Seanad debates

Wednesday, 20 January 2016

Competition (Amendment) Bill 2016: Second Stage [Private Members]


10:30 am

Photo of Ivana BacikIvana Bacik (Independent)
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I move: "That the Bill be now read a Second Time."

I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and thank him for coming to the House for the debate on this Bill. I also welcome the opportunity to introduce this important Bill. In addition, I welcome the people with a real interest in this matter in the Visitors Gallery, particularly representatives from the Services Industrial Professional and Technical Union, SIPTU, the National Union of Journalists, NUJ, and Irish Actors Equity, among others. I thank the Minister of State at the Department of Justice and Equality, Deputy Ó Ríordáin, who met us earlier and who is a strong supporter of the legislation.

This Bill arises from a long-standing Labour Party commitment to ensure protection of the right to collectively bargain for freelance workers, including journalists, actors and others, who perform their work on a self-employed or contract-for-services basis. Under competition law, self-employed persons are considered to be separate, independent economic undertakings. If the Competition Act 2002 were to be applied with full force and effect to trade unions and their members, as the explanatory memorandum to the Bill suggests, trade unions would revert to their old common law status as unlawful combinations and trade union leaders would be prosecuted as parties to a criminal conspiracy. Clearly, that is not the case but the objective of this Bill is to seek to exempt certain groups of workers from an over-rigid application of the Competition Act. At present, if one self-employed person combines with others to set prices for their services, the risk under the current competition law is that they could be accused of an illegal, anti-competitive practice. At its most extreme, freelance journalists in a newsroom would be barred from bargaining collectively with their common employer about their wages.

The Acting Chairman, Senator Mooney, today raised with me, as did others, the fact that minimum rates are being set by some unions in respect of freelance workers and that they continue to apply. However, the reality is that the Competition Act 2002, as interpreted and applied by the Competition and Consumer Protection Commission, formerly the Competition Authority, has had a chilling effect - as union representatives have informed me - on those unions that represent freelance workers. It leaves freelancers vulnerable. Employers can use the 2002 Act and its interpretation by the Competition Authority to avoid the bargaining of minimum pay rates with unions in respect of freelance workers.

The European Court of Justice recently held, however, that a worker is not genuinely freelance or independent of their employer if the worker acts under the direction of the employer as regards freedom to choose time, place and content of work and, in reality, forms an integral economic unit within the employer's undertaking. As a result, this category of worker is entitled to bargain collectively. This was the European Court of Justice decision in 2014 in FNV Kunsten Informatie en Media v. the Netherlands. Arguably, this case has a direct impact on Irish competition law and is helpful in providing support for the principle being put forward in this Bill. The commitment to introduce a Bill such as this is also contained in the Labour Party document, Standing Up for Working People, published last week. This Bill shows the seriousness of our intent to act on the reforms within the document.

I will describe further the historical background to the Bill and its origins before discussing its provisions in more detail. The historical issue is described in the explanatory memorandum. The application of the Competition Act to freelancers has been a issue of contention for some time and has been a matter of serious concern to the trade union movement. I should declare a professional interest as I advised a number of trade unions on this issue some years ago in my capacity as a barrister. In 2004, the then Competition Authority ruled, in applying the Competition Act 2002, that a collective agreement between Irish Actors Equity and the Institute of Advertising Practitioners in Ireland in respect of voice-overs provided by freelancers was a breach of section 4 of the 2002 Act on the basis that each actor was a separate business undertaking and it was therefore unlawful for them to collectively fix prices for voice-over services. I am told this ruling went on to affect all those engaged in acting in visual commercials. It has had a chilling effect and could affect many others, such as journalists, photographers, writers, musicians, models, bricklayers and other skilled tradespeople in the construction industry and other professionals. Indeed, the Dutch case from 2014 to which I refer related to musicians, namely, orchestra members who were ostensibly self-employed musicians but whom the court found potentially to be false self-employed or bogus. In other words, they were, in effect, employees. The competition ruling also had an impact on representative bodies such as the Irish Medical Organisation, IMO. That is the issue with which a further section of this Bill is concerned.

