Seanad Éireann díospóireacht -
Tuesday, 18 Dec 1984

Vol. 106 No. 9

Social Welfare (Amendment) Bill, 1984: Second Stage.

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

Minister of State at the Department of Social Welfare (Mr. Pattison)

This Bill has a twofold purpose. First, it lays the groundwork for the introduction of a new scheme, the social employment scheme for the long-term unemployed and, second, it provides for the abolition of a scheme which has outlived its usefulness, namely, the intermittent unemployment scheme known as the wet-time scheme. The explanatory memorandum circulated with the Bill was I trust helpful in the examination of the proposals by Senators.

The Government's plan Building on Reality 1985-1987 outlined a range of measures which have been devised to aid employment creation and halt the upward trend of unemployment. The new social employment scheme will offer opportunity and hope to significant numbers of our longterm unemployed. This major initiative will be introduced over the coming months by the Minister for Labour who will be announcing full details of the new scheme early in the new year. Some details of the scheme have yet to be finalised but I will mention those aspects of the scheme which are relevant to the Bill.

Under the new scheme, persons who have been unemployed for at least 12 months and who are drawing unemployment assistance will be offered part-time work for up to two and a half days per week. Generally speaking, applications for participation in the scheme will be accepted for employment on projects which respond to clearly identified community needs. These may range from environmental projects to those in the arts and cultural areas. These projects must be non-profit in nature and must not affect the employment prospects of existing workers.

A project will not under any circumstances be acceptable where it is in substitution for existing employment. Employment under the scheme will last for up to 52 weeks for each person and the £70 wages under the scheme will be paid in lieu of the unemployment assistance that would normally be paid in respect of a full week. Accordingly the savings on unemployment assistance will partially offset the cost of wages, supervision, materials and general overheads. The wages under the scheme will be like wages under any other employment, be liable for income tax, where appropriate, and for PRSI deductions.

This Bill sets out the PRSI arrangements for employees under the new scheme and it also provides for the exclusion of participants in the scheme from unemployment assistance and unemployment benefit. Sections 3 and 9 of the Bill deal with the PRSI arrangements. The effect of section 9 is to exclude employment under the new scheme from normal social insurance cover by classifying it as an "excepted employment" for the purpose of the Social Welfare (Consolidation) Act, 1981. However, section 3 of the Bill provides that the employment will be insurable for occupational injuries purposes. This is the type of insurance cover that already applies to employment under schemes promoted by AnCO and the Youth Employment Agency — the intention is that the social insurance position of social employment or training schemes should be broadly similar. As employment under the new scheme will be insurable for occupational injuries benefits only, the class J rate of employment contribution will apply instead of the normal PRSI contribution. The class J rate normally amounts to 3.4 per cent, that is 0.4 per cent for the employer and 3 per cent for the employee. The 3 per cent is made up of the 1 per cent health contribution, 1 per cent Youth Employment contribution and the 1 per cent income levy. However, where the employee has a medical card — and it can be assumed that many participants in the social employment scheme would be holders of medical cards — then the full 3.4 per cent contribution is paid by the employer.

It will, of course, be open to persons employed under the social employment scheme to engage in other employment for the remainder of the week. However, where a person does not succeed in getting insurable employment for the remainder of the week his social insurance record will be fully protected through the award of special credited contributions. These credits will substitute for the credits normally awarded when a person draws unemployment benefit or assistance and the Minister will be making regulations for this purpose on the same lines as those already in force in respect of AnCO and youth employment trainees. Accordingly, workers in the new scheme can be assured that their social insurance records will be fully protected. In the case of workers who take up a job for the remainder of the week, the employment with the second employer could be fully insurable, depending on hours worked and other factors and this would also enable the person concerned to maintain his insurance record and possibly to requalify for unemployment benefit.

Sections 2 and 4 provide that participants in the social employment scheme will not be eligible to receive unemployment payments for the balance of each week that they take part in the scheme. To allow participants to receive unemployment payments while employed under the scheme would undermine the whole rationale of the scheme. As I have stated already, the scheme is being funded on the basis that participants will not be eligible to draw unemployment assistance — hence the provision in section 2 of the Bill. Participants will also be disqualified for receiving unemployment benefit through section 4 of the Bill — this is necessary because some participants could by virtue of getting fully insurable employment for the balance of the week succeed in qualifying or requalifying for unemployment benefit.

The new social employment scheme will offer new hope to the long term unemployed and the new scheme complements the special efforts which have already been made by the Government to improve the social welfare incomes of the long-term unemployed. Senators will know that this group have received special increases in their rates of payment over the last two years. These were the 5 per cent increase granted in October 1983 and a further 1 per cent above the level of general increase in payments in July last.

The winding-up of the wet-time scheme is dealt with in sections 5 to 8 of the Bill. Before looking at the individual sections of the Bill, I would like to give Senators a general outline of the scheme and the reasons for the Government's decision to abolish the scheme from the beginning of the new year.

The scheme was introduced in the Insurance (Intermittent Unemployment) Act, 1942 and is now incorporated in Part V of the Social Welfare (Consolidation) Act, 1981. It provided insurance against loss of wages due to inclement weather for manual workers in the building trade. Prior to that, those who were normally paid by the hour, received no compensation for loss of earnings due to recurrent short periods of interruption of work due to bad weather and this gave rise to a great deal of hardship. In 1955 the scheme was extended to include manual workers in the civil engineering and painting trades.

Under the scheme workers are compensated for the earnings lost in periods of inclement weather, up to a maximum of eight hours per day. To qualify for benefit a worker must have 12 contributions paid between the beginning of the previous contribution year and the date of the stoppage of work. The wet-time benefit is paid by the employer and is repaid to him by the Department of Social Welfare out of the wet-time fund.

The current rates of wet-time benefit which have been in force since 1978 are 87p per hour for a skilled worker, 79p per hour for an unskilled worker and 32p per hour for a young person.

