Vol. 4 No. 12
I welcome the Minister of State at the Department of Finance, Deputy Cullen, and his officials. I suggest we consider the Bill until 8.30 p.m. and if we have not concluded by then a further meeting will be arranged. Is that agreed? Agreed.
SECTION 1.
I move amendment No. 1:
In page 3, subsection (1), line 14, to delete "1999" and substitute "2001".
Since the passing of the Bill by Seanad Éireann, the Company Law Enforcement Act, 2001, has been enacted. This amendment is necessary to bring the Ordnance Survey Ireland Bill up to date with that Act.
Amendment No. 2 in the names of Deputies J. Mitchell and McGrath is deemed out of order as it involves a potential charge on the Revenue.
I am at a loss to know why the amendment should be ruled out in terms of involvement of a potential charge on the Revenue. The Minister indicated on Second Stage that the OSI would be considered for decentralisation. It is at present located in the Phoenix Park and has a considerable staff, many of whom have been located there for some time and many of whom are resistant to a move out of Dublin as they have their homes there. We appreciate that the actual headquarters in the Phoenix Park may not be suitable for the OSI as the building is inadequate in many ways but we are anxious to ensure that new premises would be in the Dublin area. We are anxious to ensure that in any discussions or thoughts which may arise in relation to finding a new premises, it will be somewhere in the Dublin area in order to facilitate the staff who are already working there. It is a reasonable amendment to ensure we keep in situ, or almost in situ, the staff who already are there. Very strong representations have been made on this. The Minister of State, when concluding on Second Stage, indicated that he had met staff. Nonetheless, there are still many misgivings regarding the proposals on a possible move and so on. I am disappointed this amendment has been ruled out of order. Perhaps the Minister of State will give commitments in relation to possible relocations and give us his views on the OSI headquarters and his plans for the future in regard to it.
I share Deputy McGrath's concerns. The Minister of State will know this is central to the concerns of the workforce, or at least the bulk of it. The Minister of State used a very careful phrase in his Second Stage contribution on this issue when he said the Bill did not deal with the location of the offices, whether the Dublin office or the regional offices, and, of course, it does not. Nonetheless, it seems to be clear to the workforce at least that significant changes might very well flow from the passage of this Bill. It would be unreal if we did not get some elaboration from the Minister of State as to what the intention is in relation to the location of the regional offices and, for that matter, the continued occupation of Phoenix Park.
I would like to correct what Deputy McGrath put to me when he said that I said the OSI would be one of the bodies. I did not say that. I said that in the context of the overall decentralisation programme, it is the sort of body which could be considered. I would like to make it absolutely clear that I have not said that definitively in the way the Deputy put it. I would like to clear up that point so there are no misunderstandings.
The issue of decentralisation is being discussed across all Departments and that includes potentially everything. I have, however, said in the context of the OSI that in arriving at a decision on decentralisation, the specialised and technical nature of the work carried out by OSI staff in contrast to the work of most other Civil Service Departments and offices - that is a key phrase - will be taken into account by the Government. In addition, it is also relevant to refer to my statement to the House earlier this month during an Adjournment debate on decentralisation when I said the issue of staff welfare is very much to the forefront of everybody's mind and that the Minister has in this regard been very consistent in restating his commitment to the voluntary nature of decentralisation. The members of the committee and those in the House today during Question Time will appreciate that I cannot go beyond that. I have gone a fair distance.
I discussed this matter at some length with all the parties involved. We had a fruitful discussion. In terms of the configuration of the buildings which exist and from where the staff operate at present, I would not consider them the best in the world. There are obvious matters pertaining to the OSI, particularly the fact that the majority of the staff carry out particular technical and specialised work, which will be to the forefront in any questions that may arise in the consideration of what may happen to the OSI in the future.
On decentralisation, am I right in saying the Minister of State envisages that the headquarters will be decentralised?
No, I have to be straight with the Deputy. I am not saying that. In the broad sense of decentralisation, it is obviously the sort of body that would, I am sure, be looked at. What I have said specifically is that the headquarters - I am not saying there is anything wrong with where it is - with the configuration of so many different buildings is not what the staff and everybody else would say is the best configuration for a modern ordnance survey set up, particularly as we move forward. I am in no way suggesting that the OSI will be taken out of Dublin and moved somewhere down the country.
How stands the regional offices? Is the Minister of State saying their continued existence is not consistent with a commercial mandate?
I am not saying that at all. I think I have gone to some length to say the opposite. Again, I discussed this at some length with the staff. As I understand it, the regional offices have a very important role and I have discussed this with the director and others in the context of the way the OSI is structured. I have given instances of some of the offices which do very specialised work which is only done there. That is the way the OSI has developed. I have had no sense or no intimation - I have asked the question directly - that the regional offices will be closed down. That is not an issue for the director or the OSI. My view is that we will see a strengthening of the offices in the OSI in the future. I am not the director of the OSI, who is sitting beside me, and I do not want to get into the territory of what future developments may take place in management. There was a very fruitful and frank exchange of views between all of us. I have no sense - and it is not my view nor has it been expressed to me - that the regional offices are inconsistent with a commercial ethos. I would like to be very specific on that.
