Siptu Conference ‘End hospitality sector Vat benefit’

Delegates vote at the Siptu conference in Cork's City Hall. The union has reiterated its call for the 9% Vat rate for hotels and restaurants to be scrapped. Picture: Jim Coughlan

Siptu has renewed its call that the Government scrap the preferential 9% Vat rate for hotels and restaurants unless they agree to go into talks with the union on setting minimum levels for pay and conditions in the hospitality sector.

Hotel worker and Siptu shop steward Tim Herlihy told the union’s biennial conference in Cork’s City Hall yesterday that the cut in the rate from 13.5% to 9% was costing the exchequer €350m per year and that the deficit was being covered by the levy on private pensions.

He said the employers benefiting from the reduced tax rate were the same employers who were refusing to engage in Joint Labour Committees (JLCs).

JLCs are made up of employer and employee representatives and set minimum rates of pay and conditions in various sectors across the economy.

Mr Herlihy’s fellow Cork delegate Maureen Coffey explained that, in 2011, a group of employers took a case to the High Court which resulted in JLCs being ruled as unconstitutional.

She said that impacted on 200,000 workers covered by JLCs, including cleaners, security guards, agricultural workers, and retail workers.

“What they set out to do was to drive thousands of workers back to €8.65 per hour with no overtime rate or Sunday premiums,” she said.

“Everyone in this hall knows you cannot survive on €8.65 per hour.”

Ms Coffey said that, after a four-year campaign, the union last week managed to get the reintroduction of a JLC to set rates in the security and cleaning sector.

“The reintroduction of EROs [employment regulation orders] into cleaning and security are cold comfort for hotel and restaurant workers who still languish at the bottom of the ladder,” Ms Coffey said.

“In January 2014, Jobs Minister Richard Bruton signed an establishment order which put a joint labour committee for hotels back on the statute book.

“It was hoped that the employers in the hotel sector would co-operate with the State’s preference for a JLC system for wages and conditions. But instead the hotel employer bodies, the Irish Hotels Federation, mounted a judicial challenge to the minister’s order.”

Ms Coffey said that, due to the lack of engagement by the employers, “we now have a totally intolerable situation where the hotels JLC has been made inoperable by the employer”.

“The hotels and restaurant employer bodies, the IHF, and the Restaurants Association of Ireland flatly refuse to come to the table to engage in sectoral bargaining with Siptu,” she said.

As well as seeking the abolition of the reduced Vat rate, the union also said if hospitality employer representatives refuse to engage in the JLC process, the Oireachtas should give the Labour Court the power to provide for decent work conditions in the absence of a negotiated employment agreement.

Mr Herlihy told delegates of the impact of the lack of a JLC: “During the recession I have seen many of my colleagues and counterparts throughout the country receive pay cuts and short- time working.”

“Zero hours contracts seem to have replaced long-term permanent members of staff.

“€8.65 is now the norm for a majority of casual workers and this, in turn, puts pressure on permanent members of staff who have better pay and terms and conditions.”

The Irish Hotels Federation has claimed that the reintroduction of the JLC system “jeopardises jobs by creating counterproductive inefficiencies and rigidities in the Irish labour market”, Mr Herlihy said.

It has also said the 9% Vat rate is one of the most successful job creation initiatives in modern times, helping to create more than 33,000 jobs since 2011 and that calls for its withdrawal are “nothing short of reckless”, given the number of livelihoods that depend on Irish tourism.

Business: 16

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