draft orders before the House to reconstitute the boards of these two bodies.
I have already made regulations for the conduct of elections under the Act which were laid before the House on 1 March 1978 in accordance with section 4 (3). This draft order represents the next step towards bringing the Act into operation since it specifies the number of board seats which may be contested in elections.
I can assure the House that I am very anxious to proceed with the implementation of the Act. In that connection, it is relevant to mention that there have been consultations with all the interests concerned about the election procedures and about board sizes. The draft order was approved by Dáil Éireann on 27 June 1978. I would, therefore, recommend that the House approve the draft order.
We accept the Minister's recommendation and approve of the draft order. It implements the first piece of legislation introduced in the history of the State to attain worker democracy in industry. It is a matter of some satisfaction that the parent legislation was introduced by the National Coalition Government.
This legislation brings us into line with the state of affairs which pertains in many other European countries. It has worked, I understand, to the benefit of industrial relations and industrial efficiency generally in those other countries. It is very important at this stage of the new development that steps be taken to ensure that workers in the State bodies concerned would be fully aware of what is in store for them by way of powers to elect board members. They should be educated as to the importance of this development in the affairs of their companies and made aware of the duties and responsibilities of members of boards so that they will have a complete interest in the election proceedings and their approach will be a responsible one.
The appointment of these new board members should improve the efficiency of the companies concerned and benefit their industrial relations.
I regret that the discussions in Aer Lingus and CIE have not concluded. I urge the Minister to bring them to a conclusion as quickly as possible because their recent history indicates that they are ripe for worker participation at board level. We welcome the making of the order and hope that it will have the success, in practice, that we anticipate for it.
I should like to confine my remarks to a definition of worker participation, to identify pressures for worker participation and to comment on the legislation which is the subject of the draft order before the House. For many years there has been much discussion about worker participation in the countries of western Europe, including Ireland, but little concrete action. I should like to add my voice of approval to the draft order which represents the next step towards bringing the Worker Participation (State Enterprises) Act into operation.
Worker participation is concerned with the principle of developing avenues of participation for employees and is essentially concerned with giving employees a say in the decisions that affect them. This Act represents one, and only one, first step or avenue towards worker participation in decision-making. It is sometimes argued that the demand for worker participation is a myth, indeed there may be people who say that they have not noticed any demands for increased participation. However, to understand the pressures for employee participation, and I will argue that such pressures do exist, the question of worker participation must be viewed in the broader context of changes which have already occurred and will continue to occur.
For convenience purposes, I will comment briefly on these changes under three headings: first, the changing relationship between the worker and the company; secondly, the changing concept of the company itself and finally, the changing values of society. With regard to the changing relationship between employee and company, it is worth recalling that originally the employers' contractual liability to workers amounted only to the payment of wages. Gradually however employers were seen to have other obligations and responsibilities, for example, in health and safety which were under-pinned by protective legislation in these areas.
Then a further shift took place when certain entitlements or rights, usually associated with the length of service of an employee, were achieved by the workers, for example, holidays, redundancy payments and so on. Again, these rights were enshrined and under-pinned by legislation. This shift or change has meant of course that the employee has now become a kind of partner or associate of the company. This evolving aspect of the workers' position is now getting a further impetus through the Worker Participation Act in the seven designated State enterprises when employee representatives will get a voice by right in the policy making of these organisations.
The second strand of change to which I wish to refer is the changing concept of the company itself. The company originally was viewed as the property of the shareholders only and employees had no legal standing in company law. A variety of changes have occurred which underline the importance and interdependence of various interest groups, shareholders, managers, customers, financiers and, of course, employees, each of whom is imperative for the overall success of the company. Company law has not as yet changed so as formally to recognise these interest groups but the legislation before us gives employees a representative voice on the important decisions taken at board level in the State enterprises concerned.