In 2006, the then Deputy Michael D. Higgins published the Competition (Trade Union Membership) Bill which would have permitted collective agreements between individuals who engage for gain under a contract personally to do work or provide services. This issue was then pursued by unions in national agreement and partnership negotiations and a previous Government, in the programme entitled "Towards 2016", made a commitment to deal with the matter in respect of both freelance workers and representative bodies by way of amending legislation. I understand that the EU-IMF memorandum of understanding then posed an obstacle by providing that there was a need to ensure that no further exemptions to the competition law framework would be granted unless entirely consistent with the goals of the EU-IMF programme and the needs of the economy. In 2012, Deputy Emmet Stagg published the Competition (Amendment) Bill 2012, on which the Bill before the House is based. It had the same aim of former Deputy Michael D. Higgins's earlier Bill, but the correspondence from the EU-IMF and the correspondence between the EU-IMF and the Irish Congress of Trade Unions, ICTU, in 2012 were grounds for a reason not to proceed with this type of amending legislation.

Obviously, however, matters have moved on. The issue remains a live one for many freelance workers in various fields and, indeed, for the unions that represent them. Happily, we have emerged from the programme, we are in a phase of economic recovery and we now have the 2014 judgment of the European Court of Justice.In that judgment the Dutch domestic law was very much equivalent to our existing Competition Act 2002 and I would argue that the decision has a very direct relevance to the law in Ireland. In January of 2015 ICTU wrote to what is now the Competition and Consumer Protection Commission asking them tor reconsider their position of the 2004 interpretation in light of the ECJ judgment. I understand they did not agree to reconsider at that point. However, the decision does pave the way for a Bill of this nature to be brought in.

Before I turn to the specific provisions of the Bill it is important to say that there is a serious issue about consumer protection. Any exemption from the normal application of competition law must be narrowly drawn to ensure that consumers are not put to any detriment. It is a knotty business to distinguish between self-employed contractors on the one hand and employees on the other. We are all conscious that atypical employment - involving people who are not obviously either self-employed or employees - is a growing phenomenon and that people often describe themselves as, or are described as, self-employed for a variety of reasons such as tax, PRSI or pension purposes. The ECJ decision says we must look behind that descriptions to see what is the reality, which is very helpful for a Bill of this nature.

I will now turn to the provisions of this Bill. Section 2 of the Bill is the core section which would provide the protection of which I speak for freelance workers as represented by their trade unions. The Bill provides a definition that "where an individual engages for gain under a contract with an undertaking personally to do any work or provide any services", then a trade union should be able to negotiate effectively on their behalf regarding their terms and conditions. This is a new litmus test for what constitutes an undertaking or an individual to whom the Competition Act 2002 applies. A core point in section 2 is to enable trade unions to organise and to negotiate collectively on behalf of those individuals who enter into, or work under, contracts personally to do or provide any work or services. The emphasis is on the word "personally". This would protect those freelancers who currently face this legal uncertainty. It would also prohibit self-employed individuals from price fixing against consumer interests and it would retain the core public interest principle of the Competition Act 2002. The exemption from the application of the Competition Act would apply only to contracts with undertakings, not with consumers. This is a key component of the Bill.

Section 3 of the Bill is designed for a different purpose to allow for collective negotiation and bargaining regarding terms and conditions of a scheme whereby services are provided to the public by members of a trade or so on. It covers issues such as negotiations with the IMO. However, I believe the core part of this Bill is section 2. It is important to adopt this Bill, and in particular section 2, as it would end the unfair and anomalous situation where many vulnerable workers are denied the protection of collective bargaining rights on the basis of what is an overly rigid interpretation of competition law, an interpretation which arguably goes against the ECJ's decision. I urge colleagues to support this Bill.

