Legislation to allow employers in sectors such as catering and retail to plead “inability to pay” the legal minimum rate to workers is being considered by Ministers.
Minister of State for Labour Affairs Dara Calleary told the MacGill Summer School yesterday: “A reform on these lines would contribute to protecting employment in situations where employers are faced with severe economic challenges.”
A similar inability-to-pay clause already exists in relation to the national minimum wage of €8.65 per hour, although it is understood that this has never been invoked.
However, the law currently does not permit employers to withdraw from the type of agreement on wages which is common in such sectors as the hotel and catering trade, retail, security and contract cleaning.
The proposals considered by the Government would permit an individual firm, with the consent of a majority of its workforce, to apply to the Labour Court for exemption from the agreement. Evidence of financial difficulties would have to be produced.
Under the Minimum Wage Act, any such exemption would apply for a period of only three to 12 months and it is likely a similar time-limit would apply in the new legislation.
Minister for Finance Brian Lenihan caused controversy this week when, also speaking at the MacGill Summer School, he said if the minimum wage was shown to be an obstacle to job creation in any sector, the Government would have to address the issue. Irish Congress of Trade Unions general secretary David Begg said cutting the minimum wage was a “toxic proposal” that would not be tolerated by unions. Fine Gael also said it opposed any move to cut the minimum wage.