Minister sticks to his guns on lower pay rates and Sundays

ANALYSIS:THE NET effect of the Government's wage-setting reform plans is likely to be that pay rates for tens of thousands of workers employed in the future will be lower than they are now.

In addition, workers covered by the joint labour committee and employment regulation order system will lose their legal entitlements to Sunday premium payments. Instead they will have to rely on existing legislation which allows employers a choice of measures to recognise Sunday working, including the provision of time off in lieu.

About 190,000 workers in areas such as catering, hotels, security, hairdressing, contract cleaning and retailing currently have their terms and conditions set down in legally binding employment regulation orders. These are produced on foot of deliberations of joint labour committees involving union and employer representatives.

Minister for Enterprise Richard Bruton said yesterday that existing workers would be unaffected as they are covered by existing contractual agreements with their employers.

However, some unions have warned that given the large turnover of staff and the possibility that employers could seek to change existing arrangements, the new rates could come into force across the board within a short time-frame.

Bruton indicated strongly that new staff were likely to face lower pay rates.

The Minister’s proposals to reform the wage-setting mechanisms, first put forward in May, have proved hugely controversial and led to tensions with Labour Party backbenchers.

While the Government plan announced yesterday is different in some significant ways to the original proposals, on the main issues of Sunday premiums and pay rates the Minister would appear to have gotten his way.

However, some unions have contended that they secured advances in negotiations with the Government.

Reform of the wage-setting mechanisms has been on the cards for some time. The EU-IMF agreement last year contained a commitment that a review would be carried out.

However, the game changed earlier this month when the High Court declared parts of industrial relations legislation governing the joint labour committee system to be unconstitutional. This meant 17 employment regulation orders then in place ceased to have statutory effect.

For some in Government this effectively presented a blank page for reforming the system.

Under the new plans, employment regulation orders are to be revised using new criteria.

These will include competitiveness, average hourly rates of pay in comparable sectors in Ireland’s main trading partners and unemployment rates. Many observers, including it would appear the Minister, believe this will result in lower rates for new staff.

For those working on Sunday, joint labour committees will no longer be able to set specific premium rates. Instead, workers will have to rely on the Organisation of Working Time Act. This allows for Sunday working to be recognised in three ways; a premium payment, an increased hourly rate across the week or time off in lieu.

In other words, jobs which attract a special Sunday premium by law may no longer do so and future staff could be offered time off in compensation.

There will, however, be a new statutory code of conduct for Sunday working – which was not in the original proposals – which will act as a guide on complying with the options set out.

While some trade unions strongly criticised the Government’s plan last night, Siptu gave it a cautious welcome.

Siptu sources said that while much of the text of the Government statement yesterday was virtually identical to that in the Minister’s original proposals, the interpretations of the wording have changed following negotiations.

They also pointed to the new commitment that joint labour committees will in future have the power to set two higher incremental rates to reflect experience of staff in addition to one basic adult rate.