Paul Connaughton (Galway East, Fine Gael)

I thank the Ceann Comhairle for giving me the opportunity to speak on this very important Bill.

Maintaining competitiveness in what are volatile national and international markets is a key element of this Government's economic strategy. To that end, I welcome the provisions of the Bill as it seeks to overhaul wage setting mechanisms radically in response to the current deep recession the country is experiencing. A wage-setting mechanism had evolved in recent decades that reflected an increasing prosperity and sought to ensure that the economic fruits of the Celtic tiger era were shared among workers. Now, in a drastically different economic climate, it is timely and just that these wage-setting mechanisms should be changed to reflect the new challenges faced by industries across all sectors.

This Bill seeks to implement a robust system of protection for workers following a High Court ruling in summer 2011 in which employment regulation orders, EROs, were found by Mr. Justice Feeney to be unconstitutional as they lacked the necessary Oireachtas oversight. This case was one of a number of important cases brought in recent years in respect of wage-setting mechanisms. There are also a number of challenges in regard to electrical and construction registered employment agreements, REAs, pending in the High Court.

Following the judgment of Mr. Justice Feeney, an independent review report, the Duffy-Walsh report, was brought forward, which featured a range of recommendations in terms of wage reform. The introduction of such legislation to reform the JLC system had been part of the commitment in the programme for Government and this commitment was underlined in the EU-IMF memorandum of understanding, by which the Government undertook to introduce legislation to modernise registered employment agreements and employment regulation orders, with a view to reducing the negative impact on both job creation and competitiveness.

The principal measures outlined in the action plan included a proposal that JLCs would no longer set Sunday premium rates or any other conditions of employment covered by universal standards provided for in existing legislation. However, it is important to point out that the special position of Sunday working will still be upheld under section 14 of the Organisation of Working Time Act 1997, and a special code of practice to be devised under that Act.

Employers will be able to seek temporary exemptions from EROs and REAs in cases of financial difficulties. I also welcome the fact that in setting rates, JLCs will have to take into account factors such as unemployment rates, competitiveness and wage trends here and in our major trading partners. This reference to those trading partners is a key inclusion, given that huge disparities in wage rages in certain sectors are giving industries outside this jurisdiction an unfair advantage when it comes to tendering for important contracts. I note that the Minister has signalled his intention to introduce an amendment to clarify this matter. I also welcome the reduction in record keeping requirements for employers in the sectors covered by the JLCs.

Overall, the provisions of this Bill aim to maintain the country's competitiveness in key areas and underpin employment levels in these sectors. As with any such new regime, it is key that proper review structures are put in place and adhered to. The new legislation provides for a review mechanism to ensure that reviews of the JLCs will be undertaken by the Labour Court, at a minimum at five year intervals. These comprehensive reviews will examine the scope of all remaining JLCs and changes to the relevant orders if necessary.

The derogation offered by the current legislation is a key feature of the current Bill, providing a much-needed lifeline to many businesses currently struggling to pay wage bills. The new derogation will pertain where it can be proved to the satisfaction of the Labour Court that there is a genuine inability to pay. It provides that the maximum period to which the derogation can apply is two years and it must be for a minimum of three months. An employer will not be entitled to seek an exemption if he or she has already received an exemption in respect of the same worker in the previous five years.

In the absence of such an agreement being agreed with the majority of the workforce, the Labour Court must be satisfied that the employer has informed the workers of the financial difficulties and has attempted to reach agreement with the workers concerned; that the employer is unable to maintain the terms of the ERO; and that requiring the employer to comply with the ERO would result in a substantial risk that a significant number of workers would be made redundant or laid off, or that the sustainability of the business would be affected.

A safeguard in the Bill is provided in that the Minister may refuse to make any order that he or she considers inappropriate, and if the Minister is not satisfied that the procedures have not been complied with, he or she may refuse to make an order and notify the Labour Court of his or her decision. Another welcome provision in the Bill is that civil penalties will be used rather than the current reliance on criminal sanctions. In recent court decisions the use of criminal law as a sanction for failure to comply with employment registered orders has already been questionable. One hopes this measure represents a move away from incarceration as a remedy to all social ills. The individual industries involved have profit making as a primary aim and therefore civil penalties are wholly appropriate.

This Bill contains a proposal to remove the Sunday premium from the remit of the JLCs and its replacement with a code of practice on Sunday working, to be devised by the Labour Relations Commission. The LRC will seek submissions from employer interests and trade union representatives in preparing the proposed code of practice. The consultation process will result in a code of practice that will be given effect by a ministerial order. This code will provide guidance to all employers and their employees in sectors covered by EROs on the compensatory arrangements that must apply, including the additional amounts deemed reasonable for Sunday working and the procedure to apply in the event of a dispute concerning the various entitlements.

This consultation process should be greatly widened to allow individuals and various interest groups to take part. For example, an increase in the number of people required to work on Sunday could have a huge impact on sporting organisations, youth groups and also many community events such as village fairs and fetes, agricultural shows, county ploughing championships and other community events.

Religious organisations should also be offered an opportunity to have a say on this Sunday working code of practice. Such a consultation process would open the debate on Sunday working practices to a wider public and determine a course of action that takes into account both the undoubted market for shopping on Sundays with the effect that even wider Sunday opening could have on family life across the country. This consultation process must not be limited to only employer interests and trade union representatives but open to the wider public.

Competitiveness across all sectors and industries will be a key factor in putting the economy back on a sound footing. The economic conditions that pertained in the boom times are but a distant memory for many companies and wage-setting mechanisms have to be changed to reflect that. However, I caution that much greater consultation than is envisaged is needed in the treatment of Sunday working practices in the economy for the future.

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