Wage-setting deals backed but call for radical overhaul

A CONFIDENTIAL review of legally binding wage-setting mechanisms has said the system should be maintained to protect reasonable employment standards for vulnerable workers.

The review carried out by the chairman of the Labour Court Kevin Duffy and UCD professor of economics Frank Walsh says that the system of legally binding arrangements should continue. However, it maintains that it needs a radical overhaul to make it fairer and more responsive to changing economic circumstances.

Under current arrangements, joint labour committees – which comprise union and employer representatives as well as an independent chairman appointed by the Minister for Enterprise – submit proposals covering pay and conditions to the Labour Court.

If approved, the court makes a legally binding order known as an employment regulation order, setting out the minimum terms to apply across the sector concerned.

The High Court was told in March, as part of a challenge brought by employers in the fast food industry, that about 190,000 workers in various sectors of the economy are covered by wage levels set by such a process.

In a separate process, workers and employers in other sectors can register an employment agreement, setting a floor on terms and conditions with the Labour Court.

Employers have warned that the differential between pay rates in the UK and those in sectors governed by joint labour committees is acting as a brake on job creation.

However, the new report argues that abolition of the current system would not lead to an increase in employment.

The review also finds that existing employment rights legislation would not adequately cover matters dealt with by joint labour committees and registered employment agreements.

The report maintains that Sunday premium and overtime arrangements applying in various sectors should be streamlined.

The report says: “We believe that as far as possible conditions of employment regarding overtime payment, including the conditions under which they become payable, and Sunday premium should be standardised across the various employment regulation orders under which they apply.

“We recommend that guidance be provided to joint labour committees in these matters by way of a protocol agreed between the social partners or in the absence of an agreed protocol by way of a Code of Practice made under Section 42 of the Industrial Relations Act 1990. These guidelines should be taken into account by joint labour committees formulating proposals for an ERO.

“Furthermore, the Labour Court should ensure adherence to these guidelines by exercising its power under Section 48 of the Industrial Relations Act 1990 not to adopt proposals which are not in conformity with the guidelines.”

It also urges reform to the number and structure of existing joint labour committees.

It contends that there should not be separate joint labour committees in place covering different parts of the country such as in the catering, hotels and hairdressing sectors. The report suggests abolishing the joint labour committees in the sectors of aerated water and wholesale bottling, provender milling and clothing.