At the end of July 2005, the Irish Minister for Labour Affairs belatedly published the Employees (Provision of Information and Consultation) Bill 2005, with the aim of implementing the 2002 EU information and consultation Directive. The new Bill has attracted contrasting responses from the social partners, with employers seemingly happier with its contents than trade unions.
The Minister for Labour Affairs formally published the Employees (Provision of Information and Consultation) Bill 2005 at the end of July 2005. The Bill sets out minimum employee rights to information and consultation, seeking to transpose the 2002 EU information and consultation Directive (2002/14/EC) (EU0204207F), which should have been implemented by 23 March 2005. It is likely that the Bill will be finally adopted later in the autumn.
The Bill provides for the establishment of a general framework setting out minimum requirements for the right to information and consultation of employees in undertakings with at least 50 employees. It will apply in accordance with the following timetable: undertakings with at least 150 employees from a date to be prescribed following enactment of the Bill; undertakings with at least 100 employees from 23 March 2007; and undertakings with at least 50 employees from 23 March 2008 (IE0502203F).
At present the information and consultation rights of employees in Ireland are limited to specific situations, notably, on collective redundancies and transfers of undertakings.
Under Section 9 of the Bill, employers have the option of concluding agreements, before a date to be prescribed following enactment of the Bill, referred to as 'pre-existing agreements', which can be tailor-made to suit the culture and circumstances of their own company. An extra window of opportunity for pre-existing agreements was slotted in at a late stage in the preparation of the legislation, and the Bill was adjusted to address employer concerns relating to the scope for concluding pre-existing agreements. This window of opportunity will give employers more time to finalise pre-existing agreements before the normal procedures come into force.
Trigger mechanism
In Section 7 of the Bill, the onus is placed on employees to trigger a request that an employer sets up an information and consultation procedure. Once 10% of employees (subject to a minimum of 15 and a maximum of 100) make such a request, an employer must enter into negotiations to agree an appropriate procedure with employees. However, this trigger mechanism may well face legal scrutiny in future, should workers or their representatives try to challenge its legitimacy on the basis that consultation should be an automatic right. According to commentators, the possibility cannot be ruled out that, in some instances, employees could face various hurdles when attempting to trigger the procedures, and may have to fight to secure information and consultation rights. In the main, few employers are likely to volunteer to introduce such arrangements, unless they can perceive a competitive advantage in so doing, and, outside of trade union 'heartlands', workers in non-union firms may be largely unaware of these new rights.
The parties have six months to conclude a negotiated agreement, whereafter the 'standard fall-back rules' apply if no agreement is reached. The standard rules in the Bill prescribe the procedures to be followed in setting up an 'information and consultation forum'. This forum must comprise elected employee representatives.
The Bill provides for the Labour Court to investigate disputes about the operation or interpretation of agreements, and to issue legally binding determinations. It also provides for the enforcement of Labour Court determinations by the Circuit Court. The legislation provides for penalties of up to EUR 3,000, or imprisonment for a term not exceeding six months, or both, on summary conviction for offences under the Bill, and on conviction on indictment to a fine not exceeding EUR 30,000 or imprisonment for a term not exceeding three years, or both.
Under Section 11, the legislation provides for employers to continue with systems of information and consultation that deal with employees directly, and which match their own specific circumstances - provided that employees have agreed to continue without change. However, employees must be free at a later stage to exercise their rights through representatives of their choosing.
In relation to employee representatives, it is seen as significant that the legislation was adjusted at a late stage to offer a stronger role for trade unions, notably in workplaces where unions are already recognised. This was in response to concerns within senior union ranks that the Bill, as it stood, provided no real role for trade unions. In view of this, Section 6 (3) now reads: '… where it is the practice of the employer to conduct collective bargaining negotiations with a trade union or excepted body, employees who are members of a trade union or excepted body that represents 10% or more of the employees in the undertaking shall be entitled to elect or appoint from amongst their members one or more than one employees’ representative for the purposes of this Act.'
As a result, the fact that the transposing legislation does not give trade unions an automatic guarantee that they will be the sole employee representative channel should not present too much of a problem in workplaces where unions are already quite strongly established and management is used to dealing with them, according to commentators. However, difficulties are thought to be more likely to arise at non-union sites, partially unionised sites (for instance, where there are union members, but recognition has not been granted), or in unionised sites where management wants to bypass unions. This raises the prospect that non-union consultation forums could end up in competition with trade union structures, particularly in sites where unions are hoping to organise. All this is complicated by the fact that the unions arguably almost seem 'caught between two stools', in strategic terms, in deciding whether to treat the Directive as an opportunity or a threat.
