Review of wage agreements says maintain the status quo

A REVIEW of the legally binding agreements which set the wages for more than 200,000 workers has concluded that the current system should be maintained to protect the employment standards of vulnerable workers.

Joint Labour Committees (JLCs) and Registered Employment Agreements govern pay and conditions for workers across a range of sectors. They were identified by the IMF/EU/ECB delegations as a key competitiveness issue.

A review of the agreements says abolishing them would not lead to an increase in employment, and could worsen the pay and employment conditions for low-paid vulnerable workers.

However, IBEC, the group that represents Irish business, said the review findings were “out of touch” with the need to sustain and create employment and urged the government to take decisive action to abolish JLCs.

IBEC director of industrial relations Brendan McGinty said domestic sectors operating under the burden of the JLC system are suffering a premium against Britain of about 37% on average.

“These wage rules are putting viable businesses in jeopardy. The problem is most acute in the hospitality, wholesale and retail sectors,” he said.

Mr McGinty urged the Government to reflect carefully on the needs of businesses affected by these mechanisms.

“Having already taken the decision to reverse the reduction in the national minimum wage, it should take bold and decisive action to abolish the JLCs and bring our REA wage setting framework into the 21st century,” he said.

Mandate trade union, which represents 45,000 workers in the retail and bar trades, called for the report to be made public. John Douglas, Mandate general secretary, said it was hard to make a final judgment until the full review is published.

Jack O’Connor of SIPTU said while he would have reservations about aspects of the review, it provides a rational objective analysis of the issues. In particular, it addresses exaggerated claims for the job generating potential of the abolition of these mechanisms, he said.

“These are motivated only by the desire of some unscrupulous elements among the employers to use the economic crisis to enhance their position at the expense of the most vulnerable workers in this country,” Mr O’Connor said.

“Apart from the injustice of it, cutting the pay of the lowest paid 20% of the workforce, who must spend all their income to live, will depress demand, destroying jobs rather than creating them.”

Retail Ireland rejected the conclusions of the review.

“Government should push ahead and abolish the Retail JLC and ignore the recommendations of this review” Retail Ireland director Torlach Denihan said. “The JLC is costing the retail sector approximately €30m annually. It is defying reason for the review to suggest that this is not a cause of job losses in the retail sector.”

JLCs ‘strangling’ tourism

By Jimmy Woulfe, Mid-West Correspondent

IRELAND’S tourism industry is being strangled by the Joint Labour Committee (JLC) system preventing the creation of thousands of jobs in the sector, the director of the Shannon College of Hotel Management, Philip Smyth has said.

Mr Smyth said that Sunday trading has become a “write off” for many operators in the industry because of the JLC minimum pay terms for Sunday work.

Mr Smyth said: “A senior hotelier said to me this week that, effectively, tourism cannot make money on Sundays.

“The concept of having to protect workers in the tourism sector is outdated and the sooner we abolish the JLC, the sooner we will begin creating jobs and fulfilling the enormous potential of the industry.

“In an industry which was rightly recognised in the Government jobs initiative as a pillar of our economic recovery, there is no need for artificial wage supports. The free labour market should determine wage levels and fairness is already guaranteed by the existence of the minimum wage, which by any international comparison is generous.”

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