Dara Calleary (Mayo, Fianna Fail)

I am pleased to bring the Industrial Relations (Amendment) Bill 2009 before this House for its consideration and, moreover, to have the debate on the Bill initiated in this House. I propose to offer some general observations on the rationale and general principles informing the content of this amending measure, and then to proceed to summarise the provisions of the Bill. I appreciate that Members will have a fuller opportunity to explore the provisions in more detail at Committee Stage, something to which I look forward.

In the context of the Towards 2016 Review and Transitional Agreement 2008-2009, the Government and the social partners had agreed to the implementation of a series of measures on aspects of employment rights and compliance. These included, in particular, the introduction of legislation to strengthen the arrangements for the making of employment regulation orders, EROs, and registered employment agreements, REAs, that have been features of our legal system for more than 60 years and to provide for their continued effective operation. I am pleased to say that this commitment is being met within the framework of this Bill.

The joint labour committee, JLC, and registered employment agreement systems have been the subject of a number of recent legal challenges that have gone to the High Court. As well as raising issues specific to particular EROs or REAs, these challenges also related to the constitutional propriety of the legislative provisions under which they were made. This Bill will provide for a number of amendments to the existing legislative framework surrounding the JLC and REA systems, including improved procedures and clear principles and policies to be taken into account by JLCs when formulating proposals for EROs. The Bill also provides that EROs and REAs will be given legal effect in future by ministerial order and that a perceived gap in the scope of parliamentary supervision will be filled by providing for Oireachtas scrutiny of these instruments.

Joint labour committees are independent bodies composed of representatives of employers and workers in a particular sector with a chairman who is appointed by the Minister. There are currently 13 JLCs in existence. The committees meet periodically to discuss and agree rates of pay and conditions of employment to apply to workers in a particular sector. JLCs operate in areas where collective bargaining is not well established and wages tend to be lower than other sectors of the economy, for example, in the hospitality sector, hairdressing, retail groceries and contract cleaning.

I am very conscious that many firms operating in sectors covered by EROs are experiencing considerable difficulties at present. I appreciate that these issues, along with the impact of strengthened arrangements for enforcement and inspection, have also been of concern to Members of this House and have been debated here in recent months in particular with my predecessor, the Minister of State, Deputy Kelleher. These difficulties have been to the fore throughout a series of meetings I have had since I took office as Minister of State with responsibility for labour affairs during which I have met representatives of employer organisations and of those employed in these sectors.

In my view the parties represented on a joint labour committee are best placed to address the impact of the economic crisis on employment levels and the viability of services in their sectors. They are the ones who must discuss and reflect on the new realities in the context of the downturn in the economy.

At national level the social partners have co-operated in developing a range of improvements designed to modernise the JLC system as envisaged under previous social partnership agreements. These reforms have facilitated the amalgamation and abolition by agreement of a number of JLCs, and the strengthening of their operational arrangements through the standardisation of the content of EROs. They have resulted in a closer alignment of the variation of EROs with the cycle of adjustments of the national minimum wage.

I am pleased to say this shared capacity for co-operation has also been demonstrated by the representatives who comprise the membership of particular JLCs. This is reflected in the agreements reached on the adjustment of the Sunday premium rate from double time to time plus one third that have already taken effect in hotels and catering establishments over recent weeks. That same realism has informed the successful efforts made by both sides within the agriculture and retail sectors to reach agreement on the deferral of increases in minimum rates that would otherwise have fallen due later this year.

It is exactly 100 years since bodies empowered to set minimum wages were first established in Britain and Ireland under the Trade Boards Act 1909. As part of the major reform of the Irish industrial relations pioneered by the then Minister for Industry and Commerce, Seán Lemass, in 1946, these bodies were given the new title of joint labour committees and their competence was expanded beyond the fixing of minimum wages only so as to cover the regulation of conditions of employment as well. Seán Lemass decided to amend the powers of the original trade boards and to transfer the supervisory and order-making functions that had been exercised by the Minister for Industry and Commerce in the years after the foundation of the State to the new, independent Labour Court. Under the provisions of the 1946 Act, when a JLC agrees terms and conditions, it makes proposals to the Labour Court on foot of which the Labour Court can make employment regulation orders, EROs.

