Dara Calleary (Mayo, Fianna Fail)

I thank the Deputies who spoke today and on the previous occasions for their contributions. I thank my departmental officials for attending and listening. We have noted many ideas and themes from the debate. There is general agreement about the main objectives of the proposed legislation. A common theme of the majority of contributions has been the importance of maintaining protection for the most vulnerable workers and ensuring that the existing mechanisms for making employment regulation orders and registered employment agreements operate effectively and are seen as being fit for purpose.

While this particular measure constitutes only one part of a suite of measures intended to strengthen the protection of the rights of employees and to secure greatly increased public confidence in the system of compliance, Deputies emphasised a need to reform the State's architecture providing avenues for redress of workers' grievances and have argued that the current system is excessively complicated for employees and employers alike.

There has been a general welcome for the proposal to establish Oireachtas scrutiny of EROs and REAs and to secure these mechanisms against the risk of legal challenge.

The introduction of a clear set of principles and policies for JLCs to consider in framing their proposals and the more focused supervisory role of the Labour Court in relation to the work of JLCs was also generally supported. The proposed extension of the definition of "worker" and the proposal to use to primary legislation in future as the mechanism for effecting changes in this area was generally welcomed.

A number of Deputies referred to the severe competitive pressures operating in many sectors, and the importance of sustaining employment levels by maintaining reasonable wage rates that reflect the reality of the current economic and trading environment. Some Deputies have referred to recent examples of constructive engagement by all parties within JLCs that have resulted in adjustments to both rates and conditions of employment under the relevant EROs covering key sectors. It was acknowledged that the provisions of this Bill would facilitate such consensus-building in future. I pay tribute to my predecessor, the Minister of State, Deputy Billy Kelleher, for his work in this regard.

The need for safeguards to protect the workers that may be affected where employers may claim inability to pay was urged by Deputies across the board. They were concerned that those securing exemptions might obtain an unfair competitive advantage relative to other compliant firms and cause a collapse in wage protection standards. I will refer to this later.

The broad endorsement Deputies have given to the main purpose of this Bill echoes the welcome it received in the Seanad, as does the social partner consensus in favour of changes to modernise and streamline the JLC system. Together, the social partners had resolved to rectify legal and constitutional deficiencies affecting the JLC and REA systems and to update the provisions of the Industrial Relations Acts so as to ensure the responsiveness of our industrial relations machinery to changes in the labour market and to the immediate challenges facing the economy.

I want to reassure Deputy Penrose in particular that, as was noted this morning by Deputy Costello, there was continuing consultation with employer and trade union interests both before the publication of the Bill in August 2009 and in the period following. I invited ICTU and IBEC to participate in consultations in August 2009. At that stage I informed them of my intention to introduce an amendment providing for an inability to pay mechanism. Both organisations, as was noted by Deputy Costello, made submissions to me in recent months and those submissions are the subject of continuing consultations between my officials and representatives of the main employer and trade union interests. I have also made a commitment to spokespersons that we will consult with them about the amendment when we are in a position to table it.

Many Deputies wanted to see the streamlining of the whole architecture - Deputy Clune referred to that this morning - for the redress of employment rights grievances and disputes. While the Bill deals primarily with the streamlining of procedures for making EROs and REAs and makes limited changes regarding access for workers to the industrial relations machinery, I agree that a piecemeal evolution of employment rights legislation over the past 30 years has resulted in a complicated system which is confusing and costly, with a duplication of functions as well as divergences in procedures and remedies. I have found, however, that there is a general acceptance by stakeholders and service users alike of the desirability of simplifying and streamlining the complaint, appeal and enforcement procedures across existing bodies and I agree with every speaker who has said the status quo is unsatisfactory.

I have begun an examination of the scope for effecting a more coherent and streamlined organisation of the roles and functions currently discharged within the fragmented architecture in the industrial relations and employment rights field. I have already met with both ICTU and IBEC in recent months as part of this review of employment rights, industrial relations structures and processes and we have had a useful exchange with their representatives. Both organisations had very positive things to say about the operation of the employment bodies. There are real strengths that need to be protected and built upon. They also had some views about how procedures could be improved. However, nobody was calling for a full "scrap and re-build" approach.

