Léim ar aghaidh chuig an bpríomhábhar

Tuesday, 7 Mar 2000

Vol. 3 No. 9

National Minimum Wage Bill, 2000: Committee Stage.

Today's meeting marks the commencement of the Committee Stage debate on the National Minimum Wage Bill, 2000. I welcome the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, and the officials of the industrial relations section of her Department, Mr. Maurice Cashell, principal officer, Mr. Ciarán Ó Cuinneagáin, assistant principal officer, and Mr. Maurice Nagle, higher executive officer.

I suggest that we work until 2.30 p.m. and then resume at 6 p.m. Is that agreed?

I thought we were to resume at 6.30 p.m.

We can resume then if the Deputy so desires. However, on the circular the evening session was listed as commencing at 6 p.m. and adjourning at 8.30 p.m.

I will agree with whatever was listed on the circular.

Is it agreed to resume in Select Committee at 6 p.m.? Agreed. It has also been suggested that we should meet tomorrow from 11 a.m. until 1.30 p.m. and from 6.30 p.m. to 8.30 p.m., if necessary, to consider the Bill. I suggest we consider these options this evening in light of today's progress. Is that agreed? Agreed.

Members have been circulated with a list of proposed groupings of amendments for the purpose of debate. For the benefit of Members it is proposed to group the following amendments for the purpose of debate: Nos. 1 and 68; Nos. 11 and 94; Nos. 13 to 16, inclusive; Nos. 24 and 30; Nos. 25 to 27, inclusive, and Nos. 35 to 39, inclusive. I now propose that we proceed with the Bill. The Tánaiste may make some introductory remarks at this point if she so wishes.

I appreciate that the committee has convened at relatively short notice following the Second Stage debate in order to consider the Committee Stage amendments. A considerable burden has been placed on Members because it is proposed that we meet for a number of hours today and again tomorrow. I appreciate the difficulties this causes and I wish it could be different. It is always desirable to have a sizeable break between Second and Committee Stages. However, because of the national pay talks, it was not possible to take the Second Stage of the Bill any earlier than we did.

I have taken on board a number of the suggestions made by Deputies from all sides of the House on Second Stage. I will be bringing forward a number of fairly substantial amendments to the Bill, which fall into four main categories. First, the Schedule will be altered substantially to take on board the concerns expressed by Deputies from every party. Second, amendments will be forthcoming in relation to the provisions dealing with unfair dismissals. Third, Deputies drew to my attention the fact that, effectively, there were no anti-avoidance measures in the Bill and that the penalties were not sufficient. Amendments will be forthcoming in that regard. Fourth, the final category of amendment will deal with the scope of the Bill in so far as it affects the Defence Forces. I believe that covers the main areas. We will not agree on everything, but I believe we can reach substantial agreement on the Bill.

The Bill is historic because it enshrines in law the principle of a minimum wage. From here on it can be developed but what is important is the principle. As with the legislation which brought about equal pay, entitlement to maternity leave and many of the other advances made in the sphere of labour affairs, this Bill will bring about enormous benefits for Irish workers. If the market were the answer, we would not need legislation of this kind. However, the Bill will affect approximately 163,000 workers - a substantial number of which is made up mainly, but not exclusively, of women and young people.

In the circumstances it is appropriate that we should introduce legislation of this kind and that we should, at the end of the legislative process, be left with an Act which reflects, in so far as possible, the views across the House in relation to this issue. At the end of Committee Stage, I hope Deputies on all sides, while they might not be 100% satisfied, will feel that what they said was taken on board and that the Bill was amended accordingly.

I wish to reiterate my dissatisfaction about the speed with which the legislation is being put through the House. I accept that 1 April has become a deadline and I do not want to be blamed for delaying the passage of the legislation. However, the Opposition should not be blamed if that deadline is not met. The Bill should have been published before Christmas and we should have been able to take Second Stage at an earlier date. I do not agree with the Tánaiste's assertion that it could not be taken until the negotiations on the new programme were completed because the Bill, in the main, is an enabling mechanism and does not refer to the amount to be paid as the national minimum wage. I am glad the Tánaiste appears to be taking a number of our amendments on board by tabling similar amendments in her own name. However, I hope she will also accept some of the other amendments.

The Tánaiste stated that 163,000 people will benefit from the introduction of the national minimum wage and that is a good development. Let us not forget, however, that people on the minimum wage will begin paying tax after the first £110 of their earnings. That means that approximately £61 of their minimum wage payment will be taxed. This will return to the State, depending on the calculation, between £50 million and £100 million in tax revenue. This money will derive from the lowest paid sector of the economy and, therefore, I must take with a grain of salt the praise heaped on itself by the Government for introducing the minimum wage. Fine Gael and other parties proposed that people on the minimum wage would not be subjected to any tax up to the minimum wage level but the Government has not introduced such a measure. It has promised to do so but from 1 April 2000 those earning the minimum wage will be adding between £50 million and £100 million to the State's coffers. That is scandalous.

I hope that on Committee Stage we will be able to pass amendments which protect employees earning the minimum wage. The Bill lacks measures to protect workers and the minimum wage reports published by the two commissions clearly stated that systems should be in place to enable employees, without cost, to seek redress if their employers are not paying the minimum wage or they are being done down in any way. However, the legislation has not fulfilled the commissions' recommendations. I look forward to the Committee State debate which will not be completed until after the St. Patrick's Day holiday.

I welcome the Minster's indication that she is prepared to contemplate serious amendments to the Bill but I hope she has more in her arsenal than is indicated on the list of amendments. I am not as concerned about the imposition on members of the committee as regards the manner in which the Bill is being processed and I appreciate the Minister's remarks in this regard. However, I am concerned by the inadequate amount of time available for Committee Stage. On the face of it there are quite a number of issues which require detailed consideration but because of the 1 April guillotine hanging over us I am concerned that such consideration will not take place.

I do not wish to rehearse the arguments made on Second Stage except to refer to the Minister's comment that the important issue is that in any event and in principle we now have a Bill that can be worked on for the future. Generally speaking I agree with that approach and agree that it is easier to build something up than to knock something down. However, in this case the principle, if it stands, is a bad principle. We are not talking about basic pay but a national minimum earnings Bill which is an entirely different matter. Low paid workers expected the Bill to provide a basic minimum wage but, unless we can change that principle, I do not agree with the Minister's assertion that the Bill is historic or whatever else.

I do not wish to rehearse Second Stage and we may as well get stuck into the amendments. I agree with Deputy Owen's comments on the taxation aspect of the Bill. However, that is another day's discussion.

I have just received a letter which has left me quite stunned as regards a raft of amendments in my name and in the names of Deputies Owen, Stanton and Rabbitte which are being ruled out of order. This is not a good footing on which to begin Committee Stage and it underlines the unsatisfactory speed with which we have been forced to process the Bill. We need time to discuss the effects of this large scale ruling out of order of amendments. In the course of this discussion it is not satisfactory or allowable that this strict matter of what places a charge on the public purse is allowed to emasculate a substantial part of the Opposition parties' proposals. We are talking about a national minimum wage and Deputies want to legislate for the people we represent, who include public and private sector workers.

Chairman, you will accept that amendments to the national minimum wage, the categories of workers to which they apply, how they should be applied and the levels at which the national minimum wage should be set are different to proposing measures in the Finance Bill which may directly result in additional taxation or a charge on the public purse. However, the committee might as well pack up and go home if you, Chairman, are going to allow amendments Nos. 6, 7, 18, 19, 22, 23, 28, 31, 32 and 102 to be ruled out of order.

We only have an indication that our amendments which are ruled out of order. Are there other letters indicating that other amendments are also ruled out of order?

I have just opened my letter and I did not know about this. I do not think that there is any point in my——

Sorry, Deputy, can we allow Deputy Higgins to finish?

I am sorry, Chairman, I thought he was finished.

It seems as if the amendments I referred to are not the only ones to be ruled out of order and that other Deputies have their own lists. I think we will have to adjourn the meeting immediately, Chairman, as it is impossible to continue with such a radical decision. The Bill itself is full of holes and escape hatches for employers. I have not had time to examine the Minister's proposals in detail because of pressure of time. However, this devastates the whole process and we will have to adjourn the meeting to see exactly what is being ruled out of order or ruled in order so that we can come back with a reaction.

On a point of order, Chairman, can we have a list of all the amendments which have been disallowed? I only have an indication of amendments Nos. 7 and 80 to 89. We have now heard another long list and I am sure Deputy Rabbitte also has a long list.

It is important that we commence Committee Stage and deal with the Bill section by section and amendment by amendment. I also wish to draw to members' attention that there are Standing Orders which are applicable. Standing Order No. 142 (3) states, "An amendment to a Bill which could have the effect of imposing or increasing a charge upon the revenue may not be moved by any member, save a member of the Government or Minister of State". That is quite clear and we have to adhere to Standing Orders applicable to the committee. I am happy to read a list of the amendments ruled out of order under Standing Order No. 142.

Chairman, may I challenge that ruling? The amendments tabled to reckonable pay do not involve a charge on the State but on employers. At present the Bill allows them to include certain benefits in reckoning the £4.40 rate. If we are withdrawing some of these benefits the employers, and not the State, will have to pay the minimum wage plus the other benefits. Can someone explain how it constitutes a charge on the State if an employer is not going to be able to calculate tips and bonuses as part of reckonable pay? I may not be up to date with trade union matters but that does not seem right as the charge is on the employer.

As Deputy Owen is aware, I am guided by the information presented to me by the secretariat. It has been clearly brought to my attention that the amendments have been ruled out of order on the basis of Standing Order 143 which I read. If the Deputy wishes I will try to get clarification of the point she has raised and as soon as I do I will pass it on to her.

I have just read my billet-doux and apparently amendments Nos. 2, 9, 10, 12, 21, 29, 90 to 93, inclusive, 95 and 99, in my name, as well as those jointly tabled with Deputies Owen and Stanton, amendments Nos. 7, 80, 81, 82, 84, 85 and 89, are all ruled out of order.

I will get the ruling for the Deputies as soon as possible. We either abide by Standing Orders or we do not. If Deputies can bear with me for a few minutes, we will deal with some of the easier matters.

We could deal with the whole agenda because so much has been removed. There is no point in my continuing to scrutinise this Bill; all my amendments have been ruled out of order. That is extraordinary, whatever the technical and legal position. In my case there was no indication from the Bills Office that this view would be taken. If I had known, I would have tabled all my amendments in the name of the private sector.

The implication is that the State itself has employees who might fall into this category and, therefore, there is a potential charge on the Exchequer. If the State does not have such employees, the ruling is incorrect. Where does the State employ people for less than £4.40 per hour? I can understand why the Tánaiste expects to have the Bill passed by 1 April. There is no point in our arguing with it judging from the decisions in the letter. We need to hear the rationale behind a swathe of amendments being ruled out of order.

Which amendments have been ruled out of order?

A total of 32 amendments have been ruled out of order.

Can the secretariat read out those which have been ruled out of order?

The secretariat is gagged so that is not permissible. The amendments which have been ruled out are——

The secretariat is what?

As the Deputy knows, it is gagged. Its members cannot speak while we are in public session. I was amused when this was first brought to my attention when Deputy O'Malley was being prompted by his clerk and he had to relay what the clerk was saying because he could not say it directly.

Deputy O'Malley would not be accustomed to that.

Are Government Deputies notified of this or is it only those who have tabled amendments?

Only those who tabled amendments are notified.

We get the billets-doux.

Can this not be circulated to us on the day of the meeting?

The proper and appropriate procedures have been followed in relation to the amendments which have been tabled and people being notified. These procedures have been agreed by the House.

The amendments ruled out are Nos. 2, 9, 10, 12——

Are those Deputy Rabbitte's amendments?

Normal procedure is to deal with the Bill by going into the section, dealing with the amendments and ruling accordingly. I am anxious that we do this in line with normal procedures. To be helpful, I am prepared to give committee members the information now but I will have to go over ground which would be dealt with in the normal fashion when it is reached in each section.

That may be normal procedure but it not normal that 33% of the amendments are ruled out of order. This Bill is different from other legislation. As Deputy Rabbitte pointed out, it is questionable that the Chairman is in a position to judge that the Standing Order is applicable to some of these amendments, even if it is strictly interpreted.

The nature of this legislation is such that for there to be a proper debate which brings the interests of workers to the fore, we must put down these amendments. The fact that they apply to workers in both the public and private sector follows the nature of the Bill. It is impossible to proceed in this manner when a third of the amendments are ruled out of order. It makes a mockery of the committee. The Standing Order should be interpreted differently or, because of the nature of the Bill, it should not apply. A further alternative would be for the Tánaiste to move all the amendments and then vote against them so they can be discussed at least. It is impossible to proceed on the basis that 32 of them will be ruled out of order.

My difficulty in co-operating with the Chairman is that we walked in and a letter was handed to the members of each of the three parties who had tabled amendments. It does not affect the Government members. In dealing with the amendments which have been left in, I must have a few minutes, at least, to assess the impact of the removed amendments so I can make my points on the amendments which are still included. The Chairman says we can go through the Bill section by section but, because amendments are ruled out of order later on, I will not have time to make points which I might make on other sections and thus give the Minister a flavour of their content so she could return with her own amendments. I am hoping that the Minister will look at the 32 amendments which have been ruled out of order.

It is not true that a smoke screen has been put in place. The Deputy indicated that she would have to consider her amendments because she may wish to speak on them but would not have an opportunity to do so if there was not time to judge the more important points. The Deputy is well aware that the normal procedure on Committee Stage is to go through the Bill section by section and amendment by amendment. On sections in which an amendment is disallowed, the Deputy will have a chance during debate of that section to contribute.

I have a brief on this. Any amendments which have been ruled out of order have been ruled out of order by those familiar with the procedures for such rulings - the Bills Office. Anyone who has difficulties with the ruling or the Standing Order knows that there are other avenues to raise his or her difficulties. A significant number of amendments to the Bill have been disallowed as involving a potential charge on the Revenue. There is a fundamental principle underlining the disallowance of the amendments. In these circumstances I will give a brief explanation to the Select Committee.

Paragraph 3 of Standing Order 143 provides that an amendment to a Bill which could have the effect of imposing or increasing a charge upon the Revenue may not be moved by any Member save a member of the Government or Minister of State. To deal with Deputy Rabbitte's point, the State is an employer. In disallowing the amendments the Chair was bound by the Standing Order which cannot be construed in such a way as to permit private Members to move amendments which could have the effect of imposing or increasing labour costs on employers generally and which, accordingly, would or would potentially have a similar impact on the State.

