ANALYSIS:Minister has signalled changes to Sunday payments and overtime are on the cards
CONTROVERSIAL PROPOSALS for reforming wage-setting mechanisms put forward by Minister for Enterprise and Jobs Richard Bruton do not specifically suggest there should be wage cuts. However, the likely net effect of the measures would be that many people would have less in their pay packets than at present.
Workers who could be affected by the Minister’s proposals are those in the dozen or so sectors where minimum terms and conditions are set down in legally binding employment regulation orders. These are produced on foot of deliberations of joint labour committees involving union and employer representatives. These sectors include hotels, restaurants, hairdressing, contract cleaning, security, grocery, retail and tailoring.
The High Court was told in a case several weeks ago that there are about 190,000 workers covered by the joint labour committee and employment regulation order system.
The Minister has also put forward other proposals to reform another wage-setting system known as registered employment agreements, which covers tens of thousands of other workers in areas such as construction.
However, it is the proposed reforms to the joint labour committee system which have generated most attention so far.
For workers in these areas, there are likely to be three main issues of concern in the Minister’s reform blueprint. These relate to Sunday working, overtime rates and the move to revise existing employment regulation orders and to reconstruct them using new criteria.
Workers covered by employment rights orders at present must receive a special premium payment for working on a Sunday. This ranges from double-time in the hairdressing, retail and security sectors to time and a third or time and a half in some hotels.
Under the Minister’s proposals, this entitlement would be scrapped and instead workers would fall back on the provisions of the Organisation of Working Time Act.
While this provides for a recognition of Sunday working, it could be marked in some cases by the provision of time off in lieu.
Unions fear some employers would willingly trade the provision of a day off for staff on a quiet Monday or Tuesday if they did not have to pay the current premium rate on a Sunday.
Secondly, the Minister’s proposals to standardise overtime rates, which currently vary from sector to sector, would undoubtedly lead to a situation where some workers would receive more but others would receive less than at present.
Bruton has also proposed that existing employment rights orders be effectively reconstituted using new criteria. He has suggested that in making such orders in the future, consideration would have to be given to competitiveness factors, pay rates in comparable sectors abroad and unemployment levels. With the Minister and the employer’s group Ibec both highlighting that comparable wage rates in Northern Ireland could be up to 30 per cent lower, the fear of unions is that the new criteria could result in lower pay rates.
While reform of the wage-setting mechanisms has been in the air for some time, unions are very angry at the sudden emergence of the Minister’s specific proposals.
Union leaders and some Labour Party backbenchers had put their faith in an independent report on the issue drawn up by Labour Court chairman Kevin Duffy and Dr Frank Walsh of UCD. They had welcomed the main finding of this report, published only on Tuesday, which argued that pay cuts would not lead to jobs growth and that the existing systems of wage-setting should be reformed but not abolished.
However, while the Minister’s proposals undoubtedly go further than those in the report, they did not come out of the blue.
A fortnight ago, before the report was published, he flagged in a speech in Athlone that changes to Sunday premium payments and overtime were on the cards.
The big question is what happens next. The Minister has told unions and employers he wants discussions on his proposals over the next couple of weeks before he brings a final plan back to Cabinet in the second half of June.
His problem is that while unions are furious – and some are sceptical about how genuine the new consultation process actually will be – the employers want him to go further still and abolish the current joint labour committees completely.
Both unions and employers will be watching very carefully for signals as to whether the proposals are set in stone or merely the first play in a process which could see them changed considerably.
The Minister indicated yesterday that some changes were possible when he indicated that he would not ignore any unforeseen consequences arising from his proposals.
In the meantime, the lobbying will continue with unions and workers’ representatives in particular expected to put strong pressure on the Labour Party to dilute the Bruton proposals.
However, in the background there are growing signs that any move to implement plans along the lines of those set out by the Minister will lead to industrial relations trouble.
Patricia King of Siptu last night said the Minister’s proposals raised fundamental issues and were worse than she had anticipated. She warned that any move to implement them would be resisted and that this could involve industrial action.
