Unions query state’s power to reduce wage
The National Recovery Plan states the existing rate of €8.65, the sixth highest as a percentage of the average gross monthly earnings in the EU, is causing higher levels of unemployment in the sectors where it is most prevalent.
“Some workers will be willing to work for a wage lower than the national minimum wage but employers are restricted from providing these job opportunities,” the plan states. It adds the minimum:
* Acts as a barrier to younger and less skilled workers entering the labour force and taking up jobs.
* Prevents small and medium sized enterprises from adjusting wage costs downward in order to maintain viability and improve competitiveness.
* Reduces the capacity of the services sector to generate additional activity and employment through lower prices for consumers.
However, ICTU’s legislation officer Esther Lynch questioned whether Finance Minister Brian Lenihan has the power to reduce minimum wages.
“There is nothing in the minimum wage legislation that provides the minister with power to reduce the minimum wage without going through the review mechanism,” she said.
“My analysis is that once the minimum wage was introduced then the review mechanism applies. The FEMPI (Financial Emergency Measures in the Public Interest Act) provided the minister with power to make cuts in the public sector not the private sector. Backbenchers need to be aware they will be specifically voting to cut the wages of about 80,000 lowest-paid people in the country.”
Over the next three months, the plan also commits Enterprise Minister Batt O’Keeffe to a review of the framework arrangements for Registered Employment Agreements (REAs) and Employment Regulation Orders (EROs).
REAs and EROs set binding rates of pay as well as working conditions for hundreds of thousands of workers in a range of sectors including construction, hospitality and agriculture.
“Both types of agreements constitute another form of labour market rigidity by preventing wage levels from adjusting,” the agreement states.
“This in turn affects the sustainability of existing jobs and may also prevent the creation of new jobs, particularly for younger people.”
Again Esther Lynch disagreed. “Ireland and the IMF are required to operate in accordance with the core International Labour Organisation conventions.
“Under these conventions Governments must refrain from ‘interfering’ in collective agreements. So the idea that the minister will take it on himself to rewrite the REAs is not permitted nor legitimate,” she said.