Photo of Aideen HaydenAideen Hayden (Labour)
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I congratulate Senator Bacik and Deputy Stagg on bringing an important matter to fruition today. It is an important step on a road to remedy what is a significant anomaly in our employment code. This Bill would provide, under section 2, that where a person works under a temporary contract any activity by that person - as a member of a trade union - is not deemed to be an association of undertakings, for the purposes of the Competition Act 2002. Senator Bacik has set out the importance of that distinction. Section 3 would provide that a representative organisation is not an association of undertakings where a declaration is made by the Government. This also would apply to professions where a profession includes trade, vocation and other occupation. It is immaterial whether members of a profession provide services as sole traders or as members or employees of partnerships or corporate bodies.

This issue has been bubbling under the surface since the Competition Authority held, in a 2004 decision on arrangements between the Irish Equity, SIPTU and the Institute of Advertising Practitioners in Ireland, that any immunity enjoyed by a trade union - for example on collective bargaining - could only apply when the union was acting on behalf of employees and not, as in this case, where Equity was acting more as a trade association on behalf of independent contractors as opposed to employees. That is the nub of the problem which section 2 attempts to address.

People who work under contract and who currently work together through collective bargaining could be prosecuted under the competition legislation as it currently stands. Under the law every self-employed person is considered to be a separate, independent economic undertaking. If one self-employed person combines with others to set prices for their services they can be accused of illegal, anti-competitive practices. Senator Bacik has made reference to the huge impact this has on people who work as freelance journalists, actors, models, photographers, musicians, construction and trade workers, various professionals and temporary workers for hire in the hospitality sector and many others. These workers are inherently vulnerable due to their need to continually apply for jobs and are in a dangerous position to agitate for better pay and conditions. I will give the example of one freelance journalist who told me that freelance journalists send work to a number of outlets. The outlets often do not state their pay levels for pieces which are printed upfront and it can take a number of months for payments to be made. It could be very easy to lowball a new journalist in the profession while paying more to established freelancers for similar quality work. Unions such as the NUJ and SIPTU have sought to change the law such as this Bill would achieve.

This Bill is also in compliance with the ruling of the ECJ that the worker is not genuinely independent of their employer if the worker acts under the direction of the employer regrading freedom to choose time, place and content of work and forms, in reality, an integral economic unit within the employer's undertaking. There is a balance to be struck between protecting the rights of vulnerable workers while not providing cover for individuals who are legitimate self-employed contractors and business who jack up prices for consumers. The test on whether the worker has the ability to choose their own assignments or whether they share the economic risk of the outlet does not protect workers such as freelance journalists where there is a substantial amount of power in the hands of media outlets and a huge number of journalists competing with each other for work. This goes right to the heart of the problem where collective bargaining is not an option. One may get a race to the bottom where workers would try to outbid each other by agreeing to accept less and less pay. This is especially pertinent as we see a move away from traditional full-time employment towards situations where an employee is more likely to work on temporary contracts, be self-employed or work as an intern. There has been a demise of the job for life. There are many reasons employment has become more precarious not least because of employers' desire to avoid the costs associated with the status of employee.

I will conclude by reiterating that this Bill is a very important step along the road to restoring fairness in a situation where self-employed persons do not have control over their own destinies and are at the mercy of those who are economically able to determine the outcome. The Labour Party has always believed in standing up for workers going right back to the 1920 Lock-out. The answers unfortunately become more complex as our economy does and how we ensure that consumers get better value while also protecting workers and making it attractive for businesses to set up and remain in the State also becomes more complex as time goes on. Changing employment patterns must be taken into account while firmly committing to ensuring that workers are protected. However, we must acknowledge that we are increasingly seeing people trapped in precarious work. There is a word to identify this work situation without predictability and security and it is now part of the English language - "precariat". The word has been analysed as a new social class by author, Guy Standing. It must be asked if, as a society, we can achieve a balance between the legitimate needs to ensure healthy competition while ensuring protection for those in work. This Bill is doing just that. I conclude by acknowledging the Government's role in improving employment situations overall - the House will forgive me for mentioning the Low Pay Commission, restoration of the minimum wage and more recently the increase of the minimum wage in Budget 2016. Without further elaborating on the wider role of Labour in government I believe we should look at this Bill on its merits as an extremely important piece of legislation which will restore balance to what should be a more equitable working relationship.

