Dara Calleary (Mayo, Fianna Fail)

First, I will describe the context for this Bill. FÁS is the national training and employment authority and has the remit to provide a range of proactive job-related services, supports and programmes to assist individuals to remain in and return to the labour market. The agency also promotes workforce development by upgrading the competencies and qualifications of individuals and by providing and facilitating targeted training programmes and services to employees and especially to the unemployed.

There was a welcome fall in the live register in October. However, despite this decrease some 412,400 people remain on the live register. The Government is committed to continuing to provide these individuals with the necessary assistance during this difficult period such that they can return to work as quickly as possible.

Significant numbers of unemployed persons leave the live register on an ongoing basis. From November 2008 to October 2009 almost 155,000 people are recorded as leaving to employment. This is a positive trend that shows there are still jobs available and that the Government activation measures are assisting the unemployed to develop their skills and secure employment. In this context, I highlight some of the achievements of FÁS in 2008 to illustrate the scale of the work being carried out by the organisation and its staff.

Under training in employment measures, some 26,100 apprentices were trained to meet future craft skills needs and 32,400 employees were upskilled in priority skill areas, including information and communications technology and management skills. Under training for the unemployed, some 7,900 received specific skills training and 12,800 received training in foundation skills, including early school leavers and people with disabilities. Under employment programmes, some 24,400 people were on a community employment or a job initiative programme at the end of December 2008. Under employment services, FÁS employment services received notification of 96,000 job vacancies. Some 60,000 people were referred to FÁS in 2008 from the live register, of which 41,000 were interviewed and approximately 34,000 had left the live register by the end of the year.

I assure the Seanad that the Tánaiste is working closely with her colleagues the Minister for Social and Family Affairs, Deputy Hanafin, and the Minister for Education and Science, Deputy O'Keeffe, to ensure appropriate responses are developed and put in place to meet the upskilling needs of those who are losing their jobs or facing uncertain employment prospects.

I reiterate that the fact there were problems in one area in FÁS does not in any way reflect the work of the majority of the staff in FÁS, who are hardworking and committed to their role in supporting those who avail of the training or employment activities of the organisation. I acknowledge the excellent work carried out by them. Their commitment and professionalism are crucial in helping us to deal with the key labour market challenges currently facing this country. Effective governance in any organisation is fundamental to efficient and cost effective delivery of services. Effective governance flows from the board of an organisation and it is with this in mind that it is proposed to make a number of structural changes to streamline the board of FÁS. In future, the board of FÁS will be comprised of members who have the necessary expertise and competencies to lead FÁS proactively in the current economic environment.

It is against this background that I bring the Labour Services (Amendment) Bill 2009 before this House for its consideration. The Bill is part of a response to ensure FÁS is fit for purpose and operates under the highest standards of corporate governance. I propose to offer some general observations on the rationale and general principles informing the content of this amending legislation and then proceed to summarise the provisions of the Bill. I appreciate that Members will have greater opportunity to explore the provisions in more detail on Committee Stage, to which I look forward.

The Labour Services Act 1987 established FÁS more than 20 years ago. In the intervening period there has been a sea change in the worlds of corporate governance and public service ethics. One of the aims of this Bill is to introduce current best practice in these areas into legislation in order to improve and update the corporate governance structure in FÁS. The Bill also takes account of the recommendations contained in the Committee of Public Accounts Fourth Interim Report on Special Report 10 of the Comptroller and Auditor General and FÁS 2007 Accounts and the work of the Comptroller and Auditor General. I pay tribute to the work of Deputy Bernard Allen and the members of the Committee of Public Accounts for the amount of time and work on FÁS in the past number of months.