We are in the process of collating views and reflecting on them. I have indicated that my preference would be for a pragmatic twin-track approach involving exploring the feasibility of a one-stop-shop concept that would ensure more coherence regarding the appropriate forum for adjudication on relevant issues so as to avoid wasteful "forum shopping", of which there is evidence at the moment; and the tidying up of the existing corpus of employment law with a view to ironing out wrinkles, inconsistencies, routing ambiguities, etc. I look forward to the support of Deputies opposite through the Oireachtas committees for some sensible reform measures and for a carefully prepared programme of consolidation in the employment law field.

Regarding the joint labour committees, Deputy Varadkar queried the regionally differentiated rates that were set by JLCs within the same sector. He called for uniform rates to apply throughout the country. He also favours the removal of the casting vote that may be exercised by the independent chairman of a JLC.

Existing legislation is not an obstacle to the introduction of uniform rates throughout the country, nor to the amalgamation of JLCs. The key issue here has been the degree of willingness of the parties involved in the JLCs to make changes or to engage. Deputies will be aware that regional differentiation in private sector wage rates was traditionally a feature of the economy. Historically, there has been some ebb and flow between reliance on national rates or on regional pay differentiation, depending upon the strength or weakness of the economy and the labour market. The situation in the catering sector has been referred to by many Deputies and was to the fore last year. There are two separate JLCs in the catering sector, one covering the greater Dublin region and the second the rest of the country. However, contrary to the impression conveyed during the debate, uniform rates are now applied in the catering sector throughout the entire country, including pay rates and the Sunday premium.

The parties involved in the two separate committees reached agreement earlier this year on an amalgamation of the two JLCs. In advance of that amalgamation, the parties representing the employer and trade union interests on the two committees decided, however, that they would first ensure the implementation of a uniform set of terms and conditions before proceeding with formal institutional change. I agree that this was a sensible course of action and I see no need to interfere in the modernisation process that is already under way.

With regard to the composition of the JLCs and the voting rights of the independent chairman, I would be concerned that altering the role of the independent chairman could undermine the JLC system and might only serve to make it more difficult to arrive at decisions and lengthen the process of adjusting rates in response to changing economic conditions. I believe this is appropriate too in the context of some remarks made this morning about the composition of joint labour committees. JLCs comprise people appointed by the Labour Court as representative of employers and workers in designated sectors. Before appointing these representatives, the Labour Court must consult the relevant employer and trade union organisations. The people around the table have been urged by me to become more engaged with the wider sector as opposed to specific employer and union interests. We have seen some success in that regard in some JLCs recently. There was some comment this morning about the low penetration of union membership, but it is appropriate that they should seek to take a wider representative role, in representing workers who may or may not be members of a union. The JLC system provides an opportunity for this, I believe.

Deputy Mary White queried why we were imposing a maximum age limit of 65 and I agree that the case for fixing an age limit, as distinct from the normal limit to any term of office, should be looked at again. We will refer to the committee on that. Many colleagues, including my colleague, the Minister of State, Deputy Kelleher, and a predecessor in this office, Deputy Fahey, as well as many other speakers, have urged that our priority should be in taking action to contain costs and make the country more competitive. We had contributions this morning from Deputy Costello about rent costs, but we must recognise that labour costs in Ireland are high and this issue must be addressed.

The Government is taking a number of actions to accelerate the process of recovering our cost competitiveness across the entire economy. It is sure to be a painful adjustment, but a reduction in unit labour costs delivered through pay reform will strengthen our long-term competitiveness. I have no doubt that having a job is the best route out of poverty. Having work can prevent people from falling into poverty in the future. Employment enables people to provide for themselves, their families, communities and future retirement.

We need to have measures that protect vulnerable workers in situations where they may be unable to protect themselves or to avail of their full entitlements. Workers are most at risk when they work in an environment where the risk of being denied employment rights is high and where employees may not have the capacity or means to protect themselves from such abuse. There are good and poor employers in every sector, but data provided to me by NERA, the National Employment Rights Authority, suggests that problems seem to occur more frequently in some sectors such as retail, hotels, restaurants, construction, security and cleaning, which are those often governed by joint labour committees. We must keep under continuing review the mechanisms put in place to protect these vulnerable workers. Certainly, we must from time to time re-examine, as we have done under section 8, the way in which we calibrate the economic and social considerations that should be taken into account when fixing or adjusting minimum rates backed by the force of law.