One of the things the Minister of State said is indicative of the kind of difficulties that may arise. He said if there was decentralisation, the staff would locate voluntarily.
That is the whole basis of decentralisation.
Yes, that is the whole basis of decentralisation. That, in itself, creates a problem when one looks at some of the other aspects of this Bill. When the Bill becomes an Act, the OSI will, in effect, become a semi-State company and its employees will no longer be civil servants. If the Minister of State decides that the office in the Phoenix Park is to be relocated and an employee of the OSI decides he does not want to relocate to Mullingar, Athlone or Waterford——
I have not suggested that is a likely scenario.
That is the fear of the staff.
There is the possibility that it will be considered for decentralisation.
The Deputy is straying from his amendment which has been ruled out of order.
This is the nub of many of the amendments tabled. What it boils down to is that these employees will cease to be civil servants. If there is decentralisation thereafter, whether of the Phoenix Park office, the Longford office or another office, the personnel involved will not be able to transfer to another Department as they would have been heretofore. If one looks at what has happened with decentralisation to date, one will see that if the decentralisation is to Athlone, people from that general area will transfer to the Department concerned.
I would like to say something which may be helpful. There is a presumption, which has been a trend in the Second Stage debate as well, that people transfer from one Department to another. That is very limited. The number of people who transfer between Departments is almost nil.
In decentralisation cases, it is quite a lot.
Irrespective, the possibility to transfer from one Department to another is almost nil. Those are the facts. I would like to guard against the notion that something which is happening everyday of the week is somehow being lost. That does not happen. The experience previously is the same. As Deputies, we get many requests from staff members who want transfers when their wives are being sent somewhere. The ability of anybody in a Department to accept a transfer is negligible as union rules about rights, career paths and blocking others comes to the fore. It has become virtually impossible to transfer between Departments. The notion that there is widespread availability of interdepartmental transfers is erroneous.
Maybe the extent of it in more recent times means the option is almost non-existent but in the context of previous decentralisation there was a degree of it. Even if it is only a small degree, when this Bill becomes an Act there will not be any facility for these people to transfer. Even a member of staff with a degree of seniority currently based at the OSI in the Phoenix Park - and some of them have sent in correspondence stating they have been there for up to 35 years - if transferred has no career option such as was there in the past, albeit to a limited extent, but at least there was an option which will no longer be there.
I appreciate the point the Deputy is making, but the Ordnance Survey in terms of the staff involved, as I have said previously in the Dáil, is almost unique in the system. The work differs to the work of most other civil service Departments and offices. If the OSI staff do not want to travel then it is quite clear because of the technical nature of their work and the expertise built up that one could not go to another Department and pick 50 out of 7,000 who will become the new OSI. This is simply not possible and the real safeguard for current staff is that the majority of them are specialists and ergo will not be forced to move elsewhere in the country. This can clearly only function if there is unanimity and I recognise that. It is different to other civil service bodies and that is accepted.
Why are the staff so concerned about this matter? They feel their fears in this regard have not been allayed. What the Minister of State said sounds good, but why has the message not been conveyed in a convincing manner to the OSI staff. The Minister of State emphasised how important the staff is and he should have been in negotiations with the unions and staff. If that is really the case then why is there such bad feeling towards him and this move?
While I did not negotiate, I took the opportunity to meet and hear the views of the staff and did not get any sense of what the Deputy said regarding bad feeling towards me. I thought there was a very open——
Steady on. I did not say that about the Minister of State.
Yes, the Deputy did.
I said there was bad feeling towards the Minister of State and this move. Deputy Cullen is the Minister of State responsible for this move and I am speaking in terms of the person holding the office and not in a personal sense.
I am responding to the Deputy in the context of the office I hold.
Correct.
There was a very fruitful exchange of views. I discussed the matter with the staff and felt they understood I could not go any further. They made their position clear, as is their right and I have no difficulty with that. They equally understand that the matter we are now discussing does not form part of the Bill anyway, although I know there are consequences in a wider sense.
What I have said here to this committee, and what I have said in the Dáil, can be quoted to staff members and their representatives. It clearly leads in an obvious direction. There can only be a change of location with OSI, as with any other organisation, with the agreement of those involved. I emphasise again that OSI is a unique organisation whose work is different to the vast majority of other civil servants ergo they can not be replaced by 70 other civil servants at random. I have been more than fair on this issue.
It appears to allow the company to form joint venture companies or something of that kind. I am not sure what the purpose of the section is.
It is a standard provision which allows OSI to acquire, hold and dispose of shares and other interests in a company or become a member of a company. That is one of the elements that underpins the Bill, to go and form companies on a commercial basis, raise capital on a commercial basis and ensure viability. The State will not give it subventions but the State will still be the major source of funding for the OSI into the future and there will not be cross subsidisation.
I understand that, but wonder whether it represents any specific intent in terms of a joint venture company or the intention of the company to take shares in another company or anything like that?
No.
Section 9, amendment No. 3 is in the name of the Minister of State. It is a drafting amendment. The Minister of State is to move the amendment.