The board of FÁS as it is currently constituted is considered large and unwieldy. It is proposed to reduce the size of the board from 17 members to 11 members, including the chair. As part of this process, it is also intended to change the composition of the board. The board will be appointed on the basis of relevant experience and competencies in areas such as the functions of FÁS, finance, corporate governance and public administration. This will be a move away from the current system where a number of board members are nominated by bodies not accountable to the Oireachtas. The Bill provides for a system of rolling appointments and resignations of board members. Experience has shown that this system has the dual benefit of preserving corporate knowledge and at the same time bringing new ideas to a board. The Minister for Enterprise, Trade and Employment will appoint the members of the board in consultation with the Minster for Education and Science and the Minister for Social and Family Affairs. It is also proposed to include the director general of FÁS as an ex-officio member of the board as is standard practice in other agencies under the remit of the Department, such as IDA Ireland and Enterprise Ireland. The inclusion of the director general on the board of FÁS will improve the lines of communication between the executive and the board and will assist the board in its deliberations on often complex and varied matters.

There is considered to be a lack of clarity around the accountability of the director general of FÁS to the Oireachtas. In order to resolve this matter, provisions have been included in the Bill that set out quite clearly the accountability of the director general to the Committee of Public Accounts and other committees of the Oireachtas.

FÁS has a significant annual budget and it is important that its spending is directed in a way that is both transparent and provides value for money. External contractors provide a number of services to FÁS and it is in this context that provisions have been included in the Bill that will prohibit staff and board members from engaging in procurement matters where a conflict of interest exists. These provisions also provide for appropriate penalties where these rules are broken, including dismissal for members of staff and the removal from the board of board members. Wrongdoing can take place in large organisations in both the public and private sector even where proper internal financial control structures are put in place. Against this background, provisions have been included in the Bill to protect bona fide whistleblowers when reporting wrongdoing at any level within the organisation.

I propose to summarise the main provisions of the Bill. These will be examined in more detail on Committee Stage. Section 4 provides that the director general of FÁS shall be accountable to the Committee of Public Accounts. He shall, when required, give evidence to the committee on the regularity and propriety of transactions recorded in any accounts of FÁS subject to audit, the economy and efficiency of FÁS in the uses of its resources, the systems and procedures employed by FÁS for the purpose of evaluating the effectiveness of its operations and any matters affecting FÁS in a special report of the Comptroller and Auditor General. As is the norm in these provisions the director general shall not express an opinion on the merits of any policy of the Government or a Minister of the Government.

Section 5 provides that the director general of FÁS shall be accountable to other committees of the Oireachtas. This section provides for the director general to attend any committee appointed by either or both Houses of Oireachtas and give an account in respect of matters of the general administration of FÁS that fall within the terms of reference of that committee. This section also provides that the director general is not required to attend to give an account to an Oireachtas committee of any matter that he is of the opinion is likely to be the subject of proceedings before a court or tribunal in the State unless, on foot of an application by that committee, the High Court determines otherwise.

Section 6 provides for a number of requirements for disclosure and conflicts of interests in respect of the members of the board and staff of FÁS. Under the provisions of this section, a board member must declare a material interest in any matter relating to a contract or arrangement that comes before the board. Following such a declaration the board member must absent himself or herself from the meeting, take no part in any deliberation on the matter and not vote on a decision relating to the matter. Similar provisions are included in this section with regard to staff members in FÁS. A staff member must disclose any material interest that he has in any potential agreement, contract or arrangement and must not take part in any negotiations or deliberations on this matter. In addition, he must not influence or seek to influence or make any recommendations on the matter. The legislation provides that in the event of a staff member contravening this section, FÁS may take appropriate action against that person including termination of the person's contract. The sanction against board members who contravene the provisions of this section is contained in section 9 of the Bill and provides for the removal of the board member by the Minister.

