Pat Breen (Clare, Fine Gael) | Oireachtas source

As Senator Nash knows, I have some knowledge in this area - he was a Minister of State in the same area previously. That is why I am here. I am delighted to address the gathering this evening.

I thank Senator Gavan for the Bill. It is a good Bill, well-intentioned. Unfortunately, we need a little more time to look at the situation. The Government policy, as I have always said, is that there should be decent pay for decent work. The purpose of the Bill aligns with this and it is clearly well-intentioned, as I said. The Government will therefore not oppose the Bill.

I understand that the Bill stems from a desire to protect employees and ensure that they receive their entitlements. However, I think it is clear that more research needs to be carried out before we are in a position to decide on the best way forward.

The issues that the Bill seeks to address can be relatively complex. We need to consider the protections and rights already afforded to employees. We could consider appropriate non-legislative options for addressing concerns in this area, for example, a code of practice for the sector that would guide employers and employees. We must be cognisant that legislating in this area without being fully aware of how it will impact on current practices could lead to unintended consequences. That could lead to a negative effect. The Bill, for instance, specifically references "additional protections for employees in the service sector". However, no definition is offered of what particular industries that would cover.

Let us consider the UK position. Senator Gavan spoke briefly about the UK position in his introduction. In response to public demand, the UK Government produced a consultation paper and calls for evidence on tips, gratuities, cover charges and service charges in May 2016. The consultation process finished in June 2016. The call for evidence initially focused on the hospitality sector. The UK Department for Business, Energy and Industrial Strategy also received evidence from other sectors where the payment of tips, gratuities, cover and service charges is commonplace. They included gambling, betting and hairdressing sectors and taxi operators. Those involved concluded that intervention may be required to improve the treatment and transparency of these payments but they have not yet decided on the appropriate approach.

In my view, options such as introducing a code of practice could be considered rather than legislation. Without carrying out a thorough examination of the current practices relating to tips and gratuities across all relevant sectors, we cannot be certain that a one-size-fits-all approach is appropriate or that legislation is required. On foot of the introduction of the Bill in 2017 the Department of Business, Enterprise and Innovation, which was then responsible for the national minimum wage legislation, requested input from stakeholders but received no responses. The Irish Hotels Federation was directly contacted by the Department of Employment Affairs and Social Protection in respect of the Bill and expressed several reservations, including potential Revenue implications, the requirement for an employer to publically display the policy with regards to tips and gratuities and the difficulty of effectively policing any legislation in the area.

It is clear that to gain a better understanding of the complexities of the issue and the practices that currently operate in specific sectors, a thorough consultation in which the relevant stakeholders are engaged would be of benefit. In addition, an examination of current practices, including whether legislation might impact negatively in tax or financial terms upon either employees or employers, would be useful. To this end, the Minister for Employment Affairs and Social Protection, Deputy Doherty, intends to ask the Low Pay Commission to examine the payment of tips and gratuities as part of its work programme for 2018.

Senator Nash knows of the important work the Low Pay Commission has done. He was in office when it came into place. The Low Pay Commission was established under the National Minimum Wage (Low Pay Commission) Act 2015. Its primary remit is to make an annual recommendation on the appropriate rate of the national minimum wage. I know the members of the commission. They are all experienced members. It is an independent body, something I am keen to emphasise. The commission has members who have an understanding of employers and employees interests and members who have a particular expertise in labour market economics. The commission members are an expert group and have considerable experience. That is why the Minister has decided to refer the Bill to the commission for examination. The commission is also charged with taking an evidence-based approach, paying full regard to a range of economic factors while also taking account of the views of stakeholders and the public in general.

Since its establishment, the commission has examined and compiled reports on the sub-minima rates of the national minimum wage, that is to say, reduced rates that apply to trainees and age-related rates, the preponderance of women on the national minimum wage and the allowances provided for board and lodgings under the national minimum wage. It is clear that the commission has extensive expertise and could be considered to be the experts when it comes to the principal Act that the Bill seeks to amend. Furthermore, the commission's independence and experience in engaging with stakeholders while taking an evidence-based approach in examining all available data and assessing the strengths and weaknesses of systems internationally leaves it ideally suited to carrying out a fair and independent review of the payment of tips and other gratuities in Ireland. We can all agree that an independent review of this nature that aims to take on board all arguments and analyse all available data takes time if it is to be carried out effectively. As I have already indicated, with due regard given to the other vital work the commission is tasked with undertaking, the Minister, Deputy Doherty, will request the commission to report its views and recommendations on this matter to the Government. I understand from the Minister that she will be asking the commission to report back to the Government with its findings within six months.