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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I concur wholeheartedly with Senators Hayden and Bacik. I welcome this legislation which will restore the equilibrium of rights to all workers irrespective of where they are employed or to whom they are contracted. Society is changing, the economic output of society is changing, the role of the employee is changing, economic actors within society are changing and diversification is the reality in terms of the type of employment which is created within many sectors It is vital that workers' rights across the whole spectrum are fully protected.

This Private Members' legislation, brought forward by the Labour Party, will be supported by Fianna Fáil. Current competition law prevents actors who provide voice-overs for advertisements, musicians and freelance journalists from negotiating pay collectively, and this issue has been raised through the trade union movement, members of the media and the arts fraternity. It is right that this legislation will address that. The Bill will enable these people and others the right to collective bargaining and negotiation of their pay and conditions. The Bill will ensure such individuals will not be classed as undertakings for the purposes of competition law. Self-employed individuals will continue to be prohibited from price fixing, which is in the best interests of consumers. The ruling of the European Court of Justice was referred to and that was a groundbreaking ruling brought about as a result of Dutch unions bringing a case before the court. The court hearing of December 2014 set the bedrock for bringing forward legislation such as this, not only in Ireland but right across Europe.

This will affect many people in society such as all the people I mentioned - actors, people doing voice-overs for radio and others such as freelance journalists, photographers, those providing written copy, sound and visual contributions, photographs and film clips to media outlets, writers for radio, television and film drama, musicians hired for gigs or recording sessions, orchestras, bands, dancers for shows in clubs and other performers, models on photoshoots, bricklayers and many other skilled tradesmen in the construction industry, as well as doctors and many other professionals. This is wide-ranging and is not definitive to one sector in particular. It brings equality to many people within the dynamic workforce we have in Ireland at the moment. It brings forward employee rights and we fully support it.

The timeframe is short between now and when the Taoiseach calls the general election but I hope this legislation can be adopted before then. We will facilitate it in every way possible and, in the year that is in it, it would be good to recognise the role of many individuals employed in different sectors of society by the nation cherishing them all equally under legislation. I commend Senator Bacik and Hayden on bringing forward this legislation which I hope will see the light of day before the general election is called.

Photo of Michael MullinsMichael Mullins (Fine Gael)
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I, too, compliment Senators Bacik and Hayden on introducing this Bill and bringing forward legislation that will help improve the protections afforded to certain categories of employees who provide valuable services and who do not have the protection that organised employees have. As I understand it, any practice that distorts competition or has that as an objective is both a civil wrong and a criminal offence. However, union representation is a different animal. The area where collective bargaining and competition law intersects is a rather difficult and tortuous one. As the Bill notes, since late in the 19th century our understanding of trade unions has radically altered. Our Constitution and international human rights law recognise the right to form trade unions. The question with this legislation is whether unions representing people who are not in traditional employment are covered by competition law. The test currently is whether somebody is employed or self-employed. If they are employed, they can partake in union membership and collective bargaining. The self-employed cannot. That might be a simplification but, as I see it, that issue is at the heart of the matter. The categories of people impacted have been referred to.

We can trace this back to European Union law. This encourages competition within the trade union and regulates anti-competitive activity. Its aim is to prevent cartels and monopolies and no one would disagree with such an aim. Based on Articles 101 to 109, inclusive, of the Treaty on the Functioning of the European Union there is also a plethora of directives and regulations. This proposed legislation, therefore, transgresses on a hugely legally complex area. I will not get too immersed in the detail but I will refer to one case already referred to by Senator Back, namely, the European court case C-413/13 in which the court decided that competition law did not apply to arrangements among freelance, substitute or orchestra musicians. Its aim was an improvement in working conditions. The European law blog notes that the court significantly expanded the scope for taking social interest into account within competition law. It rejected the view of the European Commission. It is said that this particular case is very important as, for the first time, it took account the issue of false self-employed or those not in what one would term traditional employment. It said the court very much demonstrated a willingness to take public interest arguments into account rather than concentrating on very narrow economic ones. It is something I think is very relevant to this Bill.

