Ciarán Cannon (Galway East, Fine Gael)

Members have acknowledged the progress made in framing the proposals to strengthen the legal framework for EROs and REAs, originally established in the Industrial Relations Act 1946. Deputies have expressed an appreciation for the manner in which it is proposed in the Government's Bill to give legal effect to the recommendations of the independent review on the reform of these sectoral wage setting mechanisms and to take the necessary action to rectify the deficiencies in the original legislation identified in the High Court judgment of 7 July 2011 in the case of John Grace Fried Chicken Limited.

Deputies Browne and McConalogue have, however, criticised the Bill for failing to accept many of the recommendations of the Duffy Walsh report. This is patently not the case. Let me be clear. The reform proposals for the JLC and REA mechanisms agreed by Government in July last, and now reflected in this Bill, deal comprehensively with the recommendations made and issues raised in the Duffy Walsh report, as well as the outcome of the July High Court ruling.

Some Deputies have, however, taken a negative stance on the proposals in the Bill. They disregard the fact that it is a necessary step to restore the JLC system and to place the mechanisms for setting sectoral minimum wages on a sound constitutional footing. Instead, they chose to see the proposed measures as a part of an attempt to drive down wages, limit worker protections and ultimately wind down the systems of statutory wage protection. They are very much mistaken in this view.

Some Deputies considered the new criteria to be observed in the making of EROs to be too restrictive or to fail to achieve sufficient balance between the interests of employers and employees. Some took issue with the requirement that JLCs and the Labour Court should have regard to factors such as wage rates in comparable sectors in other relevant jurisdictions. Deputies have for the most part, however, recognised the need to strike a balance between striving on the one hand to make our economy more flexible, more competitive and more productive and the necessity to maintain a robust system to protect vulnerable workers. This is what the Bill seeks to achieve.

The new criteria to be observed in the making of EROs take the form of principles and policies that have been prepared in the light of the High Court judgment in the John Grace Fried Chicken case. Whenever proposals for a variation of the ERO are made, these criteria will be used in determining the validity of any variation. Similarly appropriate policies and principles will also have to be observed when REAs are created, varied or cancelled.

The Bill provides that JLCs will be permitted to set a basic adult rate and two supplementary minimum rates. Deputies welcomed the way in which this reform would substantially reduce the number of rates that had been prescribed in 17 different EROs. In addition, JLCs will be free to establish two higher rates based on length of service in the sector or enterprise concerned. The Minister indicated he will examine how the fixing of the two additional higher rates might take account of the standards and skills recognised for the sector concerned.

Deputy Daly was concerned about the issue of skills. She queried how the sub-minimum rates would be applied to employees undergoing training. I can assure the Deputy that a course of training or study will have to satisfy strict statutory criteria in order for an employer to pay an employee the trainee rates. The position will mirror the arrangements under the National Minimum Wage Act and will be supervised by NERA.

A number of Deputies have spoken against the proposal to exclude the fixing of Sunday premiums from the scope of EROs made JLCs. Deputy Boyd Barrett is mistaken in claiming that overtime rates will be taken out of the remit of JLCs. That is not so. The only exclusions relate to holiday pay, Sunday premiums, payments in lieu of notice and redundancy payments.

Deputy Dara Calleary made a very thoughtful intervention on the issue of working time options and payment for rest-days. His contribution reflected his past experience of seeking to legislate in this area. He joined with Deputy Buttimer in calling for a wider debate on Sunday work and how to accommodate different preferences and lifestyle choices about days of rest. That is an issue that might be considered when the Labour Relations Commission is called upon to undertake its statutory role to formulate a code of practice. Deputy Nash also recommended that lessons should be learned from the history of the 1998 code of practice on Sunday working in the retail trade.

Some Deputies took issue with the proposal in the Bill that will enable companies to derogate from the terms of EROs and REAs in cases of financial difficulty. Most Deputies welcomed the safeguards that have been built into the Bill to ensure the protection of employees' entitlements. They welcomed the detailed requirements upon which the Labour Court must be satisfied, especially as regards avoiding any distortion of competition, before it can determine that there is a genuine, albeit temporary, inability to pay.

On clarifying the meaning of "substantially representative parties", Deputies Tóibín and Daly appear confused about the requirement that parties to an REA be substantially representative of workers and employers in their respective sectors. I can assure the Deputies the provision does not involve any implications for trade union recognition. There is already a requirement under section 27 of the Industrial Relations Act 1946 that the Labour Court be satisfied that the parties to the agreement, whether they be employers or trade unions, be substantially representative of those to whom the agreements relate and their employers. The Duffy Walsh report recommended in favour of an amendment so as to remove an uncertainty that has arisen about how the requirement is applied in practice. That uncertainty has now been removed by a clearer definition.

Deputies O'Dea and Browne voiced concern about the discretion the Minister can exercise about whether to make EROs and-or to confirm REAs following their adoption by the Labour Court. Let me make it clear that this is an additional safeguard that has been deemed necessary to enhance accountability to the Oireachtas in response to the High Court judgment that held that the Act of 1946 constituted an excessive delegation of powers to the JLCs and Labour Court to fix minimum standards of remuneration and terms and conditions of employment for particular sectors.

A number of Deputies have made the point that NERA's statutory role in the enforcement of EROs has been removed by this Bill. This is not the case. The Duffy Walsh report recommended in favour of decriminalising the enforcement process of EROs. It makes sense, as Kevin Duffy and Dr. Walsh recommended, to enable NERA to bring a complaint to a rights commissioner on behalf of an individual or group of workers rather than retain the current arrangements where enforcement is only by way of a prosecution before the District Court.

Section 52 of the Industrial Relations Act 1946 and section 49 of the Industrial Relations Act 1990 already provide for the enforcement of EROs by NERA. Under these provisions, an inspector can institute civil proceedings on behalf of a worker in respect of the failure of the employer to pay the statutory minimum rate of remuneration or comply with a condition of employment respectively in an ERO. This will continue to be the case. Moreover, in regard to the Sunday premium, NERA inspectors will continue to inspect records of employers to ensure compliance with the obligation under the Organisation of Working Time Act to compensate a worker who is required to work on a Sunday, in addition to compliance with all other relevant employment legislation.

I agree with Deputy Calleary about the need for timely adjudication and the need to avoid delays in processing complaints. He welcomed the timebound process by which REA terms may be varied in future by the Labour Court in exceptional circumstances without consent of all parties. I agree with him that the modernisation of the statutory wage setting machinery has to be viewed in the context of the overall programme of reform of the State's employment rights and industrial relations procedures and institutions.

The Minister has confirmed that it is his intention on Committee Stage, and following further more detailed consultation with the social partners and other interests affected, to bring before the House a number of amendments in order to clarify or strengthen certain provisions of the Bill. These should address a number of areas on which Deputies raised concerns, including those provisions dealing with the principles and policies applying to the framing of REAs and EROs, the timeframe for the variation of REAs and the provisions regarding the granting of temporary exemptions from the obligation to pay the terms prescribed under EROs and REAs.

This Bill will make the long-established minimum wage setting mechanisms fairer and more responsive to changing economic circumstances and will eliminate rigidities that are considered to have had a negative impact on competitiveness and jobs in the affected sectors.

I thank the Deputies for their contributions and assure them that the points they have raised will be given further consideration in the practical work ahead on Committee Stage.

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