Gerald Nash (Louth, Labour) | Oireachtas source

I move:

That, pursuant to Standing Order 177, Standing Order 131 is modified to permit an instruction to the Committee to which the Workplace Relations Bill 2014 may be recommitted in respect of certain amendments, for which it has power to make provision in the Bill in relation to—(a) an amendment to the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 by the deletion of section 2B (inserted by section 2 of the Financial Emergency Measures in the Public Interest Act 2013), as the powers provided by this section to make changes to remuneration rates (other than basic pay) and to working time are not required to be exercised in view of the existence of a collective agreement;

(b) an amendment to section 23(3)(a) of the Industrial Relations Act 1990 by the deletion of ‘(other than established civil servants within the meaning of the Civil Service Regulation Act, 1956)’, to allow the Minister, when appropriate, to make a decision to include established civil servants as part of the normal industrial relations process by designating them as workers who have access to the LRC/Workplace Relations Commission and the Labour Court; and

(c) an amendment to the Organisation of Working Time Act 1997 to bring it into line with rulings of the Court of Justice of the EU (CJEU) regarding how time spent on sick leave should be treated for the purposes of the accrual of annual leave and to limit the carry-over of annual leave while on long term sick leave to a 15 month period, following the end of the annual leave reference period;and to change the title of the Bill to take account of these provisions.

I am introducing an amendment to the Organisation of Working Time, OWT, Act 1997 to bring our legislation into line with EU law. I am also introducing, on behalf of my colleague, the Minister for Public Expenditure and Reform, amendments to section 2 of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 and an amendment to section 23 of the Industrial Relations Act 1990 to be set out in Part 7 of the Bill. I understand Deputies have received information notes setting out the purpose of these amendments.

The amendment to the OWT Act is being made in response to infringement proceedings initiated recently by the European Commission against Ireland in respect of the incompatibility of that Act with the EU working time directive, as interpreted by the Court of Justice of the European Union, CJEU, in a number of cases regarding how time spent on sick leave should be treated for the purpose of the accrual of annual leave. The OWT Act provides for a statutory minimum entitlement of four weeks' paid annual leave. The Act transposed the EU working time directive into Irish law and that directive contained a requirement for the provision of a minimum of four weeks' paid annual leave. In recent years, the CJEU has made several rulings interpreting the annual leave provisions of the directive. Some of these rulings related to how time spent on sick leave should be regarded for the purposes of the accrual of annual leave. The cases also addressed the issue of what is referred to as the carry-over period, which means the period of time following a leave year during which untaken, accrued annual leave may be taken.

The main CJEU rulings in question are those in the cases of Schultz-Hoff-Stringer and KHS. The key points arising from Schultz-Hoff-Stringer are as follows: employees can accrue statutory annual leave while absent on sick leave; a sufficiently long carry-over period following a leave year should be provided for in cases where an employee has been unable to take annual leave due to having been on an extended period of sick leave; and, on termination of the employment relationship, an allowance in lieu of annual leave due and untaken as a result of the employee not being able to do so owing to sickness shall be paid to the employee.

The main finding arising from the KHS case is that the working time directive permits national law to put a cap on the unlimited accumulation of paid annual leave during successive years of absence on sick leave. The CJEU found on the facts of the KHS case that a 15 month carry-over period was not contrary to the working time directive. However, notably, the CJEU did not definitively state that 15 months was the appropriate length of carry-over period, thus leaving it to member states to exercise a policy judgment in this regard.

The OWT Act provides that annual leave is calculated on the basis of time worked and is silent on the issue of how time spent on sick leave should be regarded for the purposes of calculating annual leave. By virtue of the EU principle of vertical direct effect, public sector employees are able claim the benefit of the Schultz-Hoff ruling. While private sector employees cannot claim under the principle of direct effect, they could, using the Francovich principle of state liability, take a civil case against the State for compensation for non-receipt of their entitlements under the working time directive as interpreted by the CJEU in Schultz-Hoff-Stringer. Thus, as matters stand, the State is open to claims from both public sector and private sector employees further to the Schultz-Hoff-Stringer ruling, and, in the absence of legislative amendment, there is no limit on the time over which annual leave accrues while on sick leave. The proposed amendments to the OWT Act will bring clarity to our legislation for employers and employees alike as to how annual leave can be accrued and carried over when an employee cannot take their paid annual leave due to illness. The amendments to the legislation will ensure that statutory annual leave will continue to accrue to a person who is on sick leave, subject to a maximum carry-over of 15 months from the end of the year in which it accrued. The entitlement to paid annual leave is an important and fundamental employment right and, in my opinion, the Workplace Relations Bill presents an appropriate opportunity to make the necessary legislative change. I believe that the proposed amendments are fair and supportive to workers who are suffering from a long-term illness or injury. I further believe we have struck the right balance between protecting the rights of vulnerable workers who are off work due to a serious illness and trying to minimise the cost to business and the Exchequer.

I wish to indicate to the House that a further amendment to the Organisation of Working Time Act will be required on foot of the amendment being tabled today, which I intend to introduce on Committee Stage in the Seanad. This further amendment will provide that an employee whose employment terminates, and has accrued an annual leave entitlement in accordance with the Schultz-Hoff-Stringer ruling, will be entitled to payment in lieu of the untaken annual leave calculated on the same basis as if the employee had returned to work on the date of leaving the employment.