I move amendment No. 3:
In page 7, subsection (2), line 1, to delete "The".
The purpose of this amendment is simply to improve clarity in the Bill. The term "the OSI" is used to denote the existing Ordnance Survey Ireland body and the term "OSI" is used to denote the new body. The word "The" is being deleted, therefore, as it is the new body that is being referred to in this subsection. It is purely technical.
Is this on section 9?
Yes.
The practice in some legislation has been to prescribe the amount of borrowing in which a particular company can engage. Obviously the Minister of State will not go down that route and has specifically set it out in the legislation. Can the Minister of State indicate why he has chosen to do that and what would be the initial borrowing limit which he intends to impose?
I have not set out an initial borrowing limit. Obviously the Minister for Finance can take a view. I made the point on Second Stage with regard to the separate status of any company formed by OSI. There is no possibility that there could be any cross-subsidisation and any company formed by OSI will have to be formed on a commercial basis with funding coming from the markets. Wherever they might seek to borrow those companies will take a view on the commercial viability of the project and at that the stage the Minister for Finance will be aware of what is going on and can take a view on the matter.
If I am saying that I want the company to go out and develop new products - and there is a huge range of new products out there - I do not want to prescribe any limitations. That was the old way of doing things. It has to be given a mandate to stand on its own two feet within reason. I do not expect that if it borrows money to set up a company it would do so on a whim. The State will not be a guarantor and it will be done under the Companies Acts on the same basis as any other company. It has to be a commercially viable project and that is the way it should be allowed to operate. For me to prescribe limits at this stage would be ridiculous in terms of what the company may be able to achieve.
Does the Minister for State believe that the company will seek permission for borrowing or will the Minister set a limit within which the company will work?
The Minister can set a limit.
Is that the way the Minister of State sees it working?
The Minister may do that in the early stages. I do not want to start by setting specific limits for the company. The Minister will look at this issue at an early stage, on a case by case basis. As a responsible shareholder of the holding body, the Minister will be concerned as to its exposure but the ring-fencing of the commercial operation is quite clear, as I said on Second Stage. Those companies will operate as any other under the Companies Act. They will raise money exclusively from the market on their commercial viability.
Is there not a dilemma in that if the Minister sets an overall limit it allows the company flexibility within that limit whereas if a limit is not imposed, the company is obliged to come to the Minister every time it wants to borrow?
No. The Minister may well take a view after the Bill is passed that an overall limit that everyone is comfortable with may be agreed to start with, but I am coming at the issue from a different angle.
Clearly, the Minister wants to guard against reckless trading. I am not suggesting that would happen but it has always been the purpose of the limits in the past.
That is correct.
At the same time it gives some commercial flexibility to the company.
That is true but there is a difference in the way this will operate.
I accept that.
Amendments Nos. 4 and 14 are related and may be discussed together, by agreement.
I move amendment No. 4:
In page 7, subsection (10), line 51, to delete "£1,500" and substitute "€2,000 (£l,575.13)".
This amendment reflects Government policy that money amounts provided in new legislation are to be designated in euros. I want to make sure that we are not caught out.
I move amendment No. 5:
In page 8, lines 2 to 7, to delete subsections (2), (3) and (4) and substitute the following:
"(2) Members of the Board, other than worker directors, shall be appointed by the Minister.
(3) The Board shall consist of a chairperson and not more than 9 ordinary members three of whom shall be worker directors.
(4) Worker directors shall be elected by secret ballot of all employees of OSI at the same time and shall serve for a fixed term not exceeding 5 years. The Minister shall, by order, decide the detailed arrangements for the ballot, and in the same order, provide for the filling of casual vacancies.".
Section 11 deals with the membership of the board of OSI and the term of office of the members. The membership of the board, according to the Minister's proposals, shall consist of a chairperson and not fewer than four and not more than nine ordinary members. There is no mention of the inclusion of worker-directors.
There is a long and proud tradition that State companies have elected representatives of workers on their boards. Worker directors have played an important role in our State companies, and Bord na Móna, which is strong in my area, comes to mind. We have always had someone from our locality working at what we might call the "turf-face" in the bogs. They were represented on the board and some served on the board, playing an important role and bringing forward insights and views on various issues. It is a retrograde step and a major mistake to establish a State company which will turn back the clock in relation to worker-directors. We have seen the fruits of co-operation between the social partners - the unions, employers and social groups - who have played a vital role in developing the economy and building it up to the level it is at. We will be seen to turn our back on that if this issue is not addressed. The amendment proposes that there be worker-directors on the board.
The Minister implied in his response on Second Stage that workers would be appointed although positions were not reserved for them. I respect the Minister for Finance and the Minister of State and know that they will follow through on the commitments given. However, we may not have people who will want to do that in the future. The role of the workers should be preserved. It is particularly important in this company because the future for many workers within the Ordnance Survey is precarious.
I have spoken to different OSI workers in the past three days and each independently spelt out to me that they could see huge reductions in worker numbers within OSI over the next five years. They are very concerned for their positions. In establishing this company, we must recognise the importance of the workers. They play a huge role. The commercial role adopted by the company is also important and the workers will play a major part in shaping that.