The total cost of benefit payments are borne by the contributions or employers and employees which are paid into the wet-time fund. The costs of administration, however, are borne by the Exchequer out of the Vote for the Department of Social Welfare. There is a separate weekly wet-time contribution distinct from the PRSI contribution and payable on a 50-50 basis by workers and employers in the industries concerned by means of stamps affixed to or impressed on wet-time books which are issued at employment exchanges. Contribution rates have been adjusted periodically over the years to ensure that the fund is adequate to discharge its liabilities. The current rates of contributions are £1.42 per week in respect of a skilled worker, £1.38 per week in respect of an unskilled worker and 52p per week in respect of a young person.

The Government had a number of reasons for winding up the wet-time scheme. The original objective of the wet-time scheme, which was a valid one at the time, was to compensate workers in the building trade for loss of wages due to unemployment caused by bad weather. However, improvements in the conditions of employment of workers concerned have meant that there is no longer any loss of wages because of unfavourable weather. The existence of the guaranteed working week in the building industry is the main reason for the Government's decision to abolish the scheme.

Under an agreement dated 1 June 1966, which was registered under section 28 of the Industrial Relations Act, 1946, with the Labour Court, the Construction Industry Federation and trade unions agreed that the working week would be 40 hours. The agreement also provided that a worker who kept himself available for work throughout the normal working hours of each working day of the week but who had been prevented from working due to inclement weather during any part of that week was entitled to payment of not less than 32 times the hourly rate applicable to him. This became known as the guaranteed week. By a further agreement which became effective from 1 November 1980 the guaranteed week is now 40 hours. A worker in this industry, therefore, is paid for a full 40 hours regardless of any time lost because of any weather and the consequent loss of wages which is part of the definition of "intermittent unemployment" no longer applies.

In practice what happens at present is that where a stoppage of work occurs due to bad weather the employer pays the full wage in respect of the guaranteed 40 hours and subsequently recovers from the wet-time fund the amount of any wet-time benefit due. In effect, therefore, the wet-time benefit partially subsidises employers in implementing the 40 hour week to the extent that it is 50 per cent financed by the employees. This subsidy costs employees over £0.5 million a year.

The termination of a scheme which no longer fulfils an effective role is all the more important in present circumstances when a central objective of Government policy is to reduce public expenditure. In this connection the administration of the scheme in recent years has given rise to much difficulty and my Department meet with a great deal of reluctance on the part of both employers and workers to comply with the provisions of the scheme. This adds considerably to the administration costs of the scheme. Abolition of the scheme will relieve the Exchequer of the cost of the staff of the wet-time section in my Department. In addition there are costs with regard to social welfare officers, employment exchange and accounts branch personnel, post office charges etc.

A further consideration in the Government's decision to abolish the scheme is that the wet-time fund would be in deficit in 1985. The fund was intended to be self-sufficient and there is no provision for any Exchequer subsidy to meet a deficiency in the fund. The only assistance which can be provided by the State in such an event is to lend the necessary moneys to the fund and these must be repaid with interest. To maintain the solvency of the fund it would be necessary to increase the contribution rates substantially — by about 30 per cent even to maintain present benefit rates.

Benefit rates were normally maintained at approximately 60 per cent of hourly wage rates in order that a worker affected by stoppages due to bad weather would not suffer any significant reduction in his take-home pay. However, these rates have not been increased since May 1978 with the result that they are now equal to only about 30 per cent of wage rates. To bring the rates of benefit into line with wage rates would require further significant increases in contributions. Needless to say, the workers concerned would hardly be willing to pay their share of the increased contribution rates because they already have the benefit of the guaranteed week. This is another argument in favour of winding-up the scheme at this stage.

I will now briefly comment on the individual sections of the Bill which give effect to the Government's decision to abolish the scheme. Section 5 substitutes a new definition of "intermittent unemployment", the effect of which is that payments of wet-time benefit will not be made for any periods of work stoppage occurring after 6 January 1985. Section 6 provides that contributions under the scheme will cease to be payable after 6 January 1985 — this coincides with the end of the contribution year under the scheme. Section 7 provides that applications from employers for repayments of wet-time benefit may be made to the Department of Social Welfare up to 29 March 1985. This should give employers ample time to submit any outstanding claims.

As I have already indicated, it is likely that there will be insufficient assets in the wet-time fund in 1985 to meet the cost of outstanding claims and section 8 of the Bill provides that any deficit will be met through an Exchequer grant to the fund. It is estimated that the short-fall could be of the order of £0.5 million and provision for this sum has been made in my Department's Estimate for 1985.

This Bill must be seen in the context of the social policy framework contained in the Government's plan for the next three years. On the one hand the Government, in drawing up the plan, were very concerned to do something positive for the long-term unemployed and the new social employment scheme is a fairly radical initiative designed to tackle what is without doubt the most serious problem facing the country at this time. The planning process also involves the review of existing services in the light of their original purpose and the relevance of the original objectives today. The abolition of the wet-time scheme is the result of this type of review. There can be little dispute that, even when times are good, unnecessary and wasteful public expenditure must be eliminated. Resources must be freed to help the less well off sections of our community and my Department will continue to review and appraise existing schemes in terms of their effectiveness and efficiency.

I commend this Bill to the Seanad for favourable consideration.

Mr. Fallon

This Bill, which deals with social employment, is one of the latest measures from the Government plan, Building on Reality 1985-87. That plan is based on many dubious assumptions and will not give the Government the result they desire. I am extremely disappointed to read in the Minister's statement that details of this new scheme will be announced early in the new year. It was announced last Wednesday that full details would be available on Thursday but that did not happen. Now details will be announced in the new year. From this it seems that no scheme is available. This is the basis of this Bill. We need to know exactly what kind of work people are expected to undertake so that we can discuss this legislation at length. I am disappointed to be told that the scheme will be further delayed until the new year. The absence of details does not encourage Fianna Fáil Senators to have great faith in the Bill. We have to voice our objections to the fact that the plan is not available. In the post this morning I thought I received details of the full scheme from the Department of Labour and I was delighted that we would be able to read through it briefly before we discussed the Bill. However, reading through the Department of Labour document I was very disheartened to see the problem that 1983 school-leavers face in getting jobs. They make the point that 21.6 per cent of school-leavers are still looking for their first job. Emigration has accounted for 2.4 per cent and only 46 per cent have jobs. For any young boy or girl leaving school, the climate is most depressing and disheartening. Unemployment is our biggest problem today; can we be satisfied with society that has mass unemployment as a permanent feature of life? Are the Government doing their job properly and are the affairs of the nation being handled satisfactorily when they allow almost a quarter of a million people to be unemployed? We would support any measure to reduce the unemployment figures, whether by part-time or permanent work. I am disappointed in the plethora of training schemes available for people which do not produce jobs. We are spending millions of pounds in that area which could be better spent in the area of job creation. As a result of this Bill, it is unlikely that there will be a rush of volunteers from the dole queues to participate in the scheme which grants £70 for two-and-a-half days instead of unemployment benefit. The scheme will not attract many married men with families to support who feel they are better off economically in drawing unemployment benefit.

