Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)

I broadly welcome the provisions of the Industrial Relations (Amendment) (No. 3) Bill 2011. This legislation will strengthen the constitutionality and the legal framework of EROs and REAs in light of deficiencies in the original legislation. It will ease the concerns of some of our most vulnerable workers by reinstating protection for workers in the relevant sectors. A balance needs to be struck between the interests of employees and employers. The previous legislation in this area was outdated and inflexible.

Evidence has proved that the sectors covered by the JLC and the ERO system have been hit hardest by this recession. There has been a 60% loss of employment in construction and 15% in the retail-wholesale sector. Retail and catering have seen a 20% loss in employment in the past three years. I understand the lack of demand in these sectors is clearly a key factor but labour costs represent a relatively high proportion of total costs.

However, in this environment, it is necessary to ensure that structures are flexible and adaptable in changing circumstances and that they reflect the realities of our modern economy. Future wage rates must be tailored to the specific circumstances and the needs of the Irish economy. The focus of reform should be on the process and procedures relating to JLCs and REAs. The suggestion that reform is designed to penalise is simply wrong. If the process and procedures are right, sustainable long-term wage rates will be established and the boom-bust cycle of the past decade broken.

The State, businesses and workers and their families are now experiencing the painful unwinding of previously unsustainable wage agreements which were out of sync with real growth rates in the economy and which pushed up costs elsewhere in the economy to the detriment of people's purchasing power. Reforming the process and procedures is of two-way benefit to workers and employers. The provision in the legislation allowing companies to derogate from the EROs and REAs in cases of financial difficulty will provide essential support to viable companies that are struggling due to the economic climate. I am aware of cafes, restaurants and family businesses in the Dún Laoghaire-Rathdown area that close their doors on Sunday due to high staff costs imposed by the Sunday premium rate. This will streamline work in this area and make it more accessible. My recommendation is that agreements should have a defined lifetime to prevent sectors becoming stranded with uncompetitive rates as economic circumstances change. Unions and employers would be forced to engage in realistic negotiations if they realised the existing agreement was due to wither within a defined timescale. Variation procedures for both sides are cumbersome and need to be streamlined.

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