Brendan Griffin (Kerry South, Fine Gael)
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Question 107: To ask the Minister for Jobs, Enterprise and Innovation his views on issues (details supplied) raised by the Restaurants Association of Ireland concerning the way in which small and medium enterprises must operate; and if he will make a statement on the matter. [19572/12]

Richard Bruton (Dublin North Central, Fine Gael)
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The sectors covered by the JLCs are characterised by a large number of small employments in which collective bargaining is not well established and wages tend to be low.

In many of the sectors covered by JLCs there is no effective alternative mechanism by which employees and employers can engage in collective bargaining at local level on equal terms.

The Duffy/Walsh Report concluded that the main justification for the JLC system lies in the absence of any other fair system of determining pay and conditions of employment, beyond statutory minima, within the sectors concerned.

The Industrial Relations (Amendment) (No.3) Bill 2011 was published on 22 December 2011. The Bill has completed Second Stage in the Dáil and is currently awaiting Committee Stage.

The main purpose of the Bill is to implement the commitment in the Programme for Government to reform the Joint Labour Committee system. The reform of the legal framework for underpinning this system is aimed at increasing employers' ability to retain and employ workers, particularly in sectors hard hit by the prevailing economic circumstances, including the Hotel and Catering sectors, and to facilitate necessary cross-sector adjustment.

In addition, the Bill provides for the more comprehensive measures required to strengthen the legal framework for the EROs and Registered Employment Agreement sectoral wage setting mechanisms, under the Industrial Relations Acts 1946 to 2004, in the light of deficiencies in the original legislation identified in the John Grace Fried Chicken case.

The fact that the process of making EROs was found by the High Court to be unconstitutional, together with the identified lack of adequate Oireachtas scrutiny of this process, only underscores some of the main features of the recommendations for reform that were put forward by the Duffy/ Walsh report.

The commissioning of the independent review of the ERO and REA systems was one of the undertakings given by the last Government in the context of the EU and IMF-supported financial assistance programme for Ireland.

When enacted, this Bill, will implement the programme of reforms to the JLC/REA systems agreed by Government in July 2011. It will radically overhaul the system so as to make it fairer and more responsive to changing economic circumstances and labour market conditions. It will also reinstate a robust system of protection for workers in these sectors in the aftermath of the High Court ruling in the John Grace Fried Chicken case.

The principal measures in the legislation include:-

· JLCs will have the power to set a basic adult rate and two additional higher rates, based on length of service in the sector or enterprise concerned;

· JLCs will no longer set Sunday premium rates. In order to recognise the special status of Sunday working a statutory Code of Practice will be prepared by the LRC following submissions from employers and trade unions. This Code will provide guidance to both parties in the sectors covering EROs on the compensatory arrangements, including such additional amounts as are reasonable, for Sunday working and on the procedure to apply in the event of disputes concerning the varying entitlements to Sunday working.

· As regard overtime, a new statutory Code of Practice on Sunday Working will be prepared by the Labour Relations Commission to provide guidance to employers, employees and their representatives in sectors covered by Employment Regulation Orders, on arrangements that may be put in place to comply with the options specified at section 14 of the Organisation of Working Time Act, 1997;

· Companies will be able to derogate from EROs in cases of financial difficulty. For this to occur, the Labour Court must satisfy itself that specified criteria have been met. Such derogation will be granted, for up to 24 months, in cases of proven economic difficulty, following consultation with the employees;

· In setting rates, JLCs will have to take into account a series of economic and industrial relations factors;

· The burden of compliance and record-keeping requirements for employers in these sectors will be reduced;

· Providing for Ministerial involvement in the supervision of JLCs and in the making of orders to vary or revoke EROs;

· Providing for use of civil remedies rather than an exclusive reliance on criminal sanctions;

· The Constitutionality of EROs and REAs will be restored through the inclusion of robust principles and policies.

From the beginning of this process 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 as to allow the creation of jobs in these sectors.

From an employer's perspective, the overall effect of these reforms will be to substantially reduce the burden of record-keeping and compliance. This Bill will make the long-established minimum wage setting mechanisms fairer and more responsive to changing economic circumstances and will eliminate rigidities that are considered to have had a negative impact on competitiveness and jobs in the affected sector.