Finally, there are the changing values of society, including of course Irish society, which generate pressure for worker participation. The typical undertaking, including the State enterprises which are the subject of this order, form part of society at large and they must be sensitive to changes that take place in that broader society. Amongst those changes in Irish society, particularly in the last ten to 15 years, are the following: the present generation of workers is the first to experience relative affluence and the increase in leisure that goes with it. Workers wish to exercise influence over the time they give to work and to leisure. The present generation has more educational opportunities and is better informed than any previous generation. Consequently, people today have rising expectations and aspirations unheard of in previous generations leading to demands for individuality in work and for more control by individuals over their own jobs and careers. Then, there is the modern tendency to challenge authority in every sphere, in the parent-child relationship, in the teacher-pupil relationship and, of course, in the boss-subordinate relationship in the workplace. The consequential changing basis of authority, that is authority by consent, calls for a response in industry. There is an uneasiness and at times an alienation towards jobs, especially in mass production industries. In Ireland and in western Europe we are only just becoming aware of the need to improve the quality of working life. Finally, there is the growth in the size of some enterprises in both public and private sectors that has depersonalised relationships and may threaten the workers' sense of identity.
Against this background of change which generates pressures for worker participation let us consider the place of the worker in the typical enterprise. Decisions are made by a defined small group in a hierarchical structure with clearly allocated responsibilities. Thus, a great number of people are depending on the decisions made by a few. It must be remembered that workers not only derive their incomes from their employment but they devote a large proportion of their working lives to it. Decisions taken by or in the enterprise can have a significant effect on their financial circumstances, on the satisfaction or otherwise that they derive from their work and on the time which they devote to their families and activities outside the workplace. Accordingly, throughout the EEC countries continuing consideration is being given to the problem of how and to what extent employees should be able to influence the decisions of enterprises which employ them. The recurrent central theme, therefore, in the EEC debate on worker participation is the decision-making structure of enterprises and especially the role of the employee in that structure. The central feature of participation is shared decision-making. It means having a structure whereby employees have a say on decisions affecting them. In other words, it means the introduction of a democratic feature in industry.
Participation in the decision-making structure can take place at various levels within the enterprise. First, there is the shop floor level where most workers can be involved on such schemes as flexitime, group production methods, job rotation and so on. Secondly, there is collective bargaining which is the most common and indeed the most effective form of worker participation to be found in Ireland at present. Collective bargaining, as we know, consists of negotiations between unionised employees on the one hand and employers on the other, on pay and other conditions of employment.
The attitude of the law to collective bargaining in this country is one of favour and the institution of collective bargaining is supported by a broad base of opinion including the ICTU, employer organisations and, of course, the main political parties. The scope of collective bargaining is increasing and will continue to do so. A drawback of collective bargaining as a form of worker participation is the accompanying risk of confrontation which may ultimately result in industrial action.
Another level at which participation takes place in companies is through works councils. The EEC view on works councils is that they are best suited to dealing with social matters at plant level where employees interests are most affected and where humanisation of work is most possible. In practice, works councils tend to be consultative in nature and a difficulty can be encountered in separating the processes of collective bargaining proper from areas of concern to works councils.
The top level in the participation process is at board level, the subject of this legislation. This means involving employee representatives in policy making at the top level in the enterprise. Worker participation on the job has its part; so does collective bargaining at plant level but a wide range of major decisions vital to workers' interests are in fact made inside board rooms.
This legislation is a first, tentative step in developing our own structures in Ireland based on our existing industrial relations institutions. It is an experiment in seven of our State trading enterprises which I hope will be monitored and from which we will derive a lot of insights for guidance in areas of participation for the future.
I welcome this order because, as I see it, there is a need to respond to the pressure for worker participation, which is gathering momentum throughout western Europe. Having said that, I think it is worthy of note that there is no set of participative measures which are generally acceptable throughout the EEC and, therefore, a wide range of choice is still open to all the member countries. I go on the assumption that worker participation is inevitable in the long run but there is a need for further discussion and debate on alternative and additional approaches to worker participation. For example, the consideration of redesign of jobs and restructuring of work groups in which the Scandinavian countries have taken such a lead, the role and place of works councils in companies and consideration of measures to provide more information to employees to mention but a few further possibilities.