The subject matter of the disallowed amendments which are relevant to the Bill can be raised when the Select Committee comes to consider the sections to which they relate. The Standing Order is clear and allows the Chair no discretion in this matter. The committee cannot set aside or ignore the Standing Orders. That would be a matterfor the House. I now intend to proceed with section 1.

I accept that the Chairman is circumscribed by Standing Orders and is in a difficult position. The State is an employer. Does anyone know whether it is the case that there are State employees who are paid less than £4.40 per hour? If that is not the case, there is no potential charge on the Exchequer. I do not understand the Chairman's reference to "employers generally" in the statement which he read out and I would like to hear the statement again. One cannot include a measure in a Finance Bill which would incur a cost on the Exchequer but I did not understand that to apply to employers outside the State sector.

On a point of clarification, is the Chairman saying that amendments tabled by the Opposition which would incur a charge on private employers to pay people the minimum wage without taking into account certain elements is allowable but that by tabling such amendments we would be saying that people working in the sector who are not in receipt of the minimum wage would have their minimum wage calculated in a different way? We are to make fish of one group and flesh of the other.

I am anxious to move on as we could disagree on this point all day. I would rather deal with the various amendments as we come to them. That is my intention. I will read the statement again. In disallowing the amendments, the Chair was bound by the standing order which clearly cannot be construed in such way as to permit private Members to move amendments which could have the effect of imposing or increasing labour costs on employers generally and which, accordingly, would, or would have the potential to, have a similar impact on the State.

Am I correct in saying that what that convoluted statement means is that Opposition Members do not have the authority to move amendments which would incur a cost on the Exchequer in respect of State employees? In other words, can we resubmit our amendments as they relate to the private sector? Do we know whether there are State employees who are paid less than £4.40 per hour?

The issue of the rate of pay is dealt with in particular sections of the Bill.

The point is that the Chairman's ruling is not correct unless a cost would be incurred on the Exchequer. If the cost is merely a theoretical one——

The ruling has been made and I am satisfied, on the basis of the information available to me at this stage, that it is correct. If Members are dissatisfied with the ruling, there are avenues and procedures available to them to pursue the issue. We must move on to dealing with the business of the committee.

I appreciate that and I was prepared to be here last Friday. I do not want to tire the Chairman or his excellent clerk unduly but I would like to participate in the debate on the Bill and I am merely seeking to establish the rationale and relevance of the ruling in this case. I submit that if it does not apply to any workers in the State service, the ruling which does not permit us to move amendments is not correct because the amendments would not incur a cost on the Exchequer.

It is my understanding that a cost would be incurred on the State.

Therefore, there are people in the public sector who are receiving less than the minimum wage.

Yes. Is Deputy Rabbitte satisfied with my response?

That is the first time since the meeting commenced that the Chairman stated that there are State employees who receive less than £4.40 per hour and I accept that.

I understand that to be the case on the basis of information supplied to me.

The Chairman has made that comment for the first time and if he says that is the case, I accept it.

Thank you.

I am somewhat sceptical that even where people are employed part-time, they are paid less than £4.40 per hour. No doubt, the Minister will address that point before the Bill is enacted.

If we are to proceed with the Bill, I propose that we move——

That is my intention. We will move to section 1 of the Bill.

I presume the Bill affects all employers.

We will deal with the Bill section by section.

Before we come to section 1, the Chairman must clarify one issue. If Members were to submit amendments which referred only to the private sector, would they be in order?

The Deputy is asking me a hypothetical question.

I am not asking a hypothetical question. The Minister has ruled 33 amendments out of order.

I have ruled on amendments which were already submitted. I will be happy to accommodate any further amendments which may be submitted if I am in a position to do so.

With respect to the Chairman, I and the other spokespersons spent a great deal of time framing amendments to this Bill. We did not do that for our own amusement and we need to know whether any further amendments we formulate will be in order.

I would be very happy to offer my assistance and that of the Clerk to the Committee to ensure that any amendments Members wish to submit would meet with the Standing Orders and be accepted.

With respect, that is not good enough. I want to know when I leave this room whether I can re-frame my amendments - particularly those in regard to the reckonable and non-reckonable components - and insert a clause to the effect that where an employer operates in the private sector, certain issues would not be reckonable. The note which the Chairman read implied that we cannot table amendments which would incur extra charges on any employer, whether public or private. That is how I interpreted it.

I suggest that should Members wish to submit amendments they would be welcome to do so and that they could either contact me, the Clerk or the Bills Office where they would be offered every assistance to ensure the amendments would have regard to the Standing Orders. We will endeavour to accommodate Members.

I was the first Member to submit my amendments last Thursday. Although the Bills Office contacted me to clarify some minor language and punctuation issues, I did not receive any hint whatsoever that my amendments were out of order until I walked in here today and received this envelope with my name on it. I doubt that Deputies Rabbitte or Higgins received any indication that their amendments were out of order.

Deputy Owen will be aware that I am relatively new to this chairmanship. Does the procedure which has been adopted on this occasion differ to what happened in the past? Deputy Owen has had wide experience of dealing with Bills both as a spokesperson and a Minister.

The reason we are so angry on this occasion is that our entire approach is gone.

I put a fair question to the Deputy.

I have never had an amendment ruled out on the basis that it incurred a charge on the Exchequer, with the exception perhaps of one amendment I tabled to the Copyright Bill about which I was informed.

If the procedures adopted in this instance differ from those which were adopted in the past, I will make inquiries about the matter, particularly if other committees are able to breach standing orders.

The Chairman's invitation to discuss prospective amendments with him will not work.

It is important for the purposes of the record that we establish whether the procedures adopted on this occasion differ to those adopted on any other occasion when amendments have been tabled.

No, I must say that I was not ever contacted previously to be informed that my amendments would be disallowed. I had to wait until I came to the committee or received a letter on the morning of the meeting.

That is an important point.

The Chairman is saying we can have chats with the Bills Office which may not be able to inform us whether the amendments are out of order. Having received a list of disallowed amendments, it is the Chairman's responsibility to inform me, having worked a week or ten days on drafting the current amendments, if I have the right to rewrite amendments which will be in order.

Will the Chairman tell us how they will have to be phrased?

I know I am a good Chairman and that I am in great demand. I would be happy to assist Deputy Owen in drafting her amendments, should that be necessary.

The Chairman is not really helping.

(Dublin West): The Chairman was about to read the list of amendments which were ruled out of order and he only got through the first five——

That was over 25 minutes ago. I suggest that, with the agreement of members, they be circulated. Otherwise we will deal with them as they arise. Is that agreed? Agreed.


Question proposed: "That section 1 stand part of the Bill."

This section is straightforward and deals with the Short Title of the Bill.

The Minister hoped she would sign the Bill into law this Friday and the PR exercise would take place between now and 1 April. Section 1(2) states the Bill will come into operation on such day or days as by order or orders made by the Minister under this section may be fixed thereof. Given that the timetable submitted by the Minister to the committee will not be followed, is 1 April still the target date for enactment?

Obviously, I do not sign any Bill into law - that is a matter for the President. If this legislation has not passed through the Houses of the Oireachtas, that cannot happen. To a large extent, I am in the hands of the committee and others. I have not organised a PR campaign, nor is it my intention to engage in one. The intention is that my Department and others will inform employers and employees of their rights. It is normal in cases such as this to engage in an extensive publicity campaign, as all public notices are advertised in a particular format. I have not discussed this aspect with my officials nor do I intend to do so. It is a matter for them, it is not a political exercise in which I intend to take part when the Bill is passed.

Given that I will be substantially amending this Bill in line with the observations made by Deputies on both sides of the House during the Second Stage debate, I hope it will still be enacted on 1 April, which was the commitment given after the national minimum wage commission reported and during the recent talks on a national agreement.

The Title of the Bill will be the National Minimum Wage Act, 2000. People may assume from this that they will be receive £4.40 per hour into their hands. They will not receive this because the Government has decided to tax it. It is not a living wage, which might be assumed from the Title. Will the Minister ensure that people are informed of this in a publicity campaign? The Government is imposing a national minimum wage and they will have to pay their employees more, which is fair. However, some employers are concerned that the Government will be the hidden beneficiaries through, as Deputy Owen said, the generation of £50 million or £100 million in revenue. Has the Minister done any calculations or spoken to the Minister for Finance about how much of this increase will end up in Government coffers?

Nobody has been more committed to reducing tax on labour than I have been during my political career. When this Government took office, a single person began to pay tax at £70 per week which has now increased to £110 per week - an additional £40 on which single workers do not pay tax. This is still too low. I agree with the Deputy that if we believe this is the national minimum wage which people should earn, it should not be taxed. I hope this can be achieved. A commitment was given during the partnership talks to do this as quickly as possible so that nobody earning the minimum wage which, when introduced will be just under £180 per week, will pay tax. Everyone wants this. Given recent revelations, those at the bottom end of the scale should not pay tax. We must try to achieve this quickly. Obviously there is a pyramid effect. It is more expensive to move people from the bottom end of the scale because of the numbers involved. However, I agree with Deputy Stanton that we must rapidly move in this direction.

Does the Minister agree the Government may make up to £100 million by taxing the increase introduced by this Act?

I do not know the tax related implications because we do not have detailed data on the tax status of the individuals who will benefit. We know that approximately 163,000 people will benefit, but I do not know whether they are married, with dependent spouses, or are single income earners. The Government and I have given a commitment to rapidly reach a position where people do not pay tax on low earnings. It is not right that people on low income should pay tax.

Why is it happening now?

As I said, people paid tax at £70 per week two and a half years ago, when the Deputy's party left Government. I am not making a political point but saying that we have all failed to remove those on low incomes from the tax net. However, until 1997 one paid tax at £70 per week. This has now been increased to £110 per week. We must move to £170 and £180 per week as quickly as possible.

The Minister has not denied the State will accrue up to £100 million in increased revenue.

She is not in a position to do so.

She is in Government. Almost all Deputies alluded to this on Second Stage. People may assume they will receive the national minimum wage into their hands, but they will not. The State will take a certain amount.

I have been flexible with Deputy Stanton but this does not really relate tosection 1.

It relates to the Title.

It does not really. The Deputies are pushing their luck.

Section 1 specifies the Act will come into operation on such day or days as the Minister may make by order. What is the position in respect of the category of workers known as early starters, under the new agreement for prosperity, delight and happiness, which starts on 1 April? Does this Bill take precedence? If workers qualify for the new agreement on 1 April, will they first be brought into line on the £4.40 payment and then receive payment under the first phase of the agreement?

Yes, I said that in my opening remarks on Second Stage. This Bill takes precedence.

The terms of this Bill will be applied first and the first phase of the new agreement applies after that.

Will outstanding payments under Partnership 2000, which are based on percentage, be worked out on the basis of the minimum wage, even though Partnership 2000 was agreed prior to this? I am aware that some of the increases in areas such as the retail sector are backloaded to next October or November under Partnership 2000. If it is a 1% increase the employer could claim that he or she agreed a 1% increase based on their wage before the introduction of the minimum wage. It is important that they know it is to be paid on top of it.

I do not know if there are such people, perhaps there are. This is a legal entitlement to £4.40 per hour and anything negotiated under wage agreements is in addition to that.

Even if negotiated prior to the introduction of the minimum wage?

Yes, I assume so. I do not know if there is anybody in the category the Deputy mentions who has not got the minimum wage yet. I doubt that any of the early settlers were on the £4.40 margin.

I understand there are some who have a backloaded agreement under Partnership 2000.

Question put and agreed to.

Amendment No. 68 is related to amendment No. 1 and they may be discussed together by agreement.

I move amendment No. 1:

In page 6, subsection (1), line 8, after "employment" to insert "and who may or may not have one year's continuous service".

The legislation, by and large, gives protection to employees if an employer is remiss in paying the wage, if he or she refuses to give documents to the employee and so forth. However, the employee is defined as somebody who has been working in the job for one year and the legislation does not sufficiently protect those who have less than one year's service in a company. That is more likely nowadays because people are moving between jobs and, thankfully, there is a vibrant employment market.

The amendment to the description of employee will ensure that somebody who takes a case under the legislation who has less than one year's service will not be victimised and that they can challenge the employer under the legislation. I was informed by letter that amendment No. 4, in my name, is disallowed. In the last seven years there has been a plethora of new employment legislation which has included protections for employees who have less than one year's service. Amendment No. 4 sought to insert an overarching provision in the Unfair Dismissals Act, 1977, to ensure that where employees challenged an employer on the basis of rights laid down in legislation, the one year's service would not be a factor that might prevent them from doing so or from challenging their dismissal.

The only protection an employee with less than one year's service has is the Industrial Relations Acts under which they can take a case to the Labour Court. However, that is not binding on an employer. An employer does not even have to appear at the hearing as they can ignore a request to attend. Even if the Labour Court makes a ruling that the employee has right on their side, it cannot make a binding order.

There is, therefore, a lacuna in the law where people who are employed for less than one year are not protected. The fear is that such people will not take a challenge under the minimum wage legislation because they have less than one year's service and for fear that the employer will find a way of dismissing them because he or she will label them as troublemakers. They do not appear to have any protection except under the Industrial Relations Acts.

If the Minister will not accept this amendment, perhaps she would give serious consideration to amending the main body of employment legislation to cover people with less than one year's service who take a challenge on the basis of rights laid down in such legislation and who are likely to be dismissed for doing so. Amendment No. 1 would have tied in with amendment No. 4 which has been disallowed. If I had known amendment No. 4 was going to be disallowed, I might have looked at the Bill more closely to find a better way to insert it.

Under section 25 of the Parental Leave Act and under section 38 of the Maternity Protection Act, 1994, there are certain protections for people who have less than one year's service. However, that protection is not replicated in this Bill. The more recent legislation recognises that there could be a diminution of service for employees but that has not been done in this legislation. Perhaps the Minister will explain.

I indicated that I would try to get clarification in response to the questions posed regarding the public and private sectors and my earlier statement. With regard to the amendments on the document dated 7 March 2000, amendment No. 101, subsection (1) which refers to the private sector has been allowed and amendment No. 102, subsection (2) which refers to the public sector has been disallowed because of Revenue implications. I hope that is helpful to the committee.

Are you saying that amendment No. 101 is permitted?

That is correct. Amendment No. 102 is not. That might be helpful to members.

A nod is as good as a wink to a helpless Opposition.

I had better not respond.

This is a splendid amendment. It is necessary from the point of view of clarity as well as for its import. My amendment, No. 68, is similar and relates to section 35.

The two amendments are being discussed together.

