Second Stage Speech on the Employees (Provision of Information and Consultation) Bill 2005 by Mr Michael Ahern, T.D., Minister for Trade and Commerce

Introduction

On behalf of my colleague Mr Tony Killeen, Minister for Labour Affairs I am pleased to bring before the House today the Employees (Provision of Information and Consultation) Bill 2005. Minister Killeen has asked me to convey his apologies for not being present here today.

The Bill has passed all stages in the Seanad where it engendered a very constructive and productive debate. During its passage through the Seanad a number of amendments, which have strengthened the Bill, have been made. I will comment on the main amendments later on when outlining the various sections of the Bill.

The Bill establishes a general framework for the right to information and consultation of employees in undertakings over a certain size. It introduces for the first time in Ireland a general right to information and consultation for employees from their employers. This general right is without prejudice to existing rights to information and consultation, which at present are limited to specific situations for example collective redundancies and transfer of undertakings.

I propose firstly to summarise the background and context for the Bill. I will then outline the approach taken in transposing the Directive on which the Bill is based. Finally, I will describe the purpose and reasoning behind each section of the Bill.

Background and Context

The Bill seeks to implement the provisions of the European Union Information and Consultation of Employees Directive 2002/14/EC of 11 March 2002. The Directive was agreed by Member States following extensive negotiations at the European Council and Parliament. While much of the detail of implementation is left to national governments, the Directive does, nevertheless, set out clear principles. Its objective is to establish minimum requirements for information and consultation of employees across the European Union. For the first time, employers are obliged to establish arrangements for the provision of information and consultation to their employees. The Directive is an important EU intervention in national industrial relations systems. The underlying reason for this Directive was based on the need to address perceived gaps in the existing legal frameworks for information and consultation at EU and national level. These frameworks tend to focus on the provision of information and consultation when crises arise, for example collective redundancies, rather than its provision on an ongoing basis. This does not contribute either to genuine anticipation of employment developments or to risk prevention.

The Directive specifically states that its implementation shall not be sufficient grounds for any diminution in relation to the general level of protection of workers in this area. Accordingly, any obligations to inform and consult under this Directive are in addition to existing obligations. Irish law, stemming from previous EU Directives, already obliges employers to inform and consult their employees in certain defined circumstances. These include:

• Firstly, the Protection of Employment Act 1977, as amended, which provides that employers planning collective redundancies must consult employees’ representatives and notify the Minister for Enterprise, Trade and Employment at least 30 days before the redundancies commence.
• Secondly, in the event of a transfer of ownership of an undertaking, the Transfer of Undertakings Regulations 2003 provide that an employer has certain obligations toinform and consult employees at least 30 days in advance of the transfer.
• Finally, the Transnational Information and Consultation of Employees Act 1996 applies to Community-scale undertakings and Community-scale groups of undertakings and provides for information and consultation of employees on transnational matters affecting those employees.

The aim of the Information and Consultation Directive is to ensure that information and consultation is provided by employers systematically so that employees are able to acquire an informed understanding of the challenges faced by the business. Improving the adaptability of Irish workplaces is vital to meeting the challenges created by the globalised economy. Timely information and meaningful consultation are fundamental in this regard.

Approach Taken in Transposing the Directive

In recognition of the partnership approach that has served Ireland so well there has been extensive consultation with the social partners and other interested bodies regarding the transposition of this Directive into Irish law. Consultation with the Irish Congress of Trade Unions and the Irish Business and Employers Confederation included bilateral meetings, in accordance with the commitment given in the Mid-Term Review of Sustaining Progress.

The consultation process commenced in October 2002 and included the publication of a formal consultation paper in July 2003, which invited all interested bodies and individuals to make submissions setting out their views. The formal submissions received on foot of the consultation paper, together with the wider consultation process, helped inform the drafting of the Bill. Our approach has also been informed by the constructive and productive debate in the Seanad. I believe this Bill is a balanced reflection of the needs of Irish employees and the needs of Irish business, within the context of the needs of Ireland as a society and an economy.

Ireland has a wide variety of systems of workplace relations in operation. The Government’s policy approach in transposing the Directive has been to provide the maximum flexibility to employers and employees to devise arrangements which best suit their own particular circumstances. The objective of the Directive is to establish a general framework for the right to information and consultation of employees and consequently it is not overly prescriptive in terms of its provisions. The Directive leaves considerable discretion to Member States in setting out national procedures. This discretion has been fully utilised so as to tailor the legislation to Ireland’s workplace culture and to minimise the burden on enterprises. The Bill respects Ireland’s voluntarist tradition of industrial relations and allows maximum flexibility to employers and employees to implement new procedures or continue with existing customised information and consultation arrangements. Allowing scope for employers and employees to use local arrangements as much as possible, within the terms of the Directive, will, I believe, ensure that they embrace the opportunities the Bill affords them to build meaningful information and consultation processes in the workplace.