In conclusion, it should be said that any proposals for the extension of worker participation must be considered in the context of our need as a nation to produce goods competitively, to create more jobs, to promote economic growth and so on. The hope is that in the long term the adoption of more participative forms of work organisation will lead to improved industrial relations and more commitment by workers to their jobs with consequential improvements in productivity.
On behalf of the Labour group I welcome this order as a necessary step in the process of implementation of the Worker Participation (State Enterprises) Act, 1977. This was legislation introduced by the Minister's predecessor, Deputy Michael O'Leary. It was recognised at the time that it was a fairly diluted form of worker participation and by the standards of other countries it was by no means a radical measure. Senator Hillery described it as a tentative step in introducing worker democracy in the form of worker participation, in Ireland.
It does appear that there is a certain dilatoriness in implementing that legislation. The Minister referred to the fact that he had widespread consultations with his own colleagues and within each of the five State-sponsored bodies which are the subject of this order and, of course, that is necessary. But sometimes consultations can be very dilatory unless the Minister responsible is anxious and pressing for results. It is striking that although there are a mere seven State-sponsored bodies involved, the Minister can deal with only five of them. He did not tell us in his opening speech when Aer Lingus and CIE will be the subject matter of a further order.
I would like the Minister to tell the House a little more about his own approach and philosophy to worker democracy. I would like to know why he decided to standardise the size of the boards at 12 directors, which means he is increasing quite substantially the size of four of the existing boards from seven to 12 and increasing the board of the Sugar Company from ten to 12. This is relevant when one considers that a third of these enlarged boards of directors will be elected by the workers and in a sense the larger the board the more diluted that representation may be. The fact that the Minister has chosen to standardise it at 12 is in itself something that is interesting and that we should know a little more about.
I would like to know in relation to these five State-sponsored bodies when the elections will take place and when the reconstituted boards will be fully in operation? I would like to know in relation to the other two State-sponsored bodies—Aer Lingus and CIE which are two very major and important State-sponsored bodies with a very large number of workers—when the Minister will be in a position to bring forward orders in the matter and whether they too will have boards of 12 with four elected directors.
Perhaps the Minister will indicate whether he has any ideas or proposals to extend the concept of worker democracy, any plans for legislation to perhaps deepen and broaden the concept of and the framework for worker participation not just in State-sponsored bodies but generally in industry. Given the fairly diluted nature of this worker participation, that it would be just a third of the directors on the boards of seven State-sponsored bodies, there has been a fairly slow progress. We are being very careful indeed about introducing worker participation in Ireland.
I would hope that the progress from now on will be more speedy in the State-sponsored bodies themselves and also that we will see more thought-through and radical proposals for worker participation. If one looks at the type of country this is, if one looks at the youth, at the expectations and the better education of workers in Ireland, it is not something that we must reluctantly concede. I believe it is something we must approach in a much more committed sense, that it is part of any genuine sense of democracy. It is sad that Ireland is behind in this, very far behind the various Scandinavian models and also behind a number of the other countries of the European Community. I hope the Minister will bring before this House much more radical proposals for worker participation and that he will speed up the implementation of this first step along the road.
This ministerial order is the first step in initiating an experiment in worker participation in certain State bodies. I say experiment because, as Senator Hillery said a moment ago, nobody is yet clear what is the best way to ensure adequate worker participation in the affairs of the undertakings in which they work. Nobody is in any disagreement here as to the principle of workers having a say in decisions affecting their daily lives and their future prospects, but I would emphasise that this may not be universally satisfied by membership of a board and that there may be cases where it would not be appropriately dealt with by membership of a board, given the purpose and character of certain undertakings.
I would like to support the plea that Senator Hillery made for adequate monitoring of this experiment. Let us have some expert guidance as to how the experiment is going and whether it is a success both from the social standpoint and from the standpoint of the contribution that representation of workers on the board can make to the more efficient operation of the undertaking. Even where board membership or representation of workers on boards is both necessary and desirable, I would think that, to be effective, it would need to be sustained and supplemented by an active system of communication and consultation all the way up from the shop floor and throughout all the operations and activities of the undertaking.