I support Deputy Owen's amendment but I wish to make a few points on mine. Amendment No. 68 relates to the section dealing with the prohibition on victimisation of employees merely for exercising their rights under this legislation. On the face of it, section 35 appears to do that. It provides that an employer may not victimise an employee merely for that employee exercising their rights under the terms of this legislation. However, it does not mean that in practice. Subsection (2) provides that one must qualify under the Unfair Dismissals Act, which means one must have 12 months service. Most members of the committee will be sufficiently familiar with practices in industrial relations to know it is precisely during that 12 months that the protection is required.

We are talking about two categories of employer - one is the category in sectors where the margin of economic viability is extremely tight and the other is bad employers. The other group of employers has been taken out of this area by the tightening labour market and the fact that the marketplace rate has overtaken £4.40. With that group removed, we are down to the two categories I mentioned. In the case of the second category, the young 18 year old worker who asserts her right to get Mary Harney's £4.40 will find herself dismissed for reasons that allegedly have nothing to do with that. We must provide against that happening. My amendment No. 68 achieves that in so far as it can be achieved, because an employer who is determined to get rid of somebody will do it. At least there is redress - which incidentally does not amount to a hill of beans anyway - to the Employment Appeals Tribunal by removing that one year's protection in this Bill. Deputy Owen's amendment is perfectly symmetrical with that in that it is right that at this early stage it should be clear in the definition section that the employee concerned does not have to have one year's continuous service. There are precedents for this. For example, maternity protection or parental leave are already exempt from the requirement of one year's continuous service. That requirement is waived in those circumstances and it should be waived here. It is a hoary old chestnut in labour law. There is not much point in having rights if asserting those rights gets one into hot water and leaves one without a job. Therefore, Deputy Owen's amendment in respect of the definition section and my amendment in respect of the prohibition on victimisation as it refers to section 35 are important.

Previous speakers spoke about younger people. However, this could also apply to older people who are anxious to get back into the workforce and who may not have one year's continuous service. An older person may be very unskilled as well. I ask the Minister to accept the amendment.

I accept the principle of the amendments tabled by Deputies Owen and Rabbitte. Subject to clearing the matter with the parliamentary draftsman, I will table an appropriate amendment. Obviously it is not the intention that somebody has to be in employment continuously for a year in order to be able to benefit from the national minimum wage. However, it is a requirement under the Unfair Dismissals Act to be in employment for one year before one can avail of one's rights under that Act. That is not acceptable. I will come back, subject to agreeing it in principle with the parliamentary draftsman, with an amendment which will achieve what the Deputies want.

I thank the Minister. My amendment No. 4, which has been disallowed, might help her to find an appropriate wording. My concern is that an employee who has less than a year's service is not covered. Clearly this description does not cover people who have been in employment for less than a year. It leaves them floating with no real persona in the workplace. One way to address that is to include people with less than a year's service in the definition of an employee. In view of the Minister's acceptance of the principle of this amendment, I will not press it.

Amendment, by leave, withdrawn.
Amendment No. 2 not moved.

I move amendment No. 3:

In page 6, subsection (1)(b), to delete lines 20 to 22.

Can we hear the Minister on the definition of the national minimum hourly rate of pay? There is no reference in the Bill to the national minimum wage, which is what is in the popular mind in regard to this legislation. I know that, in order to get to a national minimum wage, one has to have an hourly rate. However, one of the difficulties is that the Minimum Pay Commission recommended that the rate be fixed at two-thirds of median earnings. In so far as I can establish from the persons who took part in this exercise, that is equivalent to two-thirds of average earnings. That was then, and this is now, and the Minister is standing by the rate of £4.40 which next month, based on information furnished to me from SIPTU, will be equivalent to 52% of median earnings. There is a big difference between 52% and 66%. This is one of the difficulties caused by the ruling out of amendments. I had sought to have a definition of the national minimum wage inserted to guide us when we got to the question of the hourly rate. The difficulty is that something that was fixed as a yardstick of measurement more than two years ago has already been departed from in a context where we are effectively giving the Minister the power to alter this in the future. The alteration she has made already by invoking her powers under section 11 is to bring in, from April, a rate that is equivalent to 52% of average earnings. If one is on the basic rate of pay already, there is a substantial difference between 52% and 66%.

We will deal with Deputy Higgins's point first and return to Deputy Rabbitte's when we come to that section.

Are we coming back to the issues raised by Deputy Rabbitte because I want to address them?

Is it proposed to deal with the whole section together once the amendments have been dealt with?

My amendment is to the effect that the Bill should not say that pay includes the value of any benefit not in the form of money that is allowed by an employer to an employee in respect of the employee's employment. This is one of the amendments that is allowed. In fairness to the staff in the Bills Office to whom I spoke last week, the advice I got from them was quite correct and fair in regard to what might or might not be allowable. I just did not think that the Chairman was going to be so strict in interpreting what a charge on the public purse might mean. I want to make it clear that no blame whatsoever attaches to the staff in the Bills Office.

I very much welcome the national minimum wage legislation but I deplore the mean spirited way it is being introduced. It is as if it is being done grudgingly, given the many limitations on the rights of workers. The 163,000 workers the Minister says will be affected by this are, generally speaking, among the most vulnerable in society. They are in low paid jobs, are subject to much abuse in regard to pay levels, their conditions of employment and the way they are treated by employers. This is only one of the many escape hatches the Bill, in its current form, provides for unscrupulous employers to avoid their responsibility of paying a reasonable wage. The problem is that this provision can be grotesquely abused by unscrupulous employers. There are employers who would not want to do that and who want to treat their employees fairly. However, we must try to protect the most vulnerable workers.

The Tánaiste is proposing that pay - we are discussing pay in the context of the national minimum wage - should include the value of any benefit and that can be interpreted in the widest possible sense by employers. If we consider workers in the catering or hotel industries, for example, they may be given lunch by their employers daily. If I am not mistaken, the workers, if the are subject to the JLC agreement, are obliged to have payment for their lunch factored into their income. However, standards are not laid down with regard to the contents of their lunch, its quality or the amount of money required to pay for it. These people could be given a few dried up rashers and sausages for their lunch which were left over from breakfast and that could be included by an employer in reckoning their pay. Similar situations could arise in the case of those who are obliged to work unsocial hours and who are provided with a taxi for their journey home or, perhaps, driven home by their employer if he or she is going in the same direction. That could be considered a benefit not in the form of money.

An employer could use anything he or she wishes under the very wide ranging provision the Tánaiste has included here. In my opinion, to avoid abuses and protect the vulnerable, it should not be included.

This again shows the difficulty with taking out the later amendments. This amendment would not be as relevant if we were dispensing with a number of the reckonable issues later. However, these will all be disallowed on foot of amendments which are being tabled. A person working in this House who is classed as being in the lower paid sector voiced their concerns to me on this matter. The person in question is provided with a taxi to travel home at night because they work unsocial hours.

Subsection 10 of Part 2 of the Schedule, which deals with non-reckonable components, refers to "Any payment or benefit-in-kind, except board with lodgings, lodgings only or board only". Would the benefit in kind referred to in that subsection include taxis, lunches or even the use of a uniform or clothes?

Given the amendments which will remove a number of the reckonable components, the description I quoted becomes much more significant. I would like the Tánaiste to be specific in terms of what will be covered by the word "benefit" which is used in the description to which I referred. We are not discussing benefits which are not in the form of money - obviously, shift pay and premium pay come in that form - we are discussing the add-ons which are given to an employee when they take up employment. In those circumstances, the description becomes extremely important and I am anxious to hear the Tánaiste's comments. A low paid worker who is employed by the Houses was concerned enough about this issue to ask a member of my party whether the fact that they have the use of a taxi to travel to or from work would lead to a deduction from their minimum wage.

I presume the Tánaiste's intention here is to cover the obvious benefits that accrue to an employee in the catering industry, from a relocation point of view, namely, where there is a per diem payment involved.

I struggled with this issue and opted against tabling an amendment similar to that in Deputy Higgins's name because I did not think it would be practicable in all cases. However, I was unable to construct a better model. Deputy Higgins's amendment raises a fundamental question. I reiterate that at present, because of what has happened in the marketplace, we are legislating for unscrupulous employers. The vast majority of employers pay their staff more than the envisaged national minimum wage. Employers who are finding it difficult to survive are likely to obey the law and, therefore, we are obliged to deal with the category to which I referred.

In my opinion one could drive a coach and four through this part of the Bill. For example, an employee in a bed and breakfast establishment in Killarney could find herself in a position where her employer may decide that board and lodgings are included in her wages. He could place a valuation on that board and lodging equivalent to the accommodation rates charged by the Great Southern Hotel in Killarney and this might come to half her earnings. That would totally skew the intent of the Bill. The definition of pay as being any benefit is extremely broad.

I do not know what the Tánaiste is going to say in reply to the point raised by Deputy Owen in respect of the non-reckonable components. If it specifies board and lodgings only, or lodgings only or board only, is that consistent with the definition we are applying to pay? Does it mean that the only payment that might be taken into account refers to board and lodgings? Will taxi fares or other payments be included? I cannot see how that can happen if the definition is to be consistent with subsection 10 of Part 2 of the Schedule, which deals with non-reckonable components.

Members have raised a number of issues. I wish to deal first with Deputy Rabbitte's point, which preceded the moving of the amendment, in respect of a national minimum hourly rate of pay and how that will be calculated. As the Deputy is aware, this will be done by an order under section 11. Even if one was the greatest genius in the world, one could not write into the legislation all the things everyone would want to see covered. In that context, it is appropriate that they should be done by order. It is also appropriate that we should not have too rigid or too inflexible a formula. The National Minimum Wage Commission recommended two thirds of median earnings but stated that we would have to take into account the effect on employment, competitiveness and the overall economic situation. That is why we asked the ESRI to carry out an impact study which concluded that if this rate was introduced on 1 April 1997, for example, 300,000 employees, or 23% of the labour force, would have benefited. It projected this forward to 1 April 2000 using the best data available and now projects that 163,000 people, or 13.5% of employees, will benefit. Deputies may find it hard to believe that so many people are earning less than £4.40 per hour. There may be issues concerning who is or who is not an employee but it is incredible that the hourly rate of people such as home helps working for the State is substantially less than £4.40. It is not the case that private sector employers are the only people who will have to pay more as a result of this Bill.

We have picked a reasonable rate to start with. We would all like it to be more but we are fast becoming a high wage, high-tech economy. However, we have to ensure that we do not leave too many people behind and that we equip workers with the skills to be able to access jobs in that high wage, high-tech economy.

As regards Deputy Higgins's amendment, there are 18 JLCs covering 250,000 workers from the hotel and catering industry right across the board. Various formulae are used to calculate what should be attributed to board and lodgings. Deputy Rabbitte and others will be familiar with this issue and we intend to use the established criteria used by JLCs when making the order under this legislation. Some workers have to take a taxi to and from work because there is no public transport or their hours are unsociable, others are required to wear a uniform and under no circumstances could I envisage attributing a portion of income to a uniform or travel expenses. We will be reasonable and fair but one would have to attribute a monetary value to board and lodgings. Such benefits are of value to employees and we would have to attribute a monetary value to them where provided. That will not be a market value but will be based on the current rates permitted under the hotels ERO which are £6.09 per day for board and lodgings, £3.62 per day for board only and £2.47 per day for lodgings only. These are the kinds of rates that we would intend including in the order.

The problem with this is that I am not sure that I can see how it is reconciled with the definition of pay. Deputy Higgins's amendment draws attention to the fact that pay is defined as including the value of any benefit not in the form of money that is allowed by the employer. I accept the Minister's intent and her stated purpose that this is not to include transport costs where there is only one method of transport available or because of the time of day, safety or other considerations. However, what of Deputy Owen's suggestion about a uniform or protective clothing? If an employer wants to involve this measure the Bill refers to the value of any benefit not in the form of money. It seems that one could argue that protective clothing or the cost of a taxi to go home from a hospital late at night constitute such a benefit.

I would refer Deputies to the Schedule.

Part 2 of the Schedule concerns the non-reckonable components of pay including travel allowances etc. What if an employer has a contract with a taxi firm and pays the cost? They are not paying the money for the expense of the taxi to the employee but they are providing the employee with the service as a benefit. My concern is that any payment of expenses qualifies the non-reckonable components. It is the payment of the expenses so one claims for the cost of one's uniform and one gets the money back. That is not reckonable but my concern is that an employer who wished to abuse this provision could pay directly for the uniform or for the taxi and then subtract the cost from earnings as it is not a payment of expenses but a benefit. Is this covered under No. 10 of the Schedule?

One can exclude any benefit in kind except board and lodgings. A benefit such as a uniform, taxi or whatever is excluded.

That is good and we need that clarification.

Where is that written?

Part 2 of the Schedule, page 29.

Line 37.

One would need a word processor to see why we defined pay as proposed on page 6. That is what I have been asking about from the beginning. I understand the provision in No. 10 about non-reckonable benefits but why is there a definition of pay which appears to be in conflict with that definition?

I agree with the Deputy's point and we will have to look at that and come back to the committee.

I do not see why we are including it at all. What is left? Everything else seems covered elsewhere in the Bill and there does not seem to be anything left.

Deputy Higgins, are you satisfied with the Minister's response?

Yes. I withdraw the amendment on the basis that there is an openness and an understanding that we are going to return to this issue.

Amendment, by leave, withdrawn.
Question proposed: "That section 2 stand part of the Bill."

Section 2, line 15, provides a definition of inspector. Section 32 sets out the duties of an inspector but does not give any details of the qualifications an inspector should have or the remuneration.

As regards qualifications, it would be my understanding that, apart from looking at records concerning employee details and payments, an inspector may have to check that tax returns are in order. Will the Minister give an indication of the number of inspectors, their locations and remuneration and whether they will have the qualifications which would enable them to check tax records?

There was a recent advertisement for new staff for the labour inspectorate. I do not know the precise qualifications but I will come back to the Deputy on remuneration and level of qualifications. Obviously we would require people who are familiar with the legislation, who are tough enough to ensure that it is enforced and who will not keel over the first time they are asked to leave. We all know the kind of person required but it is hard to define it. I am not aware of the specific qualifications but I will come back to the Deputy on this issue.

Whether this legislation is effective will depend largely on how it is policed and enforced. Part of the difficulty with other labour legislation, particularly legislation regarding the employment of young persons, was that it was not possible to police it to ensure that it was being complied with. This is particularly the case in busy towns and premises at unearthly hours of the morning. The difficulty with the legislation is that the inspection process may not be successful. We can, however, discuss this on section 32.

I have a note about what is required and I will circulate it.