The philosophy within the scheme is worthy of recognition although I stress that it is not the answer to our problems. I see it as a cosmetic exercise designed primarily to reduce the dole queues by 10,000 people which is an optimistic forecast and, by reducing the dole queues, to ease the political pressures of the Government who have no solution to this problem which will get worse in 1985.

The full analysis of the scheme from the Department of Labour is disappointing. We are putting the cart before the horse. It is strongly suggested that this Bill will fuel the black economy. It will be seen as a legitimate way to enter into the black economy. Nixers and side jobs will be freely available.

Local authorities and voluntary organisations are likely to be the main groups asked to organise the various community based projects and there is plenty of work available. We could have discussed problems likely to arise in the context of the Bill if we knew what we were talking about. A clerical worker would not be trained to clean up a canal, a graveyard or do other work of that nature. An unemployed dentist should not be asked to work on the roads.

Many people at present on the dole will not be suitable for projects suggested by the Department of Labour. Local authority finances are in dire straits at the moment and there is talk of staff being let go. It would be amazing if permanent staff were asked to stay at home because their jobs are no longer available while at the same time the county manager or county engineer employed 50 or 100 people to do work that might not have been done because of lack of finances. I hope it will not encourage county managers, county engineers and local authorities generally to let staff go knowing that there will be part-time workers available and that they will not have to pay for them. It is merely a transfer of funds from one Department to another. This seems to be part and parcel of the Bill.

Another section of the Bill deals with wet time. The Minister made the point that the new scheme will be insurable for occupational injuries benefit only. What about the common law liability?

Is it appropriate to bring in this measure regarding wet-time when wage negotiations are in hand? It might be seen in some way to strengthen the employers' hand against the trade unions. There has been a lack of consultation in this area, which is typical of the attitude of the Government. There has been some discourtesy to the unions and employers in the introduction of it at this time.

We all know that wet-time was introduced 42 years ago to provide a form of insurance against loss of wages when work in the building trade was held up by inclement weather. The Minister referred to the fact that now a worker in this industry is paid for a full 40 hours, regardless of any time lost due to weather conditions and the loss of wages consequent on intermittent unemployment no longer applies. The guaranteed 40-hour week makes the wet-time scheme no longer necessary and I accept that. The agreement was registered with the Labour Court. Presumably, the employers and the Construction Industry Federation will not renege on that agreement.

Going back to the first important section of the Bill which deals with the extra 10,000 jobs, or rather half jobs, what is needed is not half jobs but full time, permanent, worth-while jobs for our young people, for the thousands of well educated young men and women fresh from school, with new ideas. They deserve a better deal from this Government. I look forward to the day when they will get this from the Government.

Mr. Ferris

In opening the debate on this legislation, we would want to clarify in our minds exactly what we are discussing. Certainly I do not want to happen here what unfortunately happened in another place last week when, for some unknown reason, two schemes were linked together and the absence of a Minister from one Department when the House was dealing with another Department was taken as a slight on the scheme, or on the opposition to the scheme, which was not the case. What we are discussing today is the Social Welfare (Amendment) Bill which, although it is an important and integral part of any new legislation in this area, has nothing to do with the actual working of the scheme to which it will apply, or with any other part of the actual scheme that was outlined either in the national plan by the Minister or the trade unions in subsequent discussions. The question of class J rate contributions was very important in the original outline of the Bill and was mentioned by all who spoke. I would refer back to my previous contribution on the plan in this House when I called on the Minister for Social Welfare, through the Taoiseach, to ensure that this amendment would be made to the scheme of social welfare. Otherwise, there would be a disincentive for people to come off longterm unemployment if they were to lose their credits, or the equivalent, while they were signing. If that happened it would undermine the whole principle involved in the scheme, which is intended to be a stimulant to people to come off longterm unemployment, to do some useful work in the community and to consider themselves once again to be gainfully employed.

I also mentioned this matter at various levels within my own political party, at the administrative council and in the parliamentary party. I saw immediately that if a change were not made in the social welfare code that the whole philosophy behind the scheme would be lost. For that reason I welcome the Minister of State, Deputy Pattison, with whose Department the direct responsibility for this amendment lies. I refute any allegation that his presence, in place of a Minister from another Department, in some way shows a lack of commitment to the scheme that will arise from this change. It is a relevant Bill for the Department of Social Welfare and I welcome Deputy Pattison to explain the implications of the scheme.

This is an amendment to the Social Welfare Act and deals with exempted and very special employment. While a person is engaged in this employment and has a class J rate contribution applied on his behalf by the employer, he will be covered for his health contributions if he does not have a medical card, for his youth employment levy and also for workmen's compensation. The most important element in the scheme is that he will be covered for any future benefits arising from the Social Welfare Act by way of retirement, old age or any other such pension or, indeed, if he is unfortunate enough to be unemployed again, or sick, or in need of State assistance in the future. That is the reason behind this Bill and it is a very important and integral part of any new scheme in this area.

It is not, as Senator Fallon, for whom I have the greatest respect, has said, a transfer of funds from one Department to another. Legally, it is impossible to transfer funds from the Department of Social Welfare to pay anybody else for doing anything else in any other Department. Arising out of their financial arrangements, the Government may ensure that the Department of Labour are properly funded to participate in this scheme, but it should not be inferred that because people are participating in this scheme for some reason or another the social welfare fund will be pilfered in any way by any other Department. The social welfare fund is an insurance fund to which employees and their employers contribute towards the day when the employees might, unfortunately, be in need of assistance because they are out of work, or sick and unable to work. That is the fundamental principle behind the fund in the Department of Social Welfare.