Section 7 provides protection from civil liability to employees of FÁS who make a bona fide report of offences being committed under any enactment or any serious wrongdoing being committed in respect of FÁS to the Garda Síochána or a member of the board. It also provides protection to employees who report contraventions to the Minister of directions given by the Minister. This section of the Bill introduces a prohibition on the penalisation of FÁS employees who report offences being committed, serious wrongdoing or contraventions of ministerial directions. Penalisation in the context of this section means suspension, layoff or dismissal or the threat of suspension, layoff or dismissal; demotion or loss of opportunity for promotion; transfer of duties, change of location of place of work, reduction in wages or changes in working hours; imposition of any discipline, reprimand or other penalty; and coercion or intimidation. This section also makes it an offence for staff members of FÁS to make reports in bad faith to the Garda Síochána, members of the board or the Minister.

Section 11 provides for redress for penalisation contrary to the provisions contained in section 7 of this Bill. This section sets out the structure by which an employee of FÁS may seek redress if they are of the view that they are being penalised for reporting wrongdoing in FÁS. Employees may make a complaint to a Rights Commissioner if they consider that they are being penalised by FÁS for reporting breaches of legislation or serious wrongdoing with regard to FÁS. Following investigation of the complaint the Rights Commissioner will make a decision on the matter. Either party may appeal the decision of the Rights Commissioner to the Labour Court. Where FÁS does not carry out the terms of the decision of the Rights Commissioner, the employee may bring a complaint before the Labour Court to seek a determination to have the terms of that decision effected. In the event that FÁS fails to carry out the terms of the Labour Court determination the employee may make a complaint to the Circuit Court for an order directing FÁS to carry out the determination in accordance with its terms.

Section 8 is an amendment to section 13 of the Labour Services Act 1987 to provide for the removal of the prohibition on the disclosure of information obtained by a member of the board in the course of his or her duties in certain circumstances. The current legislation prohibits the disclosure of information with limited exceptions. This amendment will permit the disclosure of information specifically to the Minister for Enterprise, Trade and Employment and remove any doubt about there being a legal barrier to a member of the board reporting issues of concern to the Minister.

Section 9 provides for a restructuring of the board of FÁS in a number of ways. The board is considered large in comparison to many non-commercial semi-State boards and to streamline the board it is proposed to reduce its size from 17, made up of 16 ordinary members plus a chairman, to 11, made up of ten ordinary members, including the director general, and a chairman. The Bill will provide for a departure from the current model of 17 members where nominations can be made by other bodies — trade unions and employers nominate four members each and employees of FÁS elect two staff members to the board — to a model of 11 members where the Minister for Enterprise, Trade and Employment, in consultation with the Ministers for Social and Family Affairs and Education and Science, will select the chair and nine ordinary members based on their ability and experience. The other member will be the director general. Due to a reduction in the size of the board, the quorum for a meeting of the board will be reduced from nine to seven. Nominations to the board will be based on relevant experience and competencies in the functions of FÁS or finance, trade, commerce, corporate governance or public administration. Membership of the board will be limited to two terms of not more than five years each. In addition, to facilitate the development of fresh ideas and experience, the section also provides for a rolling system of appointments to the board.

The section also includes a provision to amend paragraph 12 of the First Schedule to the Labour Service Act, 1987. The purpose of the amendment is to update and strengthen the regulations surrounding the dismissal of a member of the board and is in keeping with current legislation in this area. The amendment provides that the Minister may remove a member of the board if the member is not adequately performing his or her functions, if there is a material conflict of interest in relation to the performance by the member of his or her functions, if it is necessary or expedient for the effective performance by FÁS of its functions, or if a member of the board has contravened the provisions in relation to disclosure of interest as provided for in section 6 of the Bill.

Section 10 provides for the repeal of Part II of the Schedule to the Labour Services Act 1987, as employees of FÁS will no longer be appointed to the board following election as described in the Schedule.

I reiterate that it is the Government's view that FÁS is a key agency in its plan to fight unemployment and ensure workers do not become distanced from the labour market. The introduction of the Bill sends a clear signal to the public on the Government's commitment to restore public confidence in the ability of FÁS to deliver on its training and employment mandate. On Thursday the Government will publish advertisements seeking expressions of interest in serving on the new board of FÁS. I commend the Bill to the House.