Mary Coughlan (Donegal South West, Fianna Fail)

I move: "That the Bill be now read a Second Time."

First of all, I would like to take this opportunity to describe the context of this Bill. FÁS, as the national training and employment authority, has the remit to provide a range of proactive job-related services, supports and programmes to assist individuals to remain in and return to the labour market. The agency also promotes workforce development by upgrading the competencies and qualifications of individuals and by providing and facilitating targeted training programmes and services to both employees and especially to the unemployed. FÁS, as such, is a key agency in the Government's plan to fight unemployment and ensure that workers do not become distanced from the labour market.

Last month, the live register fell by 16,500 people. This was a welcome development and was the first decrease in the live register figures since September 2008. However, despite this decrease, 423,600 people remain on the live register and the Government is committed to continuing to provide these individuals with the necessary assistance during this difficult period so that they can return to work as quickly as possible.

On an ongoing basis, significant numbers of unemployed persons leave the live register. From October 2008 to September 2009, some 150,530 people are recorded as leaving to commence employment. This is a positive trend that shows there are still jobs available and that the Government's activation measures are assisting the unemployed to develop their skills and secure employment.

In that context, I would like to highlight some of the achievements of FÁS in 2008 in order to illustrate the scale of work being carried out by the organisation. Under training in employment, 26,100 apprentices were trained to meet future craft skills needs. In addition, some 32,400 employees were upskilled in priority skill areas, including management skills and ICT. Under training for the unemployed, 7,900 people received specific skills training, while 12,800 received training in foundation skills.

Under employment programmes, 24,400 people were on a community employment or job initiative programme as at 31 December 2008. Under employment services, FÁS employment services received notification of 96,000 job vacancies. Some 60,000 were referred to FÁS in 2008 from the live register of which 41,000 were interviewed and approximately 34,000 had left the live register by the end of the year.

I am working closely with my colleagues, the Minister for Social and Family Affairs, Deputy Mary Hanafin, and the Minister for Education and Science, Deputy Batt O'Keeffe, to ensure that appropriate responses are developed and put in place to meet the upskilling needs of those who are losing their jobs or facing uncertain employment prospects.

The fact that there were problems in one area in FÁS does not in any way reflect the work of the majority of FÁS staff, who are hardworking and committed to their role in supporting those who avail of the training or employment activities of the organisation. I would like to acknowledge the excellent work carried out by them. Their commitment and professionalism are crucial in helping us to deal with the key labour market challenges currently facing this country.

Effective governance in any organisation is fundamental to efficient and cost-effective delivery of services. Effective governance flows from the board of an organisation and it is with this in mind that I propose to make a number of structural changes to streamline the board of FÁS. It is my intention that the board will comprise members who have the necessary expertise and competencies to lead FÁS proactively in the current economic environment.

It is against this background that I am bringing the Labour Services (Amendment) Bill 2009 before the House for its consideration. This Bill is part of my response to ensure that FÁS is fit for purpose and operates under the highest standards of corporate governance.

I propose to offer some general observations on the rationale and general principles informing the content of this amending legislation, and then proceed to summarise the provisions of the Bill. I appreciate that Members will have greater opportunity to explore the provisions in more detail on Committee Stage, to which I look forward.

The Labour Services Act 1987, which established FÁS, was enacted more than 20 years ago and in that intervening period there has been a sea change in the worlds of corporate governance and public service ethics. One of my aims in this Bill is to introduce current best practice in these areas into legislation in order to improve and update the corporate governance structure in FÁS. The Bill also takes account of the recommendations contained in the Committee of Public Accounts' fourth interim report on special report No. 10 of the Comptroller and Auditor General and FÁS 2007 accounts, and the work of the Comptroller and Auditor General.

