Thursday, 12 July 2012
Industrial Relations (Amendment)(No. 3) Bill 2011: Committee Stage
I wonder if we could have an explanation, in the interests of democracy, for how the Leader misinformed the House that the Tánaiste and the Minister for Foreign Affairs and Trade, Deputy Eamon Gilmore, would not be available and could not afford time-----
I move amendment No. 1:
In page 6, line 4, to delete "the desirability of agreeing and maintaining" and substitute "the agreeing and maintaining of".
I welcome the Minister to the House and apologise for my absence during the Second Stage debate, during which my party colleague, Senator Kathryn Reilly, expressed Sinn Féin's concerns about the Bill. She also signalled that we would table amendments to the Bill, as we have done. Amendments Nos. 1 and 15 are similar and refer to the registered employment agreements. Under the section, when considering whether it is appropriate to register an agreement under subsection (3) other than an agreement applying to a single employer, "the Court shall have regard to", among other factors, "the desirability of agreeing and maintaining fair and sustainable rates of remuneration in the sector in question". My party has a difficulty with the use of the word "desirability" in this context. On Committee Stage, the Minister indicated it was not necessary to change the wording of this paragraph. Sinn Féin disagrees and proposes to remove the word "desirability" in order that the paragraph reads, "the agreeing and maintaining of fair and sustainable rates of remuneration in the sector in question". The sentence has lesser legal standing when the word "desirability" is included. When discussing rates of pay and remuneration we must remind ourselves that the people to whom the legislation refers are among the lowest paid workers in the State who are frequently employed in vulnerable sectors of the economy.
It is noteworthy that the National Employment Rights Agency, NERA, published a report last year which showed that 70% of employers in the three largest sectors covered by registered employment agreements were found to be in breach of their obligations. It is vital, therefore, that the legislation is crystal clear as to what entitlements employees should have and the issues to which the court should have regard when making agreements. The NERA report also found that 53% of workers in the three sectors in question were earning less than the minimum wage, which is an incredible finding, 51% were not in receipt of wage slips, 83% did not have proper contracts and 85% were not paid premiums. We will address the issue of premiums when we discuss the Minister's proposal to abolish them. Forfás estimates that between 170,000 and 300,000 workers were covered by registered employment agreements when the court case was taken.
The amendments were tabled because the word "desirability", as used in the text, is unnecessary. While it is desirable that agreement be reached and fair and sustainable rates of remuneration maintained, the use of the word "desirability" in this context potentially dilutes the impact of the provision and the direction the legislation gives to the court. I look forward to the Minister's response.
I thank Senator Cullinane for tabling the amendment. As he recognised, there was substantial debate on this issue on Second Stage. I have been around the Houses and back to the Attorney General to evaluate the point being made by the Senator's colleagues in the other House. What is being done is a weighing up of a series of different principles, which will sometimes be in agreement and other times in conflict. The phraseology used in the context of the "desirability" of maintaining competitiveness or sustainable rates of remuneration indicates that a series of matters is to be considered, all of which are desirable in themselves. The adjudication process seeks to weigh up these different principles. The Office of the Attorney General is firmly of the view that the reference to "desirability" should remain, as it gives an indication that these are appropriate principles to which the court and a joint labour committee should have regard and are desirable provisions in themselves. These provisions seek to embody the concept of weighing up different principles which, while desirable in themselves, can be also in conflict. If one leaves out the word "desirability", one moves from one of a range of principles that must be considered to an absolute position and removes the discretion of the Labour Court in evaluating principles which may, at times, be in conflict with other principles it is seeking to pursue.
In addition, if a criterion is inserted in absolute terms, it becomes open to challenge and fetters the freedom of the court. For example, if the court "must" observe the need for competitiveness, a person may challenge whether the court, in making a ruling, honoured this absolute statement. On the other hand, when one uses the qualification of "desirability", one effectively leaves the court unfettered to weigh up the different issues in coming to its conclusion. I assure the Senator that the use of the phrase "desirability" is not in any way designed to devalue the sentiment or importance of the principle. It is simply a reflection of the legal advice from the Office of the Attorney General which indicated to me that this is the appropriate way in which to draft legislation of this nature. Unfortunately, while I understand the reason the amendment has been tabled, I cannot accept it.
