Frank Fahey (Galway West, Fianna Fail)

I welcome the opportunity to contribute to this Bill and I compliment the Minister of State, Deputy Dara Calleary, and his officials on introducing it. It is timely, not least in the context of the downturn in the economy and the need for a modernisation of labour legislation, but for a much more flexible approach than we have seen in the past. I want to dwell on the inability to pay provision and I very much welcome the Minister of State's intention to introduce an amendment in this regard on Committee Stage.

At the outset, as a former Minister of State with responsibility for labour affairs, I very much stand by the absolute requirement that workers are adequately paid and properly compensated and that workers' rights are protected. That must continue to be the bedrock of our employment legislation. I have always felt strongly about the need for strong unions and strong representations to ensure workers' rights are protected and that any type of race to the bottom, such as we have seen in this country in the past, would be prevented. This is not the purpose of this legislation or the inability to pay clause, but we must start to be realistic about our employment situation in the light of the current crisis in employment and in business generally.

There are many pressures on employers in a number of sectors who are currently experiencing, as a consequence of the absence of proper procedures, very significant difficulties. I receive complaints from employers who have NERA calling into their places of employment, stating it will bring them before the courts if they do not pay in accordance with registered agreements. There might be some case for that in good times but, at a time when companies in many sectors such as catering, retail and construction are struggling to survive, it is ludicrous for a State agency to do such work. There must be flexibility and, consequently, the inability to pay clause is of major significance.

The existing system for the making of both employment regulation orders and registered employment agreements must be improved to provide for their much more effective operation. Given so many recent challenges in the courts, no doubt this Bill will provide for a number of amendments to the existing legislative framework surrounding the GLC and REA systems. I particularly welcome the improved procedures that will be brought about, the clear principles that will be enunciated and the policies which now must be taken into account by the GLCs when they are formulating proposals for the EROs.

It is also important to point out, as the Minister of State has done, that the joint labour committee and registered employment agreements are now coming into line with the procedures already established under the National Minimum Wage Act 2000, which allows individual employers to submit inability to pay claims to the Labour Court for adjudication. In my view, the proposal that the joint labour committee and the registered employment agreement system be brought into line with the procedures that allow individual employers to submit inability to pay claims to the Labour Court for adjudication is a good one. These situations have always featured in national pay agreements and it is interesting that they have never been invoked.

However, the most important aspect of all of this is that any cut in hourly rates will need the consent of the majority of workers. The Tánaiste and Minister for Enterprise, Trade and Employment has pointed out that the clause will not be a diktat for employers and it would have to be negotiated with workers. This is a critically important part of what I would like to see in this legislation, that there must be agreement with the workers involved if there is to be a cut in pay rates. I refer mainly to cuts in pay rates which are far above the minimum wage. I do not for one moment anticipate that in many sectors the minimum wage would be breached, although there are some sectors and companies, particularly in the hospitality business, where minimum wage rates are causing some difficulty at present.

I would certainly not like to see a major breach of minimum wages. In individual companies and sectors where it is a question of trying to stay in business, there may be some arguments. Indeed, we hear continuously from employers the argument that the minimum wage should be discontinued, but I do not agree. It is important that we keep it, but it is also important to allow some flexibility where it provides employment which otherwise would be lost or ensures that companies which would otherwise go to the wall can remain in business.

I want to dwell more on pay rates which were far above the minimum rate and, in particular, I want to deal with the situation in the construction industry. There is no justification in this climate for some of the rates being paid in the construction industry. I have just checked with some people in the industry and the registered agreement for the construction industry stipulates a basic rate of €15 per hour and time and a half after 39 hours. In the current climate, where companies are struggling, where companies are on State contracts, which have very much changed recently, and where the State is paying, I see no reason workers who are prepared to work for less than that amount in order to keep their jobs should not be allowed to do so.

The basic labour rate in London is £11 per hour. That is a flat rate. There is no time and a half for overtime.

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