ISME calls for abolition of 'crippling' employment agreements

The Irish Small & Medium Enterprises Association has called for the abolition of the Registered Employment Agreements (REA) and Joint Labour Committees (JLC), in response to the proposed reduction in the national minimum wage.

The association said that the agreements are "crippling" certain industries by "forcing employers to pay beyond the level of affordability".

ISME Chief Executive, Mark Fielding, said: "You cannot have a reduction in the minimum wage without addressing the overall cost of labour in the economy. The fact that there is a national minimum wage at all makes a nonsense of maintaining agreements that set minimum terms and conditions of employment, including wage rates, in several sectors.

"It is crazy, for instance, that companies in sectors including construction, catering, retail and tourism, are unable to afford to maintain or hire staff because of the restrictions imposed by these agreements.

The association said, as a consequence, businesses in these sectors are struggling to survive and are haemorrhaging jobs.

Mr Fielding said: "Business has constantly outlined concerns about the deterioration in our cost competitiveness and nowhere has this been more evident than with labour costs. A reduction in the minimum wage is a step in the right direction but needs to be accompanied by, at the very least, a similar decrease in the rates agreed under the REA/JLC system.

"The preference of course would be to take the sensible option and abolish these agreements altogether, to provide breathing space for thousands of under pressure businesses, on which the state is hugely reliant to maintain jobs."