The point raised by the Tánaiste is material to the Bill. She mentioned the 1997 assessment by the ESRI of the impact a national minimum wage would have had that year which it then projected forward to 2000. I wonder what the ESRI's view might now be. I doubt there are 163,000 workers in this category. At that time in 1997, or shortly before, there was a strike in Dunnes Stores for the modest wage demands of the workers. Dunnes Stores has now entered an agreement with the trade union concerned that is in excess of the rate provided for in the Bill. All one has to do is walk down any street in Dublin and one will notice that there has been a stiffening of rates in the retail trade in recent times. The methodology adopted by the ESRI, which may have been perfectly reasonable then, could not pick up on the dynamic in the economy since then. It is unlikely that there are 163,000 workers in this category now.

Deputy Daly brought my attention to a section of the explanatory memorandum when I raised the question of whether there are State employees who are paid less than £4.40 per hour. Under the heading "Financial Implications" on page six of the explanatory memorandum, there is a statement that the direct cost implications of the national minimum wage for the Exchequer as an employer will be £2 million a year outside of the health sector. In the health sector, however, it is estimated that it will cost £12 million. The only category which would cost the Exchequer a great deal of money is that of home helps. Politicians, health boards and voluntary organisations have disgracefully exploited these people over the years while they did an important and demanding job which would have placed a great financial strain on the Exchequer if those for whom they care were in institutional care.

What is the significance of the insertion of section 2(2) in the definitions? What does it mean?

This is a technical provision in relation to the definition of employer which includes reference to public service employers.

It is a technical definition.

No. It is a technical provision in relation to the definition of employer which includes reference to public service employers. It is a definition of employer.

The definition of employer is further up the page in lines 9 to 12. It states that an employer in relation to an employee means the person with whom the employee has entered into or for whom the employee works or has worked under contract and includes a transfer. Is that definition not sufficient to cover a public service worker?

That is the arrangement between the employer and the employee. This is inserted for technical reasons.

Has the subsection been withdrawn from other labour legislation?

It was inserted at the insistence of the parliamentary draftsman.

Is it covered in the Worker Protection Act or the Young Persons Employment Act?

It is a standard definition.

Can we proceed?

We can proceed but I am not much the wiser as to the meaning of that chunk.

I am not much the wiser myself.

It is an odd way to define an employer. I hope the Tánaiste will not send it out in the promotional material to which Deputy Owen referred.

It might be sent to the harbour boards, health boards, vocational education committees and so on.

Why are those bodies specifically picked out? Is it that those who are in public employ, but who do not work for a harbour authority, health board or VEC, are covered by the Civil Service Regulation Act, 1956? What about those who are employed in bodies such as Enterprise Ireland? Are they covered?

Presumably these groups are specified because they are not otherwise covered.

I assume it is included because there are distinguishing benefits to be accrued from being in the mainstream public service as opposed to being in the semi-State or local government sectors. There would be different employment rights enjoyed by the mainstream Civil Service which some would argue are far better than those available in local authorities. That would be a reason for distinction to be made in the Bill. Different rights apply in taxation matters.

Question put and agreed to.

Amendment No. 4 has been ruled out of order because it is outside the scope of the Bill.

Amendment No. 4 not moved.
Question proposed: "That section 3 stand part of the Bill."

I have already referred to this amendment. I hope the Minister will take it into account when looking at amendment No. 1.

I would, however, like an explanation of the regulations in subsection (2), that regulations made under the section may contain such incidentally supplementary and consequential provisions as appear to the Minister to be necessary. That is a sweeping power. When does something cease being incidental and become substantive?

This is the standard provision in all legislation which gives Ministers power to make regulations. I know of no legislation that does not grant Ministers such powers. It is not a secret way of bestowing great powers on myself or any of my successors.

I accept the Tánaiste's explanation but I do not recall seeing it before. One of the extraordinary things about the Bill is the nervousness that characterises it. At virtually any time the Minister of the day may intervene to prevent the citadel coming under attack. The notion that the entire economy could come crashing down because of this is facile but it appears to be the mood of the day. I humbly and respectfully submit that the interdepartmental committee did not set about implementing the recommendations of the minimum pay commission, rather its members set about finding holes in the recommendations and expressing them in law. It is normal for a Minister to have the power to make regulations and I accept that in a matter such as this if one is to have the necessary flexibility, including the right to change from time to time, it would be proper for that to happen through regulation. It would seem somewhat odd, however, that the precise meanings in law of the terms "incidental", "supplementary" and "consequential" would not be provided. It may be the case that those terms are defined and I accept the Minister's statement that she does not intend to use them to undermine in any way the rate which has been fixed.

In fairness to the Minister, I found a similar clause in the Organisation of Working Time Act, 1997. I was not involved in the discussions on that Bill but the terms "supplementary", "incidental" and "consequential" are used in it.

I think Deputy Rabbitte may have been involved in that Bill.

Question put and agreed to.
Question proposed: "That section 4 stand part of the Bill."

If the Minister lays a new order before the House, will we have 21 days to table a motion challenging such an order? For example, if the current Minister were to be replaced by a Minister of a right wing disposition, God between us all and harm, who moved to make an order which undermined the existing rate, how would the House challenge that? Would such a challenge be made by way of a motion tabled within 21 days?

At the end of the day, the level of the minimum wage is a political decision. If a Member of the Deputy's party or some other party were to find himself or herself in my position and were to decide that the rate should be different, that would be a political call. If the majority of the Government of the day felt that way, such a decision could be made. The provision in relation to orders and regulations has been around for as long as I have been a Member of this House, namely, for the past 22 or 23 years, but we have the same debate each time the provision arises. Quite honestly, it would not be practical to formulate matters in any other way. This provision represents the most efficient and satisfactory way of providing for the making of orders.

I do not dispute the good sense of providing for the making of orders but, for example, if somewhere in the Bill the Minister were to seek to take account not only of national competitiveness but also of "vulnerable sectors" - a phrase contained in the Bill - one could draw the conclusion that we are either introducing a national minimum wage or we are not. Representatives of the clothing industry might say to the Minister of the day that a minimum wage is all very well in the catering sector or elsewhere but that he or she would have to provide an exemption for their industry in order that it could compete with Taiwan or wherever. That kind of derogation would seem to defeat the character of a national minimum wage. If a Minister were to agree to make an order exempting the clothing industry, how could the House challenge such an order?

Obviously, in regard to the manner in which the rate can change, a number of procedures are provided by the Labour Court which can make a recommendation to the Minister, taking account of the effect on competitiveness and so on. Deputy Rabbitte has tabled an amendment on this issue about which I would have an open mind. When setting a national minimum wage, there are procedures to provide certain companies with a once-off exemption if they can convince their employees to agree to that. It is right to provide for such a measure on a temporary basis - a three to 12 month period - where people would have difficulties implementing the rate.

This legislation is being drafted for all time and we must take account of the effects which a national minimum wage would have on competitiveness. I would prefer to see people working than not working. In many cases, no pay is worse than low pay. Unfortunately, there are many situations in which people have to work for relatively low pay and we want to introduce a national minimum wage which recognises that people must be fairly paid for their labour and that they must not be exploited. On the other hand, we have to ensure that we keep as many people as possible in the workforce, particularly in the Irish workforce. Contrary to comments made earlier, I recently encountered a significant number of workers whose wages are substantially lower than the minimum wage level. I doubt that anyone in the greater Dublin area or in any other city earns less than £4.40 per hour, but people are earning less than that in more peripheral areas. A significant number of people working in the textile industry in Donegal earns less than £4.40 per hour but such employees are devastated when they lose their jobs because they have not worked in any other area and do not want to move away from their homes.

We have sought in this legislation to be fair to those people who work and to provide a balance which will not cause unnecessary difficulties for particular sectors. We could have opted for a regional or sectoral approach but we did not do so as it would have defeated the whole purpose of the Bill. The social partners have signed up to the initial rate. Most people felt it was a good starting point which could be developed.

Section 4 refers to "every order (other than an order made under section 1(2)). . . ”, the order which will dictate the starting date. Section 11 does not offer protection. Section 11(1) states: “The Minister shall, by order, after taking into account the impact the proposed rate . . . declare a national minimum hourly rate of pay for the purposes of this Act.” Section 11(3) provides that a Minister can actually revoke an order made under the section. If, once the Bill is enacted, a Minister wanted to abolish the national minimum wage, could he or she do so by laying an order before the House?

They would have to do so through legislation passed by the Oireachtas. Commencement orders are excluded under section 4.

Perhaps when we come to section 11, the Minister will explain why section 11(3) states that an order made under the section can be amended or revoked.

One can revoke a previous order if one introduces a new order.

Could one revoke an order and leave it void?

Question put and agreed to.

I move amendment No. 5:

In page 7, lines 29 to 33, to delete paragraph (a).

Section 5 provides for the exclusion of certain categories of people - spouses, fathers, mothers, grandfathers and so on - from the minimum wage provisions. I note that nephews and nieces are not included. These people would be employed by their employers and the fact that they are related to them does not mean they will not be exploited. In some cases, the family relationship might lead to exploitation, apart from the fact that the Minister is disenfranchising these people further by excluding them from the scope of the Act. They have a business relationship if they are employed and this should be separate from the family relationship they might enjoy. I ask the Minister to accept my amendment.

My amendment is similar to Deputy Stanton's. I was surprised to see this provision and I am intrigued at the Government's reasoning, to which the Minister will hopefully respond. It is a comprehensive list of relationships, including distant ones, and I almost expected it to include the next door neighbour, the dog minder and anyone with the same colour eyes as the employer. Such provisions are as logical as what has been included in the Bill by the Minister. It provides a carte blanche for exploitation within the wider family, including stepsons, stepdaughters, grandsons, granddaughters, half brothers and half sisters.

A family relationship does not necessarily mean a close relationship and, unfortunately, it does not mean there will not be exploitation. Within certain types of businesses, family relationships can be used to exploit. The people concerned need the protection of the national minimum wage legislation, perhaps even more than workers who are not related. In the worst case scenario, a mean-minded employer might use a family relationship to maximise profits at the expense of employees who are family members in the widest sense, as provided for here. There is no reason for this section because it sends the wrong signals - it should be removed.

I agree with these amendments. The purpose of this Bill is to avoid exploitation. This list should stop with the spouse, father, mother, grandfather and grandmother. For example, numerous members of a family can be employed in a restaurant and they can be exploited, even by their family. There are other sectors in which four, five or six members of a family may work and they need the same protection as anyone else. In most cases, a grandfather and grandmother will not be working. The Minister cannot claim that this section applies to other Acts and has been copied here. I have not heard of this provision and I am not sure if any family members should be included. I agree with the withdrawal of this section.

I find the arguments persuasive. The older one gets the more one realises that strange things have been done in the name of the family in this country for many years. If there is no employment relationship, family members are not covered by the Bill. It is fair enough if someone is helping out in the family business. However, if someone is an employee, he or she might be more in need of protection than where there is a more conventional employer-employee relationship. I do not know whether Deputy D'Arcy wants to comment on his own county regarding the picking of strawberries and so on. If there is an employer-employee, it is not unreasonable that the employee ought to be paid the minimum rate. I had not dwelt on this before Deputy Higgins put down his amendment.

This was discussed and included in the organisation of working time legislation. However, this applied to where members of a family might opt to work extra hours. This Bill deals with the minimum pay an employer must pay an employee. The Minister may reply that this provision is included in our tax code, if some family members do not pay full PRSI and so on. This is different legislation as the national minimum wage is a base. Given the labour shortage, more members of the extended family are leaving other jobs to return to the employ of the family to ensure the business remains viable. The normal description of relatives which appears in legislation and which the Minister will quote should not be included in this Bill.

We should not presume what the Minister will say.

The Bill does that. However, I was asking my official how a labour inspectorate could police this provision. It is a well-established practice because it would be impossible to police. There are well established legal procedures in the area of what is called "family". If I included close relatives, I would be criticised for defining who they are. The description is used in the Redundancy Payments Acts, the Unfair Dismissals Acts, the Protection of Young Persons Employment Act, the Organisation of Working Time Act and so on. It is not only a well established precedent in labour legislation but in the UK where this issue has been debated. We want legislation which is practical and effective. Nobody wants to intervene with families, whether in pubs, shops or farms, where people are employed during the summer or weekends. It would be a nightmare and it would be dishonest to change it because I do not think it could ever be enforced.

I see the difficulties. However, the Minister is saying these people are employed by the employer. I presume this means they pay tax, PRSI and so on. I do not understand why she is allowing a way out as far as the minimum wage is concerned. Why do these people not deserve a minimum wage as well as everyone else?

I support these amendments. If a family relation is employed and has an RSI number, he or she should receive the minimum wage. The fact that they have an RSI number means that the minimum wage should apply. Families might have stepsons, stepdaughters or grandfathers working unofficially as a family support and it would be hard to police that. However, where family members are on the books as employees of a company, the minimum wage should apply.

Does the Minister accept that she is putting these people at a terrible disadvantage? Deputy Rabbitte referred to strawberry picking which is very common in my county, but that is a slightly different area. Will she not consider stopping at the spouse, father, mother, grandfather and grandmother? She is going through the list through nieces, granddaughters, brothers, sisters, half brothers and half sisters. I understand that first cousins are closer relatives than half brothers or half sisters.

The Deputy already put that to the Minister.

I did but she did not answer.

She responded.

Can she stop at grandparents?

There is no way we can police this. There is no point pretending we can do things we cannot do.

It is there to the advantage of the employer.

It is a family situation and it is impossible to police.

Whatever about the policing, it sends out the wrong signal from the Government. The introduction of this legislation should send the opposite signal, that the days of super exploitation of workers are over. I am not saying that the £4.40 is not exploitation, unfortunately it is. However, this conveys the message that within the wider family, widely defined here, one may continue to exploit at will. For that reason alone, it should be removed. I cannot say whether a father, mother, son or daughter might appeal to an inspector or bring an inspector into the workplace, but I can envisage that happening in the case of some of the relations mentioned.

It is speculation on the part of the Minister to claim that such a situation would never arise. It sends out the wrong signal that exploitation is fine within the family orbit. That is wrong.

How stands the amendment?

Perhaps the Minister might consider an insertion which would refer specifically to people who are employed because of their status as family members. That makes the distinction the Opposition seeks. These things are impossible to police in a situation where there is a family relationship and the employment has been secured because of the family relationship. However, if the situation were different and a half sister, for example, secured employment through open competition and not on the basis of a connection with the employer, she should have the protection of this legislation.

The section is clear. We are talking about people who are employed to do a job and their employer happens to be their father, mother, stepmother or stepfather. It is an antiquated concept. I can understand it in older legislation and in cases where a farm, for example, did not have outside help and the young girls and boys were collecting eggs from the age of six and did more as they got older. We are talking about people who are employed by the employer, who are properly registered as employees and who pay PRSI. Why should they be afforded less protection than me if I am employed by my next door neighbour?

