Ms Maeve McElwee:

I thank the Chairman. IBEC thanks the joint committee for the opportunity to provide a written submission to it on the heads of the industrial relations (amendment) Bill 2014.

IBEC is slightly different from the CIF is that it is representative of member companies across all sectors and all industries and therefore has a different view in respect of the heads of the Bill that have been produced. IBEC has a number of key observations and recommendations that it would like to draw to the attention of the committee.
IBEC welcomes the introduction of a proposed wage setting mechanism that would have some statutory force but would like to see it balanced with a mechanism that is both appropriate and sustainable. In the first instance I will deal with the heads in Part 2 of the Bill. I have a couple of small issues with the heads of the Bill and make the following proposals.
In regard to head 5, IBEC is concerned about the lack of requirement to specify when a registered employment agreement would cease to have effect. I respectfully submit that this head should be amended to provide that the court shall not register an employment agreement unless it contains a provision that specifies when it will come to an end. Employers would be unlikely to enter into an REA where it felt there was no end date. Given the potential that an REA could be varied without the consent of an employer, again that would be an important factor in coming towards an REA in a positive way. IBEC believes that every REA should have a termination provision in order that it would be drawn to a conclusion at a particular point in time.
The issue with head 6 is that no consent is required to vary an REA. This head would give the Labour Court the power to vary an REA which has already been made, even where the employer and the union concerned are not agreeable to that variation. IBEC respectfully submits that the agreement of the parties should be required before REAs could be varied, except in cases of force majeure, such as a major economic crisis. IBEC proposes that, in Part 2, the court could not vary a termination provision to ensure that an REA would last forever and that the head would be amended to preclude that as a possibility.
In Part 3 of the Bill, the definition of "remuneration" is set out in head 12 and it creates a material difference between the registered employment order, REO, and the joint labour committee-employment regulation order, JLC-ERO, systems. IBEC would be concerned about the likelihood of forum shopping, something it has seen in other areas of employment law and industrial relations. This head proposes to define remuneration to include matters such as basic pay, piece work, overtime, Sunday premium and travel time. We have concerns that a definition would extend the scope of registered employment orders beyond the scope of what is already contained in JLC-EROs and bring about the danger of forum shopping. Joint labour committees, JLCs, are not empowered to make recommendations in respect of Sunday premium and we submit this head should be amended to reflect the same provisions.
In head 14, the registered employment order application mechanism does not require the agreement of those to whom it applies. The proposed absence of a requirement for agreement is a radical departure from the former REA mechanism. The issue arises that this may give greater rise to challenge on constitutional grounds than the former system.
One of the failings of the former system was that some relevant employers could have an REA imposed on them. Under this new proposal, all relevant employers could have an REO imposed on them, as no agreement is required from either the employer side or the employee-trade union side for any level of agreement on what is proposed in an REO. IBEC is concerned that significant constitutional issues may arise. I have some proposals to address that and I will do under head 21.
In head 18, there is a lack of clarity about evidence the court would require to establish substantial representation. The head proposes to permit the court to specify documentation which tends to confirm whether an applicant for an REO can establish that it is "substantially representative" of the workers or employers in question.

A provision might need to be made in relation to the provision of that evidence. We submit that such provision could extend to requiring applicants to swear to statutory declarations about the relevant numbers of members or workers, as the case may be, who fall into the relevant categories. Provision for statutory declarations of this type is already included in the proposed amendment to the Industrial Relations (Amendment) Act 2001.

Head 21 relates to recommendations to the Labour Court. As I have said, IBEC's fundamental concern about the heads of this Bill is that they would facilitate the imposition of a registered employment order even if most or all of the affected employers opposed the order. We suggest that head 21 should be amended to provide that "the Court shall not make a recommendation if it is satisfied that trade unions representing, or the employers employing, a substantial number of the affected workers do not support the proposed recommendation". This fundamental protection would prevent the court from making a recommendation unless there is substantial agreement from relevant trade unions and employers. However, it would not mandate that a recommendation would be agreed simply because there is agreement. Other principles and policies would still have to be considered in the normal way to ensure any registered employment order that eventually came out adhered to those principles and policies. In the absence of such a protection, the court would have unduly broad powers to set wages in all sectors of the economy.

