Denis Naughten (Roscommon-South Leitrim, Independent) | Oireachtas source

I welcome the opportunity to speak on this legislation and the principle behind it. The important aspect of it is that it will provide certainty for employees in that they will know what their rates of pay will be and it will also provide certainty for employers. In the many sectors we are discussing, many employers tender for contracts. It is a competitive area and the provisions of the legislation level the playing pitch with respect to employers based in this jurisdiction competing for contracts in that when they tender for projects the rights, rates, conditions and terms of employment of their employees are not being squeezed. It also gives certainty to employers when they put in a price for a contract in that they know that the cost of their labour will be at a certain rate over the period of the contract. It is good from the point of view of employees and it also provides a level of certainty that is needed for employers when they tender for contracts in what is a very competitive market. If an employer can secure a long-term contract, it provides long-term security to their employees. However, some employers tendering for contracts are not covered by these agreements or this legislation because they are outside this jurisdiction or they may continue to use subcontractors. They may squeeze the price from subcontractors, cut their margins and put legitimate businesses on the road. I have a concern about that. Our tendering processes are very much to the letter of the law with regard to what must be included but there is very little flexibility in dealing with the needs in respect of that contract in terms of ensuring that certain conditions are complied with as part of the project. Therefore, price is king with respect to tendering here.

Far more contracts in Ireland are successfully won by companies outside the country than in any other jurisdiction in the European Union. While that is partly due to the fact that we are small economy and do not have the necessary expertise and skills in every area, another reason is that we only consider the price and do not consider other conditions. I will illustrate the point by giving the practical example of a sewerage contract involving the laying of sewer pipe. That is a pretty basic contract and there is not much room to cut corners. A contractor was awarded a sewerage contract in my constituency and untold problems arose while the works were ongoing. The contractor employed staff from outside this jurisdiction and they undercut legitimate employers and contractors locally who could not compete for it. It took years to resolve the problems created by that set of works and yet the next contract awarded by the local authority was given to the same contractor. The same problems arose again. That company eventually went to the wall. The local authority then had to follow up on the bond that was in place and eventually had to appoint another contractor to come in and fix the problem on the second contract. While local authorities might get caught once, there should not get caught again and again. A contractor who does shoddy work in one local authority area should not be able to move to another local authority area and create the same problems. There is a lack of joined up thinking across the board to ensure such cowboy contractors are identified. Such contractors either come back in another guise or move to another local authority area and secure contracts again.

There is also the matter of the impact of such projects in an area. I will use the example of water contracts again and this has been the experience across the board, although I have met people involved in tendering for work in the Department of Education and Skills, stationers and book supplier across the country and they have all encountered the same problems. Irish Water is awarding contracts for water and sewerage mains works. Two of those contracts in County Galway, one in Oranmore and one in Ballinasloe, are causing problems. In both cases, it seems the issue is that has been a lack of discussion with local retailers. Sewer pipes and water mains are being laid through the business areas of those towns. There was a lack of engagement with the businesses and no conditions were attached to the contract to minimise traffic disruption or minimise the period that roads would be closed. Those should be basic, fundamental conditions attaching to a contract involving the laying of mains for the public water supply through a town centre or a retail area. Such works have a direct impact on ratepayers' ability to pay rates and pay their staff and it will end up that some of those businesses will go to the wall and more staff will be laid off as a result. We need to revisit that aspect when considering contractors tendering for projects. We need the provisions in this legislation and to consider not only the employees in these companies but the wider aspect of the direct impact such projects have on other employees in retail businesses in the towns.

The second point I want to raise is in regard to correspondence I received from the ESB Retired Staff Association. It proposed that a meaningful mechanism be included in the legislation to provide that it can be part of negotiations that would take place. Where there is a collective agreement between employers and employees, in many cases it has a direct impact on pensions but pensioners and the widows of pensioners have no say in that regard. Changes in terms and conditions can have a substantial impact on them. We would all have dealt with cases involving the widows of pensioners but mainly retired pensioners where a deal has been negotiated between a trade union and an employer that has sold out on the pensioners. The trade union will focus on the rights of its existing employees who are paying their dues to the union, and the union cannot be blamed for doing that. However, the rights and entitlements of pensioners have been sacrificed to get a deal with the existing employees and that should not happen. They all need to be treated in an equitable manner. We are securing rights or employees in this legislation but we also need to provide for the pensioners. They have a fixed income and in some cases, it is tied in with the current rates which, hopefully, will keep their income in line with inflation. They do not have the ability to earn additional income. They plan their retirement based on that income. When cuts are imposed, as has happened in the case of retired employees in the public sector, it has an impact on their living standards and perhaps on their ability to service loans or mortgages that they have taken out on behalf of their sons or daughters.

A mechanism needs to be created. The ESB Retired Staff Association has suggested that the definition of "worker" be changed to include former workers. I do not know how the Government can address this matter, but some recognition needs to be given to it in the legislation because their rights should not be undermined.

The association also raised the issue of the Pensions Acts. Rather than including collective pensioner representation at the tail end of the process when there is a pension scheme deficit, it needs to be included at the front end. Regardless of whatever provision is made for retired workers in this legislation, they need to be included at an appropriate time, not after the agreement between the employer and employees has been signed and is already a fait accompliwhere people are only going through the formality of consulting pensioners with no intention of making a change even though there are direct implications for a company's retired employees. How to draft such a measure in legislation poses a challenge, but we should not sacrifice pensioners just to get a deal with existing employees. Mechanisms need to be established so as to ensure that it does not happen.

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