Encouraged by Senator Hillery's rather general comments perhaps I could say that the doubts some people have about the universal applicability and effectiveness of board representation stem from quite legitimately different views about what a board is. If one views it as a decision-making body or a sort of power centre, then all our democratic instincts make us favour power sharing—the participation in government of the workers. We want to have authority by consent, in Senator's Hillery's phrase, but this raises some problems. Are the representatives elected by the workers answerable only to their constituency or do they have wider responsibilities? Will the old trade union convention, which sees management and workers as locked in some kind of perpetual conflict, still prevail. Will the board representatives of workers in time be regarded as Uncle Toms remote from and mistrusted by their former workmates? Only time will tell what will happen on this front, and that is one reason why adequate monitoring of this experiment is desirable.
If, on the other hand, one does not regard a board as purely a decision-making body or power centre, but as having mainly consultative functions, then another view should be taken as to the appropriate relationship between the board and its employees.
Even in a decision-making board certain special management and policy-making functions have to be exercised which require contributions of skills in production, marketing, finance, planning and development and so on. Worker representatives would have special skills in regard to industrial relations or human relationships in the body concerned, but one would like to see, through objective assessment, what would be their contribution on a wider scale to the efficient discharge of the organisation's functions as distinct from its powers.
I can illustrate this from experience. I have been chairman of three State bodies and I am on the board of two major private sector companies. One of the State bodies was the Central Bank where the functions of the part-time board are very largely consultative. They have to do with the analysis of policy and the assessment of advice or proposals put before them by the whole-time chairman and chief executive, and they have to act in a very representative advisory and confirmatory capacity. In these circumstances the board, apart from representing the major banking institutions through which the Central Bank has to carry out its functions, represents broadly the major sectors of the economy and it must do that if it is to fulfil this function of being an adequate consultative and advisory body. It is difficult to see any obvious scope on a board with that kind of function for worker representation, and as far as I know there has been no demand for it. That is perhaps irrelevant. The function of keeping in close touch with the workers is discharged through the normal processes of consultation with the trade unions and the staff associations concerned.
In the private sector, the usual pattern is a board which has whole-time executive members and some part-time non-executive members. If we extend this matter to private enterprise, presumably in such a context the elected worker representatives would be part-time non-executive members. What are the functions of such a member of a board? Given that management are strongly represented through the permanent whole-time officials, the main purpose of the non-executive part-time members is to introduce wider horizons into the policy-making and decision-making of the board, to bring to bear on the board their own special knowledge and experience, to both stimulate and criticise the performance of the whole-time executives. They would act as a mixture of a gadfly and a watchdog if there were such an animal.
In looking at this experiment one has to see how to formulate best the appropriate functions of the non-executive part-time member who is elected to represent the workers. We should try to learn more by our experience and by objective assessment of this experiment before deciding to extend it much further, particularly into the private sector.
The Labour Party, as already indicated, welcome this legislation and look upon it as an historic breakthrough, somewhat belated, in this field of worker democracy. Senator Whitaker has some suspicions that the elected representatives of the worker from the floor or in administration may have limitations in the boardroom regarding decision-making and policy-making. This is the voice that has been missing all down the years in the decision-making and the policy making of many of the boards. The human element and the productive element of industries were factors that created the call for the changes that we see initiated in this legislation and for which we are extremely grateful. It is ironic that in a large workforce a board with a small membership should have the controlling voice in all their destinies without any infiltration from the floor as to what would be desirable or good to make that firm more efficient in its work. I have no doubt that those elected to the five companies mentioned by the Minister will live up to their responsibilities in making a worth-while contribution, and not a sectional one purely on industrial relations and not a contribution reflected in a conflict between management and worker. Since the very foundation of the State the trade union movement and worker organisations have been pleading for a voice for workers in the board room. I have no doubt that worker representatives will live up to their responsibility and help to create that better climate for improved industrial relations. Our image, despite the fact that it is an inflated situation in relation to the overall situation of worker-management relations here, is unfavourable and any improvement in that is welcome. It is regrettable that the Minister was unable to include two major national companies, Aer Lingus and CIE. Those companies have come under the spotlight very much in regard to industrial relations and policy and management decisions over a period of time. I appeal to the Minister not to delay the opportunity of giving the substantial number of workers in those companies a say in policy-making. This is but touching the tip of the iceberg because there is the wider private industrial field which will be pressurising for the right of the person on the floor, in administration and in other fields who were heretofore denied such an opportunity to have a say in their own destiny. The Minister and the Government, with the experience that can arise from the involvement of workers on the boards of five of the seven State companies, should not delay too long before they extend this right to workers in the wider fields of Irish industry.
