Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank Senator Bacik for introducing the Bill and other Senators for participating in this debate. I have not opposed the Bill because a fresh examination of this issue is timely. I understand the motivation outlined by Senator Bacik and others to protect vulnerable workers. The Bill seeks to establish the rights of self-employed individuals to be represented by a trade union for the purposes of collective bargaining and to allow representative bodies to enter into collective negotiations with a public body in respect of services provided to the public by its members.

It is important that Senators remember that our competition law derives from the EU treaties. Since competition policy falls within the competence of the EU, we are not sole authors of our approach in this respect.That does have a bearing on the way in which we have to assess proposals such as this. We need to look at the implications of the proposals in the context of the wider EU provisions and we have to make sure all legislation, however well motivated, is designed in such a way that it does not have unintended consequences in other areas. It is important that we do that work and that we have a proper regulatory impact assessment of any legislation of this nature, because it will apply to many professions - not just to vulnerable workers, but also people in very well paid professions, farming, and so on. It raises wider issues and we need to ensure that we understand the implications of any proposals of this nature, while recognising the motivations behind them.

The issues this Bill and its two substantive provisions seek to address are governed by the provisions of section 4(1) of the Competition Act 2002 which, among other matters, prohibits price-fixing. The subject matter of the proposed Bill has its genesis in an investigation conducted by the then Competition Authority in 2004 regarding possible price-fixing among self-employed actors and advertising agencies. The authority found that an agreement between Irish Equity, on behalf of the actors, and the Institute of Advertising Practitioners in Ireland, on behalf of advertising agencies, was in breach of competition law in that it provided for both specific fees for services rendered and various other terms and conditions. In August 2004, the Competition Authority published an explanation of its decision and the text of the undertakings made to it by Irish Equity and the Institute of Advertising Practitioners in Ireland, in which both parties agreed not to fix fees and to comply with the provisions of the Competition Act. The authority’s investigation centred on the fact that section 4 of the 2002 Competition Act prohibits anti-competitive agreements, decisions and concerted practices. Section 4 applies when undertakings are engaged in arrangements which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State. Section 4(1) reads:

Subject to the provisions of this section, all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void, including in particular, without prejudice to the generality of this subsection, those which—(a) directly or indirectly fix purchase or selling prices or any other trading conditions

Section 3 of the 2002 Act defined an undertaking as “a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service". This was expanded in the Competition and Consumer Protection Act 2014 to provide legal clarity that it includes, where the context so admits, an association of undertakings. In order to establish whether a breach of section 4 of the Act has occurred, the then Competition Authority, now the Competition and Consumer Protection Commission, would have needed to prove that there was an agreement, decision or concerted practice; that the parties to that agreement, decision or concerted practice were undertakings; and that the object or effect of the agreement, decision or concerted practice was to prevent, restrict or distort competition.

In the 2004 case, I understand that the parties did not dispute the existence of an agreement and neither did the institute contest that it was an association of undertakings and that its members were undertakings in their own right. The issue the then authority had to consider was whether actors were undertakings and whether Irish Equity was an association of undertakings for the purposes of the Act. In layperson’s terms, it was a question of whether the actors in question were self-employed independent contractors, who are subject to the Act, or employees, who are generally not subject to the Act. The authority considered this issue to be particularly important in this case, where the trade union had both employed persons and self-employed independent contractors as members. The authority stated in its decision that while it was perfectly legal for a trade union to represent employees in collective bargaining with their employers, its trade union mantle could not exempt its conduct when it acted as a trade association for self-employed contractors. The authority also stated that if one were to take an inflexible approach and find that all trade union members were exempt from the Act, the protections afforded to consumers by the Oireachtas in the Competition Act could easily be bypassed in that associations of independent professionals could obtain sanctuary for their members by adding "union" to their name and obtaining a negotiating licence.

On the question of whether actors are undertakings within the meaning of the Competition Act, I understand the Competition Authority noted that the Revenue Commissioners treated the vast majority of actors in the State as independent contractors rather than as employees subject to PAYE. It also considered other factors, such as the following: actors providing advertising services generally are not obliged to work for a single advertising agency and may work for several at a time; such actors generally do not receive the benefits one usually associates with a contract of employment - holiday pay, health insurance, maternity leave, and so on; such actors do not generally have employment security and are free to accept or decline specific work as they see fit; and actors are not generally thought of as employees of a particular agency. In light of these factors, the Competition Authority took the view that most actors were independent contractors and therefore were undertakings subject to the Competition Act. The authority also said there might be some actors who had genuine contracts of service and who were therefore employees, as is the case with some musicians. However, its investigation into that particular agreement revealed that the vast majority of actors providing advertising services under the agreement were independent contractors and therefore undertakings.