I urge the Minister of State to accept the amendment - I know that Deputy McDowell proposes a similar amendment. The message being sent out should be considered, as should the role of workers within the OSI and the tremendous job they do. Even at this late stage, the Minister might relent.
Unfortunately, the amendments in my name have been ruled out of order on the ingenious basis that they impose a charge on the people. I assume that arises through the directors' fees that would be payable through the additional directors. This baffles me but I am happy to speak on the Fine Gael amendment.
The amendment which I proposed would have increased the size of the board. It was proposed on behalf of the trade union that represents the bulk of the workforce at OSI. A principle is involved for the trade union movement. They see it as being implicit, if not explicit, in the concept of partnership that there be worker-directors on the boards of semi-State bodies. The precedent has been established over many years, as Deputy McGrath pointed out. To the best of my knowledge, there have been no bad experiences due to this. The experience has generally been the opposite.
Clearly, this is a company that is to go through significant change in the near future. In that context, it is all the more important that the workforce should be on board. There is a feeling among trade union representatives and the workforce that the consultation process leading up to this change, and to the passage of this Bill, has not been the best. I realise that the Minister does not accept this but against such a background, this amendment and debate have taken on increased importance.
I do not understand why the Minister finds it impossible to accept the amendment. The precedent is long established and there is no reason for refusal. On grounds of good industrial relations there is every advantage to be gained from going down this road. I support enthusiastically the amendment put by Deputy McGrath.
I support this amendment. The points made by previous speakers are valid. I know from my experience of Bord na Móna that the practice of having worker-directors on the board works very well. The Minister should explain why he did not specifically mention the subject of worker-directors as board members.
I have no disagreement with the general thrust of what the proposer of the motion has had to say about worker directors. They do make a valuable contribution to the companies on whose boards they sit. They have a good track record and I certainly believe in partnership. I have just come from a meeting about a particular issue, with a unique partnership group within a company, and it is interesting to see how it operates. Such partnerships are extraordinarily successful and now being reimported to America. Although there is no specific provision in the Bill for the appointment of worker directors, this does not reflect a rejection of the concept in so far as the OSI Bill is concerned. When it was being drafted it was considered that the hands of the Minister for Finance should not be tied as regards the composition of the board, that he or she should have freedom to make appointments to it in accordance with Government policy of the day on such matters and include one or more worker representatives if he or she thinks fit. I make that point very strongly, which is supportive of those made by previous speakers.
It is also envisaged that board structures, for example, in the form of sub-committees, a number of which are already established in the context of partnership, will be strengthened and further developed so as to ensure as far as possible that OSI management and the board will always be in close touch with the views of OSI staff on important organisational and business issues. I do not think it would be appropriate, therefore, to accept the amendment. It is not something that I would wish to insert directly into the legislation. We live in a world of common sense and the idea of partnership dictates that logic will prevail and that the value of worker directors will be adopted by the OSI in the same way as everybody else has done.
I am amused and confused by the Minister of State's response. Either one accepts the right of the workforce to be represented as of right on the board or one does not. The Minister of State is saying that it should be up to the Minister for Finance to decide not to have the workforce represented on the board, should he or she not want them to be so represented, but that is not the argument. The argument is whether, in principle and as of right, the workforce should be represented. The Minister of State thinks, as I do, that this will be dictated by common sense, but it should also be dictated by principle and by right. It should not be done by grace and favour of the Minister for Finance. It is not too difficult to imagine that a particular Minister for Finance might find it inconvenient to have worker directors, or may not even agree with the principle to which I subscribe and to which the Minister of State appears to subscribe. We should insist on this principle which should be reflected in the legislation.
I am disappointed and mystified by what the Minister of State said. In saying they already play an important role and could do so in the new body he is, in effect, paying lip-service to the workers. From a meeting he attended earlier today he recognises the huge role workers play, yet he is not prepared to insert such a principle into the legislation. As he is in the driving seat as regards the Bill, he can choose to live up to what he is talking about or turn his back on it. He can appoint directors to the board who happen to be OSI workers, but unless a structure is built into the legislation by which they can be elected to the board, he will be sending out the wrong message to workers. Who will he pick within the OSI to appoint to the board? Will it be the director or somebody else? How will he pick people if he leaves the selection process on an ad hoc basis? Will he run elections for the board or pick somebody who happens to be a member of a local cumann?
Or a branch.
Or a branch.
What does Deputy McDowell call them?
Branches.
We could be there a lot sooner than the Deputy expects. As the situation is not satisfactory, the Minister of State should reconsider.
The Irish Congress of Trade Unions was one of the major players on the interim board which was the driving force for the review body which came up with this legislation. That speaks volumes about seeing all sides of the equation represented. I do not wish to tie anybody's hands - it is something that, generally, I do not do - but that does not mean I am paying lip-service to the issue, I certainly am not. I have had long discussions with the workers about their commitment to the OSI and my own view on the company's future and the composition of the board. However, I am not prepared to go down the road proposed by the amendment because if I did, all sorts of other bodies and individuals would seek to be prescribed. They may have a good case also, but the status quo is the way it should be because it does not tie anybody's hands. I cannot go any further than that.