EU and national research demonstrates the tangible benefits that effective and meaningful information and consultation arrangements can bring to both business and the individual. Employers who share information and consult with their workers are the high performing companies not only in today’s but tomorrow’s markets. Establishing and developing effective information and consultation arrangements at the level of the workplace leads to a sense of involvement for employees, and a greater understanding on their part of the environment within which the undertaking operates. This in turn can help organisations to anticipate and manage change, facilitate workplace adaptability and develop partnership at the level of the enterprise, all of which are vital in maintaining and improving competitiveness. This Bill aims to encourage and support the establishment of arrangements for information and consultation and I am convinced that effective employee involvement will play a key role in increasing company performance.

Content of Bill

Turning to the content of the Bill, I would now like to outline to the House the main provisions of the Bill.

Section 1 is a standard section in all Acts. It provides for the interpretation of certain words or expressions, which are mentioned in the Bill and also permits abbreviated references to sections, subsections and to other Acts. The section draws on the text of the Directive itself, but it also interprets some terms not defined in the Directive, and includes terms such as employee and employees’ representative which the Directive leaves to be defined in accordance with national law and practice. There were a number of minor amendments made to this Section at Report Stage in the Seanad.

Section 2 includes standard provisions which empower the Minister for Enterprise, Trade and Employment to make such regulations as may be necessary to give full effect to the Bill.

Section 3 establishes a right to information and consultation for employees in undertakings with 50 or more employees. The provisions set out in the Bill are without prejudice to existing rights to information, consultation or participation under other legislation, for example, collective redundancies and transfer of undertakings legislation. They are also in addition to the rights accorded to employees under the Transnational Information and Consultation of Employees Act 1996; procedures established on foot of that Act are not sufficient to fulfil the rights accorded by this Directive and hence this Bill.

Section 4 sets out the number of employees that must be employed in an undertaking for it to fall within the scope of the legislation. This section avails of the option in the Directive to phase in its application in Member States where there is no general statutory system of employee information and consultation, as is the case in Ireland. The timetable for the phased-in application of the legislation means that it will apply on a date to be prescribed to undertakings with 150 or more employees. It is intended to make an order shortly after enactment of the legislation prescribing a date on which the legislation will apply to undertakings of this size. Undertakings with 100 or more employees will be covered from the 23 March 2007, and by the 23 March 2008 all undertakings with 50 or more employees will fall within the scope of the legislation.

Section 5 sets out the method of calculating the workforce thresholds for the purpose of determining whether or not an undertaking has enough employees to fall within the scope of the legislation. The Directive allows Member States to determine the method for calculating the thresholds of employees employed and the Bill bases the calculation on an average number of employees taken over a two-year period. This takes out seasonal factors which might skew the figures if employee numbers were to be counted on a certain date each year.

An obligation is placed upon the employer to provide details of the workforce numbers within four weeks of this information being requested - this period of four weeks may be extended by agreement between the parties. Employees can request this information themselves, or through their representatives, or through the Labour Court or its nominee. The right to request information through representatives or through the Labour Court or its nominee was agreed at Report Stage in the Seanad.

Section 6 defines an employees’ representative for the purposes of the Bill. An employees’ representative must be an employee of the undertaking and must be elected or appointed for the purposes of the Bill. This ensures that the representatives are democratically elected or appointed by the employees and are representative of them. Where it is the practice of an employer to conduct collective bargaining negotiations with a Trade Union or excepted body, which represents 10% or more of the employees, the employees who are members of that Trade Union or excepted body are entitled to elect or appoint their own employees’ representative(s).

This section also provides that the number of Trade Union or excepted body representatives will be determined on a pro rata basis with other elected or appointed representatives. There is an obligation in this section on the employer to arrange for the election or appointment of the employees’ representative. Where a dispute arises under this section, it may be referred by the employer, trade union, excepted body or one, or more than one, employee to the Labour Court for determination in accordance with the procedures set out in section 15(6), 15(7) and 15(9).

Section 7 sets out the process by which employees may trigger negotiations that will lead to an information and consultation arrangement being put in place in the undertaking. At least 10% of employees must make a written request for an employer to commence negotiations to establish such an arrangement. This 10% is subject to a minimum of 15 and a maximum of 100 employees. An employer can alternatively commence negotiations on his or her own initiative. Provision is made for employees to make their request to either the employer or to the Labour Court or a nominee of the Court and various steps are set down in terms of the Labour Court or a nominee of the Court processing a request received. Negotiations must be concluded within a 6-month period although this period may be extended by agreement of the parties.

