Business association Ibec has called for a planned pay rise of 1.25 per cent in the grocery retail sector to be put on hold.
The increase, which is to come into effect in January, is due under the terms of an employment regulation order (ERO) for the sector. These orders set wage levels and other terms of employment above the minimum wage, and are used in sectors such as retail, catering and hospitality.
The business group said the award should be put on hold in light of an upcoming review of wage procedures, which is scheduled to be completed by the end of March.
Director Brendan McGinty said many retailers could not afford to pay such increases.
"Higher labour costs, on top of the effect of bad weather on trade, will simply put more retailers out of business and cost jobs," he said.
The association said it is seeking an urgent meeting of the retail grocery joint labour committee. It called for the abolition of the current system, claiming it was no longer "fit for purpose".
"At a time when most other employers are freezing or reducing pay to safeguard their business, it is entirely inappropriate that employers in certain sectors should have to contemplate pay rises.
"Many of Ireland's regulated wage rates are too high by international standards, particularly when compared with the UK, and are a major stumbling block to regaining competitiveness and creating jobs. This is simply not sustainable in the current economic climate."
The Mandate trade union, which represents 45,000 workers in the retail and bar trades, accused Ibec of reneging on its commitments.
General secretary John Douglas said the move, taken together with the recent cut in the minimum wage, is another attack on the lowest paid and most vulnerable workers in the State.
"Ibec are looking to close the door after the horse has bolted. The Labour Court has approved the 1.25 per cent pay increase and as such it is now legally enforceable."