The Minister of State will go down in history as the one who established a new State board and refused to acknowledge the important role of worker directors. When the history of labour legislation is written this will be a sad chapter and one that the Minister of State may not wish to have associated with his name. He should reconsider.
Amendments Nos. 6 to 8, inclusive, are out of order.
I move amendment No. 9:
In page 8, subsection (11), line 45, to delete "and shall cease to hold office".
The purpose of this amendment is to clarify the subsection. It is purely technical.
Have any decisions been taken in relation to the salary of the chief executive officer of Ordnance Survey Ireland? Will there be a new salary scale for such a person? The salaries of the chief executive officers of some of our State companies are quite substantial and would be totally out of kilter with that of the current director whose salary, I understand, is linked to a particular grade in the Civil Service. Have decisions been made in relation to the new chief executive officer and will he or she get an enhanced salary as distinct from the current salary scale in the OSI?
That issue is under active discussion. I understand an external firm of consultants has been engaged and is involved in the discussions. The issue has not yet been finalised.
Will the decisions be taken at board level or by the Department of Finance? Why would the salary change substantially? Are there reasons the chief executive officer would be paid more? In the Minister of State's speech on Second Stage we heard the OSI will not change much other than having a different name and remit. Would the functions and responsibilities of the chief executive officer of the new structure be much different from those of the director of the OSI as currently constituted?
At no stage did I say there would be a substantial change in the director's remuneration. It is reasonable that the matter would be examined. Ultimately, based on the report of the consultants and the recommendations made, the Minister for Finance will look at it and make a decision. I do not want to give the impression that there will be a substantially different package. That may well be the case, but I have no reason to say so.
Regarding subsection 14(14), I am not sure I have seen such words used before to express something which is generally the practice, namely, that chief executive officers of semi-State bodies do not express opinions on Government policy. Is there a precedent in statute for this sort of affirmation or prohibition? In this day and age is it appropriate to include such a statutory provision? We are cutting the company loose up to a point, at least in terms of giving it a more commercial mandate, but this subsection seems to gag the chief executive officer as if he or she were a civil servant or a functionary of the Government, which does not seem to be entirely appropriate.
If it was not included, questions would be asked the reason that was so and if the Dáil would receive proper reports. Deputy McDowell and others raised the issue of reporting and laying reports before the Dáil. Given our experience in recent years it is right that a chief executive officer of a semi-State company——
I am not sure we are on the same subsection. I am referring to subsection (14) rather than subsection (15). Subsection (14) states, "In the performance of his or her duties . . . the chief executive officer shall not question or express an opinion on the merits of any policy of the Government or a Minister of the Government or on the merits of the objectives of such a policy."
That is taken from other legislation and we were told to include it.
I was not aware it was included in other legislation, although that does not surprise me. It is remarkably broad and thorough. It gags the chief executive officer of a commercial semi-State body to an extraordinary extent. Whether there is a precedent I am not sure we should include it. Clearly, it would not be sensible for the chief executive officer of a semi-State company to openly court controversy to the extent of condemning what a Government is doing, but I question whether such a specific and broad provision is necessary.
The subsection states the chief executive officer "shall not question." The chief executive officer must question the policy of the Government and the Minister in order to find out what it is thinking.
It obviously refers to doing so in public. It does not mean the chief executive officer could not go toe to toe with the Minister if they had a fundamental disagreement on a point of view. The section must be read in terms of the overall provisions for accountability.
Can the Minister of State give an example of where this has been used in other legislation?
To my knowledge, all legislation relating to other semi-State companies contains a similar provision.
I, too, have particular worries in this regard. This body will be established in a way that is different from other State companies. For example, Bord na Móna will not be totally dependent on a subsidy from the Minister for Finance on an annual basis. However, the OSI will be dependent on a subsidy from the Department of Finance to carry out its public functions in relation to mapping, etc. There will be controversy at times about the level of subsidy paid by the Department as it is not fixed. If the chief executive officer is of the view that he cannot fulfil his or her role and responsibilities because of the level of the subsidy, he or she will be gagged by this subsection as he or she will not be able to question it. Where will the chief executive officer be able to express his or her concerns? Will he or she be allowed talk to Members of Parliament and say he or she can no longer do his or her job - to complete the mapping of the west, for example - because he or she has not received the necessary subsidy from the Department of Finance? Like my colleague, Deputy McDowell, I have not noticed a similar subsection in recent legislation.
On that point, this particular subsection emerged in the 1990s. It would not have pertained in the 1970s or 1980s, but has become part of legislation, probably from the early to mid-1990s onwards.
It certainly runs counter to the age of freedom of information, on which the Minister of State has recently majored, and the need to open up and make people aware of what is happening, including the various constraints that apply.
The other sections of the Bill provide for a very open and accountable questioning of the chief executive officer. Let me turn it around a little. If the chief executive officer of a private sector company and its shareholders did not implement what the company wanted, he would be fired.
That is not what it states.