Here is a scheme that will be a stimulant to people to be employed in their own community. I welcome the fact that the employers mentioned in the plan are predominantly employers in the local authority areas. All of us know how important and urgent much of the work in local authority areas is and there is nobody there to do that work at the moment because of the derating of all the normal contributors to local authority funds. We are now almost totally dependent on State grants. Sixty-seven per cent of all the income of local authorities comes from State funds, which means that the State has a right to dictate how those funds should be spent. Normally, they are spent on the improvement of the infrastructure and the national primary routes which as Senator Fallon said, has allowed county and minor roads to be neglected. We have here an opportunity to take people off long-term unemployment of 12 months or more and gainfully employ them in their own community doing this kind of work — cutting hedges, opening water drains, inspecting water tables on the roads, carrying out minor repairs to county roads and roads that have been taken in charge. They would be paid £70 for approximately two-and-a-half days work. This £70 will be an incentive even to a married person, on the basis that if he were on long-term unemployment without the added attraction of the PRSI level of assistance, his dole as it is commonly known would not be equal to the £70. It will attract many people. I am sorry to disappoint Senator Fallon but there is widespread interest in this scheme throughout the whole country.

In south Tipperary people genuinely want to work. It does not matter how many hours in the week they work; they want the feeling of work. They do not want to be in the demoralising position of having to sign on at the employment exchange to say that they are available for work. What could be more Christian and humane than to provide that work for them? They should be given money to work for the community. That is why I welcome the fact that local authorities have been chosen primarily. They are the people who can provide the most beneficial work. There will be no abuse of the scheme by employers who might use this scheme as a means of underpaying their existing workforce. Part of this scheme provides that it must be additional employment.

I understand that the Government are also considering the extension of this scheme to other local communities who could usefully utilise people now signing on at labour exchanges. Local communities use people on a voluntary basis where there is quite a lot of work to be done and where their own budget does not allow them to employ people. Because of this, unemployed people are availed of to assist them to plant flowers for Tidy Towns competitions etc. They repair local halls, community centres, playing pitches and children's playgrounds. There are so many things being done by people in communities that it is only appropriate that they have access to able bodied young people on the unemployment list. They should be able to say that if a young person works for the community on a scheme the Government will recognise that work and will compensate them for portion of the week.

It is important not to call it part-time employment because although it is designed to give people at least that amount of work there is nothing to stop that person continuing to do that work, especially for communities, for the rest of the week. There is nothing to stop them working for a different employer in a different capacity for the rest of the week and get paid for it. There is nothing to stop them having a further addition to their income which would be an added advantage to them without branding them as criminals. Certain people in the community and sometimes the Department brand these people as criminals because they sign-on as being unemployed and available for work but because they are helping other people technically they are not available. This will eliminate that anomaly in the Act and give some semblance of pride back to people. They can now hold their heads high and work for their local community and get paid by the State for doing so. They will get a proper rate of contribution, their existing contributions will be protected as will their future entitlements and they will be covered for workman's compensation.

It is an excellent scheme. The Opposition should agree that it is an excellent scheme and give it a chance. People should be encouraged to avail of this scheme. It should not be knocked before it has a chance to get off the ground. Young people need encouragement from politicians on all sides of the House. We had nothing more than a charade last week. It did more damage to what people perceive politicians should be doing in the area of employment. It is a pity that it should have happened at a time of high unemployment when people should be doing something constructive to combat it.

This scheme will eliminate some of the problems in the black economy referred to by Senator Fallon. There are people who are double jobbing. They are allowed time off by their employers to sign on the dole. Some employers refuse to insure certain employees properly because they get cheap labour by allowing employees time off to sign on the dole and get additional income. That is rampant within the country and the sooner people are made aware of it the better. Employees, generally, want to work and get paid for it. If employers are not prepared to fulfil their responsibilities to their employees by ensuring that they are properly compensated and covered, any scheme is likely to run into trouble.

I should like the Minister to give special mention to section 4 of the Bill. In his opening speech the Minister said that if a person gets further employment for the rest of the week which becomes insurable and his new employer pays a proper stamp for him he would not be eligible under section 4. I understood the Minister to say that workers in the new scheme could be sure that their social insurance records would be fully covered. Sections 2 and 4 provide that participants in the social employment scheme will not be eligible to receive unemployment payments for the balance of each week they take part in the scheme, which I accept. But if a proper stamp is paid somehow they will not be disqualified from that benefit in the future. I do not understand that. I take it the Bill ensures that people will get a credit. That is fair enough. Their entitlements in the future will be protected. If they get a stamp and become unemployment at some future date they will qualify for the full amount of stamps or PRSI contributions that would have applied during that period. If my reading of this is right and that loophole is allowed to remain, it could be a disincentive to people to get work for the balance of the week. We all want to try to ensure that people are gainfully employed for as many hours in the week as possible. Perhaps the Minister will comment on that.

The second part of this Bill was the cause of some consternation to spokesmen of the Department in another area. They were looking for the resignation of Ministers and all sorts of other headline-grabbing comments. I will only say in this regard that they are completely misinformed. They obviously had not been in consultation with any worker or representative of trade unions as regards wet-time. I fail to understand the reason for any such outburst.