Trade union reactions
The trade unions' initial response to the Employees (Provision of Information and Consultation) Bill 2005 has been scathing, with the Irish Congress of Trade Unions (ICTU) stating that, from a partnership perspective, it is 'untenable in its current form'. ICTU is opposed to the 'opt-in trigger mechanism' in Section 7, and would have preferred an opt-out approach, whereby employees would have a guaranteed right to consultation (IE0309204F and IE0411202F). It is also unhappy with Section 11, which provides for employers to maintain and promote direct involvement approaches. ICTU argues that that this provision on its own will provide employers that wish to avoid even the Bill's 'minimalist' form of collective representation with the opportunity to do so.
ICTU is also unhappy with elements of Section 13, entitled 'protection of employee representatives'. This section provides that an employer may not penalise an employee representative. While on the face of it this seems to provide some protection to employee representatives, ICTU believes that the legislation provides no basis for an employee seeking redress. This may render Section 13(1) and (2) meaningless, it argues. ICTU is also of the view that there is no provision in the legislation that provides protection or redress for an employee who is victimised as a result of having sought the establishment of structures for information and consultation in his or her employment. Meanwhile, Section 13(3) provides that employee representative be afforded facilities including time off to perform their duties. ICTU welcomes this, but says the legislation stops short of providing for paid time off and makes no mention of paid time off for training.
Legal challenge?
An ICTU working group established to work on the transposition of the Directive will now meet and prepare a full analysis of the Bill and make a further report with recommendations for amendments to the September meeting of the ICTU executive council. ICTU has not ruled out some kind of legal challenge in future to test the validity of the transposing legislation. Some labour lawyers and industrial relations experts in Ireland and elsewhere have already questioned the long-term legality of direct methods of information and consultation, and the validity of an opt-in trigger mechanism, in terms of meeting the criteria implied in the Directive. In this regard, there is a possibility that, in future, employer attempts to impose direct methods of information and consultation in the face of employee demands for independent indirect representation - whether through unions or other elected employee representatives - could open up the possibility of a legal challenge, perhaps in the European Court of Justice (ECJ).
Employer reaction
In contrast, despite some reservations, the initial response to the Bill from the Irish Business and Employers Confederation (IBEC) seems somewhat more positive than that emanating from union sources. Together with other powerful employer lobby groups, such as the American Chamber of Commerce, IBEC seems to have obtained limits on the extent to which the EU Directive encroaches on traditional management terrain. Most employers should be able to live with the Bill as it stands, commentators argue, as it seems that it will not intrude far onto the terrain of management prerogative. Employers had been afraid that the Directive could potentially open the door for de facto union recognition in previously non-union firms.
In IBEC’s initial reaction, Brendan McGinty, its director of industrial relations and human resources, stressed the need for flexible implementation if the legislation is to succeed. 'The government must ensure that the new proposals do not undermine a company’s ability to adjust to new market conditions or the right of management to make the difficult decisions associated with such a change. Any measures that make Irish business less able to adapt to changing global markets will undermine competitiveness and put jobs at risk. The aim of the legislation to facilitate local agreements is a welcome acknowledgement of our voluntary tradition. It will give many organisations the confidence to tailor an agreement to the company’s and the employees’ needs.'
Welcoming the window of opportunity to conclude pre-existing agreements, Mr McGinty remarked: 'Critically the Bill will allow undertakings with at least 150 employees the opportunity to put in place 'pre-existing' agreements prior to the 23 March 2007 deadline, as set out in the Bill'. However, he was critical of the delay in publishing the Bill: 'The Bill was due to be effective in Ireland on 23 March and the delay has created major problem for many businesses. Many employers have wanted to put in place agreements with staff, but were unable due to the lack of clear legislation.'
Commentary
In its Bill transposing the EU Directive on worker information and consultation, the Irish government has adopted a rather minimalist interpretation of the provisions. In particularly, the opt-in approach it has chosen places the onus on workers to trigger the process, rather than requiring employers to provide workers with an automatic right to information and consultation.
The new Bill has attracted contrasting responses from the social partners, with employers seemingly happier with its contents than trade unions. The initial responses from the social partners are perhaps not too surprising in light of the rather minimalist interpretation of the Directive’s provisions adopted by the government. In other words, the government appears to have transposed into Irish law only the measures it deems necessary to comply with the terms of the Directive, and little more.
To some extent, the choice of going down the minimalist road has been prompted by the concern not to scare off foreign inward investment, particularly from powerful American-based multinational companies, which are now a significant feature of Ireland’s economic and industrial relations landscape. Together with IBEC, the American Chamber of Commerce, which represents the interests of large US-owned businesses in Ireland, appears to have left its imprint on the Bill. The Chamber is a powerful player where the 'sacred cow' of inward investment is concerned, and it seems that government industrial relations policy is influenced by this factor to some extent. (Tony Dobbins, Industrial Relations News)