No, I use it as an analogy. One must remember that the State is the shareholder. Shareholders in any organisation have a major say in what is happening in the broad brush, not the day-to-day running of a company. In terms of setting policy one will not find senior management or directors of a company saying something is laughable because they would not remain in their position for very long if they were to do so.
Let me give an example. I have no idea whether there is a similar provision in place or of what the views of the chief executive officer are in the case of the ESB.
It is a much older company.
Yes. Assuming there is a similar provision in the relevant legislation, given the debate taking place on restructuring and the delivery of ESB services, I would like to think that if we summoned the chief executive officer of the ESB to a committee, he would be able to express the company's view and what he thinks would be good for the ESB as a company. Of course, it must ultimately deliver on Government policy and it is ultimately for the shareholders to decide on the structure of the company, but to prevent the chief executive officer from articulating the company's view is not good.
Rather than prolong the discussion I will undertake to come back to this subsection on Report Stage because it merits further information.
The Minister of State could always make an alteration if he so wished. Any chief executive officer who comes before an Oireachtas committee is free to say what he or she likes. However, we must have due regard to the fact that occasionally it can happen that people can go mad or, without naming names, there could be an eccentric guy who might be guilty of frivolous behaviour, so to speak. There might be a guy who decides to show vote. I am not saying this will happen, but one cannot be certain that it will not. There is nothing to say that occasionally people do not go a little odd. Heads of semi-State bodies have always been free to speak. I interpret the section to mean making statements to the press which are contrary to Government policy. From that point of view the legislation offers a certain protection because the State is the chief shareholder and we, as guardians of the shareholding, have a responsibility to ensure——
As I said, it warrants further investigation.
As amendment No. 11 is an alternative to amendment No. 10, both may be discussed together.
I move amendment No. 10:
In page 11, subsection (1), line 30, after "OSI." to insert "Such persons will retain their existing civil service status.".
This amendment seeks to preserve the Civil Service status of the workforce of the OSI, a matter we debated earlier during the discussion on the location of offices and so on. Perhaps the Minister of State will elaborate on the status of the workforce following the establishment of the new company.
The primary purpose of the Bill is to establish the OSI as a State body outside the Civil Service to enable it to have the freedom to operate with a more——
The overriding concern of members of the OSI is the change in their status, the fact that they will lose their Civil Service status. This is seen as a huge change in their terms of employment, about which they are very concerned. They want to retain the option of being able to transfer between various Government Departments, which will be lost to them. They are also concerned about future wage agreements. While wage increases will be paid to their colleagues in the Civil Service in the normal way, to what extent will OSI Ireland be bound by wage agreements and will the workforce be guaranteed the same increases as civil servants? From time to time companies in the private sector claim inability to pay. Will this be bound up with the subvention from the Department of Finance and work generated in the commercial sector? Will the workforce be guaranteed that they will be treated in the same way as civil servants from the point of view of wage increases?
On redundancy and early retirement packages available within the Civil Service, the staff concerned currently have access to the same early retirement packages available in all Government Departments. Will those packages be available to staff when the new company is formed? Will their rights be preserved? The question of superannuation will soon arise in regard to those staff transferring. What will be the detail of the superannuation arrangements?
That question will be dealt with when we reach the appropriate amendment.
In response to Deputy McDowell's amendment, obviously the OSI has been established to have freedom to operate with a more commercial focus. If the workforce were to remain in the Civil Service, the body could not have this freedom. As a result, its capacity to meet its customers' demands and exploit new opportunities in the marketplace would be seriously limited. The Government accepts this view which was validated by the interim board of the OSI. If this would mean that on establishment day the OSI would become a State body outside the Civil Service, staffed by civil servants who did not belong to it, among the disadvantages, of which there would be many, would be that the necessary commitment to the new body would be very questionable in order to make the changes to adapt to its new role. It would be a totally analogous situation and the whole proposal would be at risk. This would be totally analogous and unprecedented in terms of anything that has happened in the past.
On Deputy McGrath's question, issues such as access to interdepartmental competitions and transfers after establishment day are for negotiation between the relevant staff representatives and officials. I spent a lot of time talking to them about this matter. Obviously they are not issues which should be enshrined in legislation.
As I said in my speech in the Dáil, I took the opportunity last week to meet staff representatives at OSI headquarters in the Phoenix Park. One of the most important issues of concern to OSI staff is their eligibility for interdepartmental Civil Service competitions after establishment day. This is of particular concern to the relatively few OSI staff in general service grades who consider their career prospects, as administrators, would be limited if they remained in what is overwhelmingly a technical production focused organisation. The career prospects for these grades will not be as limited in the new OSI as they are at present. In fact, there will be greater scope in this regard because the reorientation of the OSI in its new role will require new structures which will result in new opportunities for all staff. Apart from this, I fully expect that the usual arrangements whereby Civil Service staff who transfer to State bodies remain eligible to participate in Civil Service competitions after establishment day will also apply in the case of the OSI. I have said this to the staff. Negotiations are ongoing on this issue between OSI management, officials of my Department and OSI staff representatives.