After the announcement that this scheme was to be abolished I made it my business to find out exactly how the scheme applies at present. Years ago it was a very important scheme. It was initiated in 1942 under the Insurance (Intermittent Unemployment) Act. It was introduced at a time when people in the building industry were employed on an hourly basis. If it rained and they were unable to work naturally they would be out of work and had to be compensated in some way because they would not qualify for unemployment benefit. This wet-time scheme was initiated after discussions with the workers, the industry and the trade unions representing them. In 1981 section 5 of the Social Welfare (Consolidation) Act superseded the previous arrangement. There was agreement on a full week extending from a 32-hour guarantee week up to the present 40-hour week. People are now working on a full time basis under agreements which have been ratified. I have no reason to believe that any employer or employee would break any previous agreement in this area. The agreement have been registered in the Labour Court and elsewhere. People employed on a full time basis pay into a wet-time scheme from which they do not benefit and it costs them 60p or 70p a week. At any time up to three or four months after the extended period the employer can apply to the Department for a refund of money on the basis that at certain times during that period it was raining and the employees wanted a refund from the scheme, and employees were supplementing what was an insurance scheme for employers. Employers in the building industry need every bit of assistance that they can get. They have gone through a lean period. The plan has brought forward a great deal of construction work that will give much valuable employment, but it is questionable whether this scheme could be looked upon as a social scheme in any sense of the word. Originally it was brought in for a specific purpose, and I fail to see what its continuation is worth.

The amount of bureaucracy involved in the scheme and the cost to the State in administering it outweigh any advantage it may have had, particularly for employers. Employers would be more gainfully occupied now if, instead of being worried about this aspect, they looked at the ordinary insurance policy that might be available to them in any area such as this. If they think a risk is involved in entering into a contract and giving a contract figure for a job which must take into account all weathers that will prevail especially in outdoor work, then within all such contracts could be written provisions and clauses to cover the employer against eventualities like different surfaces, rock formation and all the other things that are now built into contracts. There is no risk to employers in this area. If they feel there is a risk from the elements there is nothing to stop them from taking out an ordinary insurance policy in the commercial world which would probably give them better cover; maybe it would be as cheap as this scheme, and certainly the employees would not be expected to contribute to it.

The employees, the PAYE sector, now must pay proportionately much more than any other section to protect their entitlement to sickness and unemployment benefit and so on to which they contribute out of their pay packet. Indeed, they make a major contribution to the running of the State, more so than any other section. That is common knowledge. Here is an opportunity for us to remove one anomaly in their PAYE contribution, the anomaly of wet-time. Discussions I have had with employers indicate that this would make no difference whatsoever. Heretofore they claimed when they felt it was appropriate to claim. A claim that came in over a period had to be checked out, and one almost had to check the weather forecast to find out whether it had been raining in an area at a period, that is if the scheme was to be implemented to the letter of the law. I am sure that the Department were liberal in the application of the scheme in the past.

It is interesting that the scheme cannot be sustained on the present level of contributions, that an increase of 32 times the present rate is necessary to continue it. That would be totally unacceptable to the employees in the industry. I have no doubt whatsoever that they would not accept any increase for a scheme from which they do not benefit. Having discussed this with the various people involved, it is a reasonable assumption on the part of all of us that no harm will be done to either employment or benefits to employees by the abolition of this now outdated scheme which goes back to the forties. Thank God we are in 1984 when we have unions able to represent workers, when the two sections can sit down and reach proper agreement and when those agreements are honoured. I have no doubt that this will continue in spite of the abolition of this wet-time scheme.

I look forward to the publication of information as to how the scheme for social employment will operate. It is important that we know that also. I disagree with Senator Fallon who said that this is the cart before the horse. It is the opposite. This is a very important horse to put before the cart. If this section were not written in, any scheme in the world that might disallow people's entitlement in the future would be doomed to failure. It is important that the people signing who would be availing of this would know in advance from the Government clearly and without ambiguity that anybody who benefits under this scheme will not be penalised in future under the social welfare code. It is vital that that be done. I have called for it, I am pleased it is to come about. I am glad that those administering the scheme have seen the anomaly that is there. I am confident that the provisions here will make all the difference to the success of the scheme. I wish the scheme well and I hope the Opposition will do so also.

Professor Hillery

I want to make a few observations on the wet-time scheme. Before doing so, however, I want to ask the Minister if the Seanad will get an opportunity to discuss the full details of the new social employment scheme. There is something of a pig in a poke about it at this stage. We cannot discuss it, despite the related issues in the Bill, because we do not know its contents. However, I would make the comment thet I do not see it as a substitute for secure, long term employment. With regard to employment more generally I will reserve my comments for the Appropriation Bill. It seems that the biggest single impediment to securing long term employment and the creation of jobs generally is the penal taxation system.

On the wet-time scheme Senator Ferris has just mentioned that no loss will be incurred by workers. Obviously, the Minister has outlined his reasons for the abolition of the scheme but, as I understand it, wet-time up to now has been an integral part of the guaranteed 40-hour week. Therefore, I would like to ask the Minister if he can assure the House that, despite the abolition of this wet-time scheme, the 40-hour week will continue to be guaranteed.

I am puzzled as to why the scheme has been abolished, despite the reasons given by the Minister. The Minister for Social Welfare, Deputy Desmond, on radio a little over a week ago stated that a committee of trade unions, employers and the Department had met on 14 occasions to discuss the wet-time scheme. I understand that is correct. The committee met not to abolish the scheme, but to review it and to update it. They did not meet to consider the abolition of the scheme. I understand that on one occasion a Department representative asked whether the scheme should be abolished, but both sides, employers and trade unions, stated categorically that this should not be done. Statements have been made that trade unions want the abolition of the scheme. In fact only one trade union said so. That trade union was a member of the Joint Industrial Council for the Construction Industry. The matter was referred to the council. The dissenting union then agreed to conform to the council's view that the scheme should continue.

I am concerned about whether workers will be somewhat less well off after the abolition of the scheme. For example, take an employer who is going through an unproductive period such as winter time in which frequently we get inclement weather. Such an employer may well close down work on the site during such an unproductive period he may postpone construction development. It seems to be an obvious temptation for some employers to close for a few weeks during inclement weather, a thing they cannot do as easily at this moment before the abolition of the scheme. If employers do that, then those workers will be on the dole, which in turn will cost the State money in order to pay them their dole. The cost associated with these temporarily unemployed people in terms of dole could far exceed the savings now proposed by way of the Bill. With those few comments I look forward to the Minister's reply.

