Minister outlines reforms to wage setting mechanisms

Minister for Jobs, Enterprise and Innovation Richard Bruton has today published legislation to implement reforms to wage setting mechanisms.

Minister for Jobs, Enterprise and Innovation Richard Bruton has today published legislation to implement reforms to wage setting mechanisms.

The Industrial Relations (Amendment) (No. 3) Bill 2011, when enacted, will implement the programme of reforms to the JLC/REA systems agreed by Government in July.

“It will radically overhaul the system so as to make it fairer and more responsive to changing economic circumstances and labour market conditions,” said a statement from the Minister’s office.

“It will also reinstate a robust system of protection for workers in these sectors in the aftermath of the High Court ruling in John Grace Fried Chicken and others v The Catering Joint Labour Committee, The Labour Court, Ireland and the Attorney General.”

Employers’ group IBEC said that the Government’s plans were misguided and unnecessary.

“While some of the proposals, such as the abolition of Sunday premiums, are an improvement over the last regime, the entire JLC system should have been consigned to history,” said IBEC Director Brendan McGinty.

"The High Court decision of last summer did not provoke the crisis that some predicted. Employers have respected the fact that existing employees have contractual rights to established JLC rates, unless and until they freely agree otherwise.

"Any attempt to reinstate the JLC system will be fraught with constitutional uncertainty and will be open to further legal challenge.

"Ireland has the second highest national minimum wage in the EU, and all employees are protected by over 40 pieces of employment legislation. The move to bring in new legislation means that workers in some sectors that can least afford it will have higher sectoral minimum wages and other benefits not available to other private sector workers. The Government proposals are arbitrary and unnecessary. "

The main points of the Bill are as follows:

* JLCs will have the power to set a basic adult rate and two additional higher rates, based on length of service in the sector or enterprise concerned as well as the standards and skills recognised for the sector concerned.

* JLCs will no longer set Sunday premium rates. In order to recognise the special status of Sunday working a statutory Code of Practice will be prepared by the LRC following submissions from employers and trade unions. This Code will provide guidance to both parties in the sectors covering EROs on the compensatory arrangements, including such additional amounts as are reasonable, for Sunday working and on the procedure to apply in the event of disputes concerning the varying entitlements to Sunday working.

* Companies will be able to derogate from EROs and REAs in cases of financial difficulty. For this to occur, the Labour Court must satisfy itself that specified criteria have been met. Such derogation will be granted, for a limited period, in cases of proven economic difficulty, following consultation with the employees.

* In setting rates, JLCs will have to take into account a series of economic and industrial relations factors such as: The burden of compliance and record-keeping requirements for employers in these sectors will be reduced; Providing for Ministerial involvement in the supervision of JLCs and in the making of orders to vary or revoke EROs; Providing for use of civil remedies rather than an exclusive reliance on criminal sanctions and finally - the constitutionality of EROs and REAs will be restored through “inclusion of robust principles and policies”.

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