I thank the Minister for his reply, although I cannot accept his reasoning. While I accept he is acting on the advice of the Office of the Attorney General, my party does not have access to this information. Having said that, we are often prescriptive in what we do in putting down legislation. It is not something new that we would not be prescriptive or that we would have to be somewhat loose in regard to what we insert to give some leeway to a court. What we are talking about here is the establishment of registered agreements which deal with people's pay and entitlements. In that context, I do not see any reason that we cannot be prescriptive around ensuring there is an absolute commitment, with which I do not have any difficulty, to ensure the court has regard to agreeing and maintaining fair and sustainable rates of remuneration in the sector in question.
That is what the agreements are about. It is the core of the agreements to ensure there is a sufficient level of protection for the most vulnerable workers in society. While I accept the Minister's response, appreciate the fact he has had advice from the Attorney General and can see some logic in what the Minister is saying in respect of how the court will use the wording which is contained in the Bill, I simply cannot agree with this. I do not see any harm in being prescriptive. As I said, we are often very prescriptive in terms of laying down exactly what a court should use and determine when making certain decisions. I do not see this as being any different.
We have a genuine concern about the inclusion of that word. The Minister has answered and I do not expect him to come back again. I will press the amendment to a vote if the Minister is not willing to accept it.
I welcome the Minister. The worrying point made by Senator Cullinane was in regard to people not paying the minimum wage. Do we have any figures in that regard? Perhaps Senator Cullinane might inform me. The IBEC approach to the legislation was that we had a relatively high minimum wage and it had been defended by the Government. When the Minister of State, Deputy Sherlock, was in the House, I complimented the Government for increasing the minium wage above what the troika had recommended. However, if people are not paying that, the question arises that we need much stronger penalties. We are relying on the minimum wage so much that if Senator Cullinane has found evidence it is not being paid, then the penalties for not paying it should be increased. The approach of IBEC was that, with a high minimum wage and 40 pieces of legislation, this Bill was not necessary. However, if one of the protections is now in doubt, we have to increase the penalties for not paying the minimum wage. If the Minister or Senator Cullinane has the evidence, that would be a serious development.
The Minister will remember that at the Joint Committee on Jobs, Enterprise and Innovation yesterday his own colleague from Kildare, Deputy Lawlor, spoke about having legislation in wording and language that the layperson can understand. The word "desirability" is unnecessary and dilutes the necessity for the system to maintain fair and reasonable rates. I cannot see anything wrong with changing it, despite what the Attorney General might say, or with deleting "the desirability of agreeing and maintaining" and substituting "the agreeing and maintaining of".
We have an unemployment epidemic in this country, with the latest figures at 14.9%. What is frightening is that more than half of the people unemployed have been unemployed for 12 months or more and information given by Deputy Willie O'Dea in the Dáil suggests that almost one in three has been unemployed for two years or more, which is shocking. Unemployment and the creation of employment is the No. 1 issue. Fianna Fáil supports the amendment.
The section states that "the Court shall have regard to" the following elements, including: "the desirability of maintaining established arrangements for collective bargaining"; "the benefits of consultation between worker and employer"; "the desirability of agreeing and maintaining ... sustainable rates of remuneration"; and "the desirability of maintaining competitiveness in the sector in question". These are all potentially in conflict and the court must weigh them up. That is the purpose of the word "desirability".
There is not an absolute obligation to maintain competitiveness. Indeed, maintaining competitiveness is an ill-defined concept. One would have to weigh it up in any case and look at it as against the standards of workers for whom one is trying to provide, and as against the various different issues the court was being asked to weigh up. The use of the word "desirability" is simply to show that the court is being given discretion to weigh up these different elements. None of them is being established as absolute.
If we left out "the desirability of maintaining competitiveness in the sector in question", someone could then come back and challenge this by stating that while we were obliged to maintain competitiveness in the sector, they did not believe we had done so, and there would be a court challenge. This wording is leaving the Labour Court with the capacity to weigh up these issues, as was intended.