There are two possible outcomes to these negotiations: the establishment of a negotiated agreement under Section 8; or the application of the Standard Rules as set out in Section 10 and Schedule 1.

Where the employee threshold is not met at the time of making a request, the employees of the undertaking shall not make a further request for negotiations for a period of two years from the date on which the request was received by the employer or the date that the employer receives notification from the Labour Court that a valid request has been made.

Section 8 sets out minimum requirements for negotiated agreements on information and consultation. Employers and employees are given a wide degree of autonomy in these negotiations to devise their own information and consultation arrangements in line with the discretion allowed in the Directive. In order to encourage such agreements, the conditions and limitations attached to them in the Bill are few. This affords the parties the opportunity to develop information and consultation arrangements that are tailor-made to their particular needs.

This section also provides for different options for approving a negotiated agreement. A majority of employees or a majority of employees’ representatives must approve the agreement. Alternatively, some other system of approval can be agreed by the parties. At any time before a negotiated agreement expires or within 6 months after its expiry, the parties to the agreement may renew it for any further period they think fit.

A minor amendment was made to this section at Report Stage in the Seanad.

Section 9 deals with pre-existing agreements which are information and consultation arrangements which are already in place in an undertaking before specified dates. Many undertakings already have agreements in place which provide for information and consultation either specifically or as part of a wider agreement on terms and conditions. Parties to these agreements may be satisfied that they have a workable and suitable system to meet the provisions provided for by Article 5 of the Directive. Again, in line with the policy to encourage tailor-made agreements, the conditions and limitations attached to these agreements are few.

In relation to undertakings with 150 or more employees it is intended to make an order shortly after enactment of the legislation prescribing a date by which pre-existing agreements must be in place in undertakings of this size. Like Section 8, this section also provides for different options for approving a pre-existing agreement. Again, a majority of employees or a majority of employees’ representatives must approve the agreement and as an alternative, some other system of approval can be agreed by the parties. Where a pre-existing agreement is not in force for a period of 6 months employees are then free, if they so wish, to trigger negotiations as set out in Section 7.

Section 10 deals with the Standard Rules which are essentially a fallback position for setting up an information and consultation arrangement. The Standard Rules will apply if the parties agree to adopt them, or the employer refuses to enter into negotiations within a certain timeframe or the parties to the negotiations fail to agree within a certain timeframe. This section ensures that employees can exercise the information and consultation rights provided for in the Bill, if they wish, in the absence of agreement with the employer. The employer has 6 months to comply with the requirements of the Standard Rules. In the event that the terms of a negotiated agreement are not approved by the employees, a moratorium of two years will apply before the Standard Rules are initiated. Where during this two-year period the parties re-enter negotiations and approve a negotiated agreement, the Standard Rules shall not apply. This section also provides for a review of the Standard Rules.

Schedule 1 sets out the detail of the Standard Rules. These Standard Rules provide for the establishment of an Information and Consultation Forum which comprises employees’ representatives and provide details on the size and structure, expenses, rules of procedure and competence of that Forum, together with the practical arrangements for information and consultation. Schedule 2 details the requirements for the election of employees' representatives to the Information and Consultation Forum for the purpose of the Standard Rules.

A minor amendment was made to section 10 at Report Stage in the Seanad.

Section 11 provides that, in relation to negotiated agreements and pre-existing agreements, an employee may exercise his or her right to information and consultation from the employer either by direct means or by means of his or her representatives. In order for employees to change from a system of direct involvement to a system of representation through employees’ representatives, there must be a written request to do so by at least 10% followed by the approval of a majority of those employees operating under a direct involvement system. Following approval of such a request there is an obligation on the employer to arrange for the election or appointment of representatives by the employees.

A few minor amendments were made to this section at Report Stage in the Seanad.

Section 12 provides that employers and employees and their representatives must work in a spirit of cooperation in implementing this legislation.

Section 13 provides protection for employees' representatives in the performance of his or her functions in accordance with the Bill. It includes provisions contained insomeother employment legislation, such as: protection against dismissal; protection against suffering any unfavourable change to the conditions of employment; protection against unfair treatment or any other action prejudicial to the employment.

Section 13 also provides for the facilities to be afforded to employees’ representatives to enable them to effectively carry out their duties.

An amendment agreed at Report Stage in the Seanad provides that employees’ representatives are paid their wages for any period of absence afforded them to perform their functions under the legislation.