Today I am proposing a change that will restore the position whereby the Minister makes the order giving effect to these proposals. At the same time, I am proposing to strengthen the manner in which the functions delegated to joint labour committees are supervised by the Labour Court and to ensure that the statute sets out a clear set of procedures and principles within which these delegated functions are to be discharged. I am also proposing that the standard legislative provision dealing with the laying of statutory instruments before the Houses of the Oireachtas will apply henceforth to these orders.

The Irish system of registered employment agreements, REAs, has been in force since 1946 and reflects the European tradition of labour law support for autonomous collective bargaining. In most other EU countries similar provisions apply in employment law facilitating the general enforceability of certain collective agreements, through either legislation or other administrative measures. Collective agreements can be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it registers the agreement. The effect of this is to make the provisions of the agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not a party to the agreement. In line with the arrangements I have already mentioned in the case of employment regulations orders, I am proposing an amendment that will ensure that henceforth such orders confirming the terms of a new or varied agreement will be made by the Minister rather than simply under the authority of the Labour Court.

The Bill also provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990. Access to the dispute settling agencies - Labour Relations Commission, Labour Court and Rights Commissioner Service - is governed by the definition of "worker" in section 23. At present, vocational education committee officers do not have access to these agencies, as they are specifically excluded from the definition of "worker". Up to now these officers have been served by a scheme of conciliation and arbitration, but they now wish to be able to access the dispute-settling agencies like workers generally. This amendment would allow officers of VECs, other than teachers, access to the dispute-settling agencies. Teachers in VECs would continue to be served by a scheme of conciliation and arbitration.

I also intend to follow the evolving best practice in parliamentary procedure with regard to the use of delegated powers by deleting the provision that had enabled the Government to amend the definition of worker simply by order. This will ensure that future changes in the definition of worker will be made only by means of primary legislation. To avoid any doubt in this regard, a ministerial order of 1998, giving local authority staff access to the dispute-settling agencies, is also being confirmed by a proposed amendment of the statute.

In addition to proceeding with legislative proposals to strengthen the existing JLC system and the operation of REAs as outlined in this Bill, I am also considering introducing an "inability to pay" mechanism so as to rebalance the existing statutory wage-fixing mechanisms. The current demands of both trade unions and employers to modernise and streamline the JLC system and to strengthen the legal status of REAs should be complemented by the introduction of an amendment to alleviate the serious difficulties that employers in some sectors currently experience under both systems. My officials are engaged in consultations with the social partners on this proposed addition to the Bill. I intend to bring forward an amendment to the Bill on Committee Stage in light of the outcome of these consultations.

Section 1 provides for the Short Title, collective citation, construction and commencement provisions of the Bill. Section 2 provides for the definitions associated with the Bill. Section 3 provides for a new definition of "registered employment agreement" to differentiate those made before the commencement of this Act, which were registered by the Labour Court, and those made after the commencement of the Act, which will be confirmed by ministerial order.

Section 4 provides for the confirmation by order of a registered employment agreement by the Minister. Following receipt of a copy of an agreement, the Minister shall make an order confirming the terms of the agreement. The standard legislative provision dealing with the laying of the order before the Houses of the Oireachtas by the Minister will apply. Section 4 also provides that the introduction of the new procedure will not detract from the validity of an existing REA made before the commencement of this Act. Sections 5 and 6 provide for the same procedure as under section 4 in respect of an order to vary an agreement or to cancel an agreement respectively.

Section 7 provides for a new definition of "employment regulation order" to differentiate between those made by the Labour Court before the commencement of this Act and those made by ministerial order after the commencement of this Act.

Section 8 provides for the "principles and policies" to which a joint labour committee must have regard when formulating proposals to submit to the Labour Court for employment regulation orders. In this context, a JLC must have regard to the following: the legitimate interests of the workers; the legitimate interests of the employers; the prevailing economic circumstances; the prevailing employment circumstances of the workers; the prevailing commercial circumstances of the employers; and the terms of any national agreement relating to pay and conditions, for the time being in force. Section 8 also provides that where an employment regulation order has been in force for less than six months, a joint labour committee may submit proposals for revoking or amending the order where it is satisfied that the order contains an error, or exceptional circumstances exist which warrant the revocation or amendment.