Mr. Cregan

I welcome the idea in principle of trying to bring about a situation to give some guarantee of work over a 12 month period to people who are more than 12 months unemployed. There are indeed welcome signs, as Senator Ferris has already said, in local authority areas about this scheme. At the same time it must be mentioned that central Government priorities are to try to create more work. There are points within the scheme that I would like to question. I welcome the idea of central Government and the Social Welfare Department broadening their ideas with regard to not trying to be so uptight about getting in moneys as a result of a person being working. They are readily admitting that a person's right must be recognised in terms of benefits when he is doing part-time work.

We are readily admitting that we are now prepared to allow people to be employed on a part-time basis, even though we may not be calling it a part time basis. This is an excellent idea in theory and I hope it will work in practice but there are very serious questions to be asked and if we are quite serious about trying to create extra work I cannot understand why we cannot be seen to be broadening our ideas to implement this idea in other areas. Local authorities, who are excellent watch-dogs for central Government, can ensure that the scheme operates properly and that we do not steal a job from one person to give it to another. There are many situations in which people could be employed part-time. Unfortunately. though, employers cannot employ on a part-time basis a person who is already unemployed. But this is being changed. The change will cost something in the region of about £9.8 million.

I fail to understand why we are not asking people in the private sector also to become involved in the new situation instead of confining it to local authorities, community associations and so on. If a person is employed on a part-time basis by a private concern, the full rates of contributions apply. In addition, there is a limit to the number of hours that a person on a part-time basis may work. For instance, if somebody in the restaurant trade wished to employ a person for a period of three hours a day for four days a week and if he were considering paying £8 or £10 for each three hours, he would not be entitled legally to engage an unemployed person. Consequently, he is faced with the option of either engaging someone already employed or of using the black economy system, which is deplorable. While that situation will prevail in the private sector, we are providing that local authorities may act differently and we are to give them millions of pounds to do so. We could make similar arrangements for the private sector at no cost to the Exchequer.

Our first priority must be work but we are not broadening our minds enough in this regard. However, the Bill is a start. It is an opportunity for us in public life to be able to say to people that if they wish to employ people on a 12 or 16 hour per week basis, they are entitled to do so and that the person may be drawn from the ranks of the unemployed. In the licensed trade, for instance, a publican is breaking the law if he engages an unemployed person for ten to 12 hours per week. That should not be the case.

A lot of money is spent every week in paying people on a part-time basis but it is only being paid to people who are already working. In this way we are making the rich richer and the poor poorer. At least we are changing that in so far as local authorities are concerned but let us bring about a similar situation in the private sector where it will not cost the Exchequer one penny.

In the Cork area alone the amount paid to part-time workers in the 200 or so licensed premises probably averages £100 per premises per week. All that money is going to people who are already employed. Is that fair when so many young people are anxious to work? Even if it is only part-time, at least these young people would be glad of it. We must recognise that. We must endeavour to eliminate black economy practices in the area of employment.

A man with a wife and three children gets something in the region of £96 per week if he is on the dole and if he is handy at carpentry, masonry or whatever, a black economy employer would pay him about £150. That would give him a total net income of almost £250. At least we can keep account of the person's activities. At the moment we have people working in lower paid jobs in local authorities and elsewhere getting less than £100 per week. We have to subsidise them from now on and I welcome that. We also have a situation in which some people whose earnings do not warrant it will be subsidised. That is unfair to the PAYE sector who are paying out most of the money. They should become the watch-dogs to eliminate abuses because it is their money that is being spent.

In relation to the wet-time scheme, since 1980 a person was guaranteed pay for a 40-hour week by the employer because of an agreement reached after long negotiations with the trade unions. For four years the people were unaware that a building industry employer could claim wet-time losses from central Government and yet there was a guarantee of 40-hours to the employee. Is that not immoral? For four years we allowed a situation to prevail where employers and employees were entitled to claim for wet-time and yet the employees were guaranteed 40 hours. I would be irresponsible if I did not agree with the Minister that it is time we eliminated this anomaly. By doing this we will save £½ million next year for the PAYE sector. The general public should be made aware of that. It is no wonder we have situations where the rich are getting richer and the poor are getting poorer.

We have a responsibility to avail of every opportunity to create jobs, whether they be full-time or part-time. We are not doing this. The Minister said that there would be no question of eliminating any full-time jobs in the local authorities. Everybody is entitled to full-time employment but there are many areas in local authorities, and in the public sector generally, where people are getting agreed amounts of overtime. If we are going to give people two-and-a-half days employment a week in the public sector I do not see why we and the unions should not consider eliminating overtime so as to be able to give more work to the people who are only working part-time.

The Minister said that the person working for two-and-a-half days will pay PRSI. That person can look for more work elsewhere. He can say that his PRSI is already paid and that he will accept £50 per week. That just makes the employer richer. The same person should not be entitled to get all the work. The person who has not got 12 weeks work should go to an employer and work, for instance, for 20 hours for £78.

I am aware that a person can work a certain number of hours per week and if he works for longer he will not get any money from his local employment exchange. The dockers are an exception to this rule. The dockers can work for as many hours as they wish in three days and draw money from the employment exchange for the other three days. The docker can work for three days earning £250 and can get the dole, and then get his tax back for the other three days. Nobody questions them and I want to know why. There is no reason why one type of worker should be entitled to a benefit and others not. All workers should be treated equally. There should be no exemptions. There were times when exemptions were needed by those times are well gone. I am very much aware that the average worker is more concerned with bettering himself than with creating extra jobs. This is evidenced by the fact that so many people get so much overtime and not enough consideration is given to people who have no work.

In principle the proposed scheme is excellent but we must not allow a situation to develop where the scheme works in the public sector only and not in the private sector where it will cost less to the PAYE taxpayer. We must ensure that the private sector provide jobs on the same basis as those provided in the public sector. That will create productive work. The black economy will be eliminated if after two and a half days work an employee is referred back to the local exchange. This proposal should get urgent priority.

Mr. Fitzsimons

It is obvious that this House is in agreement on the fact that our unemployment problem is the biggest problem we have. Anything that will help this situation must be welcomed. What is needed is a radical and inspired stroke of statesmanship that will totally solve all our unemployment problems. Anything less is unacceptable. Unemployment brings many social evils with it. It brings crime, sickness and many other ills. From a personal and selfish level, it would be in all our interests to solve the unemployment problem.