Having found the actors to be undertakings, it followed that Irish Equity in this case was an association of undertakings and subject to the provisions of the Competition Act. The then Competition Authority had the option to enforce competition law either by seeking appropriate civil remedy in the High Court or by recommending the prosecution of a criminal action by the Director of Public Prosecutions. Ordinarily, the authority pursued criminal prosecutions only where there was clear evidence that parties were in breach of the more serious or hardcore provisions of the Act. Although the authority’s investigation at the time revealed an element of price-fixing, it elected to pursue civil relief. However, prior to the commencement of legal proceedings, the parties expressed their willingness to address the competition concerns and signed binding contractual undertakings to the authority. The authority also acknowledged the right of Irish Equity to represent employed actors in collective bargaining with employers. I understand the view expressed by the authority was in respect of this particular set of circumstances only, as it is the courts alone that can interpret the law.

As I mentioned earlier, section 4 of the Competition Act 2002 prohibits and makes void all agreements between undertakings, decisions by bodies representing undertakings and concerted practices that have as their object or effect the prevention, restriction or distortion of competition in trade in any good or service in the State or any part thereof. This reflects the provisions of Article 101 of the Treaty on the Functioning of the European Union, previously Article 81 of the Treaty Establishing the European Community, which contains a similar prohibition on agreements, decisions and concerted practices that may affect trade between member states. Under both Irish and EU competition legislation, therefore, self-employed persons, including professionals who are not employees, are regarded as undertakings.

There is ample evidence of EU case law at the European Court of Justice, ECJ, which has determined that professionals are regarded as undertakings from an EU competition law angle. Indeed, just over a year ago, as Senators have acknowledged, on 4 December 2014, the ECJ made a ruling on a case, FNV Kunsten Informatie en Media v.Staat der Nederlanden - my Dutch is not so good - relating to self-employed substitute orchestral musicians in the Netherlands, of which many Members will be aware. These musicians were part of a trade union, and claimed they had been excluded from minimum fee provisions in a collective agreement which they had formerly enjoyed. The ECJ ruling emphasised that self-employed service providers are, in principle, undertakings and are therefore subject to competition law. However, the ECJ also acknowledged that it is important to examine, in each case, whether individuals who appear to be self-employed service providers should, in fact, be categorised as false self-employed because they are, in reality, employees who should not be subject to the provisions of competition law that apply to self-employed independent contractors. The court made it clear that it is for national courts to examine the facts of particular cases in order to determine whether an individual should be classified as a “false self-employed" person - and therefore be deemed to be an employee for competition law purposes - or as a genuinely self-employed independent contractor.

That case has been helpful in that it sets out the considerations the ECJ had regard to. However, that ruling was a preliminary ruling on the interpretation of EU law and leaves the application of that law to the national court. Ultimately, that court had regard to a particular set of circumstances, and so any future cases would need to be examined on their own merits. It is not possible to deduce how the ECJ would interpret the law if a different set of circumstances were presented before it. I know the Competition and Consumer Protection Commission has carefully considered this case and is satisfied that the judgment constitutes a restatement of well established principles of EU law regarding the application of competition law to collective labour agreements.It is also of the view that the analysis and conclusions of the former Competition Authority in 2004 on the agreement between the Irish Actors Equity, SIPTU and the Institute of Advertising Practitioners in Ireland remain consistent with Irish competition law as interpreted in the context of the relevant principles of EU competition law set out in the European Court of Justice ruling of December 2014. We must be mindful that any deviation from the current consistency that exists between EU and Irish law could have unintended consequences. It would be prudent to explore whether an anomalous position could arise whereby if the Bill were enacted, self-employed people would be exempt under Irish competition law but could be in breach of EU competition law under Article 101 of the treaties. For this reason, I will need to consult with the European Commission on the draft text of the Bill, particularly section 2, in the context of the post-programme surveillance process on the EU-IMF programme of financial support for Ireland. This is desirable and prudent because the strong view of the EU Commission, as part of the troika, in 2012 was that any exemptions from competition law in any sector would not be beneficial to the Irish economy.