I welcome this order as a step in the right direction. It is an experiment covering seven State enterprises. I hope a lot will be learned from this first step. However, as was expressed by some other Members, I have some doubts about the rate at which this move towards worker participation is taking place. I believe it could be speeded up.
The exercise is confined to State enterprises only. In so far as it relates to only seven such organisations it clearly raises the issue of the validity of any conclusions which might be drawn from the experiment in future years if the mixture and the coverage is not representative of organisations. As Senator Whitaker has pointed out, boards and directors will operate in a different way, depending on the function of a particular organisation. In some cases it would be more consultative and in others the board of directors have wider functions, particularly where they are operating in a competitive environment.
I was disappointed to see that Radio Telefis Éireann was not included in this type of operation. As Senators are aware, I was a member of the RTE Authority which was dismissed by a Government.
Which Government was that?
It does not matter; I will take that on the chin any time. At that time if there had been a good sprinkling of staff on the board that may not have happened. Sometimes staff will fight to the last head of board members but if they are there themselves it might be a different scene. There is room for faster movement in this regard.
I question whether sufficient thought has gone into the preparation of suitable structures within these enterprises which could facilitate the worker-director in relating to his constituency, on the one hand, and the normal collective bargaining structures, on the other. Obviously, there will be a pull in this direction and this is one of the areas that will have to be studied. I see a difficulty in that no realistic assessment has been made about how junior and middle-management fall into this. I have drawn the attention of Senators to the way that junior and middle management groups are getting squeezed not only in terms of their real income increases but also in their position of responsibility, on the one hand, and eroding authority and powers, on the other. This is a matter that will have to be watched given the fact that only a small number, in this case one-third, of the worker-director group can be on the main board.
Looking at the experiment in the light of what is going on in the other parts of the world, I believe there is a need to learn from the two-tier board structure in Germany, for instance. They have found it necessary to work on two levels. They have the management board and the supervisory board. Clearly, something like that might be necessary, even in the State organisations where the first experiment is taking place. In the one-third membership alone that particular approach might not be the best, but we will have to see what can be learned from it. Denmark has had a two-tier scheme for many years also.
The problem with worker-directors on the board is that as well as getting the power and authority that goes with it equally they have the responsibility of discharging certain functions of the board. In relation to boards where there is greater commercial activity, for instance NET, one of their main responsibilities is the clarification and the analysis of the strategies that the company will follow. There have been questions as to whether elected employees would be in a position to engage in that type of strategy analysis. I have no doubts about their ability to do this, but nevertheless it is important that the qualifications of the people elected will be kept in mind in relation to discharging the duty of the analysis of strategy, particularly where competition comes in. They are some of the difficulties.
On the other hand, taking the positive view, there are some areas where movement might be made. I would like to see vigorous research into some experiments on using worker-participation as a means of improving productivity and industrial relations in two other sectors. One sector, obviously, is the private industrial sector. The boards and chairmen of private industry will be watching this experiment with a concerned eye. The other sector is the co-operative movement. We have a unique history in relation to the development of co-operation through the co-operative movement and there is a lot to be learned from it. It might be an area where experimentation could be encouraged by the Minister when he is thinking his way through the next step in the policy for worker participation.