There is also a very interesting paper on collective bargaining by musicians, written by Camilo Rubiano and supported by the International Federation of Musicians. This report notes that it is widely acknowledged that collective agreements concluded in good faith and dealing with core labour subjects are, in principle, legal. However, it also notes that there is little in the way of clear legislation removing collective bargaining from competition law and that it has been a matter for courts to establish where the limits lay and to harmonise conflicting relationships. The author goes on to give case law of the European courts in support of this position while noting that it has been very narrowly interpreted by various national competition authorities within the EU. It is therefore suggested that, although the European courts have suggested a more social approach to competition law, national authorities are very slow to follow. It is interesting to note that an Irish competition authority case involving SIPTU and self-employed actors formed the basis of decisions in other member states' various competition authorities. It is suggested that the EU courts are more open to social aspects but national authorities seemingly read and interpret the text of Articles 101 to 109, inclusive, quite strictly.

The Labour Party Bill is on a very interesting topic. It is also a very complicated topic and, in trying to balance the proper prohibition of anti-competitive practice and the right of people to fair terms and conditions, there will always be some tension. I welcome the chance for further debate on Committee Stage and generally. As a Government we are doing everything possible to enhance the rights of employees in all categories, and this Bill addresses a situation where there are anomalies and where people in certain occupations are being treated less favourably.It is with pleasure that I support the Bill.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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I welcome the Minister and rise to support this timely Bill. I thank Senators Bacik and Hayden for introducing it. Like Senator Ó Domhnaill, I hope it will pass through the House as quickly as possible and be enacted before the Houses' dissolution.

Employment has undoubtedly changed in the past 100 years. In the past ten or 20 years, it has become precarious. One can walk into an organisation today and find that some of its employees, who are of the mistaken belief that they are employed by the company on all the terms and conditions that one would expect, are essentially private contractors. Yesterday, I was shocked to see that 65,000 claimants to the Department of Social Protection were casual workers. That is a large number. It is a slight aside from this Bill and is not what the Bill is trying to address, but it is only right and proper that those in the professions - doctors, bricklayers, voiceover artists, photographers, journalists, etc. - have access to all of the protections that one might have when in full-time employment. I congratulate the Labour Party and Senator Bacik on the introduction of this Bill.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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Like Senator Bacik, I will declare an interest, although not at the lofty level of being a barrister. I am a member of the National Union of Journalists, NUJ, and Irish Equity.

Photo of Ivana BacikIvana Bacik (Independent)
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Much loftier.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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I thank the Senator. Like her, I welcome the representatives of both trade unions to the House.

As my colleague Senator Ó Domhnaill has outlined, Fianna Fáil supports the Bill. I compliment Senator Bacik, who gave me her personal insight into this legislation prior to the debate. I listened with great interest to her presentation, which made it clear that this amendment was long overdue. I posited to her - she may have been wearing her barrister's hat, as she did not quite reply - that perhaps I should have sued RTE during my time there because there are people in that organisation who are operating on minimal pay rates. I do not want to separate from the NUJ, which has done the same job, but I thank Irish Equity. As an on-air presenter in RTE, I was always subject to contracts that were of short duration and at the minimum rate that was negotiated by Irish Equity on my behalf, even though I was deemed as self-employed for tax purposes. This is the case that the Senator is making, more or less. It seems that RTE and I were acting illegally in this regard because our situation went against the essence of the 2002 Act, which I understand this Bill will correct in order to remove the legal limbo regarding the status of people such as myself who operated in RTE under those terms.

