THE REDUCTION in the national minimum wage from €8.65 an hour to €7.65 came into effect yesterday.
The Government believes the move will improve competitiveness and help generate new jobs but Opposition parties have pledged to reverse the cut if they came to power.
Minister for Enterprise, Trade and Innovation Mary Hanafin said yesterday there was no obligation on employers to reduce the pay of relevant staff.
About 47,000 workers, or 3.1 per cent of the labour force, were paid at or below the previous minimum wage rate.
The Irish Congress of Trade Unions (Ictu) has claimed it would be unlawful for employers on their own initiative to reduce payments for staff receiving the previous minimum wage rate.
Ictu legal affairs officer Esther Lynch said: “People who are on the €8.65 an hour rate should be aware that their employer cannot unilaterally cut their wages to the reduced rate of €7.65 an hour. By law, wages cannot be changed without consent or agreement.”
However, advice set out by the National Employment Rights Authority on its website suggests this may not be the case in all circumstances. It says an employee’s rate of pay is a term or condition of their contract of employment.
It notes employees have contracts or terms of employment whether notified in writing or not.
The authority says in some cases, the contract or terms can stipulate the employee is paid at the “prevailing national minimum wage hourly rate”.
It adds: “Where this is the case, then an employer may reduce the employee’s pay in line with the national minimum wage rates. In other cases, there may be a provision in the contract that provides for a reduction in pay.”
In the case of a dispute over wages, the issue can be referred to the Labour Relations Commission if both parties consent.
Where an employee considers a reduction in wages to be improper, they can consider making a complaint to a rights commissioner under the Payment of Wages Act or seek redress in the civil courts.
Yesterday a protest meeting against the cut heard a promise it would be reversed after the election.
Organisers of the protest outside Leinster House, which included trade unions Mandate and Siptu, the Migrant Rights Centre Ireland, Community Platform and the National Women’s Council of Ireland, described yesterday as a “day of shame” for the country.
Fine Gael would restore the national minimum wage to €8.65 an hour within a month of entering government, said deputy finance spokesman Brian Hayes.
Mr Hayes said at the protest that it was vital the cut was reversed to incentivise people coming off welfare and taking up work. “It is a decision to be made in the first month of coming to government,” he said.
Labour and Sinn Féin, which were both represented at the protest, have also pledged to reverse the cut, as did Independent TD Maureen O’Sullivan.
Susan McKay, director of the National Women’s Council said most of those on the minimum wage were women. “This cut will increase poverty and risk widening the gender pay gap.”
Siobhán O’Donoghue of the Migrant Rights Centre said Ireland was the first country on record to cut its minimum wage.