Employment brings contentment and a situation in which people have something to look forward to. That is my concept of work. That concept is missing in this Bill. People look forward to their work and to perfection in their work. I referred before to a picture where we walk into a house where a number of young men are unemployed. They are unshaved, unwashed and walking around aimlessly with nothing to look forward to. Obviously in a situation like that crime, drink and drugs are attractive. Young women are in an even worse situation. Work brings back dignity. I am glad the Minister told us that people engaged in this work will be able to get involved in other work as well. He said it will be open to them to take up other work for the remainder of the week. I welcome this very much.

I referred before in the House to the fact that some professional people were not allowed to take courses in other areas in which they might get employment while they were drawing unemployment benefit. That is a grave mistake. I see a big advantage with regard to this Bill in this area. It is an area in which adult education could have some part to play. I referred to that on other occasions. Perhaps the 12 month period will be a bit short to make any meaningful impact. Perhaps this could be extended.

Horticulture might have some part to play also. People with small patches of land and small gardens might be given some grants or incentives to help them to cultivate those areas. Overall, this would be of great help to the country. Also in the area of research of parish histories help could be given under this Bill. The kind of work carried out is very important too. I am glad the Minister said that applications for participation in this scheme will be accepted for employment on projects which respond to clearly identified community needs.

This country has a history of relief schemes dating from the famine times when hills were built and taken down, and holes were dug and filled up again simply to give employment. We had "follies" built all over the place by the landed gentry and the wealthy people as monuments to inflate their egoes but which incidentally gave employment. I remember, in my early days, a relief scheme in a bog not far from where I lived. There was a Christmas relief scheme to build a road which seemed to serve no purpose. We had a local poet who composed a poem "The Road To Where Nobody Knows". I sincerely hope this Bill is not a further extension of "The Road To Where Nobody Knows".

I should like to ask the Minister if the scheme of grants available to local authorities at the moment for environmental works will be affected by this Bill, or if it will continue in operation. Generally that is not the answer to the problem. In so far as it goes, we welcome the Bill and, as Senator Ferris said, we will give it a chance.

My experience of the wet-time scheme dates back to the early fifties when I was an area clerk with Meath County Council. It applied to the construction workers on the cottage repair schemes. It served a very important purpose then. It was a rather complicated scheme. It involved quite an amount of writing and detailing. For that reason, the foremen were not anxious to avail of it. I understand that many members who contributed would get nothing in return. The workers and the unions made representations for its abolition. It could have been replaced or amended in some way.

The Land Commission have played a very important role. This scheme could be extended to include road workers because from my experience with them at that time, I know they could not avail of it. They could not even take shelter from heavy showers. If someone gave them a cup of tea they had to glance over their shoulders. They worked hard on quarries and various other jobs. Private enterprise workers could work hard and take a rest. People working for the public authorities had to keep moving all the time. We had many jokes in bad taste in that regard by people who should have known better. Even today I see outdoor staffs and roadworkers working in inclement weather. Something should be done for them. People cannot work properly in very bad weather conditions. I see no reason for it. For the dignity of the workers, something should be done in that area. Perhaps this Bill could be a help in that respect.

The Minister mentioned unskilled and skilled workers. I do not believe there is any such person as an unskilled worker. When I was working on rural electrification I rose to the rank of semi-skilled at one time which meant a penny an hour more. The unskilled worker is generally regarded as the manual worker. This word is more or less synonymous with a labourer. On building work in particular, the manual worker is the most skilled man because everything depends on the manual worker: the mixing of cement and the length of time it will pour before setting depend on the labourer. He is a very skilled man. It is the same in many other areas. Take farm work, for example. I am sure many farmers would agree that all their profit did not come from land, that the farmworker was a very important person. The value of those men is beginning be be appreciated, but not fast enough. I would like to have seen something incorporated in that Bill to extend it to cover this area.

Payments of benefits will not be made for periods of work stoppages occurring after 6 January next and contributions will also cease from that time. Applications from employers for repayments of benefit may be made up to 29 March 1985. I do not know what the fund was like over the years. I accept the Minister's statement that the fund now seems to be in a bad way. The scheme generally applied only during the winter months. This scheme served a very important purpose and it could have been extended in some way to cover the other categories of workers I mentioned.

Minister of State at the Department of Social Welfare (Mr. Pattison)

Senators will forgive me if I do not deal specifically with every item which was raised during this very helpful debate. We will be dealing with Committee Stage tomorrow morning and I hope to be in a position to deal with matters of detail as they arise under the various sections of the Bill.

I want to refer in a general way to a number of matters which have been raised in the course of this debate. There is no argument about the importance the Government place on the problem of unemployment. The central thrust of the Government's policy programme, Building on Reality, is to come to grips with the problem of unemployment. That plan, by its very nature, has to be implemented over a period of years. Short-term measures have to be worked out to relieve to some extent this major problem of unemployment. In April 1984 there were 84,000 who had been unemployed for over a year. That is 39 per cent of the live register. It would be unfair for any Government simply to say that we would have to wait a year or two for the plan to show results. We have to show results much more quickly. This Bill is an important measure to bring about results as quickly as possible. No one has claimed that this proposal is the answer to unemployment, but I and other Government speakers have claimed that it is a radical approach to the problem that will bring about some relief in the very short term. That aspect of it should be borne in mind.

Senator Fallon made the point, as did other Senators, that the Bill was putting the cart before the horse; in other words, the Senators wanted to see the details of the employment scheme before making a decision on this legislation. It would be exceptional to do that because there were many other schemes introduced down through the years such as the work experience programme, the enterprise allowance scheme, the employment incentive scheme and the grant scheme for youth employment. Details of these schemes were given in the Estimates. We would be breaking with precedent by giving details, but that is not the reason for not doing so. The Minister for Labour has already made a statement on the matter and further details of the scheme will be available in the new year. If the House wishes to have a debate on the matter it might be possible to arrange that. The passing of this legislation — which is a prerequisite to the scheme itself — should not be delayed just because the details of the scheme might not be available at present. There is enough information available about the scheme to give the House a very good idea of the kind of work that will be involved and the nature of that work.

