Joe Costello (Dublin Central, Labour)

I am pleased to have the opportunity to speak on the Industrial Relations (Amendment) Bill 2009. The current economic difficulties have resulted in many sectors launching a sustained attack on important areas such as the minimum wage. I was glad to hear speakers on both sides of the House express a decent degree of support for the retention of the minimum wage, which many employers are questioning. It would be very wrong if we were to go down the road of tampering with the minimum wage and the minimum wage legislation.

Last year we put NERA on a statutory basis which was part of the Towards 2016 agreement reached by the social partners. Sadly, the social partnership is no longer in place because of Government measures in the recent budget and Government failure to proceed with the negotiations in regard to it. I was appalled by the level of opposition to putting NERA on a statutory basis. The reports of NERA show just how unscrupulous are some employers, who are using and abusing some of the most vulnerable workers in society. NERA is now a statutory watchdog. It is extremely important that we take care of people in the lower levels of employment, that is, people on the minimum wage or slightly above it who may or may not be represented by a trade union, in particular during a period of economic difficulty, because they are the vulnerable people in our society.

We now have a situation whereby there are sustained attacks on this framework of legislation, including employment regulation orders and registered employment agreements, which have been instanced in the legal and constitutional challenges brought by employers to try to undermine this element of the industrial relations framework, which is a shame. Not long ago the word was there were more dog wardens than inspectors in the construction industry. That situation has improved. There was a target of 90 inspectors and I understand some 75 are currently in place. It is unfortunate they were not there when the construction industry was rampant and all sorts of abuses were taking place therein. All sorts of dangerous practices have resulted in an inordinate number of injuries and fatalities. That is the other side of the coin.

At the current time some 700 top public servants are now retaining a 5.5% bonus while people at the very bottom of the public service, such as clerical officers, are having a 5% reduction in their wages after they earn the first 50 cent. We still have grave inequalities in the way in which we conduct our business. It important that we have a solid, legally-based industrial relations framework which will protect the most vulnerable in our society because many sectors are not properly unionised and many people, particularly in times of difficulty, can be abused and used by unscrupulous employers.

For that and other reasons I welcome this Bill, the purpose of which, according to the explanatory memorandum, is to strengthen the existing system for the making of employment regulations orders, EROs, and registered employment agreements, REAs, and to provide for their continued effective operation. The Bill also provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990. EROs and REAs have been in operation since 1946 and regulate the terms and conditions of an estimated 300,000 workers at present, a figure we would like to see examined carefully because we know there has been an inordinate increase in recent years but we do not know to what extent.

The minimum pay and conditions of employment in low paid sectors where collective bargaining is poorly developed are negotiated and drafted into an ERO by the joint labour committee. These terms and conditions are legally binding and apply equally to union and non-union employment, which is the strength of the EROs, when approved by the Labour Court and are transposed into law by the Minister for Enterprise, Trade and Employment, a new role which will be given to the Minister. In contrast to EROs, REAs are collective agreements negotiated by the trade union movement and employers in a particular industry or business and registered with the Labour Court. They also apply to all workers and employers in that industry.

The system has stood the test of time in protecting Irish workers against unscrupulous employers who are only interested in profit and a race to the bottom in terms of wages and ensuring there is a decent wage for a decent level of work. They are also automatically applicable to contractors based outside of Ireland and can be enforced against such contractors. Thus, these instruments protect against unfair and unscrupulous cross-border competition and a race to the bottom for wages. In recent years employers have engaged in constitutional and legal attacks on the system. In Towards 2016 the trade union movement persuaded the Government to introduce legislation to protect and secure the system against legal challenge.

From a worker's viewpoint the JLCs, EROs and REAs are valuable industrial relations mechanisms. They apply to categories of workers who are generally above minimum wage rates and below unionised rates in fraught and precarious areas of employment. They are good ways of collectively vindicating workers' rights. As a result of their binding nature on all employers they provide a strong barrier against a race to the bottom. This point became particularly obvious in the debate on the first Lisbon treaty referendum and demonstrated that Ireland had a more robust system of worker protection than many other European Union countries due to the legal underpinning of the orders and agreements.

However, employers at home and abroad have been seeking to undermine that legal protection. The debates on the first referendum on the Lisbon treaty were very focused on workers' rights. Some 40% of those who voted against it stated one of the main reasons for this was because of their fear that the Lisbon treaty would result in an undermining of workers' rights. They pointed to the lack of legal protection for workers' rights in vulnerable areas in other countries. Sweden, Finland, Luxembourg and Germany did not have the same type of protective measures in place. They were unable to apply and connect the system directly to the Irish situation, largely because of EROs and REAs. Nevertheless, because the situation was not properly explained it resulted in a significant number of people who would be sympathetic to a good legal statutory structure of industrial relations voting "No" in the first Lisbon treaty referendum. That was something which we argued and the legislation which was being introduced to strengthen it was also an argument put forward in the second Lisbon debate and carried a lot of clout. It is another reason we should make sure the agreements to which I refer have a strong underpinning. . A number of challenges have been taken, most notably a constitutional action by the Irish Hotels Federation in 2007. Thus, the present legislation is a welcome measure to tighten the legal and constitutional basis of the system. Despite that, it is time to examine, regulate and overhaul the JLC system. For example, the last official estimate of the number of workers covered by the system was 162,000 in 1999, more than ten years ago. It had increased enormously since the previous ten years. The increase is largely due to the huge boost in the economy and the massive increase in the service, hotel, tourist, catering and construction industries in recent years, as well as the unprecedented expansion in the economy.