Let us not forget the reason we are here, which is that we did not have adequate policies and principles that underpinned the consideration of these issues. The High Court struck it down and we have to come back with a robust system which shows that different issues are being weighed up in a fair-handed way. That is why the policies and principles are here and why it is being expressed in this way, because there are different things to be done.
The issue of enforcement is the subject we discussed yesterday. I accept there is inadequate enforcement and that awards duly made are often not pursued. Under the separate workplace relations commission, we are introducing better procedures for compliance notices and fixed penalty notices, and, in situations where an employee does not get an award, that employee can go back within six weeks to have that enforced on his or her behalf by the State, with the possibility of criminal offences. We recognise there are breaches and that we need to have a better, more robust and more effective system for enforcement. We recognise there is work to be done in improving the enforcement system. That is a lot of the work we are doing in reforming the employment rights and industrial relations machinery which we discussed in committee yesterday.
The Seanad Divided:
For the motion: 29 (Ivana Bacik, Paul Bradford, Terry Brennan, Colm Burke, Deirdre Clune, Eamonn Coghlan, Paul Coghlan, Michael Comiskey, Martin Conway, Maurice Cummins, Jim D'Arcy, Michael D'Arcy, John Gilroy, Jimmy Harte, Aideen Hayden, Fidelma Healy Eames, Imelda Henry, Caít Keane, Marie Maloney, Mary Moran, Tony Mulcahy, Rónán Mullen, Michael Mullins, Catherine Noone, Susan O'Keeffe, Pat O'Neill, Feargal Quinn, Tom Shehan, John Whelan)
Against the motion: 12 (David Cullinane, Mark Daly, Terry Leyden, Marc MacSharry, Paschal Mooney, David Norris, Darragh O'Brien, Ned O'Sullivan, Averil Power, Kathryn Reilly, Jim Walsh, Mary White)
Tellers: Tá, Senators Paul Coghlan and Susan O'Keeffe; Níl, Senators David Cullinane and Mary M. White.
Question declared carried.
I move amendment No. 2:
In page 6, lines 31 to 32, to delete all words from and including "and" in line 31 down to and including "so," in line 32.
These amendments are being taken together because they all deal with removing the ability of the Minister to exercise powers of discretion in a number of areas. Amendments Nos. 2 and 3 remove the discretion to refuse to make an order to confirm the terms of a wage agreement. We are of the view that the integrity and independence of the Labour Court should be protected. We do not believe the Minister should have the power to second guess anything the Labour Court, which is a statutory body, says or does. In that context, a Minister would never be given the power to set aside a decision of the Circuit Court or the District Court. The Bill states that "As soon as practicable after receipt of a copy of the agreement, the Minister shall, where he or she is satisfied that subsections (1) to (5) have 30 been complied with, and where he or she considers it appropriate to do so, by order confirm the terms of the agreement". It is our opinion that it should not be the responsibility of the Minister to decide whether it is appropriate to confirm the terms of an agreement. It is the responsibility of the Labour Court to make such decisions.
Amendments Nos. 2 and 3 also relate to removing the power of the Minister to set aside a decision of the Labour Court where "he or she considers it appropriate". As I understand it, the legislation already includes a provision under which the Minister of the day will have the power not to implement the recommendations of the court where the relevant procedures have not been followed. In light of the fact that this power already exists, we are of the view that the formula of words used in particular parts of the Bill in the context of granting to the Minister certain powers of discretion is inappropriate. It is right and proper that the Minister of the day will have the power to refuse to implement recommendations where the relevant procedures have not been followed. Under section 5, however, he or she will have the power to set aside the views of the Labour Court even where a case has been handled correctly and where consideration has been given to the competing rights and views to which the Minister, Deputy Bruton, referred earlier.