The Bill is also timely in that it allows me to reiterate the fact that the majority of on-air people working in RTE are operating on minimum Irish Equity rates. The high flyers and celebrities give the public the mistaken impression that everyone they listen to on RTE radio is earning multiple thousands of euro. Only a small number of presenters are being paid at that level. They operate on individual contracts that are negotiated by agents whom they are affluent enough to afford. I was never in that situation. During the recent economic downturn, rates for programmes were cut drastically by RTE. In my case, it sadly reached the point at which it was no longer worth it to me financially because of the amount of work involved in the programmes. I am not blaming RTE, which was in a loss-making situation. I am glad it has extricated itself from that position, as I am a strong supporter of the concept of public service broadcasting.

This debate allows me to make a point, particularly given the attendance of my Irish Equity friends. When I started in broadcasting, there was an agreement between Irish Equity and RTE that non-Irish television and radio advertising would be re-voiced by the former's members, but that agreement seems to have gone away. Forget about the other channels. I am becoming increasingly irritated with regional British voices on RTE trying to sell consumer products to Irish viewers. It is unacceptable. One does not hear Irish voices in adverts on ITV, but one hears a plethora of British voices - not just plummy, upper-class English voices, but also regional accents that are, in some cases, harsh on the Irish ear. I wonder whether advertisers are aware of the adverse impact this has on Irish consumers. It is not because people are anti-British, but because they cannot understand some of the accents. I should have checked with Irish Equity prior to this debate whether the agreement had lapsed or RTE had taken a decision to end it, but it is long past time for it to be restored. It provides Irish voiceover actors with work. I do not know whether the Minister has a role in this matter or whether he will stand back and state that this is between RTE and the trade union concerned, but I would be interested in his opinion. Perhaps I can draw him out a little.

This legislation is welcome. It will protect many of those who - like me, even though I am no longer employed by RTE - operated or continue to operate on short-term contracts. This issue may also affect local radio, where there is a race to the bottom. People who are anxious to get involved in broadcasting, particularly young people, are prepared to take whatever money is offered. I am not suggesting that they are not being paid the minimum wage, as they are, but JobBridge raises serious concerns. The NUJ conducted a survey on its use in enhancing the income of local radio stations. JobBridge participants were taken on for nine months, only to be told at that point that the stations were not in a position to offer them full-time employment. The stations then re-advertised the same jobs, albeit with different wording to give the impression that these were different jobs. The radio stations benefited by having a continuing stream of people taking over from other people. This practice is unacceptable. I do not know whether the Minister has been made aware of the NUJ's survey, or whether there has been communication between the NUJ and his office in this regard. It is unacceptable regardless of the difficulties facing local radio in maintaining current job levels following a difficult economic period that affected it and other elements of the economy. I am not trying to have a go at local radio. If, as this Bill proposes, the law is meant to protect workers and ensure that they get fair wages, it should be applied across the board.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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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.

Photo of Ivana BacikIvana Bacik (Independent)
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I thank my colleagues for their support. I welcome that the Minister is not opposing the Bill and thank him for his detailed consideration of it. I also welcome the Minister's reference to the need to take the time to consider these matters afresh.

I thank Senator Hayden for seconding the Bill and for her support for it. I also thank Senators Ó Domhnaill, Craughwell and Mooney for their support. As pointed out by Senators Hayden and Craughwell, the Bill is being introduced in the context of the dramatic change in the nature of employment. Senator Hayden described this as the growth of the precariat, which I think is a very accurate term. Senator Mooney spoke of the legal limbo in which those who are members of said precariat, namely, the self-employed, find themselves, in that many of them because they are working freelance cannot be represented in collective bargaining negotiations by trade unions. As stated by many colleagues, this is a difficult and complex area.