The board of FÁS as it is currently constituted is considered large and unwieldy by any standards. Therefore, I propose to reduce the size of the board from 17 to 11 members, including the chair. As part of this process, I also intend to change the composition of the board. The board will be appointed on the basis of relevant experience and competencies in areas such as the functions of FÁS, finance, corporate governance and public administration. This will be a move away from the current system where a number of board members are nominated by bodies not accountable to the Oireachtas. In addition, the Bill provides for a system of rolling appointments and resignations of board members. Experience has shown that this system has the dual benefit of preserving corporate knowledge and, at the same time, bringing new ideas to a board.

The Minister for Enterprise, Trade and Employment will appoint the members of the board in consultation with the Minster for Education and Science and the Minister for Social and Family Affairs.

I also propose to include the director general of FÁS as an ex officio member of the board as is standard practice in other agencies under my remit, such as IDA Ireland and Enterprise Ireland. The inclusion of the director general on the board of FÁS will improve the lines of communication between the executive and the board. This will assist the board in its deliberations on often complex and varied matters.

At present, there is considered to be a lack of clarity around the accountability of the director general of FÁS to the Oireachtas. In order to resolve this matter, I have included provisions in the Bill which set out quite clearly the accountability of the director general to the Committee of Public Accounts and other committees of the Oireachtas.

FÁS has a significant annual budget and it is important that its spending is directed in a way that is both transparent and provides value for money. External contractors provide a number of services to FÁS and it is in this context that I have included provisions in the Bill that will prohibit staff and board members from engaging in procurement matters where a conflict of interest exists. These provisions also provide for appropriate penalties where these rules are broken, including dismissal for members of staff and the removal from the board of board members.

Wrongdoing can take place in large organisations in both the public and private sectors, even where proper internal financial control structures are put in place. It is against this background that I also considered it important to include provisions in the Bill that would protect bona fide whistleblowers from reporting wrongdoing at any level within the organisation.

I now propose to summarise the main provision of the Bill and these will be examined in more detail on Committee Stage.

Section 4 provides that the director general of FÁS shall be accountable to the Committee of Public Accounts. He shall, when required, give evidence to the committee on the regularity and propriety of the following: transactions recorded in any accounts of FÁS subject to audit; the economy and efficiency of FÁS in the uses of its resources; the systems and procedures employed by FÁS for the purpose of evaluating the effectiveness of its operations; and any matters affecting FÁS in a special report of the Comptroller and Auditor General.

As is the norm in these provisions, the director general shall not express an opinion on the merits of any policy of the Government or a Minister of the Government. Section 5 provides that the director general of FÁS shall be accountable to all other committees of the Oireachtas. This section provides for the him or her to attend any committee appointed by either or both Houses of Oireachtas and give an account in respect of matters concerning the general administration of FÁS that fall within the terms of reference of that committee. This section also provides that the director general is not required to attend to give an account to an Oireachtas committee of any matter that he or she is of the opinion has been, is or is likely to be the subject of proceedings before a court or tribunal in the State unless, on foot of an application by that committee, the High Court determines otherwise.

Section 6 provides for a number of requirements relating to disclosure and conflicts of interests in respect of the members of the board and staff of FÁS. Under the provisions of this section, a board member must declare a material interest in any matter relating to a contract or arrangement that comes before the board. Following such a declaration, he or she must absent himself or herself from the meeting, take no part in any deliberation on the matter and not vote on a decision relating to the matter. Similar provisions are included in this section in regard to staff members in FÁS. A staff member must disclose any material interest that he has in any potential agreement, contract or arrangement and must not take part in any negotiations or deliberations on this matter. In addition, he or she must not influence or seek to influence or make recommendations on the matter. The legislation provides that where a staff member contravenes this section, FÁS may take appropriate action against that person including termination of that person's contract. The sanction against board members who contravene the provisions of this section is contained in section 9 and provides for the removal of the board member by the Minister.

