Restaurant owners seek cost cuts

Restaurant owners are seeking a reduction in the minimum wage, a reduction in rates and the abolition of premiums for Sunday working, warning that the industry is facing further job losses.

The Restaurant Association of Ireland (RAI) said urgent action was needed, with its annual survey showing 75 per cent of businesses had recorded a drop in business levels compared with last year. SOme 38 per cent said business had edropped by more than 30 per cent.

“Our industry survey show that further job losses and closures are inevitable” RAI chief executive Adrian Cummins.

“Restaurants are facing challenging times ahead with the cost of doing business increasing on a weekly basis. We are calling on the Government to seriously address the issues that affect the restaurant sector.”

The group said its survey showed members backed a reduction of the minimum wage from €8.65 per hour to €7.65, and is also seeking the abolition of joint labour committee rates.

It said Ireland is the most expensive country in Europe in which to run a restaurant, with waste licence fees rising, water rates and development levies all impacting overall costs.

But the Irish Congress of Trade Unions (Ictu) condemned the call for wage cuts as “hypocritical”, claiming the sector had the worst labour law compliance record.

“Repeated investigations by the National Employment Rights Authority (Nera) have found workers in the sector receiving as little €3 and €5 per hour,” said Ictu official Peter Rigney.

“In 2009, NERA recovered €737,000 in unpaid wages from almost 450 employers. The sector as a whole has a compliance rate of just 21 per cent – the lowest in the entire economy,” he said.

Mr Rigney said the RAI would be better served addressing the sector’s problems with compliance than trying to cut peoples’ wages.

He claimed the sector’s problems did not stem from excessive wage costs, but “from the fact that Government is sucking money and demand out of the economy through a policy of deflation”.

Restaurant owners are seeking to scrap the Sunday premium scheme, which sees workers get a 33 per cent wage premium for the day. It said Ireland is the only country in Europe where this premium exists.

About 64,000 people are employed in the restaurant industry in Ireland, contributing about €2 billion to the Irish economy every year.

“Our results also show the cost of operating a restaurant is continuously increasing with Ireland now becoming the most expensive place to do business," said Mr Cummins.

"We pay our staff one of the highest wage rates within the European hospitality sector. We are obliged to charge our customers rates of VAT and Excise Duty which are again at the top of the EU league. Our food input costs are 24 per cent higher than the EU average. The Irish restaurant sector cannot continue within such a regime.”