I understand the current estimate being compiled estimates those working in the industries to which I refer at between 156,700 and 461,600, or 9% and 25% of total employment in Ireland. It is a huge disparity. We do not have accurate figures on the number of REA, EROs and workers affected by them, and the difference between the different ones which have been negotiated. A significant job of work is required to put a proper database and audit of the system in place. We need information and an audit of the number of practices in order that we can streamline the system. This is an area which the Minister should address as a priority. In the context of this Bill it would be very valuable if we had all of the information, which we do not currently have, to hand. I hope it will be done shortly, because we should consider the extent of the workforce which is affected by this Bill.

The Minister received a submission from the Irish Congress of Trade Unions shortly after the Bill was published in 2009 which expressed support and some concerns. The delegates expressed their support, and some of their concerns, to the Minister of State. Of particular concern were remarks made by the Minister of State to the effect that he was considering introducing an inability to pay clause which would allow an exemption from the requirements of the ERO-REA. He said the Government was thinking along those lines. The danger in having such a condition is that application for the exemption would become the norm in the armoury of every employer and the bottom line payments across the board, which characterise the ERO-REA, would be frustrated. With an inability to pay clause, the legal integrity of the ERO-REA system might be frustrated and if this exemption were to be created the system would require a great deal of care.

The Irish Congress of Trade Unions listed a number of other concerns which I wish to place on the record in summary fashion. First, ICTU feels that the provision of exemptions will encourage and reward unfair cost competitions, as companies will tender, even for public procurement, on the basis of the exemptions. This will have the effect of increasing all companies' inability to pay because any company that factors the full rate of the REA-ERO into its tender will be put at a disadvantage. The procurement system would itself immediately distort the entire process.

Second, the safeguards are too easily evaded. For example, the provision that the majority of workers must agree to an exemption will not offer robust protection in employments where there is no trade union. It is easy to imagine the type of pressure that might be exerted on workers to agree to their employer being given an exemption. Here again we would bring an unwanted factor into the equation.

Third, the safeguard whereby an employer would be granted an exemption only once can be avoided by recasting the company and thus easily disguising repeat applications for exemptions. This is a particular worry given the contracting-sub-contracting and phoenix-like features of the construction sector. We know very well how companies can restructure themselves and use the system if the opportunity is present.

Fourth, the proposed method of establishing inability to pay, namely, that the Labour Court must be satisfied the employer is unable to pay and is likely to lay off workers or terminate their employment, is much easier to establish by contractors in poorer EU member states. This could give rise to unfair and inappropriate cross-border competition. In other words, the very strength of the ERO-REAs in the 27 member states and some other countries would be undermined because poorer countries could plead inability to pay much more easily than, for example, strong companies in this country.

Fifth, there is no limit to the amount below the ERO-REA that the Labour Court will exempt an employer from paying or providing. There are particular concerns about how exemptions will interact with pension obligations and other entitlements set down in the agreements. Again, we must ask what is the bottom line.

Sixth, the proposed duration of the exemption is too long - at between 3 months and a year - as construction contracts regularly last for periods less than a year. This again is an avenue for undermining the EROs and REAs.

I offer as an example, the recent high profile case of the popular Italian restaurant, Carluccio's, on Dawson Street, which demonstrates how external factors can impact on employment and wages. The retail sector in this prime Grafton Street area has plummeted in business activity but commercial rents have remained similar to what they were in the heady days of the Celtic tiger. Most of the retailers in this area not far from Leinster House are up in arms about the incredible rents they are still expected to pay. Although it continued to do good business Carluccio's could not reduce its prices, pay staff and pay the rent and so it was forced to close its doors. A viable business, even in these hard times, was shut down. Happily, a compromise was reached with the landlord on the rent issue, the restaurant was reprieved and is again open. However, very many other retail outlets in the general area have closed because of excessive rents. The landlords in this High Street area are mainly large companies and pension funds and are based abroad. They do not know the situation on the ground in this country and they do not care. They want to get the return on their pension funds or for their shareholders. That is a feature of the High Street rents just down the road. An inability to pay exemption would allow the ERO-REA to be breached and permit a race to the bottom but would do nothing about the real cause of the problem - the exorbitant rents being charged in these difficult times. This is not a single issue but is much broader in terms of how we must deal with keeping down prices in this economic climate.

The amendment to the definition of worker is extended to include workers in the Vocational Educational Committees, VEC, who are other than teachers, to enable them access the dispute settling agencies, namely, the Labour Relations Commission, the Labour Court and the Rights Commissioner Service. That is reasonable because at present they have access only to a scheme of conciliation and arbitration and they should have the expanded access. However, any future change, according to this legislation, will be made possible only through fresh primary legislation rather than by statutory instrument. Even though I am not a proponent of the statutory instrument, nevertheless this requirement will result in a lengthy parliamentary process and the workers concerned will undoubtedly experience a considerable and unnecessary delay before the new definition is in place. There is a balance to be arrived at between protecting the worker and allowing a procedure that may go on for months or years. This seems to be an area where a ministerial order would be appropriate, as with a statutory instrument, unless there were a particular aspect to a case that would require primary legislation..

There is need to address the totally unsatisfactory situation whereby workers who retire are denied recourse to the employment rights mechanisms unless they refer their claim prior to retirement. This is an anomaly in the legislation. An amendment should be tabled and we should address the situation. Retired workers are exactly that and deserve their rights as workers. The legislation should be amended to provide a facility for those workers to have their grievances heard and examined.

The industrial relations architecture which contains employment regulation orders and registered employment agreements has served workers, the country and employers well for more than half a century. I welcome the legislation's main thrust which is to strengthen this legal framework. However, it would be short-sighted if the minimum wage were to be threatened in the present economic recession and if agreed minimum rates negotiated between employer and trade unions for the most vulnerable workers in our society were to be undermined.

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