Will the Minister respond on the issue of less protection? You have dealt with most of the other questions raised.

There are a number of issues and we must be practical. I do not believe it could be enforced.

Why not? One can enforce the legislation where one is not a relation. What difference does having a family relationship make?

Deputy Rabbitte drew attention to more serious things that happened where the laws were not enforced and could not be enforced in a situation where people were in danger. We are talking about legislation that is practical for employees. This provision is standard in labour legislation and to change it would be unenforceable. If people in their own family make employment arrangements and are willing to work for £3 per hour for their mother, brother or stepmother, the State should not seek to intervene.

Amendment put.
The Select Committee divided: Tá, 6; Níl, 8.

  • D’Arcy, Michael
  • Higgins, Joe (Dublin West)
  • Owen, Nora
  • Perry, John
  • Rabbitte, Pat
  • Stanton, David


  • Browne, John (Wexford)
  • Callely, Ivor
  • Daly, Brendan
  • Harney, Mary
  • Lenihan, Conor
  • McGuinness, John
  • O’Flynn, Noel
  • O’Keeffe, Batt
Sitting suspended at 2.48 p.m. and resumed at5 p.m.

We are resuming our consideration of the National Minimum Wage Bill, 2000. I welcome back the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, and the officials of the industrial relations section of the Department, Mr. Maurice Cashell, principal officer, Mr. Ciarán Ó Cuinneagáin, assistant principal officer, and Mr. Maurice Nagle, higher executive officer. I suggest we work until about 8 p.m. Is that agreed? Agreed.

It had been agreed at our select committee meeting of 23 February that we meet tomorrow from 11 a.m. to 1.30 p.m. to consider this Bill. We agreed also, depending on the progress, to consider meeting from 6.30 p.m. to 8.30 p.m. tomorrow, if necessary. Is it agreed to proceed on that basis? Agreed.

I also understand that, if necessary, it will be possible for the select committee to consider the Bill on Tuesday, 21 March from 12.30 p.m. onwards. I would be happy to take on board members' views as we proceed.

Members have been circulated with a list of proposed groupings of amendments for the purpose of debate.

Amendments Nos. 6 and 7 not moved.
Question proposed: "That section 5 stand part of the Bill."

I am disappointed amendment No. 7 is ruled out of order. When replying perhaps the Minister will give the reason members of the Defence Forces were omitted from the National Minimum Wage Bill, 2000, although I can understand the reason the Defence Forces and the Garda Síochána were left out of the Organisation of Working Time Act.

I indicated earlier that the scope is changing and I am going to exclude the Defence Forces——

The Minister will include——

I am going to exclude them from the exclusion.

That is good. May I ask about apprentices in section 5(b). I accept that the ICTU, the IBEC and all those involved with the commission agreed that apprentices serving statutory apprenticeships should be exempted in recognition of the fact that an apprenticeship is a unique type of employment opportunity and there are long established ways in which rates for apprentices are set and that they are adequately protected. However, a problem has arisen vis-à-vis the minimum wage. Most apprenticeships are about five years duration and contain a module of education followed by a module of practical work with the company, followed by a module of education and practical work. With each module being completed the apprentice moves forward both in the job and in pay because that is built in to the determination of rates. A serious problem has arisen in that there are 2,000 apprentices or more currently in the system who cannot move from one module to the next because there are no places in the educational establishments.

The effect of this is that a boy or girl doing an apprenticeship is stuck in the groove of, say, phase three because they cannot move on to phase four, which is the educational phase, as no college can take them. The pressure on college places is such that the colleges are taking on full-time students at the beginning of the term. When it is time for a number of apprentices to do the study part of their apprenticeship there are no places for them. If this continues to happen apprentices will be exploited because they will not command the extra rate of pay to which they would be entitled had they proceeded to phase five of their apprenticeship. For that reason they may remain on a lower income than they would otherwise. Will the Tánaiste with her colleague, the Minister for Education and Science, Deputy Woods, look seriously at this logjam with a view to expediting the provision of education modules to help avoid exploitation of apprentices, particularly in the construction industry? Many other industries are crying out for apprentices to come through the system but they are being delayed for as long as a year because there are no educational places for them. That is where some of the gap in skills shortage is occurring. The Government is responsible for the lack of places for these apprentices. They went into their training and this shortage of places should have been anticipated.

If it is raining it is the Government's fault as well.

If Deputy O'Flynn is getting sensitive I cannot help him.

The Deputy is not so long out of Government.

I am glad the Tánaiste has acceded to the norms of decency in ensuring that soldiers - who are workers in uniform - are not specifically excluded from the Bill. Even if it were not applicable in terms of figures it would be a disgrace if it were allowed in, and if it came before the European Court it would not allow it stand. I am pleased there has been a change.

I see no reason apprentices should not qualify for a minimum wage provision in the same way as other workers. There is too much scope for apprentices to be exploited. In the case of unscrupulous employers, given the pressures in the economy it is open to them to use apprentices as cheap labour. That our amendments were moved out of order takes from this point but nevertheless the points must stand.

I am glad this matter with regard to the Defence Forces has been cleared up and I welcome it. I did not hear the Tánaiste's final word on the section spelling out the various degrees of kinship that are ruled out by virtue of the extended family.

In view of our discussion this morning, clearly the professional and technical people regard this as a money Bill. Ruling out half of the amendments we have submitted is tying our hands in a fashion that makes discussion and progress on the Bill very difficult unless the Tánaiste is prepared to sponsor some of the more significant amendments. I do not want to obstruct the Bill or to anticipate that the Tánaiste will not do that. The change in respect of the Unfair Dismissals Act is especially welcome. I want to put down a marker that in terms of the requirements we should ventilate matters that might subsequently appear on Report Stage. In respect of the matters we have covered by amendments ruled out, I would like to give notice that it may be necessary to re-enter them in an altered fashion on Report Stage. Unfortunately, that may require a ridiculous situation whereby it shall only relate to employees who are not paid from the public purse. It would be a matter then for the Minister to decide whether she can live with the anomaly that would give rise to in terms of a national minimum wage. Subject to putting that on the record, however, I am happy to proceed.

I want to be associated with the remarks regarding the Defence Forces. The Minister has decided to remove paragraph (c), if I understand that correctly. The apprenticeship question, which I mentioned in a previous meeting, is a serious problem although I know some work has been done to address it. Some apprentices have spent four years training. In one sense they have finished their time but not officially, so they are in a type of limbo. It would be interesting to know what will happen to those people if they do not continue their training. Will they be classed as apprentices forever or as general operatives? How will that change?

I am sorry to press the Minister on the issue of apprenticeships but I received correspondence, which I understand was copied to her, in relation to one of the leading companies in the hairdressing industry, which voiced concerns about the apprenticeship scheme as it operates in that industry. This company has 478 apprentices on its books but there is no corresponding course at FÁS level. While there is a pilot programme of FÁS training for that industry, there is no regular FÁS training to supplant the apprenticeship places which apparently will be lost in the medium term to this industry, even though this operator, Peter Mark, has taken a proactive view of training in relation to its own business. It supplies apprentices to the whole industry but obviously this measure will affect its bottom line and it is not inconceivable that, in the long run, it may decide to opt out of the provision of apprenticeships because of the high cost involved. Has the Minister given consideration to this factor?

I understand this problem is specific to the hairdressing industry but there may be other similar industries in which apprenticeship schemes will not be operated. The organisation I mentioned is somewhat an industry leader in this regard and it would be a tragedy if the introduction of the minimum wage led to the loss of apprenticeships. Given the success of the economy, it is difficult to retain people on apprenticeship schemes because they opt for employment. We are already beginning to see an apprenticeship gap develop because people are opting for the high wages they can command elsewhere. Has the Minister seen that correspondence and absorbed the issues involved, and will some exception be made in that regard? I accept it would be foolish to amend the Bill in relation to the time lines, the 70%, the 19% or whatever, but has the Minister any plan to compensate for potential loss in terms of apprenticeship training that may be incurred as a result of the introduction of the Bill?

I would like to be associated with the remarks complimenting the Minister on the moves she has made in regard to certain categories in this section. In light of the last speaker's comments, on Second Stage I raised the question of discussions with representatives of the industries regarding training and apprenticeships, particularly the hairdressing federation. Perhaps the Minister will elaborate on that?

There are long established procedures for determining pay levels for those serving statutory apprenticeships. Those pay levels are clearly linked to the rates of pay to craftspeople in those sectors and, therefore, they should be excluded from the provisions of this legislation. I know this matter was discussed with the social partners.

Hairdressers, however, do not come under the category of statutory apprentice. Assuming the training given in the hairdressing industry can conform with FÁS or nationally recognised standards, obviously the other training provisions of this legislation will apply but they are not apprentices in the same sense as people doing carpentry, electricians or those kinds of areas. The established practice and procedure, which has been in place for a considerable length of time, is appropriate.

In relation to Deputy Owen's point, she is right, there is pressure on the system. I recently had a meeting with the Construction Industry Federation and subsequent to that meeting there were a number of discussions between my Department and the Department of Education and Science. Some of the difficulties have been ironed out but the sheer demand for people in the construction industry generally has put pressure on the system. There are approximately 18,000 apprentices now compared to a figure of 9,000 a few years ago and that has put undue pressure on the system. As far as I know, work is fairly advanced to resolve the difficulties. I have not since heard from the Construction Industry Federation but I undertook to establish an ad hoc group to monitor this area to ensure that some of the delays that had occurred and the difficulties could be resolved in a speedy and successful fashion.

May I tease out the hairdressing question a little further? I have a particular vested interest, which I mentioned on Second Stage. The Minister made a clarification in relation to one category over another and she mentioned the word "statutory".

As you know, under this Bill, £4.40 will be the minimum wage from 1 April this year, assuming we pass the legislation and it is signed by the President. There are rates for those who are in training for a three year period. Assuming that those being trained as apprentice hairdressers conform with the national standard and that it is a recognised training, they will have to be paid the training rates for a three year period. As I understand it, those training rates are substantially higher than what is currently paid, and that is the reason some people in this sector, contrary to what was said this morning, believe that this will cause difficulties for them. I do not anticipate that will be the case, certainly not in the greater Dublin area. I understand that the company which has been in touch with the Deputy operates in areas other than the greater Dublin area, but it is not unacceptable that somebody who is training to be a hairdresser should be paid the training rate over three years that is intended as a result of this legislation.

Is the Minister saying they will have to be paid that amount?

They will have to be paid, yes.

On the point about the rates, it is important that employees and their employers are aware of their entitlements. The role of apprenticeship, not just in the hairdressing business, is very difficulty in terms of the block relief system that currently operates. This may not be the place to raise this issue but the whole system of training of apprentices with FÁS and the fact that they get a three month block release to go to college is unworkable and needs to be examined. It is important also that when this legislation comes into effect on 1 April there is an effective marketing campaign on television and over the airwaves aimed at both employees and employers.

On the hairdressing industry, it is obvious from the correspondence I have received from the organisation concerned that it is effectively training for the industry. In the medium term, however, it will not be able to do that so where will the training occur? Does the Minister have any plan for this industry to ensure that people other than private businesses do the training? That company is paying apprentices in the industry twice the average industrial wage. Will apprentices in the industry have access to a training programme that would have the statutory backing of FÁS to ensure the supply of trained staff to that industry in which there will be a deficit of staff in a few years' time if this business decides it will no longer be involved in apprenticeship training?

Our first concern should be about the outrageous exploitative rates of wages in the hair cutting sector and that is the area we need to address. I am touched by the concern for the employers in this sector who are notorious low payers. The level of exploitation in hair salons in Dublin and outside it is incredible at present.

I was talking about an industry and company specific problem. It has nothing to do with the rest of the industry, which the Deputy rightly pointed out has a bad reputation in terms of low pay. It appears this particular company is a better payer than the norm in the industry. I want the Minister to elucidate further on this issue.

This is the kind of situation that would be protected by this legislation. The rates of pay in the first year are about £100 per week for 40 or more hours, which is about £2.50 an hour. After the enactment of this legislation, the rate will have to be increased to a minimum of £3.30 an hour, which would be 75% of £4.40. The industry will have to begin to put in place an effective training programme, otherwise the provisions of the legislation would apply. If a person was not in genuine training, he or she would have to be paid £4.40 an hour. It would be in the industry's interest and not only in the interests of a particular company to ensure a meaningful three year training programme for apprentice hairdressers is put in place and for it to be recognised. If such a training programme was put in place, trainees would be able to avail of the 75%, 80% and 90% rates of pay provided for in the legislation. I envisage that category of worker would benefit from the legislation.

Given that this problem has been raised and that hairdressing apprentices do not come under the terms of the normal protection of apprenticeships, will the Minister give a commitment that the inspectorate will take a particular interest in this area. I have heard that some qualified hairdressers who do relief work are paid only £20 a day, which is appalling. The hairdressers who do such relief work are often women who stay at home to mind their children. They tend to be asked to come in to do work when the salon is busy, for example, when children are making their communion and confirmation. They need a few extra bob and they are willing to work for that rate of pay, which is very low. Similar to the case made for the need to address rates of pay in the catering and hotel sector, I hope this sector will be given a fair amount of scrutiny to get people into good habits from the word go.

That is a valid point. The workers in this and some other sectors will be the main beneficiaries of this legislation. I expect those are the areas the inspectorate would target initially. It is also intended to establish a monitoring committee involving the social partners. If one employer pays the minimum wage and another employer gets away with paying a lower wage, there are competitive issues in terms of the price that can be charged to consumers and so on. I hope to put in place a monitoring committee, representative of the social partners and I am sure such a committee would bring these types of matters to our attention.

I am fairly familiar with this industry and my understanding of it would be the opposite to what Deputy Owen said. A qualified hairdresser's rate of pay is relatively good and he or she would also get other benefits. We want to ensure that existing apprenticeship posts are maintained in salons. If we price the rate of pay for apprentices too high, it would not encourage employers to take on apprentices. Small quaint hair salons may have a staff of two or three which can carry one apprentice. If the price of training is set too high, the owner of such a salon might decide he or she would be better off taking on a "Mrs. Mop", so to speak, instead of an apprentice to do various jobs and the salon would not have to put any effort into——

Such a person would have to be paid the minimum wage, so an owner might as well take on an apprentice.

Yes, but the employer would not have to spend time training an apprentice. We must recognise that small salons that employ staff of two or three spend time training apprentices. Are we sending them a message that they should not bother training apprentices? There are no such training opportunities in FÁS and other organisations. This is an important aspect that we must consider. The Minister said that the position in Dublin was different, but not all salons in Dublin are big. There are small salons in Dublin and those in Grafton Street pay Grafton Street prices, and there are not necessarily major differences in their hairdressing prices.