We are also of the view that this provision undermines the entire Bill, the purpose of which is to empower the Labour Court to be able to make decisions in respect of matters of this nature. The provision also has the potential to undermine the role of the court itself. There is a concern that the Minister has responded to lobbying on this matter. I am aware that some of the organisations which represent employers have been lobbying him hard in respect of it. Perhaps that is the reason the relevant provisions have been included in the Bill. I am not directing my comments in this regard at the Minister, Deputy Bruton, but if the Bill is passed, a Minister could have the ability to subvert a statutory legal body and its findings. This could set a very dangerous precedent. What is proposed does nothing to add value to the legislation. As already stated, we would not provide another Minister with the power to set aside decisions made by other courts. Why, then, should such a power be granted in this instance?
Amendments Nos. 4 and 5 deal with removing powers of discretion relating to varying the terms of wage agreements. We do not have a difficulty with the Labour Court being able to vary the terms of such agreements. Obviously, the latter is an important function of the court. However, the Minister should not be given discretionary power to set aside a decision of the court.
Amendment No. 6 deals with removing the discretion to refuse to cancel a wage agreement. That might make sense and we have no difficulty with the Labour Court having the power to remove such an agreement. The latter might, for many different reasons, be the right thing to do. We are of the opinion that responsibility for the making of decisions in this regard should rest with the Labour Court and that the Minister should not be in a position to second guess the court or to reject a recommendation it might make.
Amendment No. 12 also deals with ministerial discretion and relates to the new section 41A which is to be inserted into the 1946 Act and which refers to reviews of JLCs carried out by the Labour Court. Where the court carries out such a review, it will be obliged, under the new section 41A, to refer its recommendations to the Minister who will then make an order in respect of them. Again, the Minister is being given the power to set aside any decision reached or recommendation made by the Labour Court. We are of the view that this would not be appropriate.
Amendment No. 13 is somewhat similar to amendment No. 12, while amendment No. 17 would remove the discretion of the Minister with regard to giving effect to recommendations of the Labour Court in respect of the adoption of the proposals of a JLC. The Labour Court is an adjudicative body and we must protect its independence. If the court makes a recommendation, it is the duty and responsibility of the Minister of the day to honour and implement it. This goes to the core and logic of what the Bill should be about, which is to put in place agreements which protect some of the most vulnerable workers in this State. There is no doubt that a Minister potentially could be open to all sorts of lobbying. If the court makes a recommendation and a group, whether it represents workers or employers, decides to lobby the Minister because of his or her powers of discretion, that would be very unhelpful to the process. It would put the Minister in a very difficult situation. We believe that removing the ministerial powers of discretion would be good for the Minister and would protect the independence and integrity of the Labour Court.
The Minister referred to compliance when discussing previous amendments. We had a discussion yesterday at the Joint Committee on Jobs, Enterprise and Innovation on reforms to the employment rights bodies. We support much of what the Minister is trying to do in the area of streamlining the system and making it easier for people to make complaints. The lack of enforcement right across the board is very real and that is the reason we want to ensure that the Labour Court has the necessary powers and functions. We ask the Minister to go a step further than the recommendations he presented to the committee yesterday. From our understanding of the recommendations that were put to us yesterday, the fixed notices will not be sufficient or robust enough to deter or act as deterrent for employers who are in breach of the employment rights bodies. Yesterday, the Minister made the point that the system was clogged up with cases which have been taken by workers. The reason the system is clogged up is that many workers are being denied basic entitlements. The National Employment Rights Authority, NERA, report comments on people not having a wage slip, not being paid their holiday pay and not being paid the minimum wage. However, if an employer is brought to court, he or she is asked only to pay back what the worker is owed. There might be a small fine. The Minister has spoken about a fixed notice, but that will not act as a deterrent. It is similar to going into a shop and walking out with a basket full of groceries, but when caught offering to give back the groceries. That is what is happening in relation to the employment rights bodies.
I may be straying from the amendment, but I wanted to raise this important issue for workers. If we are trying to reform the system of JLC or employment rights bodies, the measures must be fair and also reduce the incidence of cases where workers are forced to seek redress through the courts. The reason that many are forced to seek redress through the courts is because some employers disregard employment rights and break the law. The reason they do so is that there are no real penalties or sanctions in place for doing so.
