Bruton planning to reform wage-setting mechanisms


MINISTER FOR Enterprise and Jobs Richard Bruton is to put forward new proposals for reforming wage-setting mechanisms in various sectors of the economy such as retail, catering and hotels.

The new proposals will be based mainly, but not exclusively, on recommendations in a report produced by the chairman of the Labour Court, Kevin Duffy, and Dr Frank Walsh of UCD, which was published by the Government last night.

Government sources said the Minister would put forward proposals in areas where the authors believed that any recommendations would go beyond their remit.

The Duffy-Walsh report says that its terms of reference did not mandate the authors to propose specific changes to the terms of either employment rights orders (ERO) or registered employment agreements (REA).

EROs fix minimum pay and conditions in sectors based on the deliberations of a joint labour committee comprising union and employer representatives and an independent chairman. REAs are collective agreements between employers and unions which are registered with the Labour Court and are enforceable in law.

The Department of Enterprise said Mr Bruton would be “setting out proposals arising from the recommendations and other issues raised by the report, which will then be the subject of time-limited discussions with relevant stakeholders”. It said the Minister had been asked to bring a plan to the Government in time to be finalised by the end of June.

Mr Bruton said the report’s overall finding that the current regulatory system required “radical overhaul” was consistent with the commitment in the programme for government.

“There is no adjustment as traumatic for any worker as the loss of a job and the retail, hotel and catering sectors – the major sectors affected by these wage-setting mechanisms – have suffered a 20 per cent loss in employment in the past three years.

“Furthermore, in many cases businesses are competing directly with the UK market where wages are 25-30 per cent lower in these sectors, while rates of pay in the sectors covered by the joint labour committees have increased much faster than the national minimum wage, in some cases by more than 20 per cent.”

The Duffy-Walsh report recommends that the basic framework of the existing joint labour committee/registered employment agreement system for setting wages should be retained but overhauled.

It finds that lowering the basic wage rates set under joint labour committees was “unlikely to have a substantial effect on employment”.

It says as far as possible, conditions of employment regarding overtime payments and Sunday premiums should be standardised across joint labour committees.