There is another aspect of the matter I have heard mentioned and Senator Fallon repeated it here today — that this scheme would not be attractive to married men with families, because they would lose money by opting for this scheme. This is very misleading, although I am not suggesting that the Senator was deliberately misleading. It is true to say that if the married person with a family opted for the scheme and did not obtain any other employment during that week he could very well lose money. But it is a very attractive scheme for those people who can get employment for the balance of the week because the amount they receive from such employment, when added to the £70, could well exceed their income from unemployment assistance. The sky is the limit. There are no limits on what one can earn in the balance of the week. I would like to correct the misleading impression that married men in particular should not interest themselves in this scheme. That would be an injustice and a disservice to those people. The scheme should be quite attractive to them, as it is obviously attractive to people who receive something less than £70 in unemployment assistance. It can be even more attractive to people who are receiving far in excess of £70 a week on unemployment assistance. I hope I have clarified that position and corrected any misdirected information or guidance that may have been given to people regarding the scheme.

The scheme will be designed in such a way that it will not displace permanent employees or people who were either made redundant or laid off on short-time by local authorities. An undertaking has been given to the Irish Congress of Trade Unions that no such displacement will take place as a result of the operation of this scheme. The necessary measures will be taken in implementing the scheme to ensure that this will not happen.

Senator Fallon asked for clarification of the proposal in the Bill that persons engaged under the social employment scheme would be insurable for occupational injury benefit. That is so. Persons who are employed under the schemes run by AnCO and the Youth Employment Agency are insured for occupational injuries only. They are not insured for the general benefits of the social insurance system but their insurance position is safeguarded. That is the important element of the scheme. That is done by the award of credited contributions for the period they are involved in the scheme. It is necessary to cover the persons concerned for occupational injury benefits so that they have a certain guaranteed level of benefits in the event of employment injury. However — and this point was referred to by Senator Fallon — it will be necessary for the organisers of projects under the scheme to ensure that adequate insurance cover is available for the workers concerned.

Mr. Fallon

Common law.

Mr. Pattison

Yes. Public liability and common law will be a precondition of the scheme. That aspect of insurance will be covered by those participating in the scheme. Senator Ferris raised the point about requalifying for unemployment benefit. It is true to say that paid insurance contributions by the person in the scheme will, of course, provide for any benefits the participant may claim in the future and those paid contributions will apply to his record.

Senator Hillery referred to the unemployment problem and stated that a very important factor in contributing to the numbers of unemployed was the penal taxation system. He said that was the cause of the shortage of jobs and I agree with him to a certain extent on that point. Senator Hillery went on to call for a retention of the wet-time scheme. I pointed out that that would mean further payments by the employees which would be seen by the employees and employers as further taxation. I pointed out in my opening speech that the retention of the scheme would mean it would have to be funded by the Exchequer which, in turn, would mean additional taxation. The retention of the scheme itself would mean substantial additional taxation on employees, employers and the general taxpayers. I thought the Senator contradicted himself to some extent because, as I stated in my opening remarks, one of the reasons the scheme was being abolished was to reduce the burden of taxation and to prevent any further increases in taxation which would inevitably rise out of the retention of the scheme.

Senator Hillery also questioned whether workers would be better off. He suggested there might be a temptation on employers to close down their workplace during periods of inclement weather, perhaps for the winter months. I certainly do not see it that way. First, we have a very active trade union movement there to see that that kind of abuse would not happen. Secondly, the position in the building industry, like all industries, is highly competitive. I cannot see how in the competitive nature of the construction industry at present that kind of option would be open. It is not a good argument for retaining the scheme. If one were to go along with that argument one could say that if workers made bigger contributions into the scheme it would mean more long-term and permanent work in the building industry.

Senator Cregan made a case very forcibly for an extension of the scheme to the private sector. This is a factor that will receive every consideration as experience of this scheme is gained. The scheme by its very nature is called social employment. It involves community work, environmental work and work with the arts and culture. It is very difficult to think of any group in the private sector engaged in that kind of community work. I am sure there are but they are not too clearly identifiable. The problems in that area would certainly have to be looked at because every proposal or idea towards the resolving or easing of the unemployment problem has to be explored and continually looked at. That is why any Member with any idea should not be shy about putting it forward for consideration. I wish to assure the House that the points raised by Senator Cregan will be fully examined to see if it is possible to accommodate them. Care has to be taken that any scheme introduced will not displace existing employees. Recently I had a garage proprietor, not a Member of this House, I hasten to add——

Mrs. Honan

That is unnecessary.

Mr. Fallon

Not the obvious instance.

Mr. Pattison

There is more than one a Member of this House.

Mrs. Honan

We know of only one.

Mr. Pattison

There is one on that side too. He is absent today. The garage proprietor made the point to me that it would be a good idea to take workers off the exchange, offer them more or less the same money they are getting on the exchange and get them to work. I said to him there were four motor mechanics I knew who are unemployed at the moment and I asked him if he was suggesting that the State should take them off the exchange register. Then he started to think and the penny dropped. Possibly four people in his garage would have to be made redundant to make way for four other people. It is not quite as simple, particularly in the private sector, to find schemes that will not interfere with existing employment.

Before I leave the 40-hour guaranteed week — Senator Fitzsimons among others raised this — this Bill does not of itself give the guaranteed 40-hour week. As I said in my opening remarks, that is a Labour Court registered agreement which the construction industry and the unions negotiated and then registered. It is therefore legally binding, but not as a result of anything in this Bill. The extensions which Senator Fitzsimons sought and with which I would have sympathy, could not be provided for in the Bill. The procedure is for the employers and employees concerned to enter into negotiations under the mechanisms laid down, which are operated by the Labour Court. For the reasons I have given, I could not provide anything in the Bill that would give the extensions sought.

I hope I have answered in a general way most of the points raised by Senators. I will be happy to answer further questions in detail as we deal with Committee Stage in the morning.

Question put and agreed to.

Committee Stage ordered for Wednesday, 19 December 1984.