Section 7 provides protection from civil liability to employees of FÁS who make a bona fide report of offences being committed under any enactment or any serious wrongdoing being committed in regard to FÁS to the Garda or a member of the board. It also provides protection to employees who report contraventions to the Minister of directions given by the Minister. This section introduces a prohibition on the penalisation of employees who report offences being committed, serious wrongdoing or contraventions of ministerial directions. Penalisation in the context of this section means suspension, lay-off or dismissal or the threat of suspension, lay-off or dismissal; demotion or loss of opportunity for promotion; transfer of duties, change of location of place of work, reduction in wages or changes in working hours; imposition of any discipline, reprimand or other penalty; and coercion or intimidation. This section also makes it an offence for staff members of FÁS to make reports in bad faith to the Garda, members of the board or the Minister.

Section 11 provides for redress for penalisation contrary to the provisions contained in section 7. This section sets out the structure by which an employee of FÁS may seek redress if he or she is of the view that he or she is being penalised for reporting wrongdoing in the organisation. Employees may make a complaint to a Rights Commissioner if they consider that they are being penalised by FÁS for reporting breaches of legislation or serious wrongdoing relating to the organisation. Following investigation of the complaint, the Rights Commissioner will make a decision on the matter. Either party may appeal the decision of the commissioner to the Labour Court. Where FÁS does not carry out the terms of the decision of the Rights Commissioner, the employee may bring a complaint before the Labour Court to seek a determination to have the terms of that decision effected. In the further event that FÁS fails to carry out the terms of the Labour Court determination, the employee may make a complaint to the Circuit Court for an order directing the organisation to carry out the determination in accordance with its terms.

Section 8 is an amendment to section 13 of the Labour Services Act 1987 to provide for the removal of the prohibition on the disclosure of information obtained by a member of the board in the course of his or her duties in certain circumstances. The current legislation prohibits the disclosure of information with limited exceptions. This amendment will permit the disclosure of information specifically to the Minister for Enterprise, Trade and Employment and will remove any doubt about there being a legal barrier to a member of the board reporting issues of concern to the Minister.

Section 9 provides for restructuring the board of FÁS in a number of ways. The board is considered large in comparison to many non-commercial semi-State boards and, to streamline the board, it is proposed to reduce its size from 17 to 11, including the director general as an ex officio member and a chairman. The Bill will provide for a departure from the current model of 17 members where nominations can be made by other bodies to a model of 11 members where the Minister for Enterprise, Trade and Employment, in consultation with the Ministers for Social and Family Affairs and Education and Science, will select the chairman and nine ordinary members based on their ability and experience, the other member being the director general. Due to a reduction in the size of the board, the quorum for a meeting will be reduced from nine to seven. Nominations to the board will be based on relevant experience and competencies in the following areas: the functions of FÁS or finance, trade, commerce, corporate governance or public administration. Membership of the board will be limited to two terms of not more than five years each. In addition, to facilitate the development of fresh ideas and experience, this section provides for a rolling system of appointments to the board.

This section also includes a provision to amend paragraph 12 of the First Schedule of the Labour Services Act 1987. The purpose of this amendment is to update and strengthen the regulations surrounding the dismissal of a member of the board and it is in keeping with current legislation in this area. The amendment provides that the Minister may remove a member of the board for the following reasons - the member is not adequately performing his functions; a material conflict of interest exists in the performance by the member of his or her functions; the removal of a member is necessary or expedient for the effective performance by FÁS of its functions; or a member of the board has contravened the provisions relating to disclosure of interest as provided for in section 6.

Section 10 provides for the repeal of Part II of the Schedule to Labour Services Act 1987, as employees of FÁS will no longer be appointed to the board following election as described in the Schedule.

Members will have greater opportunity to explore the Bill's provisions in more detail on Committee Stage, something to which I look forward. The Bill will require technical drafting amendments, which I propose to bring forward on Committee Stage. My introduction of this legislation sends a clear message to the public and to FÁS itself that I want to restore public confidence in its ability to deliver its training and employment mandate. I commend the Bill to the House.

See this speech in context