There is a very comprehensive body of employment rights legislation in place providing protection for employees, including legislation governing working time and pay. This includes the National Minimum Wage Act 2000, the Payment of Wages Act 1991, the Organisation of Working Time Act 1997, the Minimum Notice and Terms of Employment Acts 1973 to 2001, the Protection of Employees (Part-Time Work) Act 2001, the Protection of Employees (Fixed-Term Work) Act 2003, and the Protection of Employees (Temporary Agency Work) Act 2012. These Acts provide for redress mechanisms through the dispute settling institutions of the State in circumstances where an individual considers that he or she is not getting his or her legal entitlements.

Under the industrial relations Acts, workers, either individually or collectively, can refer a dispute with their employer regarding terms and conditions of employment, not already governed by statute, to the Labour Relations Commission or the Labour Court, which can assist in the resolution of the dispute.

The Government has a policy of continually improving and enhancing legislation and has recently approved the text of the Employment (Miscellaneous Provisions) Bill 2017, which was brought forward by my Department and will strengthen further the protection and rights of the employee in Ireland.

Good progress has been made over recent years in terms of our economic recovery and creating new job opportunities, the majority of which are full-time positions. We must remember, however, those people who, not by choice, are in less secure arrangements and may not know from week to week what hours they will be working. This makes it very difficult for people to plan their lives outside work.

The Employment (Miscellaneous Provisions) Bill 2017 delivers on the commitment in the programme for Government to tackle the problems caused by the increased casualisation of work and to strengthen the regulation of precarious work.

This is very important legislation. The key objective is to improve the security and predictability of working hours for employees on insecure contracts and those working variable hours.

A number of key issues that have been identified as being areas where current employment rights legislation can be strengthened to the benefit of employees have been addressed, without imposing unnecessarily onerous burdens on employers. The Bill addresses the following five issues.

The first is ensuring that workers are better informed about the nature of their employment arrangements and, in particular, their core terms at an early stage of their employment. Currently, 15 terms of employment are required to be given by employers to employees within two months. Instead, it is proposed that the following five key terms of employment must be provided within five days of starting work for that employer: the full name of the employer and employee in that it is important that the person knows who he or she is working for; the address of the employer, because somebody could be working for somebody else, as we often see; the expected duration of the contract - where the contract is temporary or of a fixed term; the rate or method of calculating pay; and what the employer reasonably expects the normal length of the employee's working day and week will be. Other required terms of employment should be provided within the current two-month period. That is also really good news.

Second, provision is also made for the creation of a new offence where an employer does not provide the proposed statement of the five core terms of employment within one month of commencement of employment. Strengthening the sanction for non-compliance will help to promote better work practices and provide greater clarity around the essential elements of the employment relationship for both the employer and the employee.

The third is strengthening the provisions around minimum payments to low-paid employees who may be called in to work for a period but sent home without any or significantly less work and where they have not been paid. It is intended to introduce a floor payment for employees who are called into work and then sent home in these circumstances. For example, if an employer called six people into work and then decided only three were needed, the three sent home would be entitled to 25% of what they would have been paid for that shift, but with a minimum payment of three times the national minimum wage or three times the Employment Regulation Order rate, where it applies.

The fourth is prohibiting zero-hour contracts except in cases of genuine casual work or emergency cover or short-term relief work for the employer. This proposal is to avoid the contagion of an increase in zero-hours practices in this jurisdiction. There will always be a need for some casual work, but an employer who deliberately misrepresents employees as casual leaves itself open to being prosecuted by the Workplace Relations Commission for providing false and misleading information.

The fifth is creating a new right for an employee whose contract of employment does not reflect the reality of the hours worked on a consistent basis over a reference period of 18 months, to be placed in a band of hours that better reflects the actual hours worked over that reference period. This will provide greater certainty and a truer reflection of the hours of work and level of earnings, thereby addressing, in particular, difficulties employees may have in accessing financial credit, including mortgages. The reference period of 18 months is considered sufficiently long to allow for the normal peaks and troughs of businesses, including those subject to seasonal fluctuations. An employee will be able to seek redress through the Workplace Relations Commission but redress will be limited to being placed in an appropriate band of hours.

Legislation in the area of employment is complex and needs to be carefully thought through. It is important, therefore, that we do not do anything that impacts negatively on employees. Information regarding the codes of practice on the payment of tips and other gratuities in industries in which such payments are commonplace is relatively limited. The introduction of legislation in this area in the absence of such knowledge may have unintended consequences. First, we need to get information about current practices so we have the full picture. The first step is that the Minister, Deputy Doherty, will request the Low Pay Commission to undertake a review of the issue and report its findings and recommendations on the matter. As I said, this will be done within a period of six months. We can then use that evidence to determine the best options with a view to ensuring the adequate protection of employees, particularly those working in the service industry, particularly regarding the sharing of tips. It is about the service industry that Senator Gavan has genuine concerns.

I thank Senator Gavan for introducing this legislation. We will not be opposing it but I hope the House will accept the Government's very genuine reason for referring it to the Low Pay Commission, which has a range of experts. I have worked with them in the past on a number of issues and found them to be very good. I am sure Senator Nash would agree in that regard.