Opening Address by Minister Kelleher at the IBOA - The Finance Union’s Conference

27 September, 2007

Good Afternoon Ladies and Gentlemen.

I would like to thank the IBOA for your kind invitation to me to address the Conference, which, to day, celebrates the 90^th Anniversary of the Association’s foundation.

I want to start by congratulating the IBOA on reaching this important landmark and to wish you well in your work over the two days of the Conference.

Given the importance of this milestone in the IBOA’s history, it is an opportune time to reflect on the Association’s past, and, as part of the celebrations, I note that an exhibition of 90 years history of IBOA is taking place tomorrow and Saturday at the new IBOA Headquarters which was officially opened by the Taoiseach last September.

I am sure the group of bank officials who met in the Glenworth Hotel 90 years ago today to form the IBOA would be amazed at the progress that the Association has made over the intervening years. No doubt the group would be equally surprised to note that the issues that were of concern to them in 1917, in terms of pay and conditions, would still be concentrating the Association’s minds 90 years later. What odds that these issues will still be concentrating minds 90 years from now?

Special tribute must be paid to the IBOA, including under your current General Secretary Larry Broderick, for the professional and effective way in which it has represented the interests of its members over the years.

The IBOA has played an important role as Ireland’s leading trade union representing over 21,000 staff in the financial services industry, spread over three jurisdictions. I know that the Taoiseach has previously acknowledged the strong North/South dimension to the Union's work and that your membership in Northern Ireland crosses sectarian and political divisions.

Banking Sector

The development of the financial services sector is one of the great success stories of recent years. The sector now employs over 55,000 people, over 35,000 of which are employed by banks. Financial services are our 4th largest services export sector. This makes it a crucial pillar of our prosperity, as Ireland needs to export to survive.

It is thought provoking to consider that almost 1 in every 50 workers is employed by a bank. Additionally, 18,000 people are employed by Irish banks outside of Ireland. Nor is this a purely Dublin-based phenomenon. Retail andinternational financial service operations are located right across Ireland.

The financial services sector accounts for 6.0% of our GNP. To give an international perspective on the importance of the sector nationally, Ireland’s ratio of total assets of credit institutions to GDP is exceeded in the EU only by Luxembourg.

International competition

The financial services sector is one of the most innovative and rapidly evolving industries. New products are constantly being brought forward at the cutting edge of this exciting business. At their heart, I suppose, they are all about finding new ways of packaging risk. A sector, which is increasingly technologically enabled, is also one, which is highly mobile. We must be careful, therefore, that we get the regulatory and fiscal ‘mix’ right for the sector.

Thankfully, there is now an increasing awareness at EU level that excessively onerous or restrictive regulation within the Union could stifle the innovation that is so essential in this sector and undermine the EU’s competitiveness in the global financial services marketplace and perhaps even drive the market into more accommodating jurisdictions.

So we can see that, at many levels, banking and financial services form a vital component of the Irish economy. In this context, it is important to acknowledge the considerable contribution, which bank officials have made to the success of the sector, and indeed to the development of the wider Irish economy.

Industrial Relations

The capacity to resolve workplace disputes effectively contributes to the quality of the working environment and has a significant impact on organisational performance in terms of reducing days lost, enhancing productivity and improving management-employee relations.

I believe that we are very fortunate in terms of the industrial relations systems we have developed together in Ireland. The fundamental approach of successive Governments to industrial relations has been one of voluntarism. There is a consensus among the social partners that the terms and conditions of employment of workers are best determined through the process of voluntary bargaining between employers and workers and between employers’ associations and one or more trade unions or staff associations. This approach to industrial relations has served us well over the years.

In general, our laws do not try to impose a solution on parties to a trade dispute, but rather are designed to help support the parties in resolving their differences. The State has, by and large, confined its role to underpinning voluntarism through the provision of a framework and the industrial relations institutions that can assist in the resolution of disputes between employers and workers and through which good industrial relations can prosper.

The Government is focussed, through its investment in dispute resolution machinery, on making a real difference to the conduct of industrial relations in the country. A key feature of that investment since 1991 has been the Labour Relations Commission. The Commission since that time has been a very successful organisation, whether judged from the perspective of dispute settlement or from the perspective of dispute prevention. In particular, both Kieran Mulvey and Kevin Foley of the LRC have, I’m sure you will agree, played important roles in facilitating significant agreements made between the IBOA and the main Irish banks in recent months.

