Some beauty salons are renting chairs to hairdressers rather than employing full-time staff, an Oireachtas committee has been told.
Neil McDonnell of the small and medium business group Isme said if the Government made it very hard for business to lay off people when times were bad, they would be very reluctant to hire full time personnel when times changed around.
He told the Oireachtas committee on enterprise, trade and employment on Wednesday that Ireland was facing a significant number of post-pandemic redundancies and the Government needed to correct the mistake made during the last recession and reverse the removal of the statutory redundancy rebate.
He said employers had been levied 0.5 per cent on PRSI in respect of the redundancy fund since 1979, yet this levy was not removed when the rebate was removed.
Mr McDonnell said his organisation was hearing from the grooming sector was “that there are people setting up hairdressing salons where they are not employing anyone.
“What they are doing is setting up a nicely-branded salon and they are doing a thing called ‘rent the chair’, so they are letting people come in. That is discouraging full-time employment.”
Separately, the Irish Congress of Trade Unions (Ictu)expressed concern for the future of the aviation sector and urged the Government to provide supports.
Liam Berney of Ictu told the committee that if supports were not made available, there was a danger that decisions would be made outside the State which would damage the aviation sector.
He suggested the sector would be a perfect fit for the piloting of a short -term work scheme.
‘State of denial’
Questioned by Fine Gael TD Richard Bruton, Mr Berney said under such a scheme, workers would be given a guarantee of a significant proportion of their net income and the employer would employ them for as much time as possible. He said the remainder of the time would be used "to be engaged in upskilling, either addressing the future skills need that the enterprise might have or in the sector more generally".
Mr McDonnell said the labour market must return to normal, and that this would require a more rapid tapering of the pandemic unemployment payment, especially to part time workers.
He argued there was a “ state of denial” about the impact the pandemic unemployment payment was having upon recruitment in certain sectors where part-time, seasonal or casual working is regular, particularly in agriculture, hospitality, grooming and accommodation.
Sinn Féin TD Louise O’Reilly said if employers paid decent wages and provided good conditions of employment, they would not have problems in recruiting staff. She said the only evidence of workers being reluctant to return to employment was anecdotal.
Mr McDonnell said there was no point in saying to a hotel or a restaurant, where typically part-time work was on offer, that if they employed everyone on a 39-hour week basis or increased their rates of pay that the recruiting issue would go away. “It is not going to go away, unless we start charging people through the nose.”
Dr Laura Bambrick of Ictu said the trade union movement did not dispute that there were a small number of employers who were struggling to find staff as they re-opened. However, she said Ictu was calling into question the "baseless claim" that this was caused by the pandemic unemployment payment. She also said unusual situations were being presented as being representative of the norm.
She suggested the international evidence indicated that some sectors which had relied disproportionately on cheap migrant workers, who were no longer available as they had returned to their home countries, were being affected. She also suggested that in some cases, resident or native workers had changed sectors or had left the work force.