Amendments Nos. 2 to 7, inclusive, and 12, 13 and 17 relate to powers of discretion, which in this instance will be given to the Minister, but this is not personal to the current Minister, and our fear is that this could undermine the independence of the Labour Court.
I thank Senator Cullinane for his contribution. Again we must consider the reason we are in the current situation. These orders were struck down by the High Court on a number of grounds, one was they were not referring to policies and principles when they made orders. Let us not forget, as the court found, that these orders had potential criminal implications for the people who were found to be in breach of them. The second element, is that there was no proper democratic oversight, so effectively a body removed from the Oireachtas was making decisions that created criminal offences and that was beyond the constitutional entitlement. The whole house, so to speak, was struck down. We are reconstructing all of it.
The Senator is mistaken in suggesting to the House that the power being given to the Minister is like second guessing a decision of a court. The Minister in this situation is not second guessing a decision of a court of law.
I ask the Senator to look again at what is happening. The structure being put in place by the new construction is that the JLCs consider an issue and then come forward with a set of recommendations, which then go to the Labour Court for adoption. The Labour Court adopts them. It is the Minister who makes the order. The court made it very clear that when a Minister is making such an order it cannot be just by way of a rubber stamp, there has to be a genuine element of democratic oversight of this process so that the Minister has this unfettered consideration of the proposals as adopted by the Labour Court and can reject them or otherwise and then brings that order to the Houses for adoption. The Oireachtas has the right within 21 days to reject it. The court was very clear in its judgment; it referred to the fact there was neither ministerial nor Oireachtas oversight. We are inserting that necessary ministerial oversight link in the chain to make this robust. It is clear that this cannot just be a question of rubber-stamping, it must be a genuine capacity of the Minister, representing the Government, bringing an order to the Oireachtas which, in turn, has genuine capacity to consider it. That element is important to reconstitute a constitutionally sound system.
I refer to the parallel of the High Court making a judgment and the Minister overturning it. What is happening here is the Labour Court is adopting a set of proposals put together by a joint labour committee and bringing them forward to the Minister, having vetted the way it was done, for the Minister to make an order. I am not setting up all this elaborate machinery to try to pull the mat from under it. That is not my intention but I have very strong legal advice from the Attorney General that to make this robust and prevent it from being pulled apart, we must proceed in this sequence.
The drafting, which I agree on the face of it seems to give the Minister unfettered discretion, is done in this manner because we must reconstitute a proper system of democratic oversight. I refer the Senator to the High Court judgment in which Mr. Justice Feeney recalled an earlier Supreme Court case where the matter of delegated legislation had been addressed in Burke v. the Minister for Labour. He cited the observations made in the Supreme Court by Mr. Justice Henchy in 1979 who identified the absoluteness of the delegation within the 1946 Act.
In his High Court ruling last year, Mr. Justice Feeney contrasted the failure to amend the provisions of the Act of 1946, notwithstanding the concerns raised by Mr. Justice Henchy more than 30 years ago in the Supreme Court about the untrammelled powers given to JLCs, with the provisions that had been incorporated in the National Minimum Wage Act 2000. Under that Act, the Labour Court's role is subject to guidance to the principles and policies that must apply to the determination of the minimum hourly rate. The Act also specifically empowered the Minister to accept, vary or reject the recommendations made by the Labour Court. In varying the power or rejecting any such recommendation by the Labour Court on the fixing of an hourly minimum wage, the Minister must make a statement to the Oireachtas setting out the reasons for same. If I were to reject the work of the Labour Court, I must set out my reasons in writing to the Labour Court.
The judgment referred to above and the rationale used and adopted regarding the national minimum wage necessitate this link in the chain to make the process robust from legal challenge. The purpose here is to ensure these protections for vulnerable workers are not struck down in future; it is not to create any untrammelled power for the Minister. I categorically assure the House there was no question of caving in to any lobby in this respect. This is necessitated by the design of a robust system by the legal adviser to the Government.