There has been much comment in this debate about the "inability to pay" mechanism. Many Deputies have expressed doubts about the adequacy of the safeguards that can be put in place to protect workers under the proposed mechanism to enable employers, subject to certain conditions, to seek a temporary exemption from the strict application of EROs, employment regulation orders, and REAs, registered employment agreements.

I will be very clear. The mechanism under discussion already exists in terms of the legislation for the minimum wage. The lectures we have received from some Deputies on the minimum wage seem somewhat ignorant given the provision to which I have referred which covers those workers paid the minimum wage. The provision is for those subject to the agreement under discussion today. Consultations are proceeding with employer and trade union interests on the best approach to facilitating such a form of temporary relief in cases where employers face short-term financial difficulties. This is a key consideration in terms of safeguarding the jobs and entitlements of workers affected and serves to ensure that any such mechanism would be once-off and time-limited.

The approach to enabling employers to make claims based on their economic and financial situation will depend on whether the employers in difficulty are covered by employment regulation orders or registered employment agreements. Different approaches will apply in the design of the "inability to pay" mechanism in view of the different contexts presented by the EROs and REAs respectively. Many Deputies, including Deputies Penrose and Costello, highlighted the significance of REAs as collective agreements under international law. I appreciate fully the status of REAs as collective agreements, voluntarily agreed by the parties directly concerned. I propose to ensure that the parties to a registered employment agreement should, accordingly, retain discretion in the matter of whether to vary the application of their agreement through the inclusion of a prescribed inability to pay mechanism.

It was originally envisaged that the approach to introducing an inability to pay mechanism would be modelled on the provision in the National Minimum Wage Act, 2000, to which I have referred previously. I am considering the scope for incorporating additional procedures and safeguards in the proposed inability to pay provision in the light of some of the issues that have been raised during the debate, as well as those identified in the course of consultations held with the social partners.

I have noted the concerns raised by Deputies Varadkar, Penrose, English and Costello regarding the dangers of unfair cost competition and the resulting consequences to maintain a level playing field in sectors where wage costs are a major component of overall costs. I am considering requiring that the Labour Court, as part of its examination of a claim for a temporary exemption, should have to consider in advance whether any particular exemption could, if granted, place other employers covered by the same ERO at a competitive disadvantage and result in the displacement of workers employed in competing undertakings. Deputies Penrose, Bannon and Costello expressed concern that pressure might be exerted on workers to agree to their employer's claim for an exemption and that workers might be afraid they could be victimised for failing to give consent to an exemption. In my approach to framing an inability to pay amendment, I propose to examine ways of protecting workers from any improper pressure of that kind. I am also considering requiring that the Labour Court, as part of its examination of a claim for a temporary exemption, should have regard to whether the consent of the majority of employees has been freely given.

In response to many representations made to me by several organisations representing sectoral interests, I am prepared to explore how an application for a derogation from an ERO or an REA might be entertained in the absence of consent on the part of a majority of the employees. It will be recalled that under previous social partnership agreements on private sector inability to pay disputes, such disputes could be referred, in the event of a failure to reach agreement at enterprise level, to the Labour Relations Commission and, if unresolved there, to the Labour Court for an investigation. However, any safeguards that would apply in such circumstances would have to be even more stringent than a given situation in which the exemption is supported by an agreement made with the employees at the workplace level.

Several Deputies, including Deputies Clune, Costello and Fleming, referred to the number of workers affected by JLCs, joint labour committees. I may raise this matter with the Labour Relations Commission, which has powers under the Industrial Relations Act 1990 to undertake periodic review to establish whether these orders should be amended and what volume of workers would be affected. I thank Deputies from all sides of the House for their input to the debate and I thank Senators for their input before Christmas. We will now bring the Bill to Committee Stage. I commend the Bill to the House.

Question put and agreed to.

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