In that regard I would draw attention to that wonderful example of the co-operative movement, the Modragon example in north Spain. It has been an unequivocal success story. They have made continuous growth, have given tremendous employment in the twenty thousands and have been successful in taking on the competition of any capitalist system. I believe that some studies have been made of the Modragon success by the IDA and others and I look forward to hearing in the future some of the points and crucial factors which have made that a success. I would say that it is probably based on the fact that the co-operatives must have suitable management which is as professional in its approach as management in any successful private, normally organised enterprise. We have seen that ourselves in the success of our own co-operatives as professional management has come through to the top. The co-operatives must have adequate finance and in our case we have seen that, where the shareholders in the co-operative are not putting up sufficient finance to keep the capital base strong and firm, then problems arise. In the Modragon case there is plenty of finance.
Thirdly, the democratic control must lie in the workforce, coupled with a suitable dimension of capital ownership which reflects the cost of entry on the part of the shareholder and worker and also some adjustment for losses as well as for profits.
There is a lot of work to be done and I would hope that there will be no dragging of feet in relation to this. I have had the experience of operating on a number of State boards and in some public companies and also working in an organisation where a real movement through a revolutionary process brought about worker management—I am talking about the Irish Management Institute. Given all of that, I am still concerned with the conservative nature of the reaction of a member of the normal board of directors and the chairman. This is probably institutionalised to some extent by the views of the employer body. They have got to recognise, as Senators said earlier, that the value systems of society are changing, that it is not in the interests of the evolution of successful profitable industry to ignore that and that maybe they have to move faster in bringing about effective worker participation, one dimension of which is board membership for those who work in the enterprise and participate in its functions and give their life to it. I am aware of some of the work that the Irish Productivity Centre are doing in this regard. They have a section specialising in the study of participation and they have some experiments running. I should like to commend them for the excellent work going on there and look forward to hearing further as the work there continues.
As has been pointed out by Senator Hillery and added to by Senator Whitaker, the worker director is only one dimension of the total aspect of worker participation. It is a structural aspect and, because it is structural and the Minister has powers in relation to some aspects of that, it is possible to make changes and to use the Minister's power to do so in relation to State enterprises. But worker participation is based also on an understanding of what is now known as the study of organisational development. This is an elaborate and well-researched field of study with professional chairs in various universities across the world. Maybe it is significant that we have not really sufficiently recognised that yet in our own academic institutions, though in the Irish Management Institute we have about four people specialising in that area.
I do not want to bore the House with a treatise on organisational development, but one aspect of it which has been mentioned already is the whole process of decision-making. This is an area which leads to a lot of confusion because people tend to see decision-making from different points of view, depending on their position. Decision-making can be simply broken up into four areas. The first step is to identify optional courses of action which are required, courses of action in relation to a management function, a business function or an industrial relations function. The second one is to decide how to measure the effectiveness of those courses of action. The third step is to decide what one is trying to maximise, whether it is trying to maximise profits or minimise costs or maximise morale. One has to decide the objectives in relation to the different courses of action in order to measure the effectiveness of one course against another. Finally, there is the actual taking of that decision, the opting for one of those courses of action.
I believe that a lot of the discussion or complaint that goes on about workers not being involved in decision-making has to do with the first three steps of that four-way process. It has to do with the worker saying "Did they consider such and such? Was it included in the list of courses of action? How did they go about assessing it? What are they trying to achieve? We were not brought in on this. We were not consulted on it. We had an input to put into this." When it comes to the fourth point, actually taking the decision and opting for one of the courses of action which may involves assessing probabilities and making judgments, that is a conflict position for anyone. Imagine what it is like when you are deciding what sort of motor car to buy or what kind of house. At the actual point of making the decision, it is a conflict situation. Most people do not want to be in that position and they are relieved when they have made the decision. I believe that decision-making in terms of worker participation could be much easier if we recognised that the first three steps of the decision-making process lend themselves to worker participation and more can be done in that regard.