I accept the Minister is well intentioned in terms of what he is trying to achieve but I believe the provision is flawed. In my view, political oversight is where we legislate for the setting of parameters and rules. That is what we should do here for the Labour Court, namely set out rules and conditions to which it must have regard. We had a discussion about those previously. We are not talking about rubber-stamping what some State body recommends the Minister does. We are asking the Minister to make an order or implement a recommendation of a statutory court. That is what this is about. There is a difference between ministerial and political oversight and a Minister having the ability to disregard, if he or so chooses, the recommendation or a determination of a court.
I accept that but the Minister should do so only on the basis of a recommendation which comes from the court because it makes a determination based on what has been laid down by us as legislators. I shall make a comparison for the Minister. I am not sure if he was a councillor but I was and so were a number of Senators.
Then the Minister will fully understand the point I shall make. I was part of group that developed the housing policy for Waterford City Council. We developed a scheme of letting priorities by setting out the parameters under which people were entitled to housing and the housing officials were then given the power and responsibility to implement the policy. They decided to whom and how people were allocated houses without political interference. It was prescriptive and stated what the local authority housing officers needed to abide by. The political oversight is where we would decide policy. That is right and appropriate because there should not be interference in decisions made by a housing officer because then it would become a difficult situation where a person's political priorities came first.
I shall make the same comparison to what is happening here because the provision is similar and I disagree with it. We could have a Minister who is minded and guided by a certain ideology and could disregard a recommendation or not make an order. I accept the point made by the Minister that it is the function of a Minister to make an order. He or she should only do so on foot of a recommendation by a court. I shall quote the Minister when he published the Bill. He said: "I have been determined to strike a balance between protecting vulnerable workers and providing reforms that would make the systems more competitive and more flexible so to allow for the creation of jobs in these sectors." In so doing he is creating a false dichotomy because, on the one hand, the creation of jobs must be done or is in some way in conflict with workers' rights. That is the connotation of what has been said here and that is why many people have a difficulty with a Minister who holds that view and mindset and wants the power to set aside decisions made by the court. That is the reason my party is concerned about the amendment.
I have made one analogy but there are many other analogies such as the planning system. Our local authority members and legislators provide legislation for planning whether it is national planning guidelines, regional planning guidelines or development plans crafted by councils. They draft policy. The planners are the experts and have the devolved authority to implement the guidelines that have already been laid down. That is political oversight and I argue that the same thing should happen here. We are the legislators and my party has set out the parameters contained in the Bill. The Labour Court is the body that can adjudicate on such matters and make a recommendation. The Minister should simply have regard for that system and make the order. He might call it rubber stamping but that is fair enough because that is the process. There should be no political interference or a perception of same.
The legislation gives any future Minister carte blanche to terminate at will a registered employment agreement or, more seriously, an employment regulation order simply because he or she considers it appropriate to do so. This is not what was envisaged when the Duffy-Walsh review group suggested changes to the position obtaining at that time because it was conscious of legal difficulties. It is appropriate and probably necessary to grant a general supervisory power to the Minister to cure the constitutional defect in the legislation. However, for him to include in the legislation an excuse to exercise absolute power to refuse to accept an ERO on a whim is not one but several steps too far. The provision is unacceptable. It removes from workers at the lower end of the payscale who are not unionised or properly represented the entire protection that has been in place since 1946; the entire employment regulation system. It can be terminated at will by a Minister taking a decision not to proceed with an order simply because he or she does not believe that it is appropriate.
I have listened carefully to the points made by Senators Cullinane and White and both made an understandable and strong case. It seems to me that the Minister has won the argument hands down when he talked about the democratic oversight. It is a real reminder. Senator Cullinane, at the end of his contribution, wondered if when choosing between workers' rights and creating jobs would the Minister have the freedom to decide to handle things differently. The Minister made it clear that he does not have that choice. What would I do if I was given the choice or if I had a Minister who was given a choice between workers' rights or creating jobs? Potential employers would be deterred if they came to Ireland and on examining the legislation found that employment was tightly controlled and workers' rights were strong. We are not talking about that in this case because we have heard what the Minister has said. It seems to me that the question is based on the removal of the term "where he or she considers it appropriate to do so," which Senator Cullinane has proposed. I would like the Minister to have that freedom because it is necessary and essential. He has made a strong case for it and I support the Bill as it stands.
