Alan Dillon (Mayo, Fine Gael)

I welcome the opportunity to discuss Government's position on Second Stage of this Private Members' Bill, the Trade Union Recognition Bill 2021. The Bill aims to establish a legal mechanism for trade union recognition for workers, who constitute at least 20% of employees in an employment or any category within that employment. It also proposes criminal sanctions for employers who fail to recognise and engage with the trade union. After careful consideration, Government will oppose this Bill for several compelling reasons. I will outline these reasons and the plans the Government has for strengthening supports for collective bargaining this year.

Legal advice provided to the Government since the Bill was originally considered by this House outlines how this Bill gives rise to an apparent breach of Article 40 of the Constitution, at least insofar as it proposes an employer be compelled to recognise and engage with a trade union under threat of criminal sanction. Article 40 of the Constitution guarantees the right of citizens to form associations and unions. The Supreme Court has also held there is no duty on employers to recognise unions. Any legislation which seeks to compel an employer to consult or engage with a trade union would therefore be at significant risk of being found to be unconstitutional. In addition, the Bill fundamentally misrepresents the legal basis of employment regulation orders, EROs, which are intended to be sectoral wage-setting mechanisms negotiated at joint labour committees, not applicable to individual employers or trade unions.

Certain sections of the Bill, such as those related to unfair dismissal for seeking trade union recognition, are already covered under existing legislation, specifically the Unfair Dismissals Acts. It has been the consistent policy of successive Irish Governments to promote collective bargaining through legislation and by the development of an institutional framework supportive of a voluntary system of industrial relations that is premised upon freedom of contract and freedom of association.

The Industrial Relations (Amendment) Act 2015 defines "collective bargaining" as comprising voluntary engagements or negotiations with the object of reaching agreement regarding working conditions or terms of employment or non-employment of workers. There is an extensive range of statutory provisions designed to support collective bargaining. The freedom of association and the right to organise and bargain collectively are also guaranteed in several international instruments the State has ratified and is therefore bound to uphold under international law.

This long-standing tradition of a voluntarist system has served us well through the decades. Ireland’s attractiveness as an investment location and the basis for much of our competitive advantage have been due to the stability and industrial peace provided by our voluntary model for social dialogue. This has also fostered a stable and co-operative industrial relations environment, facilitated numerous successful resolutions of industrial disputes and the negotiation of collective agreements that have benefited both workers and their employers.

The voluntarist system of industrial relations allows for tailored solutions that meet the specific needs of different sectors and workplaces. By fostering a co-operative and non-confrontational approach to industrial relations, the voluntarist system has contributed to industrial peace and stability. The system is based on mutual respect and trust between employers and trade unions. A strong and well-functioning collective bargaining system supports productivity and fair wages, especially in low-paid sectors. For example, the 2024 sectoral employment order for the construction sector comes into effect on 1 August and will introduce higher rates of pay for craft and general construction workers. Their pay will increase by 3.4% in August 2025 and by a further 3.2% in August 2026. The sectoral employment order process is a statutory wage-setting mechanism provided for in the Industrial Relations (Amendment) Act 2015 and is based on the principles of collective bargaining.

In addition, three new employment regulation orders came into effect last year, covering workers in the early years learning, security and contract cleaning sectors. These agreements demonstrate how effective the joint labour committee system can be when representatives of employees and employers voluntarily negotiate together to identify a mutually beneficial agreement.

Members will also be aware of the directive on adequate minimum wages, which aims to promote collective bargaining on wages in all EU member states. It sets out that each member state in which the collective bargaining coverage rate is less than a threshold of 80%, as is the case in the majority of member states including Ireland, shall provide for a "framework of enabling conditions" for collective bargaining and shall also establish an action plan to promote collective bargaining by end of 2025.

There is no obligation on member states to reach any prescribed level of collective bargaining coverage within any defined time period. In 2023, a technical group was established with the social partners to discuss collective bargaining and Ireland's action plan. It has been meeting regularly and constructively. The capacity of our social partners to engage effectively in collective bargaining is also a key element of the directive. I hope that the Government can further support the social partners in this area. Government supports for collective bargaining is reflected in the programme for Government which contains a commitment to finalise an action plan on the promotion of collective bargaining by the end of this year.

I am pleased my Department held a public consultation process on the promotion of collective bargaining from 14 April to 12 May. My Department is now carefully reviewing the submissions received. It is intended that the consultation will help guide us in finalising the proposals, both legislative and administrative, which may be considered for inclusion in Ireland’s action plan. I want to make the process of finalising this action plan as open and transparent as possible.

I also highlight the many positive and progressive changes to workers' rights which the Government has introduced in recent years. These employment law developments have resulted in significant improvements for conditions of workers. I would like to mention the legislation introduced in July 2024, which provided for the establishment of the Employment Law Review Group, ELRG. This work kicked off in January of this year, when the Minister, Deputy Peter Burke, announced the appointment of the chairperson and members of the ELRG. Since then, the inaugural meeting of the group took place in March and the group's work programme has been agreed and published on the Department's website. The work programme contains three items: the determination of employment status; review of the Unfair Dismissals Act 1997; and review of the notice period in the minimum notice of terms of the Employment (Miscellaneous Provisions) Act 2018. The work of the group will be critically important in the coming years. It will provide a unique, independent and expert analysis on our suite of employment rights and protections.

Another important development took place in January this year when the European Communities Organisation of Working Time (Defence Forces) Regulations 2025 was signed into law. These important regulations provide for the statutory protection of the Organisation of Working Time Act 1997, which now applies to members of the Defence Forces. In 2024, the Employment Permits Act 2024 introduced significant changes, including the introduction of a new seasonal employment permit. This is a short-term permit which will allow non-EEA nationals to work in seasonal employment for up to seven months per year.

Last year also saw the commencement of the rights to request remote working under the Work Life Balance and Miscellaneous Provisions Act 2023. In July of last year, we saw the commencements of the Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024. This amended the Protection of Employment Act 1977 to further enhance the protection of employees facing collective redundancies, caused by employers' insolvency.

Since the introduction of statutory sick leave in 2023, business owners, particularly in the retail and hospitality sectors, have consistently raised concerns about the collective impact of such measures, in light of rising costs of input and security costs. We saw the introduction of statutory sick pay, which marked a key policy development for Ireland. The entitlement was originally for three days and was increased to five days in January 2024. Recent research from the Department has shown that firms in the retail, accommodation and food services sectors are likely to be more impacted should the statutory sick pay entitlement increase from five days to seven days. Following this work and in line with relevant legislation, statutory sick pay will remain at five days.

Another piece of legislation which has had a significant positive impact for workers is the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022. This Act has been in operation for more than two years and obliges employers to distribute tips fairly and to prominently display the tips distribution policy for its employees. Regarding the wider work in this area, there has also been significant development at EU level with my Department to engage in work within the EU platform work directive, which entered into force on 1 December 2024 and which will be transposed by 2 December 2025.

The Government will continue to protect the measures which have been put in place to support collective bargaining, within a volunteerist, industrial relations framework, which has served the State well to date. It is also important to do this in a manner that is ambitious, balanced, legislatively sustainable and cognisant of the views of the public consultation that my Department will conclude, on the basis that the Government opposes this Private Members' Bill, while reiterating our continued support for proactive engagement with workers, their representatives and their employers.

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