I want to take the opportunity when we are talking about worker participation to draw the attention of the House to the fact that this is an exercise in power sharing. A lot has been said about power sharing under various political headings, but when it comes down to the most way-out shop steward or the secretary who is bucking for the secretary of the union or the chairman of the worker council or whatever, at that point it is concerned with sharing power and this is a study in itself. It is not by any means unreasonable to expect that people will not want to shift positions. If a person is chairman of a committee and enjoys being chairman of the committee he will not go along very easily with the destruction of that committee for the sake of new structures. The process of change in that regard requires very specialised skills and cannot be based on draconian structural moves.
On the other hand we have a situation, outlined already by one or two Senators, that in a society where the proportion of people who have gone through second level education is increasing, the expectations and therefore the value of systems of the participating workers will shift as well. In a society like ours, where we are up against it in terms of the unemployment problem with a high dependency ratio of 73 per cent, the workers will have to recognise their responsibilities in relation to the question of work-sharing and income restraint.
Any society will be stable if the groups within that society are willing to subordinate their goals to the superior goals of society as a whole. To the degree that they do not do that we will have an unstable society. Obviously, there will have to be some balance between those two tensions. But it is important to recognise it. The whole process of worker participation will be a moderating influence in helping to reconcile those conflicting goals of the subgroups of society as a whole.
There is one area which has not been touched upon and I should like to conclude with it. That is satisfaction at work. It has been established by the industrial psychologists that this depends on the challenge in the job that people have to do, the recognition they get for doing a good job and the opportunity for personal growth available to them in carrying out that job. But the reward they get for doing it is always seen as a measure of that recognition. It is not necessarily the money itself but the degree to which that company or organisation recognises the efforts of the individual in performing a given function. As Senator Hillery said, until such time as the awards system in all enterprises is related directly to the efforts of the people working, we will not get a healthy organisation. Without going into it in too much detail, the method of measuring, particularly in business-clud type operations, the success of an enterprise in terms of the added value created in that organisation is the basis for this and provides the answer. The emphasis on wages on the one hand and on profit, on the other, can be and has been shown many times to be counterproductive, whereas added value is a goal which is common to both the worker participants in the enterprise and the capital participants. To the degree that the legislation, company law, does not recognise this, we will have problems.
It is interesting to note that in company operations the only legal protection is for the capital holder. Until company law changes in this regard, worker participation will not be a reality. In the future we should be looking at methods whereby the added value approach could be incorporated in the system — for instance, by insisting that companies prepare their accounts not only to show the profit analysis but also to show added value analysis across the sectors of the company. Possibly the Minister might give some consideration in the future to giving some tax concession as an incentive to any company who would prepare accounts in that way. I know that may be a big leap, but one can trace some of the delay that takes place in moving a policy of worker participation forward to some key points like that.
It is interesting to note that at one stage companies operated without having the protection of limited liability. Once limited liability came in, the capital investor in a company had a great deal of the risk removed from him. So there is a case for legislating for the worker's right to share in the output generated by his labour input, coupled with the capital which is invested in plant, buildings and so on.
I would conclude by welcoming this first step in what is really a long road. I hope that we could speed up the process and try to get over this dogged conservatism that runs through our society and which may have emanated from our links with the UK over the years. We should look to Europe. We are in Europe. Things are happening over there. We do not have to wait and see what they are doing in London. Things are already happening in Bonn, they are happening in Copenhagen and have been happening for a long time and we can move forward on the same basis.
At the outset I should like to thank the Members who contributed, particularly those Members who made very excellent contributions on a subject which is so interesting and needs to be discussed and considered at great length. I want to thank particularly those Senators who obviously have researched the subject, who have a very thorough knowledge of the subject and who had some very powerful comments to make. It is significant that such contributions have been made here by those Senators at a time when we are introducing an order fixing the size of boards and providing on an experimental basis for worker participation.
I should like to refer as quickly as I can, and in as much detail as possible, to some of the comments made by the various contributors. Senator Cooney referred to the necessity for education. He is right. It is a new area. Education is a necessity. Already the Irish Congress of Trade Unions have had some training courses for shop stewards and others and there is great co-operation there with my own Department. Indeed, my Department staff have conducted courses and given lectures at seminars elsewhere educating people on the subject. As well as that, explanatory leaflets will be issued and distributed to all the employees in the enterprises concerned.