I wish to clarify a point I made earlier. When I talked about a conflict between workers' rights and job creation I made the point that it was a false dichotomy. I do not believe that there is a conflict. It is important that we have robust protections and enhance employment rights. The Minister seeks to improve some of the employment rights and bodies and to streamline the process which my party supports. Some people have a perception about when they use words like "we need to be more competitive", or "we need to reduce the minimum wage" like the last Government did, "or we need to remove the Sunday premium" which is contained in the Bill but I will deal with that later. There is a false dichotomy that we need to reduce basic rights for some of the most vulnerable workers in the State as a justification for job creation and to create extra jobs.
The independent Duffy-Walsh report was published. Most of it was disregarded by the Government even though the authors found no evidence, and clearly stated that in their report, of a connection between the protection of pay rates which were previously determined by REAs and EROs and employment opportunities or levels. In other words, the authors found no evidence that reducing the basic level of pay for the lowest paid workers in the State would create jobs. Let us remind ourselves that we are talking about people who work in vulnerable sectors. Before joint labour committees were struck down, the average JLC rate per hour was €9.66. That meant that if one worked a 35-hour week in the retail sector under a JLC one earned less than €17,500 a year. An EU labour cost survey carried out in 2008 showed that labour costs in the retail, hotel and restaurant sectors were below the EU average. On the one hand, we should not race to the bottom while or, on the other hand, have a false dichotomy that rows back on basic rights and entitlements in order to make Ireland more competitive. I do not believe that is what the Minister is trying to do and I am simply responding to a point made by Senator Quinn. There is no difference between the two. We, as legislators, should set out the criteria so that it is not open to any sort of undue ministerial influence and I look forward to hearing what the Minister has to say.
While I do not wish to repeat myself, Senator Feargal Quinn is right. We need this freedom, not to give the Minister discretion to strike down decisions that have been reached by the joint labour committees and adopted by the Labour Court but in order to make it constitutionally sound from challenge in the courts. Senator White referred to the Duffy-Walsh report. Duffy-Walsh did not consider this issue as the courts only made their judgment after the report was made. It is the John Grace Fried Chicken case that has raised all of this issue. They have drawn attention to the fact that by creating an indirect body we were, effectively, creating crimes for employers and those decisions exposed employers to criminal prosecution. The courts struck it down, stating such a body did not have the right to create crimes for an individual and that it was unconstitutional. To reconstitute that, a system must be put in place whereby the JLCs consider the issues and make a proposal which is adopted by the Labour Court and where the Minister has the unfettered power to say, "Yae" or "Nay", and the Oireachtas makes the adoption. The Minister, if he exercises that power, must set out in writing to the Labour Court the reason he is doing it. This is not intended to second-guess the work of the JLCs and the Labour Court but to make it clear that this is democratic, it is a Minister making an order, a proposition to the Oireachtas, which the Oireachtas can reject or allow through. That is the link in the chain that has to be rebuilt. The parallel of letting priorities is simply not valid. Clearly, by making a set of letting priorities one is not creating criminal offences for people. The legal oversight is entirely different where one is setting letting priorities by a council and then other people implement those. It has been found that these regulations create potential criminal offences. One can only make such potentially criminal statements if it has the extra link of the Minister overseeing it, not rubber-stamping it or ensuring they tick various boxes, but with genuine ability and discretion and bringing it to the Oireachtas with parliamentary oversight. The sole motivation is to create a system that is robust from a constitutional challenge in the knowledge that the previous vehicle was demolished by the courts, specifically on the grounds of lack of policy and principles or parliamentary oversight. I do not think we will agree on this issue. I am doing this not to give myself carte blanche but to make the system legally robust in order that vulnerable workers are not in the same situation as last year when what they thought was protection was pulled from underneath them.