The Irish Hairdressing Federation, a representative group of hairdressers, is anxious to try to resolve difficulties in this sector. It would like the Department to acknowledge that hairdressing should be recognised as a training apprenticeship. We could move forward matters by asking the Minister to enter into dialogue with the Irish Hairdressing Federation to see what measures could be put in place in terms of training and addressing the needs in the sector for the benefit of all concerned. Benefits would accrue from such dialogue. I ask the Minister to consider that suggestion.

It must become a feature of our society that employers and industry take responsibility for training. In an environment where corporate taxes are being substantially reduced, more and more employers must recognise this as part of their responsibility. It is in their vested interest. The State cannot train every worker for every employer. I am open to discussing the issues here with anybody. Some representatives have been in touch with my Department, but I cannot give an undertaking that the State will start picking up the Bill for those who——

I am not asking for that.

If their training was recongised, they would be able to avail of the training rates under the legislation. If it was not, the rate of £4.40 would apply, as Deputy Owen said. I accept there are difficulties in this regard for small sized businesses, whether they are hairdressers or one or two person outfits. It is difficult for a person to have the time to train an apprentice. If any of us was to take in a transition year student into one of our offices for a week, or a student from the United States or some other country who is here for six months, at the end of the student's placement when one takes the student out to celebrate and thank him or her, one wonders what one has taught the student given that one has been so busy. With the best will in the world, sometimes smaller businesses do not have the resources or the sheer manpower to take on trainees, and I appreciate that. We would be open to having discussions with any sector that wants to make the desired achievements, which are to raise the standards and pay a decent return to trainees or apprentices and to their employees.

That is welcome. I have no doubt the Irish Hairdressing Federation will enter into dialogue. It would also welcome recognition of such training by the Department by way of a licence or otherwise. That is an issue it is anxious to resolve. I am sure the Minister will have great co-operation in entering into dialogue with the federation. I note Deputy Lenihan is nodding his head in agreement with that.

The Chairman's point about the role of employers in training apprentices is important. The Minister should seriously consider giving accreditation or certification to people who have undertaken business training. We have an educational system where business is not the popular choice of parents, particularly careers in the services sector. While the impression is given that certain employers treat staff unfairly, the bulk of small companies do their utmost to keep good staff because it is probably the most important investment they will make.

The Tánaiste referred to the role of employers and training. Unfortunately, a huge number of employers are more involved in the operation of their small businesses and they find training extraordinarily difficult. If business in the services sector is to grow, regardless of whether it is the hotels, restaurants and hairdressing salons which provide the services that give Ireland a good name as a tourist destination, it is important that people are highly qualified and trained. However, the training aspect has been neglected over the years.

The Department should give recognition to the associations which train apprentices by giving them a national certificate. That would enhance the provision of training. There is a perception that a hairdressing salon is taking in people to get cheap labour at £2.50 per hour and abusing the system. I do not believe that is correct. There might be exceptions but the majority of business people, particularly those in niche markets, believe they are only as good as their staff. If people are unsuitable for the job, they will not employ them.

It is wrong to give the impression that all employers are taking advantage of the training system. They are not. Indeed, more assistance is needed from the Department to encourage training within business. FÁS is the only recognised training body in this country. The Tánaiste referred to the reduction in corporation tax. That will not benefit small companies which have little or no tax liability in that regard. Support should be given to small businesses which have one or two apprentices. Properly trained apprentices will, in turn, generally set up their own businesses. It would be a major mistake to lose that system.

I welcome the introduction of the minimum wage but I must point out that the majority of employers are well intentioned and like to train their staff properly. This country has benefited considerably from the business people who trained staff and received no support for doing so. That has been the practice to date and we should not take it for granted.

The Deputy is correct with regard to both the rate and the amount of training for apprentices.

If the Tánaiste is aware of employers who pay £2.50 per hour in the hairdressing sector, what rate do those in training in that sector receive?

That is what is called the apprentice rate. I understand the first year apprentice rate is £2.50 per hour.

I am not sure there would be many available at that rate.

Maybe the members of the committee who use hairdressers can find out.

My understanding is that a young person who starts training in a hairdressing salon belonging to one of the bigger chains and starts by washing hair, sweeping the premises and so forth, is paid approximately £100 per week. That is well below the minimum wage. I had intended reserving comment until we reached the training section but the reality is that many hairdressers have people in what they call training for five years, not three. Where a course that is not a bona fide apprenticeship becomes a five year training course, what happens in the last two years?

I am anxious to deal with the amendments. Can we first deal with section 5?

Question put and agreed to.

I am circulating a list of amendments: under section 11, amendments Nos. 18a and 18b; section 12, amendment No. 22a; and section 13, amendment No. 31a. They were put down by Deputy Higgins and we will deal with them as we reach them. I have also received an amendment on section 19 from Deputy Rabbitte. That will also be circulated.

Were these amendments tabled before 11 a.m. yesterday?

I did not realise one could put down amendments after 11 a.m. on the day before Committee Stage of the Bill if the committee was due to reach the sections that day. I accept that in the case of the copyright legislation one can continue to put down amendments because the Bill is so extensive and will probably take forever. However, I understood one could only put down amendments today on sections which will not be reached today by the committee.

My understanding is that, in line with long-standing procedure, the chairman has discretion to accommodate amendments. In light of the number of amendments which were ruled out of order, I am trying to accommodate colleagues as best I can. I have been advised that I can use my discretion to accommodate amendments. I am trying to be helpful.

That means I could put down further amendments?

Section 6 agreed to.
Question proposed: "That section 7 stand part of the Bill."

The point made by Deputy Perry about promulgating the legislation is important. I specifically refer to the Tánaiste's response this morning to my point about the terms of the Bill superseding any agreement. I am referring in particular to the fact that a large number of workers are entitled to phase one of the new agreement for prosperity and happiness from 1 April.

Is the Deputy using the correct title?

Happiness is in quotes.

Everybody is happy under this Administration.

I tend to confuse it with Partnership for Peace. The Tánaiste pointed out that workers in that situation will first be brought to the £4.40 rate and the first phase of the new agreement will apply on top of that. It is important that this information is promulgated. For the greater part, the workers we are discussing are not trade union members and would not know their rights in this situation. It is important that every reasonable effort is made to advertise the fact.

I welcome the provisions in section 7(1) and (2). The effect is that if somebody has a contract of employment that pays, for example, £3.50 per hour, the employer is obliged with effect from the commencement of this legislation to bring the rate to the legal minimum. How does that fit in with the fact that legislation cannot be made retrospective? Is this provision sufficiently strong that it cannot be challenged by employers?

There have been challenges on a number of occasions to finance related measures on the basis of what is called legitimate expectation, but none of them has succeeded. It would be unthinkable that somebody could have a contract of employment for, let us say, the next ten years to work for £3.50 per hour and that we could not legislate to change that from a date hence - it will be a date hence. The specified date is 1 April and the legislation will be passed before that. If someone has a contract of employment in advance of that or has entered into a contract of employment, it becomes void if the rate is below £4.40 an hour. No legal difficulties have been raised by the Attorney General and we are satisfied there are none. Employers and employees must meet each other. There are no legal implications in relation to maternity leave, equal pay, etc. which bestow benefits retrospectively based on the fact that a contract of employment was entered into which did not include such things. I am satisfied this is in order. It will be a statutory requirement under legislation to pay employees £4.40 per hour from 1 April.

Question put and agreed to.

I move amendment No. 8:

In page 8, subsection (1)(a), to delete lines 19 to 22 and substitute the following:

"(ii) any collective agreement that relates to the employee,".

The material in brackets was inserted in the belief that, as far as possible, all sources of information on working hours should be identified. The reference is being deleted at the request of the Labour Court which feels that technically it would be incorrect to refer to it in this context.

What does that mean?

The new definition is more inclusive because it includes not just Labour Court agreements but any agreement entered into.

This section gives rise to the perennial question of why a city which prides itself on being able to write better English than a neighbouring island manages to make something like this so complex? Section 8 is extraordinary in terms of trying to make a simple statement about the calculation of working hours over this reference period. I do not know why it is so prescriptive and complex.

The National Minimum Wage Act, 1998, on a neighbouring island is a model of simple, clear and succinct prose, with the exception of one piece of antiquity that is in every Act which states, "BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows". Perhaps the Minister could explain why we must define working hours and the pay reference period in this way.

The English legislation may be more succinct but there are hundreds of pages of accompanying regulations which put it into effect.

The Minister also has hundreds of pages.

I hope not. It cannot be more complicated than this. I am advised that this was included to ensure that every possible collective agreement was included in the legislation. However, it was unnecessary to include it according to the Labour Court.

Amendment agreed to.

Amendments Nos. 9 and 10 have been ruled out of order.

Amendments Nos. 9 and 10 not moved.

Amendments Nos. 11 and 94 are related and may be discussed together by agreement.

I move amendment No. 11:

In page 9, subsection (2), line 13, to delete "maternity" and substitute "protective".

Protective leave is the term used in the Maternity Protection Act, 1994, to collectively refer to maternity leave, additional maternity leave, the various leaves to which the father is entitled and health and safety leave.

The budget provided for the introduction of statutory carer's leave with effect from October 2000. However, that provision is not included in this Bill. I thought the word "protective" would encompass that. I did not realise it had a meaning in maternity legislation. I ask the Minister to include carer's leave which will come into effect in October.

We will look at that for Report Stage.

Amendment agreed to.

Amendment No. 12 has been ruled out of order.

Amendment No. 12 not moved.
Question proposed: "That section 8, as amended, stand part of the Bill."

Perhaps the Minister could explain why this section is extraordinarily unwieldy. Subsection (2) states that " 'Working hours' under this section shall include". I am not sure I understand that vis-à-vis subsection (1). What does the inclusion of overtime mean? What does it have to do with the reference period? As regards workers on standby or on call, are there implications for junior hospital doctors? People might ask if there is an implication that junior hospital doctors are on the minimum rate. I worked out their hours of work and they come under the minimum rate. Perhaps the Minister could explain that.

I am puzzled about the things which are and are not included in the working hours definition. Why, for example, is training outside the employee's place of work not included? I am quite sure the fault is mine but——

In relation to training, it is my intention to move an amendment along the lines of Deputy Rabbitte's to exclude that.

I welcome that. This section is a bit like snakes and ladders - one would not want to have any drink taken if one was trying to follow it.

I agree with Deputy Rabbitte. The problem with such a long-winded section is that one has to keep going back to it. My English teacher used say "Find the subject, verb and object in the sentence" and I quite enjoyed that parsing and analysing when I was at school. However, I am trying to find where subsection (2) relates to section 8(1). Why does subsection (1) refer to "For the purpose of determining under this Act whether an employee is being paid not less than the minimum" wage to which he is entitled, "but, subject to section 9, 'working hours', in relation to an employee in a pay reference period"? Why does it not say "the minimum wage"? One can calculate overtime but one cannot calculate time spent on standby, annual leave, sick leave, adoptive parent leave and so on.

I cannot work out whether it is good or bad for it to be included. I have a problem understanding in simple English what this section is saying. Should we be very angry that overtime is included or should we be perfectly happy about it? Should we be angry that annual leave is excluded? Does it mean one is not paid for annual leave or sick leave? Does it mean the employer is getting away with giving a lower rate of pay because these are not included? That is my difficulty. I cannot follow the thinking in this section.

I also have difficulties with it. I assume the reference in section 8(1)(b) to “the employee’s place of employment” includes people working from home. The section states that working hours shall not include “time spent absent from work on annual leave, sick leave” and so on. Will the Minister clarify that further?

They are not included for the purposes of calculating the minimum wage.

Is that a good or bad thing?

How does that actually affect somebody in practice? Will the Minister give an example of what that will mean?

Are they better or worse off because it is included?

I would have thought they were better off.

That is what I need to know.

Why exactly is that the case? The employer may select the reference period. If the employer selects the month of July and I am on annual leave for the last week of July, the normal understanding is that I am paid the going rate for the week. What difference does it make and why is it excluded?

I am advised it has to be like this for clarity and to make sure nothing is excluded.

I would hate to see it if it was unclear.

The minimum wage has to apply to the hours one works, not the hours one does not work.

Does that mean one can be paid less than the minimum wage if one is on holidays?

But if one averages out one's minimum pay——

Obviously, one's holiday pay is based on one's rate of pay.

But it is excluded here.

We are excluding it for the calculation of the minimum wage.

I know the period will be shorter than a year. However, is it conceivable that if someone took annual leave, sick leave, parental leave, adoptive leave and so on they could get a minimum wage of about £2 when it was averaged out over a year?

How does it work in practice?

Obviously, if one worked for only half a year one would not get £4.40 by 52 weeks.

What if one had a collective agreement that permitted one 26 weeks at full pay and 26 weeks at half pay, which is not unusual? Is the implication that one would divide the other six months by——

Does the Deputy mean that one would work half the hours for 50% of the rate?

No. There are various sick pay schemes. For example, one might be in a job that paid normal wages for 13 weeks and half wages for 13 weeks which would be reconciled with social welfare. There are also better schemes. The Minister seems to be saying that one divides the remaining number of hours to get the hourly rate. If the objective is clarity, which is what she has advised us, it has failed that test, unless we are a particularly retarded cross-section of the population. It is not clear.

Hopefully, it will have legal clarity if it is being interpreted legally. None of us are qualified to say that.

The Minister has raised a very serious point. This says that an employer will be able to drop payments for a period in a working year when a person who might be on annual leave or sick leave. If there is an agreement to pay sick leave for three days or to pay annual leave, an employer can pay below the minimum wage for at least two or three weeks of the year because the employee is not paid the minimum wage when on annual leave.

But annual leave is related to the hours one works and to the pay one gets when one works.

But it is not included.

One is entitled under other legislation to particular periods of leave, depending on——

The question is not about annual leave - it is about the calculation of hours. Let us take a simpler case. For example, if I work for two weeks of August and am on holiday for the other two weeks, what are the implications of that for the calculation formula built into this? The employer seems to be excluding the two weeks I am on holidays. What does that do to my hourly rate?

I suspect the Minister has a very good reason for including this. A high tech employer might, to keep his employees extremely happy, give them annual leave way out of proportion to leave in the normal workplace. For example, somebody like Bill Gates might decide to give his employees four months holidays every year.

The only thing Deputy Lenihan can be sure of is that the terms of this Bill will not apply to them. There may be a very good explanation, but I suspect that is not it.

The point is that employers giving those kinds of employment packages cannot be held to be in breach of the minimum wage legislation.