Section 9 provides for the making of an ERO by the Minister. Following adoption of a proposal for an ERO by the Labour Court, the proposals will be forwarded to the Minister who shall make an order giving effect to the proposals. The standard legislative provision dealing with the laying of the order before the Houses of the Oireachtas by the Minister will apply. Section 9 also provides that the introduction of the new procedure will not detract from the validity of an existing ERO made before the commencement of the Act.

Section 10 provides for the amendment of the definition of "worker" under section 23 of the Industrial Relations Act 1990 to allow officers of VECs, other than teachers, access to the dispute-settling agencies. Section 10 also provides for the deletion of sections 23(2), 23(5) and 23(6) of the 1990 Act. Section 23(5) provides that the Government may by order amend the definition of "worker" in section 23(1) and may by order revoke or amend any such order. Section 23(6) deals with the laying of such orders before the Houses of the Oireachtas. The effect of these amendments is to remove the power to make changes in the definition of worker by ministerial order and to ensure, in line with the decision in the case of Mulcreevy v. the Minister for Environment and Local Government, that future changes in the definition of worker will be made by primary legislation.

Moreover, the Industrial Relations Act 1990 (Definition of "Worker") Order 1998 amended the definition of "worker" in section 23(1) of the Industrial Relations Act of 1990 in order to give officers of local authorities, including health boards, access to the Labour Relations Commission, Labour Court and rights commissioners. Since it is considered unsafe to rely on changes made to statute by secondary legislation, it is now proposed to make the amendment in primary legislation. The definition of "local authority" contained in section 23(2) of the 1990 Act should be deleted in consequence.

Section 11 provides for improved procedures to be followed when formulating proposals for an ERO. The current legislation merely requires that, when proposals for the making of an ERO are being forwarded to the Labour Court, the JLC chairman must submit a report to the court on the circumstances surrounding their adoption by the JLC. The Bill provides that, in future, the chairman of the JLC shall forward to the Labour Court, in addition to a report on the circumstances surrounding their adoption, copies of all written submissions and any other documentation considered by the JLC in formulating its proposals. The Labour Court will consider the material forwarded to it in considering the JLC's proposals and may hold a hearing where there are objections to the proposals.

Section 12 provides that the term of office of a chairman of a JLC shall not exceed five years and he or she shall cease to hold office on attaining the age of 65. An existing JLC chairman shall hold office for no longer than three years following enactment. Section 13 provides for consequential amendments to the Employment Permits Act 2006 and the Organisation of Working Time Act 1997.

As I mentioned, the statutory minimum terms and conditions applicable to workers in vulnerable sectors covered by EROs, along with our system of universally applicable, legally enforceable collective agreements represented by REAs, together have their origin in the provisions of the Industrial Relations Act 1946. Senators will be aware that these provisions have taken on new significance in the light of recent controversy about the European directive on the posting of workers and the implications of the recent European Court of Justice rulings in cases such as Laval and Rüffert. I commend the recent report by the Oireachtas Joint Committee on European Affairs on the Lisbon treaty and workers' rights for confirming that the disputes which gave rise to those cases could not have happened in Ireland. Since EROs and REAs have been enshrined in our domestic legislation and now qualify - along with our national minimum wage - as core employment standards under the EU directive, they are automatically applicable to and can be enforced against contractors based outside Ireland. These instruments ensure foreign service providers cannot undermine the competitive position of Irish contractors or displace Irish workers.

The overall purpose of this Bill, together with the Employment Law Compliance Bill, which has completed Second Stage in Dáil Éireann and is now awaiting further consideration on Committee and remaining Stages before coming to the Seanad, is to secure greatly increased public confidence in the system of compliance and to strengthen and uphold the established employment rights bodies against legal challenge. With the publication of this Bill and this debate, the Government is continuing to meet commitments on core elements of the range of employment rights measures agreed with the social partners and is again demonstrating the benefit of structured social dialogue as an enabler of economic and social progress. I commend the Bill to the House.