Mr. Denis Sheridan:

I thank the Chair and the committee for the invite. I am here to discuss the implications of how the Transnational Information and Consultation of Employees Act 1996 and the recast legislation of 2011 were transposed into Irish law. The Acts are derived from the EU Directive 1994/45/EC and the recast Directive 2009/38/EC on the establishment of European works councils, EWCs. The purposes of the directive and Acts were to set in place procedures for multinational companies based in the EU to inform and consult with their employees. Each EWC that is established is subject to the law of a member state where central management is based, but in cases where the central management is based outside the EU, it can nominate a legal base or member state of its choice.

Prior to Brexit, the UK was a popular destination but since then, more and more companies are using Ireland as their legal base. In 2019, in the pursuance of a complaint against a multinational entity, SIPTU discovered anomalies within the legislation and in particular the redress pertained in the Act. SIPTU contacted the then Department of Business, Enterprise and Innovation and was requested to highlight the issues, which SIPTU did but received no further response from the Department. This was concerning as SIPTU could see that Ireland was the most likely destination for EWCs after Brexit. SIPTU engaged with a number of politicians on the matter and it was raised in private questions where the Government stated it believed the legislation was fit for purpose. SIPTU then wrote to the Tánaiste, Deputy Varadkar, whose response was that the legislation would be reviewed but again nothing was forthcoming. SIPTU was left with a scenario where it had to write to the Minister requesting that he proceed with the investigation of a multinational company for breaches of the EWC legislation, rather than the employees' representatives concerned utilising Ireland’s industrial relations resolution mechanisms. Further to this, and on behalf of workers in Ireland, SIPTU had no alternative but to make an official complaint to the European Commission on 8 March 2021 about how the Government transposed the EU directive. The European Commission informed SIPTU that it had sent a letter of formal notice to the Irish Government on 19 May 2022 stating it had initiated an infringement procedure against Ireland on the matter.

As more multinational companies move their European works council legal bases from the UK to Ireland, it has become clear that the legislation is simply not adequate to deal with the disputes arising from it. Issues include a dispute resolved within the legal framework and penalties and punishments for breaches. As the normal State industrial relations resolution mechanisms do not apply here, as with all other worker legislation in Ireland, by submitting a complaint to the relevant Minister under this legislation, it will be heard under criminal law before the District Court. Herein lies a number of problems. First, on receipt of application from employee representatives in two member states, the company has six months to begin the process of setting up a EWC and to provide all relevant information concerning the company. Application of complaint for breaches in the first instance must be made to the Minister, who in practice will send it to the Workplace Relations Commission, which will then appoint the labour inspectorate to investigate the complaint and to decide if a criminal case must be taken. To date, no cases have been taken to court. This is the pattern of all complaints made under the legislation, leading to major delays in the resolution of complaints.

Second, after an application for an EWC is received, after three years have elapsed since the original application, the company has six months to apply the requirements of the second subsidiary requirements of the legislation for the formation of a EWC. It may take a further two years for a criminal case to be heard at the District Court so in theory, we are looking at the possibility of no action being taken against the company for failing to provide workers with their rights for up to six years after the original application. There have been instances recently where requests of the State industrial relations resolution mechanisms and the Workplace Relations Commission to engage with companies for the purposes of resolving and setting up a EWC have been ignored.

Third, we also understand there is also a particular issue in respect of regulations not being made under section 7 of the Act. These regulations are required to enable the Minister to appoint arbitrators under sections 20 and 21 of the Act in the not-uncommon event of disputes over confidentiality and application of agreement. This feeds into what we have learned recently, namely, that the punishments for such breaches are not sufficient to act as a deterrent for potential breaches. On discussion with several relevant bodies, SIPTU has established that at the District Court, cases currently heard carry a maximum fine of €1,500. The reality is the company does not have to attend but only to send a representative and there is genuine fear that judges, who have no previous precedent to rely on, will penalise companies in the first instance, with fines ranging from as little as €100 upwards. This goes against what the European directive states in Recital 35 which states "The Member States must take appropriate measures in the event of failure to comply with the obligations laid down in this Directive" and in Recital 36, which states "In accordance with the general principles of Community law, administrative or judicial procedures, as well as sanctions that are effective, dissuasive and proportionate in relation to the seriousness of the offence, should be applicable in cases of infringement of the obligations arising from this Directive.” Where is the deterrent and pressure to afford workers their legal rights if fines are as little as a €100? When this is measured against the fines imposed in other EU member states for breaches of the legislation, it is not adequate, as fines imposed in the courts of other EU states range from €15,000 to €50,000. This makes Ireland an attractive proposition when companies wish to move their EWC legal base. Irish law speaks about fines not exceeding €1,500 on summary conviction or a maximum of €10,000 on conviction on indictment. How could the Irish maximum fine be regarded as effective, proportionate, and dissuasive?

In conclusion, these issues not only affect workers in Ireland but all workers in Europe whose company has a EWC with a legal base in Ireland. SIPTU has at all times requested the legislation be brought in line with the industrial relations resolution mechanisms of Ireland, like all other worker legislation. For collective disputes, conciliation or mediation should be used in the first instance and when required, sent on to the Labour Court for a binding decision. We also request that the penalties for breaches are reviewed as SIPTU does not believe the current punishments are fit for purpose.