Section 13 also gives effect to Schedule 3 , which was inserted in the Bill at Report Stage in the Seanad. It provides employees’ representatives with the right to make a complaint to a rights commissioner that an employer has contravened Section 13. A decision of a rights commissioner, which may include compensation to be paid by the employer to the employees’ representative, may be appealed, by a party concerned, to the Labour Court.

Section 14 deals with Confidential Information. It provides that specified individuals who receive information in confidence in the legitimate interest of the undertaking shall not disclose such confidential information to employees or to third parties, unless those employees or third parties are themselves subject to a duty of confidentiality. This duty of confidentiality will continue to apply after cessation of the employment of the individual concerned or the expiry of his or her term of office and it also extends to the Labour Court in relation to confidential information that it receives during proceedings taken under the Bill.

This section sets out situations where the employer may refuse to communicate information or undertake consultation and where he/she is prohibited from giving information.

Section 15 sets out dispute resolution procedures in respect of different types of dispute. Disputes regarding agreements, the Standard Rules or systems of direct involvement may be referred to the Labour Court for recommendation or determination, but only after the internal dispute resolution procedures, if any, have failed to resolve the dispute and the dispute has been referred to the Labour Relations Commission who certify to the Labour Court that no further efforts on its part will advance the resolution of the dispute. A role for the Labour Relations Commission in the dispute resolution process was agreed at Committee Stage in the Seanad.

Disputes regarding confidential information may be referred to the Labour Court for determination. Section 15 sets out the role and procedures of the Labour Court in relation to these matters. In deciding what constitutes confidential information, the Labour Court may be assisted by a panel of experts to be appointed by the Court.

Section 16 provides that the Labour Court has the power to administer oaths and compel witnesses in relation to disputes or appeals referred to it under the Bill.

Section 17 provides for enforcement by the Circuit Court of a Labour Court determination or a decision of a rights commissioner that has not been appealed.

A new Section 18 was introduced at Committee Stage in the Seanad and provides that the Minister may appoint inspectors for the purposes of the legislation. The powers of the inspectors are set out and include the power to enter certain premises, make such examination or enquiry as may be necessary for ascertaining whether the legislation is being complied with, and require the production of relevant records and information. The section also provides for offences in relation to obstruction or non-compliance with requests from an inspector.

Section 19 sets out the offences for non-compliance with the provisions of the Bill (apart from Section 18).

Section 20 details the penalties for non-compliance with the Bill.

A new Section 21 was introduced at Committee Stage in the Seanad. This section transposes an optional provision of another EU Council Directive – Directive 2001/23/EC - which provides that in a transfer of undertaking situation, the transferor must notify the transferee of all the rights and obligations arising from a contract of employment existing on the date of transfer, which will be transferred to the transferee. If a transferee is required by a rights commissioner or the Employment Appeals Tribunal to pay compensation to an employee because of a failure of the transferor to provide the necessary information, the transferee has a right of action in a court of competent jurisdiction to recover some or all of the amount paid in compensation.

Section 22 is a standard provision dealing with the short title of the Bill. It also provides that the Bill shall come into operation on such day or days as the Minister may appoint by order or orders.

Conclusion

The Employees (Provision of Information and Consultation) Bill 2005 seeks, as it must, to fully transpose the EU Directive on Information and Consultation into Irish law. As I mentioned earlier, in framing this legislation, there was extensive consultation with the representatives of the business community and the representatives of employees. The debate in the Seanad has also informed the text of the Bill before you today. I believe that the legislation represents a balanced approach within the requirements of the Directive. The provision of information and consultation of employees is good practice. This Bill ensures that workers will now have a right to information and consultation in regard to their companies. The approval of the workforce is key to ensuring that both negotiated and pre-existing agreements reflect the concerns and meet the needs of both sides. Employees’ representatives are given stronger protections and right of redress in this Bill than in any other piece of employment rights or industrial relations legislation to date.

The Government approach to the Bill has been to facilitate a co-operative and positive approach by individual companies and their employees in meeting the objectives of the Directive. I believe that this approach has resulted in a Bill which recognises the voluntarist tradition in Irish industrial relations and which will assist companies and their employees in establishing effective and efficient information and consultation arrangements.

This Bill – The Employees (Provision of Information and Consultation) Bill 2005 is without doubt a welcome addition to our Employment Rights, Industrial Relations legislation and represents an important opportunity to foster and deepen customised partnership-style approaches to anticipating and managing change. The Bill affords the opportunity to meet the challenge of embedding partnership at enterprise level and making it a reality for workers and employers.

Cathaoirleach, I commend this Bill to the house.

ENDS

TC 189