The record of success in dispute resolution is clear from the available data, which shows that the Conciliation Services Division consistently settles about 80% of all cases referred to it. By the same token the Rights Commissioner Service, currently dealing with very significant growth in demand for its services, resolves the vast majority of all cases referred to it.

The Labour Court also plays a key role in contributing to the stable industrial relations climate in Ireland. The Court’s excellent reputation is built on the maintenance of high standards and a commitment to quality customer service.

We are all aware that effectiveness in dispute resolution is not the whole story in making a difference to the conduct of industrial relations however. The key to the long term health of an industrial relationship is for parties to take the steps necessary to ensure that the relationship is effective on the one hand and that they can resolve differences themselves when they arise on the other. The dispute resolution bodies have long understood this reality and have helped parties to industrial relationships right across the country to develop good communication mechanisms and good in-house dispute prevention and resolution arrangements.

Social Partnership

Social Partnership has played an important if not pivotal role in Ireland's dramatic economic and social development since 1987. Over the past twenty years, the successive social partnership agreements have reflected the unique challenges and opportunities of their time, and injected a substantial measure of stability and confidence for all sectors of the community, including investors.

It has created and sustained the conditions for remarkable employment growth, fiscal stability, restructuring of the economy to respond to new challenges and opportunities, a dramatic improvement in real living standards, through both lower taxation and lower inflation, and a culture of dialogue which has served the social partners, but more importantly, the people of this country very well indeed.

Moreover, all social partnership agreements have included provisions for the orderly processing of grievances and disputes and frameworks dealing with industrial peace and the pursuit of industrial action in regard to matters covered by the agreements. An indication of the impact of this aspect of the agreements is given by the trend over the period of reduction in days lost because of industrial action from 260,000 days in 1987 to less than 7,500 days in 2006, the lowest since records began in 1923. While there can be no room for complacency, these statistics reflect the stability of the industrial relations environment and the increased willingness of employers, workers and trade unions to resolve potential disputes either at workplace level or, if necessary, through the utilisation of the available dispute settling services, such as the Labour Relations Commission and the Labour Court.

In addition, institutions of social partnership play a significant role in ensuring delivery of the industrial stability and peace provisions of the National Agreements. In this context, the National Implementation Body (NIB) serves as a forum where the Government, employers and trade unions can work together to help ensure a positive industrial relations climate for economic and social progress

Needless to say, social partnership was not solely responsible for the dramatic turnaround in our economic and social fortunes. But social partnership was a key factor because it enabled us, Government, employers, trade unions, farmers and, in due course, the community and voluntary sector, to develop a consensus about the overall direction of our economic and social policy and to work together to achieve our shared vision of the future.

Our model for partnership is unique and adapted to Irish needs enabling us to manage rapid change successfully and built on support for the changes necessary to meet our economic and societal goals of growth and employment.

To remain a competitive, growing economy, with the capacity to improve our social provision we must continue to build on what social partnership has achieved for us. Over the past 20 years or so, if we have learned anything, it is that a shared analysis of the issues coupled with a problem-solving approach has worked.

Towards 2016 is the seventh social partnership agreement we have negotiated since 1987. The Agreement represents a shared vision and agreed framework for Ireland's continuing success in meeting its ambitious economic and social objectives. In this regard, I would like to acknowledge the role that Larry Broderick played in the negotiations on Towards 2016 as a member of the Executive Council of ICTU.

The Government for its part is living up to the commitments being entered into which will enable Ireland to become a dynamic, internationalised participatory society and economy with a strong commitment to social justice where economic development is sustainable and internationally competitive.

Employment Rights and Standards

‘Towards 2016’ provides a special focus on employment standards and compliance in response to concerns about a so-called ‘race to the bottom’ in the context of rapid labour market change, especially in light of EU enlargement. The Agreement sets out a comprehensive package of measures to ensure decent standards and fairness while, at the same time, encouraging flexibility and avoiding over-regulation of the labour market.

In this regard, I would like to report on progress achieved to date in a number of important areas aimed at improving workers’ rights.

