Gerald Nash (Labour) | Oireachtas source

I welcome colleagues from the Services Industrial Professional and Technical Union, SIPTU, and the Irish Congress of Trade Unions, ICTU, who are here to support this crucial Bill.

Since 1909, we have had in Britain and Ireland a system for statutory minimum pay and conditions for certain employment sectors. They include hotels and restaurants. The purpose is to improve terms of employment in sectors where pay is chronically low and union representation is either non-existent or inadequate. The importance of industry-wide enforcement to prevent wage undercutting has been an essential feature of the legislation from the start. Since the time of the Trade Boards Acts more than a century ago, Irish law has reflected the twin-track approach to collective bargaining. Thus, on the one hand, there are sectors where trade unions are able to organise effectively and collective bargaining is encouraged as a matter of policy. On the other hand, there is machinery for collective bargaining, through the mechanism of trade boards and subsequently joint labour committees, JLCs, in sectors where organisation is weak or non-existent. However, gaps in the statutory framework arose after the Supreme Court struck down parts of the old framework on constitutional grounds. Senators will recall that there were two constitutional cases, John Grace Fried Chicken Ltdv. Labour Court 2011 and McGowan v. Labour Court 2013. The Industrial Relations (Amendment) Act 2012 was passed in order to reform the employment regulation order, ERO, system, which had been struck down in the John Grace Fried Chicken case. Broadly speaking, the Industrial Relations (Amendment) Act 2015 did much the same for registered employment agreements, REAs, which were struck down in McGowan. The 2015 Act provided for a new framework to replace the former sectoral REAs with sectoral employment orders, SEOs, in a constitutionally robust manner. In addition, that Act provided a mechanism by which employment conditions can be assessed where there is no collective bargaining in the workplace. We are happy that the machinery already established in both these Acts would withstand challenge if one were to arise.

The Bill before us is concerned with just one outstanding aspect of the ERO system under the Industrial Relations 1946 Act, as amended in 2012. This is solely related to the fact that the procedure does not work if one side does not turn up to the table. In the case of hotels and restaurants, for example, an effective veto is operated by bosses in those sectors, thereby depriving workers in those and other low-paid sectors of the economy of the legal right to be paid anything other than the statutory hourly minimum wage. We want to see this unwarranted vet removed. I anticipate that the official Government line will warn of the constitutional questions around the provisions of this Bill. Such concerns are, in my view, entirely bogus.

We believe that this is a mechanical rather than a constitutional issue. In other words, we do not believe that there is a constitutional right for a sector of industry to refuse to engage in a JLC. Section 35 of the 1946 Act allowed the Minister to apply for a JLC establishment order where:

(ii) the existing machinery for effective regulation of remuneration and other conditions of employment of such workers is inadequate or is likely to cease or to cease to be adequate, or

(iii) having regard to the existing rates of remuneration or conditions of employment of such workers or any of them, it is expedient that a joint labour committee should be established

The 1946 Act maintained a tradition of prior consultation, before appointing members to a JLC, by providing that, "Before appointing a representative member of a committee the Court shall, so far as is reasonably practicable, consult any organisation of employers or, as the case may be, workers concerned." However, in the judicial review proceedings brought by the Irish Hotels Federation against the Minister's decision to reconstitute a JLC for the hotel sector, the Minister's statement of opposition argued, not on constitutional grounds, but simply on the basis of statutory interpretation, that a JLC could not be established in the absence of employer representatives put forward by an employer representative organisation. This is peculiar.

The State argued that the decision to come together under a JLC framework with a view to making an ERO was a matter for the two sides of industry and was not compulsory. The case ended because of a shared assumption that the non-co-operation of an employer representative body would effectively stymie the appointment of representative members to a JLC. In short, there was an employers' veto. We do not agree with the approach adopted by the State in defending that case. We believe it is ahistorical and wrong. On the logic of that position, it would follow that, in any sector of industry where there is little or no worker organisation but there is an employer representative body, that representative body could prevent the establishment of a JLC by not turning up to the negotiation table even though these are precisely the sectors which the legislation has always targeted for intervention.

If it is indeed the law that a JLC cannot be appointed without the voluntary agreement and participation of bodies representing either side, this represents a dramatic collapse of the machinery that has been working for over a century and which was aimed precisely at sectors where representative bodies were not to be found. However, we would stress that this is not a constitutional issue. It stems from the interpretation placed on the current law by the State in defending the judicial review proceedings and from the fact that the Act has no backstop or default mechanism that comes into play when either side does not turn up.

If the "inadequacy of existing machinery" is the statutory basis for setting up a JLC, then it cannot be right that the refusal of a representative body on one side to either support collective bargaining or to support a JLC can be a bar to its establishment. Such a stance on the part of a representative body should instead be proof positive that the existing machinery is inadequate and that a JLC is needed. For whatever reason, the current situation is that the process for setting up a JLC is stated by the Government to require the co-operation of both sides of industry and so the employer side, if sufficiently organised, can exercise a veto. Our Bill is aimed at clearing away this impasse. The new provisions will apply only where the Labour Court has sought to consult an organisation of employers or of workers, but that organisation has failed or refused to engage to any significant extent or at all in any consultation with the court.The factual assessment and the facts on the ground trigger the powers in the Bill.

The power to appoint has always belonged to the court. Up to now, it has engaged in prior consultation without there being a strict statutory obligation to appoint the preferred nominees of the bodies consulted with. We do not propose a very major departure from the current statutory structure.

Under the Bill the court must appoint persons who are, in the opinion of the court, representative of the interests of employers or workers, while not necessarily being representative of employers or workers. By way of comparison, a Citizens' Assembly made up entirely of Government nominees may, if it is properly composed, be considered representative of the population even though none of its members is an elected representative.

The policy issue that guides the Labour Court, when it considers whether this process should be by-passed and that it should formulate an employment regulation order, ERO, is one of simple practicability. If the court is satisfied that it is not reasonably practical for it to appoint a joint labour committee that includes persons who are representative of the interests of employers and persons who are representative of the interests of workers, the court may then, subject to certain conditions, formulate its own proposals for an ERO.

When formulating its proposals, the court must have regard to the legitimate financial and commercial interests of employers in the sector, the desirability of agreeing and maintaining fair and sustainable minimum rates of remuneration appropriate to the sector, the general level of wages in comparable sectors, the national minimum hourly rate of pay under the National Minimum Wage Act 2000 and the appropriateness of fixing a minimum hourly rate of pay above that rate. The section goes on to apply existing law, in this case the 1946 Act, as amended in 2012, to the formulation of proposals for an ERO by the court.

It is fair to say that the Bill, which will no doubt be attacked by Fine Gael and Fianna Fáil as a radical departure from industrial relations practice, is not radical at all. It simply allows for JLCs to operate as the Oireachtas originally intended. It is a backstop to ensure that one side of industry cannot continue to override or subvert the will of the Oireachtas, as reflected in legislation introduced as recently as 2012.

The best way for wages to be set in economic sectors is for trade unions and employers to come together to tailor agreements that work for everyone. Where this is prevented, the Oireachtas should accept the obligation to act on the principle of fairness, decency and respect across the economy and ensure we legislate and encourage decency where employer bodies refuse to engage.