Review of wage fixing planned

The Government is to establish an independent review to look at statutory wage fixing mechanisms in Ireland.

Minister for Enterprise, Trade and Innovation Mary Hanafin announced the review this morning, which is being undertaken as part of the Government’s commitment under the European Union and International Monetary Fund rescue plan.

The review will look at the framework of Employment Regulation Orders (ERO) and Registered Employment Agreements (REA), and is expected to be concluded by mid-April.

It will be carried out by Labour Court chairman Kevin Duffy and UCD lecturer Dr Frank Walsh.

“We need to ensure that statutory wage fixing mechanisms work effectively and efficiently and that they do not have a negative impact on economic performance and employment levels," Ms Hanafin said.

EROs set minimum wage levels and other terms of employment, while REAs are agreed minimum rates of pay and conditions of employment that are registered with the Labour Court, making them legally enforceable. The terms of many of the 68 agreements, some of which would apply to workers in the construction sector, currently registered with the court have not changed in several years.

The decision to review the wage mechanisms was welcomed by business groups. Chambers Ireland chief executive Ian Talbot said it was “long overdue” and would help support competitiveness across the economy.

Ibec, meanwhile, said the review would provide an important opportunity to carry out “much-needed and far-reaching” reform of the labour market.

The Irish Congress of Trade Unions (Ictu) said it was "a real opportunity to refute the ideological attack on incomes that was launched by the outgoing Government".

Ictu general-secretary David Begg, accused the Government of an attack on lower and middle incomes as "a policy priority" .

"The attack on the REAs and EROs is part of that campaign and a clear line can be drawn between the cut in public sector salaries, the cut in welfare rates, the cut in the minimum wage and the attempts to demolish key wage setting mechanisms such as the REAs and EROs," he said.

"The review now provides an opportunity to end this policy and start focusing on jobs and growth."