As I stated, the transfer of OSI staff to other Civil Service Departments or Offices is a complex issue. Any time a civil servant wishes to change Department or grade stream, there are difficult hurdles to be jumped before a transfer can take place. The first is that there must be a vacancy in the receiving Department and, second, that the Department's management must be willing to accept the person being transferred. Third, the trade unions involved must be satisfied that the transfer will not block promotional outlets for existing staff or affect seniority, a huge issue in interdepartmental transfers. An additional matter in the case of OSI technical staff is that they will need to be recertified to suitable general service grades. This is an issue being driven by others, but which will be decided independently by the Civil Service Commission. Notwithstanding these constraints, my Department is prepared to discuss many options on this issue and I expect a satisfactory outcome.
These issues should not be enshrined in legislation but negotiated by the staff representatives concerned, OSI management and officials from my Department. I do not, therefore, accept the amendment. We had lengthy discussions on these issues and there was no push from anyone to have them included in the legislation. The staff representatives did not see this as an issue.
Can they be resolved before establishment day when the company will actually be established?
They are issues that will be resolved before establishment day. They must be and I understand they will be. It would be a bad start for the organisation if they are not. Those with whom I dealt and I recognise that they are important for the morale and the ability of everyone involved to go forward with the new organisation. There are discussions ongoing on to resolve them. I have no principled objection to what they are attempting to achieve, and they will be resolved. I gave a direct commitment here because I feel strongly about the matter.
The Minister of State must agree that there was a lot of disquiet among staff. It is human nature to be nervous when there is change.
Exactly.
I hope the confidence expressed by the Minister of State is justified. The staff were resentful about certain issues, not about the Minister of State personally, but about the concept.
The Minister of State indicated his confidence that the OSI would expand with its new remit.
I referred specifically to some grades which were driving the first part of the issue. We expect that whole area to grow.
In the context of his negotiations with them is the Minister of State prepared to tell the staff, who are concerned about the long-term future, that there will be no compulsory redundancies for a period of up to ten years, for example, or that if there is, that anyone threatened with compulsory redundancy in that period will have the option of transferring back to the Civil Service? Someone in his or her mid-forties, who has been in the OSI for a long time, may find in five years time that there is a shrinkage of staff and he or she will be in a terrible situation. Will the Minister of State leave open the option of transferring back to the Civil Service?
This was not a major issue for the staff because our purpose is to expand what the OSI can do. It will retain responsibility for what it does, that is, it remains the mapping authority of the State. The staff never feared that there would be many redundancies. We are trying to increase the volume, opportunities and products of the company in its new status. There is no question of compulsory redundancies and it was not an issue in the discussions I had with the staff, who understood what is proposed. Staff may opt for voluntary redundancy in the future, as they sometimes do, but, as it stands, the company is not losing work. The purpose is to increase its workload. There is no need for staff reduction and there will be no compulsory redundancies.
I move amendment No. 11:
In page 12, before section 16, to insert the following new section:
16.-(1) Without prejudice to section 15, the transitional arrangements set out in this section shall apply to persons to whom subsection (1) of section 15 refers.
(2) Members of the staff of OSI referred to in subsection (1) shall continue to-
(a) be allowed to enter for the Civil Service inter-departmental competitions, and
(b) seek inter-transfers with Civil Servants of similar rank in the Departments of State.
(3) Civil Servants transferring to the staff of OSI under subsection (2)(b) shall not be entitled to transfer back to the Civil Service after the elapse of the 12 months from the date of their transfer to OSI.
(4) Subsection (2) shall not apply to staff of the OSI who, since their transfer to OSI under section 15(1), have either been promoted or who have had their remuneration significantly increased other than by pay increases applicable generally to the public sector.”.
I move amendment No. 12:
In page 12, line 29, to delete "of" and substitute "or".
The purpose of this amendment is to improve clarity.
I made a point relating to wage increases and national agreements. Will the Minister of State assure the staff that they will receive future such increases?
I have no difficulty with this issue. The section provides that the OSI shall comply with Government or nationally agreed guidelines in determining remuneration or allowances for expenses to be paid to members of its staff. This is a standard provision to ensure a new body complies with national wage agreements or other collective agreements agreed by the Government. I have said this to the staff.
Will the OSI be or is it already part of the benchmarking process?
It is doing its own benchmarking. This is part of determining where the organisation will go. I presume the process is ongoing and much work is being done on it.
I move amendment No. 12a:
In page 12, subsection (2), line 43, after “persons.” to insert “Where such a scheme provides for early retirement, the class of persons affected shall be entitled to all the benefits they would have enjoyed before establishment day.”.
There are different early retirement packages available within the Civil Service. Staff members wanted similar packages to be available to OSI staff after establishment day. Will the Minister of State say how the superannuation of those members, who have paid to date, will be affected? Will they receive two pensions on retirement, one from the existing Department and the other from the new body covering their years of service there?
I have pointed out already that the existing terms and conditions of the staff will be retained. There is no question of worsening that to which they are currently entitled. Pension schemes in State bodies do not generally provide for early retirement unless there has been a voluntary early retirement programme in the organisation. There are no plans to include such provisions in the pension schemes for the new OSI. In the event of an early retirement programme being brought forward for the staff the terms, conditions and entitlement provisions of such a programme would be a matter for negotiation between OSI staff representatives, OSI management and officials of my Department. It would then be necessary to make the necessary amendments to the OSI scheme in the light of the early retirement terms offered. Accordingly, as this would be a matter for negotiation between the interested parties involved, it would not be provided for in legislation such as this.