We have an issue with the adequacy of the principles and policies under head 21 in regard to the proposing of a registered employment order. One of the fundamental reasons the two former wage-setting mechanisms were struck down was the absence of sufficient policies and procedures to guide the court in making subordinate decisions. The Industrial Relations (Amendment) Act 2012, which restored the joint labour committee and employment regulation order system, provided detailed principles and policies for joint labour committees. Eleven policies and procedures were provided for to guide the committees in making their decisions. We believe it would be reasonable to expect the new legislation governing registered employment orders to contain similar provisions. However, the new legislation that is proposed includes just four of the 11 policies and procedures set out in the 2012 Act. For that reason we are concerned that the new proposals significantly dilute the principles and policies in question.

This dilution occurs in the context of the proposed new registered employment order mechanism, which will place an extraordinary level of decision-making in the hands of the Labour Court. The court will not have the constraints that apply under the joint labour committee and employment regulation order system. Under that system, proposals for an employment regulation order must be formulated by the joint labour committee. The court may accept or reject the committee's proposals - it might make recommendations to the committee about the content of the proposals – but it may not substitute its own views for those of the joint labour committee. We are suggesting that where the court has these broad powers, it is extremely important for them to be guided by further policies and principles. There is no requirement for agreement to be reached in the setting of a registered employment order.

We believe it is particularly important for the guiding principle in relation to competition between enterprises in the member state and enterprises in other member states to be reinstated in the consideration of a registered employment order. The court should have regard to the general level of wages in enterprises in any other member state and take account of the cost of living in the member state as set out. A wage-setting proposal is a very draconian measure. Given the broad scope of a registered employment order in any industry or sector, we think it is important for the competition consideration to be set out. It will not always be the case in every sector of industry that other legislation will be in a position to amend or contain that, as it would be for posted workers in the construction sector, for example. We need to take cognisance of the competitive markets that are in force in that sector and other sectors that are in operation in the Border counties.

We believe the court should not make a recommendation unless it is satisfied that it is in the public interest to do so. The court should always have a wider view of the public interest when it is making a wage-setting recommendation. It would not be sufficient for it to confine its consideration to the sector involved.

The potential imposition of pension schemes that are not in line with public policy is a key issue to be brought to the attention of the committee under this head. In the past, the wage-setting mechanisms under the Industrial Relations Acts included pension provisions that would certainly not meet modern-day standards. We suggest that the court not make a recommendation in respect of a pension scheme unless it is first satisfied that the request is in a form that is in compliance with national pensions policy.
On head 24, pertaining to a decision by the Minister, the lack of ministerial discretion to decline to register an REA is a matter of concern. We respectfully submit that such a provision would undulyfetter the power of the Minister and would amount to undue delegation of legislative power to the court. We suggest that the head be amended so the Minister would be obliged to make an order only in certain circumstances. As it stands, the Minister would be required to make the order even if it were contrary to public policy, if it would create an unacceptable cost to the State, if it had the effect of causing indirect discrimination or if it caused Ireland to be in breach of international treaty obligations. The Minister should have unfettered discretion to decline to make an order. Furthermore, Ibec believes the Minister should have a positive obligation to be satisfied that making the order is in the public interest before he or she makes any such order.
Head 27 concerns compliance and enforcement provisions. Our submission indicates there are excessive measures being proposed to enforce compliance with REOs. This head proposes that compliance with REOs is to be addressed through the adjudication process, compliance notices and fixed-payment notices, as provided for in the Workplace Relations Bill. We have already raised this in the context of that Bill. However, we submit that employment law is not an appropriate area of law for fixed-payment notices to be introduced, and that the criminal element of the compliance notice regime is not an appropriate system for employment enactments. We propose that provisions for compliance and enforcement notices be removed from both the Workplace Relations Bill and head 27 as there are already sufficiently rigorous provisions within the workplace relations structure to deal with any such issues that arise.