Senator Hillery, in one of the very good contributions, spoke on the principles of the Act, as indeed did some of the other speakers. The monitoring question was mentioned as was the further extension to the private sector. On the question of monitoring, I have arranged with the European Foundation—that is, the body concerned with improvement of living and working conditions—for the monitoring of the Act, in conjunction with the Irish Productivity Centre. I agree entirely with those Senators who said that if monitoring is important the monitoring could not be carried out by a better equipped group. Preliminary work on that study has already been done and the object of the study is basically to identify, examine and evaluate on a systematic and critical basis the effect of the legislation on the various aspects of company organisation. Many will be considering and looking at the size of the boards and their suitability. I was surprised to hear Senator Robinson asking questions that displayed a certain lack of knowledge on the subject or the complexities of it. I do not think anybody could have said "X number of board members is the ideal solution".
Why, then, did the Minister standardise them?
I will come back to that later. I am sure the Senator would have said the same no matter what the numbers were, but a balance had to be reached and I am satisfied that a sensible balance has been reached between on the one hand the efficiency of the board and on the other hand, the most important one, of giving an adequate and suitable representation to the employees. Discussions on the subject were held with all sides; views were expressed and in general it can be said that there was an acceptance of the figure of 12 as being a reasonable one. Even that number, naturally, will be looked at, studied and the effectiveness of the numbers will be examined by me and the bodies I have referred to.
Other initiatives on worker participation were suggested. It was said that this is but a beginning. I agree entirely that other initiatives are necessary. Discussion is essential and it is my intention to have prepared a consultative document for discussion. The debate this morning indicates the necessity for a thorough examination of the subject, for discussions among the social partners, among all of us with an interest in the subject, as to outlining the alternative approaches and the possible policy options. I hope to be able in the discussion document to set out alternative approaches and possible policy options that could be considered by the various groups and discussed with the various people with regard to further advance in the area of worker participation. I would hope that such a document would give the social partners the necessary opportunity to give their considered views and options on the subject.
Reference was made by Senator Robinson to dilatory tactics. I want to make it clear that the consultation to which I referred in my opening speech are about talks within companies. It is my wish that I will be able to introduce this order in respect of all the companies included. I want to be able to include as many companies as possible but I emphasise that the complexities of preparing the regulations on these subjects are extensive. I will always emphasise the necessity for adequate consultation between the parties concerned and it is because of the non-completion of such consultations in the two companies which are not being included today that this is incomplete. I regret that the seven are not here, but I assure the House that as soon as it is possible to have the boards' side established in relation to those two companies I will have no hesitation in bringing the necessary orders before both Houses of the Oireachtas. I am satisfied about the 12 members and this will be reviewed when the Act has been monitored.
References were made by Senators Whitaker, Moynihan and others, such as Senator Mulcahy, to directorships. I agree that worker-directors can contribute in a very important way to these boards. They will be practitioners within their own companies: they will be working in various areas of those companies and will obviously have knowledge of some of the difficulties in areas where policy changes could help to improve the efficiency of those companies. I look forward to those people playing a very full part as directors on those boards and making a worth-while contribution to the further growth and development of those State companies in a full and meaningful way.
This has been a pleasant opportunity to bring the order before the Seanad. It has been a worth-while opportunity to listen to Senators who have attached great importance to the subject. I look forward to extending the order to the two remaining companies and to progress being made in some of the areas I have referred to. When it is possible to have this document I have no doubt Senators will express equal concern and make equally worth-while contributions.
It gives me great pleasure to have this Order passed by this House this morning. All that remains to be done is for those boards to give me notice of their being in a position to go ahead with the elections so that the appointed day and nomination day can be fixed. I am hopeful that at least two, probably three and hopefully five of those elections can be held before the year ends. I hope to be back here as soon as the other two companies concerned have completed their discussions to ask for the approval of the Seanad in their regard.