Work begins on developing minimum wage 'that makes sense for Ireland'

Terms of reference agreed to allow the Low Pay Commission formally begin research
Work begins on developing minimum wage 'that makes sense for Ireland'

If legislated, a living wage would see minimum wage workers move from €10.10 to €12.30 an hour. Picture: Press Association

Work has formally begun on implementing a living wage for low-paid workers.

Following a request from the Tánaiste and Minister for Enterprise, Leo Varadkar, the Low Pay Commission has commenced work on examining how Ireland can move towards a living wage which would see the lowest-paid workers move from €10.10 per hour to €12.30.

Mr Varadkar has said that the pandemic has forced society to reconsider the value of work of frontline workers or essential workers and moving to a living wage was an important part of this re-evaluation.

“One of the legacies of the pandemic must be a more inclusive society that rewards work and enterprise better. That means better terms and conditions for lower-paid workers. Moving to a living wage is an important part of this,” he told RTÉ radio’s Morning Ireland.

He also acknowledged that the implications for business must be factored into any plans.

“Of course, in doing so, we need to recognise that many businesses are closed and are now loss-making, so we must do it in a way that does not cost jobs or cause people's working hours to be reduced. That would be counter-productive.” 

The work that was underway now is to develop a minimum wage “that makes sense for Ireland.” 

The priorities were sick pay this year, living wage next year, he added.

However, Sven Spollen-Behrens, director of the Small Firms Association, said that small businesses will not survive further financial strains such as increased wages, particularly the hospitality and tourism industry, which have been among the worst affected sectors hit by the pandemic.

“We need to know what this pathway of reopening will look like, sooner rather than later because there’s a real concern among business owners that when the economy fully reopens they’re faced with increased costs of doing business,” he said.

Mr Spollen-Behrens said that Covid “has really shown us the value of essential workers to society,” however, those working in retail and hospitality have no idea what their industry will look like once reopened and how health measures like social distancing will impact their businesses.

“People that are working in retail and hospitality, they’re just coming out of the Covid closures and have to adapt to a new environment so we really need to make sure small business owners and their staff are able to adapt to the new environment and increasing the cost of doing business is not the right answer,” he said.

The Small Firms Association is telling the Low Pay Commission that in order to improve living conditions, “you have to go to the source and tackle the housing crisis, issues around childcare, and education.

“You can’t tackle these issues by imposing additional costs on small business owners,” he said.

Earlier this year, the Tánaiste requested the Low Pay Commission to prepare a report on this issue. Terms of reference for the report have now been noted by Cabinet.

The Tánaiste said: "One of the legacies of the pandemic must be a more inclusive society that rewards work and enterprise better. 

"Moving to a living wage is an important part of this. Of course, in doing so we need to recognise that many businesses are closed and are now loss-making, so we must do it in a way that does not cost jobs or cause people’s working hours to be reduced."

We now have the agreed terms of reference to allow the commission to formally begin its research and advise us on an appropriate model in an independent and evidence-based way so that we can move towards a living wage over the period of this Government.

The Low Pay Commission study will examine the policy, social, and economic implications of a move to a living wage by looking at international evidence on it and examining the policy implications.

It is expected that the report will be completed in the second half of this year. Following its completion, the commission will submit the report to the Tánaiste for consideration.

Also at Cabinet, Helen McEntee, the justice minister, received approval to publish the general scheme of Ireland's long-awaited new hate crime legislation.

This will create new aggravated forms of certain existing criminal offences where those offences are motivated by prejudice.

An announcement on the new legislation is expected in the coming days.

Ms McEntee also received approval for the new Garda Síochána (Compensation) Bill 2021, which will repeal and replace the current legislation which dates back to 1941, which can see officers wait up to seven years for compensation after they are maliciously injured. 

The legislation will retain the parameters of the right to compensation for Garda members and their dependents.

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