With reference to section 3 of the Private Member’s Bill, under existing Irish competition law, representative bodies cannot decide on the fees paid for services provided by their members. I refer Senators to the example given in respect of doctors and so on. Nor can their members agree a price between themselves for their services because this is regarded as price fixing contrary to the 2002 Act. However, the Stale is not prohibited from unilaterally setting a fee that it is willing to pay for such services. Neither is it prohibited from consulting a representative body and its members as long as the State retains the power to set the price. Thus, the impact of any exemption from the Competition Act in respect of professionals providing services to the State would have to be examined with a view to determining whether there could be an adverse impact on Exchequer finances. In this regard, it is timely to recall the undertakings given by the Irish Medical Organisation, IMO, to the High Court in May 2014 to the effect that it would advise its members that they should decide individually, not collectively, whether to participate in publicly-funded GP health services on such terms as are offered by the Minister for Health. The then Competition Authority believed that process contained safeguards which protected the State, as a purchaser of GP services, as well as public patients and taxpayers, from potentially anti-competitive conduct.

Equally, we must be mindful that any subjugation of competition law could potentially result in higher prices for businesses and, possibly, consumers, thereby affecting competitiveness. It is also possible that as a result of the application of section 3 of the Private Member’s Bill, the State and, therefore, taxpayers would be subjected to higher costs. The growth of the economy is not something any of us want to see jeopardised. We need to be careful in these areas to ensure we are not inadvertently adding to costs without consideration of the wider implications of this section, which will have a broad application across a large number of professions and areas of activity in Irish life. Also, we would need to be mindful whether it would set a legal precedent that could lead to a rise in demands for similar treatment from a wide range of other self-employed groups. Depending on whether that scenario materialises, there could be a profound impact on competition in the State and on the State's ability to get value for money for the services in respect of which it contracts.

In the context of the possible enactment of the Bill, there are other possible legal consequences that would need to be explored in detail. I refer, for example, to whether the legislation would create a difficulty for the Competition and Consumer Protection Commission, CCPC, in seeking injunctions or to take action under the 2002 legislation in order to uphold competition law were there to be exemptions from the application of section 4 of the Competition Act. In that context, it does apply to concerted practices as well as to negotiating fees.

I understand the motivation behind the Bill but we must be careful in considering reform of this nature, which is undoubtedly based on the view that we need to protect certain categories of vulnerable workers, that we have assessed all aspects of the case. We have been careful to introduce reforms across the whole area of employment rights in a balanced way taking account of the impact on all sides, as evidenced, for example, by the Low Pay Commission. Senators will be aware that by taking that approach we have secured an increase in the national minimum wage, which came into effect on 1 January this year. During the decision making process in that regard we weighed up the potential impact of that measure across the economy. This evidenced-based approach is important as we seek to support workers in various areas of Irish life. The recently established Workplace Relations Commission makes it easier for all employees to exercise their rights and provides a wide range of information and advisory services to those who need to exercise those rights.

Another aspect upon which I must touch is the constitutional guarantee of the freedom of association, which has already been considered in a number of precedent-setting legal cases. Irish courts have already established the principle that a freedom or right to associate necessarily implies a correlative right not to join any trade union or a particular trade union. It would be important, therefore, to ensure that this right is also upheld and that the effects of the Bill do not hinder the application of those correlative rights.

I thank Senators for their participation in this debate. As outlined by Senator Mullins, there are many complexities and differing interpretations emerging in this area. For this reason, I think it is appropriate that we consider this issue afresh, which I am pleased to do. In regard to the calls by Senators Craughwell, Mooney and Ó Domhnaill for rapid enactment of this legislation, there are other issues, which I outlined earlier, which militate against that. We must be careful about what we do on foot of the complex issues at stake. In regard to Senator Mooney's invitation to me to comment on voice-overs in advertisements, I do not propose to go down that road. Senator Mooney also spoke about JobBridge and the potential for abuses of that scheme. I am the sure the Senator will be aware that this is a matter for the Department of Social Protection. While there were abuses of the scheme in the early stages, the Department has been has alert to them and has worked hard to stamp them out. Significant placement and work experience has been provided through JobBridge to people who were in the catch-22 situation of being well qualified but not having any work experience. The JobBridge scheme has provided such people with an opportunity to gain much needed experience. I know that many of the people who took up work experience in my Department found it very beneficial and have progressed to better opportunities as a result of it.

I again thank Senators for their contributions. While the Bill is timely, there are many issues which we need to consider. This has been a worthy debate and my Department will consider those issues further.