I move amendment No. 13:
In page 17, subsection (1)(a), line 6, after “member” where it firstly occurs, to insert “of the Board”.
This is a drafting amendment to improve clarity.
I move amendment No. 14:
In page 17, subsection (4), line 23, to delete "£1,500" and substitute "€2,000 (£1,575.13)".
Again, this is a drafting amendment to improve clarity.
This is a very important section which relates to the subvention to be paid to the OSI by the Minister which will form an integral part of the financing of the new OSI. The level of funding from the Department of Finance will decide the level of staff, etc. Will the Minister of State give us a rundown on the financing of the OSI? The rough figures may be in the order of a gross turnover of £12 million, of which £8 million is generated in the commercial sector and £4 million comes from the Department of Finance. What is the mechanism by which the subvention will be paid? Will the OSI have to apply on an annual basis to the Department for its needs or will an indexation figure be built in to help provide for the smooth operation of the OSI and its dealings with the Department? To what extent will the Department pry into and control the financing of the OSI? Will it impose cutbacks if it is of the view that profits are not sufficient? The level of funding will impinge entirely on staff in terms of finance, numbers of staff and even efficiency. The inclusion of the provision in respect of subvention stands out starkly. How will the amount be decided? What mechanism is in place to provide for its continuance or index linking and how will the Minister ensure there will be no cutbacks?
I agree with the Deputy that this is a very important issue on which clarity is needed. There will be a full service agreement between the Department and the OSI which will set out all of the terms and conditions as to what is expected, what is being delivered, what the funding is for, etc. It will set out the range of activities which the OSI will carry out in the national interest. The amount of subsidy from the Exchequer will be agreed in that context. I do not anticipate that it will be an annual application for funding. A multi-annual arrangement will be built into the planning of the OSI. It is envisaged that the agreement will, inter alia, contain a description of each activity to be carried out by the OSI in the public interest, justification form, benefits arising from the activity, details of the deliverers, including details of their standards and quality, and the amount of subsidy allocated to the activity.
The section also provides that the service agreement may contain terms and conditions in relation to pricing, etc. I took time with it because it is a fundamental part of the Bill and I wanted to assure the OSI that there was a specific commitment from the Government in order that the OSI could get on with its business. It will know what it has to deliver on the State side and that it will be funded to do this by agreement between both parties. That is how it is set up.
I understand what the Minister of State is saying in relation to the State funded work the OSI will undertake on behalf of the State, but what is the arrangement in relation to additional commercial work it may carry out? Section 25(5) states that it cannot be required as a matter of course to hand over moneys in credit at the end of any given year. Nonetheless, the Minister may require the company to deliver a dividend from time to time. What is the intention in this regard?
In the first few years of the new organisation and the setting up of new commercial products and opportunities whatever profits are generated will be needed for reinvestment. I am amazed at the range of competition and pressure already facing the OSI and feel a sense of urgency about allowing it to enter the market. Ironically, the OSI has done a lot of the work, the results of which are being used by other companies to make a commercial profit. We may reach the point where the OSI generates substantial profits in excess of the Government subsidy when the need for the subsidy would be reviewed by the Minister for Finance. It was important not to do this in reverse and that the subsidy and the work of the OSI be set down in the legislation to provide clarity for the staff. That is the reason the section has been included. If it was not included, we would be accused of trying to get by on a wing and a prayer. The legislation is specific. This demonstrates that the real central role of the OSI remains to operate on behalf of the State. There is no change in this, but the commercial exploitation of what it is doing can now follow.
Can we be assured that the work of updating maps will continue? I understand some maps of the western seaboard have not been updated since 1890.
That is not true. There was a distinction made about different sizes of maps. Some maps seemed to give a lot more detail and, therefore, were presumed to be more modern, but that is not the case. Maps of a different scale can give a lot more detail than others. It is not true that parts of the country have not been mapped or that no new maps have been made available since 1890.
As the Minister of State knows from his constituency work——
There is a mapping programme under way which is due to be completed within three years. I do not dispute that there are deficiencies, but they will be rectified by this extensive rural mapping programme.
An Ordnance Survey map of a particular size, I think 1:500, must be produced in the case of an application for planning permission. One of the criticisms is that many of the maps available are not up to modern standards.
The rural mapping scheme which is under way and which will run for three years will address those problems.
I move: "That section 26 be deleted."
I move amendment No. 15:
In page 18, lines 18 to 20, to delete subsection (3) and substitute the following:
"(3) A copy of the accounts referred to in subsection (2) and the report of the Comptroller and Auditor General thereon shall, as soon as is practicable, be presented to the Minister who shall cause copies thereof to be laid before each House of the Oireachtas.”.
The purpose of this amendment is to improve the clarity of the subsection.
I move amendment No. 16:
In page 19, subsection (3), line 24, to delete "this".
I thank the Minister of State and his officials for their assistance.