That kind of help to the Minister is no help at all.

It is technically possible and this seems to be covering that particular option. I do not think it can be paid for periods when one is not actually working.

Can we have some of that famous clarity?

Wherever one works one has to get £4.40 per hour. If one only works for two weeks in August, one gets £4.40 per hour for the two weeks, plus two weeks holiday pay which is obviously related to what one gets when one is working. Is that clear?

Why exclude it?

What does the Deputy mean?

Under this legislation we are building in an opportunity for an employer to pay less than the minimum wage for the two weeks of annual leave.

No, we are not.

It is a double-edged sword. Any employer would have to acknowledge and recognise holiday pay under other Acts.

In this legislation we are not dealing with what people get when they are on holidays or sick leave. We are dealing with what people receive as an hourly minimum rate of pay when they work.

To see if we can clear this up, section 8(2) states - "but shall not include . . . (ii) time spent absent from work on annual leave". Members are concerned whether the minimum wage, as the Tánaiste has outlined, is included in the calculations. However, the Tánaiste might clarify whether annual leave for any employee is covered under other legislation where they are guaranteed an entitlement to annual leave, and whether it is included in the working days to which she referred. Members are losing sight of that.

They are guaranteed the rates of pay they get when they work, and the same applies to sick leave which is covered by other legislation.

This covers purely the minimum rate of pay for hours worked.

I think that is helpful.

I understand the Tánaiste's explanation.

I am sorry if it is so complicated. When the Deputy raises queries it becomes complicated for me, but the intention is that for every hour one works one will get a minimum of £4.40, as well as holiday pay and sick leave pay in accordance with current legislation and practice.

I understand the Tánaiste's explanation but why is this here? What does it add to the sum of our knowledge about the Bill? For example, what is the answer to the overtime point? What does "Working hours under this section shall include (a) overtime" mean?

Exactly what it says.

But what is the point?

That one is entitled to £4.40 when one is working overtime.

No, it does not mean that Deputy, believe me.

What does it mean?

It is included in case the assumption is that it only includes standard working hours.

Does it mean that in the reference period the employer may include overtime working?

Yes. In other words, he cannot exclude it, and time travelling to and from.

No, time travelling to and from is not included.

Time spent travelling on official business is included.

That is in subsection (2)(b).

Subsection (2) states:

(b) time spent travelling on official business, and

(c) time spent on training or on a training course or course of study authorised by the employer, within the workplace or elsewhere, during normal working hours.

May I demonstrate a problem?

It is reasonable enough to exclude time spent travelling between an employee's place of residence and place of work, but I am trying to establish another point. The employer selects the reference period and I am asking what are the implications of overtime being included in that. Overtime attracts a premium rate and it would distort the period if overtime were counted at a premium rate. That is what I am trying to understand.

If the Deputy looks at Part 2, on page 29, he will see that an overtime premium is excluded.

It is in the non-reckonable components.

The premium is non-reckonable but the hours of work are included. If one works within the working time directive it has to apply. If one works a regular week of 39 hours and a further seven or eight hours overtime, excluding the overtime premium, the rate must be £4.40 per hour.

The premium is non-reckonable there.

I understand. Thank you.

Clearly, the minimum wage also applies if one is travelling on official business or in training.

The Tánaiste has been very helpful in clearing up the issues that have been raised.

I will admit that it was very complicated.

Is the Tánaiste satisfied that there will not be exploitation of that? In this instance, having overtime included is weighted on the side of the employee, is it not?

Yes, but the premium is excluded.

The premium is excluded but from the Tánaiste's explanation one could equally have a situation where employers, in choosing their reckonable period, could reduce overtime. Am I correct? They could work to have a lower number of hours which might reduce overtime.

Since the premium is excluded it does not really affect the rate.

It does not really matter, does it?

It means that the rate for any hour one works has to be £4.40 and that includes the ordinary overtime rate, excluding the premium.

Section 8(1)(b) states:

the total hours during which the employee carries out or performs the activities of his or her work at the employee's place of employment or is required by his or her employer to be available for work there and is paid as if the employee is carrying out or performing the activities of his or her work.

May I assume that includes home workers, so that the place of employment could be the home? What happens to salespersons who may have a place of employment in an office but are not "required. . . to be available for work there"? Are salespeople included in this subsection?

Every category of worker is included. It is not class specific in terms of what one does.

What about travelling salespersons?

Travelling time on official business, which would obviously account for a large proportion of the salesperson's time spent at work, is included.

Question put and agreed to.

Amendments Nos. 13, 14, 15 and 16 may be discussed together.

I move amendment No. 13:

In page 9, subsection (1)(a), line 26, to delete “shall” and substitute “may”.

This section relates to the point that Deputy Stanton has been raising with regard to section 8(1)(b). The responsibility in this kind of borderline situation is put on the employee. I gather that there are drastic consequences if the employee does not measure up. Given the pay for the category of work that might be involved, it seems an entirely unreasonable burden to put on the employee. My amendment seeks to state that the employee may keep a written record. However, to shift the entire burden onto the employee in that situation is an obligation that many may not be able to comply with. If that is accepted, then in respect of section 9(3), amendment No. 16 would be consequential. In other words, if amendment No. 13 was accepted, amendment No. 16 is a necessary consequence and would have to go.

Section 9(3) states:

An employee who provides his or her employer with information in a record of working hours under this section that is false or misleading in a material respect shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,500.

The national wage for that year would be almost gone in paying such a fine. If an employer is dealing with a dishonest employee let them deal with that. It is not in the real world, however, to expect an employee to keep that kind of record under punishment not just of not receiving their proper pay for the week but also committing an offence and being liable on summary conviction to a fine not exceeding £1,500. That subsection is not related to the practical world where people earn less than £4.40 a hour.

I am concerned about this also. The Bill seeks to help people who are currently earning less than the minimum wage. Quite a number of them might not be capable of keeping a written record. They might be illiterate. Are we going to penalise someone in that instance, or will they have to pay somebody else to keep a written record? How are they going to do it if they cannot read or write? We are dealing with such people every day and we know that illiteracy levels are quite high.

The amendment in my name is similar to this amendment. The provision in section 9(3) is unreasonable and disproportionate. In a tense or unhappy employment situation it could be a recipe for victimisation which the employer could use against a vulnerable employee. The subsection provides that if an employee's record is incorrect by as little as one hour or less it could be construed as false or misleading. That could lead to the imposition of a penalty of £1,500, which appears to correlate to eight weeks pay on the basis of a 40 hour week on the minimum wage. It is a draconian provision and should be removed.

The provision is tailor made to give an unscrupulous employer the excuse to get rid of an employee. He need only wait for a half hour to be mistakenly included or excluded from the record. This would amount to a falsification of the record in a material respect with the result that the employee could be brought before the District Court. Solicitors' fees would also be incurred with any fine imposed.

I am concerned about amending the section too much. While we have said the legislation needs to provide much greater protection for employees, employers also need to be protected. If an employee normally works away from supervision and from his employer, the legislation provides that working time accounted for must not be falsified and that the employee does not exploit his position. When I was Minister for Justice I had to deal with a dispute involving gardaí, who do not earn a minimum wage, taking home work. It centred on whether the hours claimed in overtime were being worked. It was very hard to prove and the case was traumatic for both sides.

The Minister needs to advise if there are ways of dealing with instances where employees are not fully literate and do not have the wherewithal to give precise indications of their working time. There must be a way to ensure that employees are paid for the kind of work outlined under section 8(1)(b) which states:

the total hours during which the employee carries out or performs the activities of his or her work at the employee's place of employment or is required by his or her employer to be available for work there and is paid as if the employee is carrying out or performing the activities of his or her work, whichever, in any case, is the greater number of hours of work.

If the arguments by Deputy Rabbitte are accepted, in that this puts a very unfair onus on the employee, can the Tánaiste suggest ways in which records can be kept? For example, the employee may work at home or in a part of the place of work, such as a factory, where there is no supervision. In such instances the employer depends on the employee to keep accurate records.

While the employer will always win an argument, which could be very unfair to the employee, we all know of instances where employees could swing the lead and say they worked for five hours when they had only work two or three hours. In view of this I hold mixed views on whether the word "shall" should be changed to "may", as provided for under the amendment, unless the Tánaiste can propose a mechanism that allows for a record to be kept that favours the employee while ensuring that the employer is not exploited.

It would be very difficult to police the issue of false claims. The responsibility should be on employers to have adequate systems of check in place, whether it be time clocks or whatever. Section 9(1)(b) states:

the employee shall give the record to his or her employer as soon as practicable (but in any case not later than 72 hours) after the end of the pay reference period (excluding any intervening Saturday or Sunday) or by such later time as the employer may allow;

That is unworkable and I cannot see it ever being applied. There are already extensive provisions in place, through the Labour Court and so on, to deal with situations where employees leave a company in a dispute over working terms and hours. In view of this, section 9 is very vague. The criterion of 72 hours and the imposition of a fine of £1,500 on the employee for non-compliance with the provisions of the section are not appropriate in this day and age.

There is a lot of misunderstanding here. This is a self-regulation mechanism designed for people whose working hours are not, broadly speaking, controlled by their employer. For example, it covers those who work from home or in sales. The onus is placed on the employee to keep and produce, as far as is practicable, within 72 hours, a record of the hours they work for the employer so that the employer is aware of his liability to the employee. Much reference was made to unscrupulous employers, but there are also unscrupulous employees, as some Deputies have acknowledged. Employers also need protection in certain circumstances.

It is for the court to decide whether a fine should be imposed and, if so, how much it should be. The provision for the imposition of a fine is standard throughout the Bill, so one cannot argue in favour of it in one area and not in another. I cannot see any other way in which employees could have certainty, other than providing them with the self-regulation and personal responsibility to provide verification of the hours.

Section 9(2) states:

Subsection (1) does not apply to an employee whose average hourly rate of pay for the working hours concerned is not less than 150 per cent, or such other percentage as may be prescribed, of the national minimum hourly rate of pay.

How can this be explained to an employee? The provisions of subsection (1) do not apply here.

Amendment No. 15 in my name inserts the words "likely to be" before the words "not less than" in the subsection. Those who earn more than the national minimum wage, say, over £6 per hour, are not obliged to keep a record because there is no point in doing so. The purpose of keeping records is to ensure payment of the national hourly minimum rate, but they are not necessary if an employee is already earning, say, £6 per hour or 150% of the rate. I cannot think of any other way where a verifiable record could be produced to make sure that one gets £4.40 per hour. One could not have a situation where somebody arrives a month or six weeks later and says that four weeks ago he worked so many hours. It must be close to the time the person worked in order that the employer has a chance of knowing whether what the person said is correct. This will only apply in a small number of cases. I do not know if there are that many salespeople earning £4.40 or £5 per hour; I am not aware of too many.

I find the Minister's arguments in this event entirely unconvincing. They misunderstand this situation. She is presenting it as the devolution of considerable responsibility to the employee and self-regulation. I know she often deals with the accountancy profession and others and self-regulation is probably prominent among matters on her mind, but for £4.40 per hour one does not find oneself in that kind of job. She is criminalising the worker who does not comply here. All I am seeking to do with "may" or "shall" is to make it optional, otherwise, in default of that, the hours under the contract should apply. If the Minister employs someone in her home to do a certain amount of work, she has contracted that person, male or female, to do the job and the job is either done or it is not done. If the person is skiving, presumably the employer will note that the work is not done.

Deputy Stanton's point is quite real, although I did not want to be as blunt about it. It is a fact that we spend a great deal of time boasting about the successes of the education system but we spend very little time talking about the failures and the people who fall through the net. There are many failures of the education system. Some people are not equipped to maintain this kind of record, and I do not think the situation arises where somebody comes out of the woodwork six months later saying, "By the way, do you know I worked 58 hours last July?" People living on the national minimum wage get paid by the week. They do not wait and come back six months later.

I cannot see the point of all this. All I am seeking is to leave it optional. Of course I am shocked, like I am sure is everybody else, by Deputy Owen's anecdote. I do not think it is entirely transferable here but I had better not dwell on it. To what is section 8(1)(b) referring?

Section 9(1)(b)?

No, section 8(1)(b) states “the total hours during which the employee carries out or performs the activities of his or her work at the employee’s place of employment or is required by his or her employer to be available for work there and is paid as if the employee--”

Deputy, to which page of the Bill do you refer?

We are on section 9.

It refers back to section 8(1)(b). The whole thing is predicated on section 8(1)(b).

I apologise. Yes. The Deputy is on section 9(1) and referring back to section 8(1)(b).

Yes. Section 8(1)(b) states “the total hours during which the employee carries out or performs the activities of his or her work at the employee’s place of employment or is required by his or her employer to be available for work there and is paid as if the employee is carrying out or performing the activities of his or her work”. What does that mean?

If one is at the place of work and available to work, one is on standby and one is expected to be there as opposed to at home waiting to be called in, and one must get the hourly minimum wage.

Yes, that is correct. I am saying that one is contracted to do that. I do not see what the big deal is about. One is either doing the job or one is not doing the job.

The Deputy is assuming that all work is carried out at a place of employment. That is just an "or"; that is not a requirement.

No, I am not.

This is to cover a situation where——

Now that Deputy Rabbitte has read it again, I think it has been written incorrectly.

It is to cover the situation where - as I understand it and perhaps the Minister will correct me on this - one is actually at work but there is nothing happening at work. In other words, if the company is going through a lean period and there are no orders coming in but the worker is actually at the place of work, that cannot be taken out of it. Is that not what the Minister is covering?

Section 8(1)(b) means that if one is on standby in the place of work and waiting to be called, the person must be there and cannot be at home or out with their friends.

If Deputy Lenihan is right, for what does one need to keep a record if one is twiddling one's thumbs?

The record does apply to that.

In the interests of clarity, the Minister said that this section applied where somebody was more or less out of the eye of the employer.

Yes, that is correct.

Section 8(1)(b) does not suggest that.

But that is only an "or"; that is not a requirement. Section 8(1)(b) is to cover a situation where one is expected to be at one’s place of employment and available for work and one must be paid the hourly minimum wage. Section 9 is about people who are away from a place of employment who perhaps are working at home, salespeople or people whose hours are not controlled in the normal way. The onus is put on them to verify the hours which they have worked, to hand to their employer in so far as it is practicable - I think those are the words which are used in the Bill - within a 72 period the number of hours they work. Earlier reference was made to small businesses which might have one or two employees. Is it unreasonable to require that an employee should state within a specific number of hours or days that he or she worked X number of hours and, therefore, is entitled to X times £4.40? I do not believe it is.

