Terence Flanagan (Dublin North East, Fine Gael)

I also support this Bill, the main purpose of which is to implement and reform the proposals in line with the Government's commitment in the national recovery plan and to reform the JLCs and provide for a stronger legal framework under the Industrial Relations Acts 1946 to 2004. Until 7 July, the Labour Court made EROs, confirming proposals submitted by JLCs. The orders were legally binding until 7 July, when the High Court ruled that legislation delegating powers concerning pay and conditions to JLCs was unconstitutional. The High Court came to the conclusion based on the fact that the 1946 Industrial Relations Act provided for JLCs to make orders on wages but the Act did not contain any principles to guide them in doing so. Furthermore, they were empowered to act without any supervision from the Executive or the Parliament. Infringement of the 1946 Act was a criminal offence, making the employer liable for conviction or payment of compensation to an aggrieved worker. Therefore, a committee with delegated powers was enabled to make an order, the breaking of which was a criminal offence without any accountability. Mr. Justice Feeney considered that the lack of principles in guiding JLCs to make a decision could lead to arbitrary and unreasonable orders, which is why that case on 7 July effectively served to remove the protection of workers after the section of the Act setting up JLCs were deemed to be invalid. The Government was keen to act as a consequence of this and new legislation is necessary in order to reinstate a robust system of protection for workers in sectors covered by such arrangements affected by the High Court decision.

The objectives of the Bill are to put the JLC system on a more secure legal and constitutional footing, to take full account of the judgment by the High Court and to ensure certain provisions of the Industrial Relations Acts are no longer contrary to the Constitution. A further objective is to meet the State's requirements to carry out labour market structural reforms under the EU-IMF programme of financial support for Ireland.

Regarding the main provisions of the Bill, JLCs will have the power to set adult rates and two additional higher rates based on the length of service in the sector or enterprise concerned and the standards or skills applicable for that sector. The new system will set the hourly rate of pay for 200,000 workers. The introduction of one main wage level will eradicate the major variance in hourly rates present under the old system. There were 300 different hourly rates under the old system, which is excessive. JLCs will be required to take into account economic and industrial relations factors and must be more aware of pay rates in comparable sectors at home and in other jurisdictions, benchmarking rates against other countries. JLCs will no longer set Sunday premium rates or other conditions of employment covered by universal standards that are already provided for in legislation. However, special recognition will be given to the status of Sunday working and will be achieved mainly through adherence to the Organisation of Working Time Act, which sets provisions such as time off in lieu. This will be a flexible measure for employers and gives them the opportunity to give employees more time off as opposed to having to pay workers extra. We know about the lack of competitiveness and the major costs for employers at present, making this a welcome development for both sides.

In order to ensure the legislation does not stifle competition and hamper new opportunities for employment, companies will be entitled to delegate from EROs in cases of financial difficulty. This will be policed strictly by the Labour Court, which must be satisfied that the criteria have been met before the employer is entitled to claim inability to pay. The derogation will be granted for a limited period where it is proven that there is economic difficulty on the part of the employer. The employees must be consulted about this. The Minister for Jobs, Enterprise and Innovation is also providing for civil remedies in the Bill as opposed to criminal sanction. The burden of compliance in small companies, which must employ one person to keep up to date with the current system, will be reduced and record-keeping requirements will be reduced. Consequently, hiring costs should be reduced. Overall, this is a positive development and will improve our competitiveness.

The Minister also wants to reduce the number of JLCs from 13 to six. Overtime will be agreed through a nationally agreed protocol and code of practice, in consultation with employers and trade unions. The Bill is a necessary measure following the High Court decision to strike down a decades old law setting wages for low paid workers. It is necessary to ensure there is protection in place for low paid workers and the last thing the Government wants to see is vulnerable and low paid workers being exploited by employers. By reinstating such protection for low paid workers in this country, the Minister, Deputy Bruton, has taken the opportunity to overhaul the old system and ensure the new system strikes a balance between protecting vulnerable workers and ensuring employers are not tied to an onerous and overly restrictive agreement with employees. The new legislation is a groundbreaking and comprehensive item of industrial relations legislation. It is probably the best in a long time. The Minister has strived to allow for new employment opportunities to be created, while protecting existing employees. The fact that companies can derogate from the terms of EROs in cases of financial difficulty is important and allows flexibility. The legitimate interests of employers and employees will be protected through this legislation.

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