Outcome of pay dispute will reach far beyond hotel industry
THE High Court will decide next week whether 25,000 hotel employees should be given pay increases demanded by SIPTU and backed by the Labour Court.
The Irish Hotels Federation (IHF) will argue the Labour Court has no role to play in the process and will claim the pay increases are simply too high compared to their profit margins.
The trade union movement will argue the pay increases are minimal in an industry which is being tainted by the accusation of exploitation of migrant workers.
Whatever the outcome, it will have consequences for industrial relations on a scale which far exceeds the hotel industry.
About 250,000 other workers in industries such as the retail sector, contract cleaning, hairdressing and agriculture are covered by employment regulation orders (EROs) and their entitlements will all be thrown into turmoil if the basis of those orders is found wanting.
At present, there are more than 120,000 employed in hotels and restaurants across the country. Almost a third of the workforce are foreign nationals, far higher than any other sector of the economy. There are 2,200 from Britain, 25,300 from elsewhere in the EU (22,500 of which are from the accession states) and 11,400 from non-EU countries. In some hotels the percentage of foreign nationals employed exceeds 60%.
There is also a high number of mothers and students working in a part-time capacity.
The tourism industry generates €6.5 billion in revenue each year. However, the trade union movement has consistently argued that little of that was being passed onto the staff, with foreign nationals being exploited by unscrupulous employers, particularly outside Dublin and Cork.
Therefore, trade unions such as Siptu pushed for and secured agreement on the establishment of Joint Labour Committees (JLCs) which established a standard rate in the provincial hotels. It is estimated that 25,000 staff would be affected by those new pay bands.
The last committee at the end of 2007 was made up of equal numbers of union and worker representatives with an independent chair, Colm Walker.
The idea was that when the JLC agreed a new rate, either by consensus or by a majority vote, the new rate would be referred to the Labour Court, which would issue an ERO making it a legal requirement within the sector.
According to Siptu, any increases due to hotel workers under the national pay agreement were awarded on top of the JLC rates, including any necessary adjustments upwards to comply with the national minimum wage.
In November, Colm Walker used his casting vote to back union claims for higher rates of pay in the sector and recommended the increases to the Labour Court. It agreed and approved the rates in the same month.
The approved rates would have seen percentage increases of between 3% and 13% for the different grades of employees.
However, before the improved rates were implemented, Vaughan Lodge Ltd in Clare and its owner Michael Vaughan, along with the Irish Hotels Federation, obtained an injunction preventing the increases being given to staff.
The employers sought a judicial review of the ERO process and the role of the Labour Court in issuing legally enforceable rates of pay for the sector.
They said the relevant provisions of the Industrial Relations Acts are unconstitutional and incompatible with the State’s obligations under the European Convention on Human Rights.
Michael Vaughan, one of the named parties in the action, points out that his hotel’s wage costs have increased by 25% in the past three years and amount to 42% of its income. The union claims the IHF and individual hoteliers have made a habit of objecting to the way pay rates are adjusted and described the process as a “double whammy”, even though the proposed new rates are relatively low.
While proceedings have been pending in the courts, workers in the sector have remained on the rates agreed in 2006, but only introduced through the JLC process in January 2007.
Ironically, according to the union side, a joint union-employer national implementation structure was set up to look at these issues and it made a joint proposal on November 8, the day before the injunction was sought. This proposed a compromise: the unions would accept that national pay agreement increases would not be consolidated on top of national minimum wage or JLC rate rises, while the employers accepted that retrospection would be given for JLC increases.
However, that remains on hold while the High Court challenge to the Labour Court and ERO process is heard.