The Minister rubbished a previous amendment relating to the family not coming under the legislation on the basis that it could not be policed. If this section refers to what the Minister is saying it does, it cannot be policed either.

A chap driving around the country, for instance——

There is an opportunity within a short period for somebody to challenge it but if a person comes back 30 days later and states that a month previously he or she worked Y number of hours, it may be impossible to verify that. Close to the time it would be possible for people to be able to discuss the matter. If it is challenged, it will at least be possible for an employer to know what is his or her liability, etc.

Employers have rights also. We should all remember that. We are not talking about a situation where one must assume someone is exploiting everybody else. There are situations where the opposite may be the case. The legislation must be fair.

On the subject of proportionality, if the Minister presented something whereby somebody was making a false claim and put a magnitude on the false claim which incurred a certain penalty, that might be an argument from the Minister's point of view but to leave it like this, that being one, two or three hours out can leave the employee open to this kind of penalty, is not reasonable.

The section states that the employee's working hours "are not normally controlled by his or her employer". That can mean far more than simply being away from the employer's grip completely. It could be somebody in a fixed place of employment but normal supervision might not apply. In such a case one can easily see where there could be conflict between an employer and an employee. As I said earlier, we must think in terms of worse case scenarios. One could have a situation where an employee could be set-up by an employer to fall foul of this particular section and then incur a massive penalty.

I appreciate what the Tánaiste is attempting to do. However, people on the minimum wage who, in some cases, are low skilled might have a problem keeping records. There is also the issue of policing the provision and ensuring that it is properly regulated. Would it not be better if an employer was to make an agreement beforehand with an employee to the effect that he or she would work a fixed number of hours for a fixed salary in a given week?

And they would have to keep a record of the additional hours they worked.

Yes, rather than trying to keep a record of all the hours the employee worked. It seems that it will be difficult to police this provision. For a person who will earn approximately £171 per week, a fine of £1,500 represents almost ten weeks wages. It is a massive fine.

The fines are a matter for the courts. Is the Deputy stating that, under the system of fines, an employer should be fined up to £1,500 where one of his or her employees does not receive the rate of £4.40 for one of the hours they worked but that an employee who lied about the number of hours he or she did or did not work should not be fined as much?

There could be very serious difficulties in the House if that system was applied.

Exactly, but that does not make it right.

No, it does not. However, it is odd that the system comes into play in relation to those who earn £4.40 per hour who, if they lie, will not only receive a fine of up to £1,500 but they will also lose their jobs. This is not real.

That is a matter for the courts; it is not a matter for us. There is a standardised penalty throughout the legislation. We cannot have one set of penalties for one group and a different set for other people. That would not be fair. We must be fair and balanced in the way we apply this legislation.

This is not proportional.

It is a matter for the courts whether that is the case when they apply the fines. I have no doubt they will take everything into account.

Section 9(1)(b) states that an employee shall provide a record of his or her hours within 72 hours or by such later time as the employer may allow. Could an employee enter into an agreement with an employer to provide a record of their hours at the end of a working fortnight?

Why does the section not state that an employee shall provide a record to his or her employer as soon as is practicable or at a time agreed with the employer? A stipulation is made that the record shall be supplied within 72 hours but that is immediately undermined by stating that it may be supplied by such later time as the employer may allow.

They can enter into other arrangements but it would be desirable that the record be provided fairly soon after the work, excluding that done at weekends, has concluded.

Deputy Stanton's suggestion is good. Whatever about an employee having to keep a record of hours worked in excess of the 39 they would work in normal circumstances, they should not be obliged to state that they got up at 7 a.m. and worked from 8 a.m. to 5 p.m. There should be a minimum number of hours in respect of which they are automatically paid.

People on a high rate of pay are being excluded from this kind of requirement. What is the current position in respect of a person on a high rate of pay who falls into this category? Is there legislation in place which requires them to keep records of the kind outlined in the section or will the keeping of such records apply only to those earning just above the minimum wage? Is the provision being included on foot of an assumption that a certain category of people are honest but those earning £4.40 per hour are not? What is the position in regard to people on a high rate of pay?

The answer to Deputy Stanton's question is that the provision only applies to this category of people. The Tánaiste is obviously correct in stating that employers also have rights. I do not suppose she is going to inform us of the paternity of this section but she might provide, by way of illustration, a number of examples of the people to whom it is intended to refer. It is simply not the case that the section refers to sales representatives or those who work in similar areas. I accept that some sales representatives are not particularly well paid but they are paid more than £4.40 per hour. Is it not correct that sales representatives - the section would be tantamount to electronic ear tagging to monitor their activities - are not included in this category?

At whom is the section directed? The Tánaiste has not provided examples of the people who will be affected by it. What damage would be done to the Bill is section 9 was excised? Would it make one whit of difference? Why should we become involved in monitoring the number of hours people work? The section, in any event, is invidious in so far as it only relates to persons who want to claim the minimum hourly rate. However, under section 9(2), a person who earns above the minimum hourly rate is excluded from this obligation. That is invidious. I presume the section has been included because representatives of ISME or some other organisation approached the Tánaiste and stated "we are disappointed that you are going along with this nonsense of a minimum wage but, if you are, will you for God's sake at least include the following". At that point they suggested the inclusion of a provision of this nature and the draftsman was prevailed upon to give it expression in law.

I take the Tánaiste's principal point that employers have rights. However, I have not yet been able to identify the category of worker to whom the section applies. Employers are not in the habit of leaving an entire complement of clothing factory workers who earn £4.40 per hour without supervision in order that they can claim to have worked whatever hours they like. Is the Tánaiste suggesting that we try to police home helps in the course of performing their duties? We did not take a great interest in their activities when they were earning £2.50 per hour, so why do they need to be policed now? Is the Tánaiste in a position to suggest how this could be done in practical terms?

I visited Trinity College on Friday night last with the Tánaiste's colleague and former party leader and a young student informed me that he was acquainted with the working class because his father had once employed a gardener. Suppose one employs a person as a gardener and he is entitled to earn £4.40 per hour, surely his worth as an employee can be determined on the basis of whether he is doing a good job in the garden and not on whether he takes a break to have a cup of tea or to peek over the wall at whatever delectations are on offer on the other side. The person might be a very good gardener but, as Deputy Stanton stated, he might not be good a keeping records. I do not see the point of section 9 which invidiously focuses on the lowest paid people in our society.

I suggest that, in light of comments made earlier, we should try to make some progress on this section.

Deputy Owen may laugh but there are many people involved in the textile industry. It seems, from the comments of Deputy Rabbitte and others, that those who work away from their place of employment, perhaps in their homes, should be paid entirely on the basis of productivity or on a piecework basis, for example, a rate per garment. That would place people in a very vulnerable position. It is much better that they are guaranteed that they will be paid £4.40 for every hour they work rather than being told that they will have to produce 25 T-shirts before being paid the same amount. It is not right that an employer should decide what they should achieve in one hour.

Deputy Rabbitte inquired about the category of worker to which the section applies. It applies to those who work in the textile industry and who work from home. There are many in this country who do so. It will also apply to people who work in the agricultural sector. These people obviously do not work from home but they do not work in a controlled, supervised environment. It is preferable that they get £4.40 per hour rather than a certain amount of money for 20 bags of potatoes, a thousand punnets of strawberries or whatever. Deputy Stanton asked about those on higher pay. This is about bringing in a minimum wage for the people at the bottom and giving those who are not in controlled employment some way of verifying their hours of work and getting the minimum rate per hour. Deputy Owen suggested removing the 72 hour provision and entering into an arrangement with the employer. If that improves the provision, I am open to doing it. Representatives of those who work from home suggested this measure, not a particular employers' organisation. It is intended as a protective measure, not to make it harder for those who are already in a difficult position. However, we must give employers the opportunity to know what they owe a certain person on a given date, rather than at some time in the future. I do not envisage that this measure will cause all the awful problems which Deputy Rabbitte anticipates. Perhaps a gardener will be expected to do a large garden in three hours and get £12, £14 or £15. He or she might do a great deal better if he or she is paid £4.40 per hour.

We have debated the amendments and the section. Perhaps we can now concentrate on dealing with the amendments. How does amendment No. 13 stand?

Amendment No. 13 stands strongly. When the Tánaiste is unable to advance an argument one can bet one's life it is because there is not much of an argument since she is an expert advocate. She is now presenting this as a protective measure, which I do not accept. The Tánaiste cannot pretend she does not know about the agricultural sector. It may be in her memory bank, but she knows about it. The notion that agricultural workers would be allowed to work unsupervised or skive off is not in accordance with the history of agricultural workers in this country. The notion that agricultural workers would mislead their farmer employers about the number of hours they have worked does not stand up in reality.

It is news to me that textile workers are represented by a federation who bring their complaints to the Department. I would have thought that if one is engaged in knitting at home, it is usually contract work and the employer can easily evaluate whether one is knitting or skiving, depending on the output.

The Deputy wants it all.

I do not understand the purpose of this provision. The notion that the measure is being introduced because representations have been made to the Department on behalf of domestic workers does not ring true. What is the answer to Deputy Stanton's question? Does the Tánaiste have a different answer from mine? Is there a precedent for criminalising workers for misleading their employers regarding the hours they have worked? It is a phenomenal proposition in our venal culture that low paid workers could be guilty of an offence for being false or misleading and could be subjected to a fine, which would also, inevitably, result in the loss of their employment. As Deputy Higgins said, it is entirely disproportionate and it does not contribute to the Bill in any way.

Amendment put and declared lost.

I move amendment No. 14:

In page 9, subsection (1)(b), line 29, to delete “shall” and substitute “may”.

Amendment put and declared lost.

I move amendment No. 15:

In page 9, subsection (2), line 42, before "not less than" to insert "likely to be".

The purpose of this is to exempt workers comfortably in excess of the minimum rate from the requirement to keep records. Why can one only mislead or be false with one's employer if one is earning £4.40 per hour? If one is earning £7.40 or £20.40, one does not need to keep an eye on them.

Why is it included?

To ensure people get £4.40 per hour.

It states that subsection (1) does not apply to an employee. It does not state an employee as assessed under section 8 (1) (b) - perhaps that is understood. It will state that the average hourly rate for the working hours concerned is likely to be not less than 150% or such other percentage as may be prescribed, of the national minimum wage. That will be the £4.40 plus another £2.20. This Bill does not deal with those who earn more than the minimum wage so why is this constraint needed? Is there a clause in other legislation providing for the 150%? Why bother stating it does not apply to those who earn more than that?

One does not want people on the margin.

This section puts an onus on those earning the minimum wage to keep records.

So that they get their £4.40 per hour and the employer knows what liability he has to people working in circumstances where the hours are not controlled or supervised.

Section 9 (1) (a), (b) and (c) suggests that if someone gets more than £4.40 per hour and they are in a place of work not normally controlled by their employer, they can pretend to do all the hours they want, claim for those hours and not have any records. In that instance, their employer is prepared to take their word that they worked 15 hours whereas this is not the case if someone earns £4.40 per hour. Is that what this means?

The purpose of this Bill is to ensure that people are paid a minimum of £4.40 for every hour they work, that they do not get less than that and that there is no doubt or dispute some time after the event as to how many hours they worked. The only way of verifying it if an employee is not in a controlled situation or is unsupervised is to put the onus on him or her. I would happy on Report Stage to delete the 72 hours requirement in favour of arrangements made with the employer. That is fine. However, that is not a situation where it is some time after the work having been done and there is a question of proving the hours worked and who should verify them. This section has been introduced to cover such a situation.

We were asked during the course of the preparation of the Bill what would happen to people who worked from home or did not work in a controlled situation. There is no problem where a person clocks in or where his or her hours are supervised or controlled. However, what about people who are not? Will they get the minimum wage? This section was introduced with a view to ensuring they do. Obviously in such a situation, there must be some protection for the employer.

They should get paid for the hours for which they were contracted.

They might not be in a contract situation based on hours.

The company could have employed them for a certain number of hours - it might be 39 or 25.

Someone might contract them to do a specific job, such as knit 25 jumpers. If the Deputy is saying to me that they should only be paid on output or productivity, I have a problem with that because it should be either/or.

I need clarification on this. What it boils down to is that the penalty of £1,500——

Up to that; it is not an automatic penalty.

--up to £1,500 applies to any worker who earns up to £6.59 per hour and does not apply to people who earn more than that.

This is about guaranteeing a minimum wage for hours worked, including overtime hours worked.

Measures in legislation introduced for one purpose can apply across the board. Whereas the purpose of the legislation is to introduce a national minimum wage, the provisions of the Bill apply generally to workers and, in this case, they would apply not just to those on the national minimum wage. If the Minister sets the minimum wage at £4.40 an hour - although we will try to convince her to set it at a higher rate - this provision will apply to workers earning up to £6.59 and will not apply to those who earn more than that. Why is this artificial provision being introduced for workers on the lowest point of the scale? Why does the Minister not introduce a provision to make this applicable to all, even to TDs, for example?

We are paid much more than the minimum hourly rate. This subsection is to ensure that people receive the minimum hourly rate. Deputy Rabbitte referred to contracts. Workers may have a contract for 35 hours but may work another 20 hours' overtime. Will they be covered in that situation? We are not going to agree on this.

Why is there no redress to the Labour Court or to a rights commissioner? Where is there a precedent for this measure whereby a worker in such vulnerable circumstances is criminalised because he or she makes a misleading claim? It is unheard of and is the wrong way to address it. All I sought to do in the amendment was to insert the word "may" which would make it optional. There may be some home workers who would be both willing and able to do this but I am sure there are many who are neither and the notion that they should be criminalised is unacceptable.

They may or could be but might not be.

Amendment put and declared carried.

Amendment No. 16 in the name of Deputies Rabbitte and Higgins has already been discussed with amendment No. 13.

No, Chairman, I am not agreeable to taking a vote on this tonight. I want to take advice on what is left.

I need further clarification from the Minister on amendment No. 16, so in fairness to our pressed schedules, I am afraid the Chairman will have to leave it until tomorrow.

I am happy to do that. For the benefit of Members, we have dealt with section 9, amendments Nos. 13 and 14 were withdrawn and amendment No. 15 was declared carried.

We will now adjourn the debate on amendment No. 16 until 11 a.m. tomorrow or after the Order of Business, whichever is the later. Anyone seeking clarification on an amendment or anything else should contact my office, the Clerk's office or the Minister's office prior to the commencement of the debate tomorrow. It may be helpful. I propose that we now adjourn until 11 a.m. tomorrow or after the Order of Business, whichever is the later, when we will resume our consideration of the Bill.

The Select Committee adjourned at 8.07 p.m. until 11 a.m. on Wednesday, 8 March 2000.