Employment Law Compliance Bill

A new Employment Law Compliance Bill will be published early in 2008. As well as providing for the establishment of the National Employment Rights Authority on a statutory basis, it will also provide for the new model of compliance, including an increased penalties regime across all employment rights legislation. It will also simplify the adjudication and redress mechanisms available in the employment rights area. In addition the Employment Law Compliance Bill will strengthen existing arrangements in relation to investigations by Labour Inspectors.

NERA

From the operational perspective, I can report on substantial progress in the establishment of the new enforcement mechanisms. The National Employment Rights Authority (NERA) has been established on an interim basis following the appointment of its Director, Ger Deering, earlier this year. As part of the decentralisation programme, NERA has set up its headquarters in Carlow. Earlier this year, proposals in relation to the regionalisation of the Labour Inspectorate were announced and it is intended that Inspectors will be based in regional offices in Dublin, Cork, Shannon and Sligo, in addition to NERA headquarters in Carlow. Furthermore, under a commitment in Towards 2016, the number of Labour Inspectors is to be progressively increased, to 90, by end-2007. This goal is also well on its way to full implementation with progressive increases in the strength of the inspectorate throughout 2007. Recruitment of inspectors since the beginning of this year means that the number of inspectors now stands at 48, and arrangements to provide the balance are well in progress. In addition, 10 foreign language inspectors are now ready to start.

Employment Agency Bill

Changing Irish work patterns are also evident from the employment agency sector. This sector of our economy comprises a diverse profile with many such workers choosing agency work above a full time position because of the flexibility it affords such workers from a work-life balance perspective or because it suits other more pressing needs relating to family life. Agency working also facilitates employer needs where one-off or seasonal surges may necessitate the recruitment of such workers. This sector also includes many migrant workers and our concern is that such workers may, because of language difficulties or because of their poor skill levels, be vulnerable to exploitation.

It is for these reasons that T16 incorporates a commitment to further strengthen our current legislation in relation to the employment agency sector with the proposed new legislation providing for a licensing system built around a statutory Code of Practice covering standards of behaviour for employment agencies. Compliance with this code will be a condition of licensing. In addition, a proposed Monitoring and Advisory Committee to be established is designed to advise me on matters relating to the overall operation of the sector. In this regard, I am conscious of the need for an appropriate balance between the demands of proper regulation and a flexible labour market.

Draft Heads of the Bill in this area is now well-advanced following consultation with the social partners.

Exceptional Collective Redundancies

The Exceptional Collective Redundancies Bill passed Final Stage in the Seanad on the 1^st of May last, thereby completing its passage through the Houses of the Oireachtas. The origins of this legislation lie in the extended discussions on a successor to “Sustaining Progress” and the enactment of this legislation is further proof, if further proof is needed, of the Government’s intention to deliver on the commitments it made in the partnership talks.

Further commitments delivered by Government under Towards 2016 include increasing the National Minimum Wage from €7.65 per hour to the current rate of €8.65 per hour, while a Code of Conduct setting out Code of Practice for Protecting Persons Employed in other People’s Homes was introduced last May.

National Workplace Strategy

On the 26^th of April last the Second Report of the High Level Group established to implement the National Workplace Strategy was published. The High Level Group involves key Government Departments and agencies working together with the social partners to support workplace change and innovation in the public and private sectors. The central proposition of the Strategy is that Ireland’s competitiveness, as a knowledge-based economy will depend significantly on the capacity of organisations to achieve transformative change through innovative work practices. I am happy to be able to report that we have seen significant progress and the launch of important new initiatives across the five strategic priority areas of the Strategy. We have reached an important juncture, where the messages and objectives agreed and adopted at national level by the Government and the social partners are now to be targeted at workplace level, across the public and private sectors. The new Workplace Innovation Fund, with funding totaling €9 million over a three-year period, will play an important role in supporting this process.

Closing

When we judge the partnership approach, we should take into account the overall benefits, which it has brought to us all. By working together to overcome the challenges we have faced, we have achieved much more than if we had acted alone. Based on the achievements so far, and the improvements that are planned or already underway, as referred to in my address here today – which by necessity are just a small portion of our recent achievements – I believe that the approach adopted by this Government has been a remarkable success.

I would like to wish you all the best for the remainder of your Conference and, finally I would hope that we will have the opportunity to meet many times in the future.

ENDS/LA251