Siptu urges VAT penalty for hotels over low pay rates

Union says special reduced VAT for tourism and hospitality sectors costs €350m anually

Delegates at the Siptu biennial delegate conference. Photograph: @Siptu

Delegates at the Siptu biennial delegate conference. Photograph: @Siptu


The country’s largest trade union has urged the Government to scrap the lower VAT rate in place for hotels and restaurants unless employers in those sectors agree to engage on pay rates for their workers.

Cork hotel shop steward Tim Herlihy told the Siptu biennial delegate conference that hotel and restaurant employers were receiving the benefit of a special reduced VAT rate for the tourism and hospitality sectors which cost €350 million per year. However he said they were refusing to engage with a new system put in place by the Government to determine terms and conditions for staff working in these areas.

In 2011 the courts struck down as unconstitutional a system of joint labour committees which set out legally-binding terms and conditions for workers in particular sectors. These generally were higher than those set down under national minum wage legislation.

The Government subsequently introduced new legislation to re-constitute the joint labour committee system in a revised form. The first legally-binding order determining pay andconditions under the new arrangements were signed by the Minister for Business and Employment Ged Nash last week covering workers inthe cleaningand security areas.

Margaret Coffey, vice president of Siptu’s services division said the hospitality employers, in taking the original court action against the joint labour committee system , wanted to “drive thousands of workers back to (the national minumum wage of ) €8.65 per hour with no overtime rates or Sunday premium payments.

She said the re-constitution of the joint labour committee system by the Government was cold comfort for workers in the hotel and restauant sectors who “continued to languish at the bottom of the ladder”.

“As a result of the lack of engagement by employers, we now have an intolerable position whereby the hotel joint labour committee has been made inoperable by the employer.”

The Irish Hotel Federation and the Restaurant Association of Ireland have flatly refuse to come to the table to engage in sectoral bargaining with Siptu.”

Ms Coffey said it was Government policy that workers inthe hospitality sector would have their terms and conditions determined by a joint labour committee system.

She called on the union to campaign for re-enaction of parts of industrial relations that was originally introduced in 1969 to empower the Labour Court to provide for decent work conditions in lieu of a negotiated employment agreement.

Mr Herlihy said the hotel and restaurant employers had been rewarded by the continuation of a special VAT rate for their sectors which had been cut in 2011 from 13.5 to 9 per cent as part of a job creation stimulus.

He said there was one law for workers and one law for business.

The conference passed a motion calling on he Government, in the event of the hospitality employers continuing to refuse to engage with the joint labour committee process, to review the reduced VAT rate inthat area with a view to its removal.

The conference also backed calls for eradication of low hour and zero hour contracts for workers across the economy.