John Browne (Wexford, Fianna Fail)

I am pleased to have the opportunity to comment on the legislation and to compliment Deputy Willie O'Dea on introducing the Industrial Relations (Amendment) Bill 2011. As a result of the High Court ruling on JLCs, thousands of low-paid workers face cuts in their pay and conditions. Having reneged on its promise to tackle this situation immediately, the Government now maintains it will not introduce legislation until the new Dáil term, probably sometime between September and Christmas. Fianna Fáil has therefore taken a decision to introduce this emergency legislation to allow protection of these workers. It is not good enough, as Deputy O'Dea said, that vulnerable workers will be left in this situation while the Government takes its holidays and will not return until some time in late September.

While the action related to catering workers, its outcome has implications for 200,000 or perhaps more workers whose minimum pay and conditions are set under the JLC system. All employment regulation orders, EROs, cease to have statutory effect from the date of the ruling and cannot be enforced. In theory, low paid workers already on contracts fixed under the JLC system cannot have their pay changed.

Following the ruling, IBEC sent a bulletin to member companies stating employees would continue to have the same rates of pay and conditions of employment "unless and until they agree otherwise". I wonder what IBEC meant by that statement and it certainly did not spell it out. I am sure many employers, given the High Court ruling, have decided they are not prepared to wait until staff freely agree to change their contracts. Some companies could actually use the High Court ruling as a cover effectively to demand that their staff renegotiate employment agreements and accept inferior terms and conditions. Were an employer to renege on a contract, how many employees would really have the resources to bring this to court? We are talking about the most vulnerable in our society, including those on the minimum wage and the low paid. With legal costs, they would not be in a position to take on some of the major employers in the courts.

It is possible that we will see a wave of employers moving together on this issue. It is also expected, as a result of this ruling, that people who take up jobs or have new contracts drawn up will face lower rates of pay and inferior working conditions. The Minister might explain the future position of people who are on contracts and then leave one employment for another. Once a person breaks a contract under the present system, given the way IBEC is talking, the person will be on the new scale of pay or whatever the employer will decide to pay. The IBEC bulletin stated:

The biggest impact will be that employers will be able to hire new employees on more competitive conditions. Until today, employers were prohibited from hiring and retaining staff at rates of pay which were less than employment regulation order rates.

It is important that the Minister carefully spells out what he would see as "more competitive conditions" given that people on minimum wage are already providing their services at a very competitive rate.

The judgment also means that the State is to discontinue 70 prosecutions against employers for breaches of JLC rules on workers' pay. The Department of Jobs, Enterprise and Innovation and the National Employment Rights Authority, NERA, confirmed that the prosecutions, which include high profile cases, would now be abandoned. The Minister might comment on the statement by NERA. Legal and employer sources also maintain that a separate system of setting pay and conditions in more than 60 companies and industries, known as registered employment agreements, could be legally shaky based on the ruling, although they are not specifically covered by it.

As Deputy O'Dea stated, we are talking about people who are already on very low incomes. There are 19 JLCs which cover areas as varied as agricultural work; catering, excluding Dublin city and Dún Laoghaire; catering in Dublin city and Dún Laoghaire; contract cleaning in Dublin; hairdressing in Cork city; handkerchief and household piece goods; hotels in Dublin city and Dún Laoghaire; hotels in other areas, excluding Cork; law clerks; provender milling; retail, grocery and allied trades; the security industry; tailoring; and other areas of industry. When we look at that list of JLCs, we see it involves people working in the lowest paid sectors. Without the protection of the JLCs, they will find it very difficult to earn adequate wages in the future.

A study published in the Industrial Relations Journal in January 2011 found that two thirds of respondents surveyed considered that JLCs were still necessary, in addition to the national minimum wage, while a third thought they were not necessary. The article, "Minimum labour standards in a social partnership system: the persistence of the Irish variant of Wages Councils", by Ms Michelle O'Sullivan and Mr. Joseph Wallace, found that the overwhelming majority of trade union and independent members believed JLCs were necessary. While employer members were most likely to hold the view that JLCs were no longer necessary, there was not a consensus among them on this issue. A substantial minority of one third of employer respondents believed JLCs were necessary. The reasons with the strongest employer support were that JLCs are necessary because they tailor minimum pay and conditions to the specific industry or employment covered - this was held by 33% of employers - and that JLCs are necessary because they try to prevent employer undercutting, which is also an important area.

The Minister spoke clearly when the ruling was published last week, stating he would act immediately, but this has not happened. He has taken advice from the Office of the Attorney General and asked her to explore all the legal options, and he might make that advice available to this House. While it is the Minister, on the advice of the Attorney General, who will make the decision that nothing will happen until later in the year, many people in the industries to which I referred will suffer very seriously in regard to their wage structure in the coming months. It is very important that the Minister would hold out some hope today and honour some of the commitments he gave immediately following the court ruling, including that he would deal with it as a matter of urgency. To wait until later in the year is not to do that. The Minister and the Cabinet are reneging on many of the promises they made in this area following the court decision.

It is also important the Labour Party would step up to the plate given its members always maintained they supported the less well-off in our community and society. If they do not support this Bill, they are reneging on the meaning of looking after the less well-off in society. I hope they will make a contribution to Deputy O'Dea's Bill in the House today and tomorrow and explain where they are coming from on this issue.

IBEC was quick out of the traps following the High Court ruling on JLCs on 7 July to advise its members that new employees might be offered rates and conditions which are not based on any employment regulation order. In my opinion, this was nothing short of appalling. It was victory for the idea of cheap labour, a return to the dark old days and an attempt to keep the less well-off just that - less well off. I am sure the head honchos in IBEC will not be on the minimum wage and will not be concerned about JLCs for their own protection. I believe IBEC has had and still has too much power, both with the last Government and with this Government. It was IBEC which stated that a reduction in the minimum wage would create hundreds of jobs, but it certainly did not do that. IBEC is now suggesting that the reduction in VAT under this Government will create hundreds of jobs. While I acknowledge the Minister dealt with this issue earlier during Question Time, how many hotels and restaurants nationwide have passed on the VAT reduction? In my home county of Wexford, it seems as though very few have done so. IBEC should also be considering this matter instead of spending all its time trying to have a race to the bottom in respect of the less well-off in society.

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