Both of the amendments being introduced on behalf of the Minister for Public Expenditure and Reform deal with workplace relations in the public service. Specifically, the Minister for Public Expenditure and Reform wishes to bring forward an amendment to section 2 of the Financial Emergency Measures in the Public Interest Act 2009. This is to remove a provision which was included in that Act to provide for a situation where no agreement was reached in the Haddington Road talks. Section 2B of the Act would have allowed for individual Ministers and public service employers to unilaterally implement changes to remuneration and working hours of employees in the absence of a collective agreement. As we all know, a very successful agreement was reached, which has produced a significant dividend for the public finances while maintaining industrial peace, and thankfully the provision has never been required to be used.

The Minister for Public Expenditure and Reform is also seeking a technical amendment to the Industrial Relations Act 1990. This will ultimately enable an order to be made that will allow for established civil servants to be included with the majority of workers in having access to the normal industrial relations machinery of the State. These are currently the Labour Relations Commission, to be replaced by the workplace relations commission, and the Labour Court. This will herald a significant reform of the way in the way in which industrial relations are conducted in the Civil Service, which currently avails of its own conciliation and arbitration scheme. I am happy to facilitate these changes in my Bill as they enable further normalisation of industrial relations in the public service which will assist in the smooth introduction of the changes to the industrial relations machinery proposed in the Bill.

I will now outline the key provisions of the amendments. The amendment to the FEMPI Act 2009 is to remove section 2B which has never been utilised and which the public service unions regard as incompatible with normal industrial relations under the collective bargaining process. In 2013, negotiations were under way between the Government and the public service unions. In the course of this process the FEMPI Act 2013 was introduced to give effect to the 2013 pay reduction for those earning over €65,000, the parallel reduction in public service pensions and other contingent measures to enable the Government achieve its savings requirements. To support and underpin the successful conclusion of negotiations with public service staff interests, the FEMPI Act 2013 also included a provision to amend the 2009 Act by including therein a new section 2B which gave individual Ministers the power to reduce non-basic pay such as rates of premium pay, overtime pay, and so on or to increase the working hours of individual public servants. Section 2B was a limited contingency measure that might have been required to secure the necessary savings in the public service pay bill in the absence of any agreement. The subsequent Haddington Road agreement, in addition to providing for a reduction in the public service pay and pensions bill of up to €l billion in the period 2013 to 2016, also addressed all matters relating to working hours and non-basic pay. The agreement has produced a significant dividend to the public finances while maintaining industrial peace and represents a key element of the Government's fiscal consolidation policy to meet the targeted general government deficit of 3% by 2015. The powers provided under section 2B have not been exercised to date and are unlikely to be exercised in the future. Taking account of the success of the Haddington Road agreement in meeting financial targets, it is difficult to consider circumstances which would now arise where those powers under section 2B could usefully be exercised. Therefore, it is considered that the requirement to have the power in section 2B included on the Statute Book has, in effect, now passed.

The Industrial Relations Acts and, in particular the Industrial Relations Act 1990, form the statutory basis for the current system of industrial relations in Ireland. The 1990 Act established the Labour Relations Commission, LRC, and provided access via the LRC to the Labour Court for workers and employers as a final court of appeal in relation to trade disputes. This Bill will rationalise and merge the overall State industrial relations machinery, although the LRC, to be renamed the workplace relations commission, and the Labour Court and the functions they currently provide, will fundamentally continue.

Section 23 of the 1990 Act sets out the categories of workers who can avail of the LRC and the Labour Court. This excludes persons employed by the State, although section 23(3)(a) gives the power to the Minister to designate those employed by the State to be entitled to avail of the LRC and Labour Court. However, there is a provision in section 23(3)(a) explicitly excluding established civil servants within the meaning of the Civil Service Regulation Act 1956 from being allowed to have access to the LRC and the Labour Court. Consequently, industrial relations matters for civil servants are currently managed through the conciliation and arbitration scheme for the Civil Service. A majority of the Civil Service unions have now sought to move away from the conciliation and arbitration scheme and wish to gain access for civil servants to the State industrial relations machinery which exists under the Industrial Relations Acts and which will be rationalised and merged under this Bill.

The amendment to section 23(3)(a) of the Industrial Relations Act 1990 is to remove the phrase, "(other than established civil servants within the meaning of the Civil Service Regulation Act, 1956)" so that section 23(3)(a) will state: "The Minister for (Public Expenditure and Reform) may from time to time designate for the purpose of subsection 1 any persons employed by virtue of section 30(1)(g) of the Defence Act, 1954, or employed by or under the State." While this amendment will enable the inclusion of established civil servants in the normal industrial relations machinery of the State, substantial preparatory work is envisaged in conjunction with Civil Service unions and human resource units in Departments and agencies to prepare for any change.

Both of the amendments which I am introducing, while not directly pertaining to the content of the Bill, will benefit the effective implementation of the revised industrial relations machinery and processes proposed in the Bill.

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