The oversight does not end when the Labour Court makes a recommendation to the Minister because there is recourse to superior courts. There are options for people to have redress through the superior courts of the land. In regard to accountability, we should not create an impression that it stops at that level. It does not stop at that level, there are superior courts which could act in an oversight role also.
I move amendment No. 8:
In page 12, line 12, to delete "24 months" and substitute "12 months".
The two amendments are linked. The legislation provides for a business to opt out of an agreement for a period of 24 months within a five-year period in certain circumstances. We see the logic of an opt out as many businesses are struggling. While it is desirable that workers protected under JLCs have protection in terms of the levels of pay, we seek to be pragmatic by reducing the time limit from 24 to 12 months. We consider that 24 months is far too long. If a business requires an opt out for 24 months out of a five-year period, essentially 40% of that time, the business has serious viability issues. Clearly,12 months would allow a business deal with the short-term pressures which led to the opt out in the first place. An opt out of 24 months is too long and the amendment seeks to reduce it to 12 months.
There are two amendments tabled by Sinn Féin that deal with the issue of the maximum duration for a derogation under the inability to pay clause. Section 9 of the Bill inserts a new section 33 in the 1946 Act providing that where an REA so provides, an employer in financial difficulty may apply to the Labour Court seeking temporary exemption from the requirement to pay the rates of remuneration in the agreement. Section 33A(2) provides that the maximum period of an exemption will be 24 months and must be for a minimum of three months. Section 33A(3)(a) provides that the Labour Court may enable an employer to qualify for up to two consecutive exemptions from the statutory pay terms of an REA where financial difficulties in an enterprise persist after the expiry of a short time limit than the maximum permitted under the legislation. Two consecutive exemptions will, accordingly, be permitted within the overall two year time limit rather than a single one under the Bill as introduced, where this is necessary to safeguard employment. Amendment No. 8, which has been tabled by Sinn Féin, would reduce the maximum exemption to 12 months. Amendment No. 9 would restrict the extension exemption to an overall 12-month limit. The inclusion of a provision to permit an extension to an exemption within the overall two-year limit is a requirement arising from the last review of the programme for financial support agreed with the EU, the IMF and the ECB. The "inability to pay" provisions relating to REAs are substantially the same as those proposed in respect of EROs. However, it is important to stress that an REA "inability to pay" mechanism will only apply if the REA itself permits it to apply. It will be a matter for the Labour Court to determine the appropriate length of an exemption on the basis of its consideration of an application for such an exemption. Accordingly, I cannot accept these amendments. Basically, the 24-month limit is the limit. It will be possible for it to be availed of in two pieces. Previously, it had to be availed of in one piece up to 24 months.
I move amendment No. 10:
In page 13, line 5, after "business" to insert the following:
", including information on payments to directors and companies associated with directors over the previous 3 years,".
This amendment is similar to amendments Nos. 8 and 9 in the sense that it deals with the "inability to pay" exemption. I am disappointed that the Minister's decision not to accept the previous amendments means the 24-month provision will remain in the Bill. I have tabled this amendment to make it explicit that employers must provide all information to the court, rather than indulging in the sin of omission. There have been umpteen examples of companies or employers failing to pay their workers the entitlements they are due, perhaps by putting a pay freeze in place and pleading inability to pay, while at the same time allowing senior managers and chief executives to give themselves Rolls-Royce salaries, pensions, performance-related payments and bonuses, etc. Such behaviour irks employees, especially those at the bottom of the pay chain whom we are trying to protect in this legislation. We should ensure they are not left high and dry. I appreciate that the court can request information, but I am trying to ensure information is automatically provided. We should not allow companies to engage in creative accountancy practices in order to avoid paying their workers proper wages and entitlements. Some companies are able to amend their profit and loss levels by making payments to other associated companies and directors. I think this amendment is a reasonable proposition. I believe it would add value to this Bill. We have to make sure we protect the integrity of the existing "inability to pay" clause. It should not be possible for it to be abused or manipulated by some unscrupulous employers. That is why we are emphasising that full disclosure would prevent that from happening by tightening the system up and making it fairer. I await the Minister's response.