Statement by Minister Martin to Dáil Eireann, Re: Irish Ferries

Re-Flagging

As regards the company’s plans for recruiting new staff to re-flagged vessels, I can confirm that the Minister for Communications, Marine and Natural Resources is continuing to consider an application from the company to remove the vessels from the Irish register to be transferred to the Cypriot register. He is doing so on the advice of the Attorney General and has sought further information on the strength of the relationship between Irish Ferries, the ships and Cyprus.

I believe that the protection of employment standards is an important goal of public policy. We do not want to create a low wage economy in this country. In particular, we don’t want to foster a social division by having jobs transformed from decent employment for Irish citizens to low pay positions targeted at migrant workers.

This country has invested hugely in tackling poverty and inequality. The Government is not prepared to see it replaced by short-sighted and exploitative decisions. Ultimately, the State winds up subsidising unsustainable low paid employment through family income supplement, social services and so on. That is why I am satisfied that we have a realistic minimum wage in this country.

The potential to re-flag in the maritime sector would appear to put the employment of seafarers beyond the minimum wage regime here. Therefore, directly comparable situations do not arise in other employments. However, there are issues arising from recent events which we all need to consider, including the arrangements for repayment of part of the cost of redundancy settlements to employers and the adequacy of our industrial relations framework in circumstances such as this. Furthermore, I want to make it very clear that the Government did not agree to immediate access to the Irish labour market by citizens of the new Member States in order to displace Irish workers.

Having said that, I do recognise that commercial reality and competitive pressures will impact on employment here which is not sustainable. The best defence for all of us, especially for workers, against these pressures is to ensure that our approach to wage bargaining reflects competitive realities, that our workers are encouraged to update their skills in line with technical progress, that our industrial relations practices foster flexibility and change in order to boost productivity, and that our support for workers who are affected by change is timely and effective.

There has been informal contact with the Irish Congress of Trade Unions following their decision to postpone the commencement of talks on a new social partnership agreement. Ministers and officials from a number of Departments, including my own, met with ICTU and SIPTU representatives on a number of occasions over the past few weeks. This provided a useful opportunity to elaborate on the key issues and to ensure that there was at least a shared understanding of the difficulties.

As Deputies know, the Government has already communicated its intention to engage fully and effectively in the process of devising policies and measures which would protect employment standards and arrest a race to the bottom in terms of employment practices. I am confident that a successful response to these issues can be found for our economy, where the very particular legal and other characteristics of the marine sector do not apply. I believe they are best found within the context of a social partnership agreement which continues the stability and progressive modernisation of our labour force and employment practices in order to sustain jobs and living standards.

I view with great concern the potential social implications of the displacement of workers on established conditions in favour of those willing to do the same jobs on much poorer conditions. The Taoiseach is on record in stating that we want to see greater productivity and enhanced competitiveness based on new products and services, upskilling of staff, new work practices and technological innovation. We do not want to see people building competitive advantage based on poor wages, casualisation of labour, low health and safety standards or other poor compliance practices. Not only is it wrong, it is simply not sustainable.

I think it would be useful if I now addressed an accusation being made by Deputy Rabbitte and others that there is some connection between the Taoiseach’s recent statement as regards the scope for action by Government and Irish Ferries’ outrageous behaviour. As I understand the Taoiseach has already made clear to the Deputy, he was aware on the weekend before last that it was expected within trade union circles that the company would proceed in the immediate future to begin implementation of its plan. Last week’s action was clearly planned in a careful and covert way and we can therefore assume it was planned long before any remarks by the Taoiseach. Any connection between those remarks and the appalling behaviour of Irish Ferries is fanciful in the extreme and clearly politically mischievous.

The Government wants to do its best to protect Irish workers and not seek to make party political capital out of this saga. I hope the Deputy and others – on further reflection – apply the same standard.

Let me set the context for the Taoiseach’s remarks. These remarks referred to the fact that, in the unique circumstances of the law relating to the marine sector, it would not be possible to enforce Irish employment terms and conditions on re-flagged vessels. That continues to be the position.

The legal position is clear. Any undertaking that seeks to exercise its European law right of establishment in another Member State cannot be prevented from so doing. The State cannot hinder the exercise of that right. Otherwise it would be in breach of its duties under the Treaty of the European Communities. Once Irish Ferries satisfies the Minister that its proposed re-flagging in Cyprus is on foot of its right of establishment then the State cannot prevent the re-flagging. That is the stark reality.

Pending that re-flagging approval Irish employment laws will continue to be enforced and at all times Irish safety laws will continue to apply to all vessels using Irish ports wherever they are flagged. But once the vessels re-flag in Cyprus it is as a matter of international law clear (as reflected in United Nations Convention on the Law of the Sea - UNCLOS) that the terms and conditions of the employed seafarers on such vessels is to be decided exclusively by the flag State i.e. Cyprus. Moreover, it is crystal clear that the Irish State cannot prevent a re-flagging that occurs as an integral part of exercising a right of establishment in another Member State.

The Government have been advised that the attempt to do so through the terms of the Bill tabled by the Labour Party would be completely ineffectual and legally unsustainable. Once a right of establishment – in accordance with European law – is exercised by definition there would be a genuine link with the Member State in which the vessel is re-flagged. Hence the Labour Party’s proposed Bill will not solve the problem. In fact, it will compound the situation by unfairly raising expectations of a legislative solution.

We offered to share our analysis of the legal position with the representatives of SIPTU and I understand that this took place last Friday evening.

It serves no purpose to provide the illusion of a solution which is not, in fact, available. Equally, I reject the suggestion that the deplorable circumstances in Irish Ferries can be repeated in other sectors of the workforce. This is, as you well know, not the case. Seafarers and States operate within well defined international legal provisions and conventions. That is a regime that applies to that industry. That is not the position in other industries. The position of other workers is entirely different.