What the then Competition Authority saw in 2014 as price fixing was viewed by the unions as wage setting for their members. It is difficult when a union representing employed persons in terms of wage setting and so on cannot also represent persons who may be close to employed. In other words, they are effectively in bogus self-employment under the rigid interpretation of competition law and, therefore, they cannot be represented by the same union. This Bill seeks to tackle that anomalous and unfair situation.Senator Michael Mullins clearly outlined the difference of view of the EU courts, which take a broader interpretation of the application of competition law to trade union activity than that taken by the national competition authority. Therefore, it is appropriate, particularly in light of the 2014 decision of the European Court of Justice, ECJ, for us as legislators to consider it afresh and not necessarily to take on board the legal interpretation of the 2014 decision that has been taken by our own commission here.

In respect of the Minister's point on Article 101, in the European Court of Justice decision in the Dutch case, the court explicitly looked at the application of Article 101 because that is the article from which the Dutch law was drawn, just as our own Competition Act is drawn. Under Article 101, the ECJ stated that it does not end the matter merely to state that because a union is negotiating for self-employed persons, they will be regarded as an association of undertakings. The court stated clearly that if the service providers on whose behalf the union is negotiating are, in fact, false self-employed, that is, if they are effectively working as employees because they do not bear any of the financial or commercial risks arising out of the employer's activity and they are really an auxiliary within the principal's undertaking, they are not in business on their own account in that sense, they may be seen as employees for the purpose of EU law and the union is therefore entitled to negotiate on their behalf.

It is a complex area and I accept the Minister's point about unforeseen consequences. However, there is a straightforward core principle here and we have attempted to deal with that in the rather narrowly drawn drafting of section 2, stating that where an individual engages for gain personally to do any work or provide any services, and a trade union of which that individual is a member negotiates an agreement on his or her behalf affecting the terms or conditions under which the work is done or the services are provided, then that should form an exemption to the application of section 4 of the Competition Act of 2002. This is narrowly drawn to protect a vulnerable group of freelance workers and it can be done in such a way that it does not fall foul of EU law or competition law and does not operate to the detriment of consumers.

Clearly, we all are very much in support of the principle that the competition law is designed primarily to protect the interests of consumers. However, there is an overly rigid interpretation of competition that suggests trade union activity is anti-competitive, and in our democratic tradition, we do not accept that. We accept there is a right to form and join trade unions, that collective bargaining is a bedrock of our society and that, therefore, we must see exemptions to what would otherwise, perhaps, rigidly be seen as anti-competitive activity where trade unions are engaged in valid and legitimate wage setting and terms and conditions agreements on behalf of members, who may be technically described as self-employed but who are, in reality, not undertakings in the spirit of competition law. That is the nub of this legislation.

I note others have spoken about the timing of the Bill. Of course, I would like to see this Bill enacted in the lifetime of this Government. Given the limited time available, I accept that is unlikely. I hope we will see it restored to the Order Paper. I anticipate it will pass Second Stage shortly in the Seanad. Therefore, it will be on the Order Paper of the Seanad. It would, therefore, be my hope and expectation that if the Labour Party is part of the next Government, we would see it is a Labour commitment and we would see it restored to the Order Paper in early course and continue its journey with rapid progress through the Houses of the Oireachtas in order that there would be the sort of protection for freelance workers that we need in law.

I thank the Minister, Deputy Richard Bruton, for taking the time to consider the matter afresh. I hope this is the start of the journey towards the enactment of this legislation. I again thank those union members and representatives in the Gallery who have lent their support and who, indeed, have been campaigning for this for many years.

Question put and agreed to.

Photo of Michael MullinsMichael Mullins (Fine Gael)
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When is proposed to take Committee Stage?

Photo of Ivana BacikIvana Bacik (Independent)
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On Tuesday next.

Committee Stage ordered for Tuesday, 26 January 2016.

Photo of Michael MullinsMichael Mullins (Fine Gael)
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When is it proposed to sit again?

Photo of Ivana BacikIvana Bacik (Independent)
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Tomorrow, at 10.30 a.m.

The Seanad adjourned at 6.05 p.m. until 10.30 a.m. on Thursday, 21 January 2016.