Keeping wages low would create jobs, employers representatives said today, while unions argued such a policy would hurt small businesses.
The Oireachtas Committee Jobs, Enterprise and Innovation heard submissions from both groups during its deliberations on the Industrial Relations (Amendment) Bill 2011.
The Bill seeks to reinstate the joint labour committee/registered employment agreement (REA) systems for determining pay and conditions for nearly 200,000 workers. It was drafted in the wake of a High Court ruling last summer that the JLC/REA system was unconstitutional.
Tara Buckley, director general of the retail representative group RGData, said wages had not been cut and jobs had been created since the High Court ruling. She said 60 per cent of the body’s members had employed new staff since July, with the minimum wage (€8.65) as their starting salary.
Typically, starting salary under the JLC rates in retail and catering were between €9.10 and €9.60 per hour. Ms Buckley said her members were concerned the new legislation would “merely reinstate the discredited regime”.
“Re-imposing the JLC regime which has as its starting point a higher earning rate than the national minimum wage would reduce employment and remove any incentive to create new jobs.”
Ibec director Brendan McGinty said new legislation must “pass the sustainable employment test”.
Union representatives argued no jobs had been created since summer, however. Rather, wages had been cut across the board, even for those workers whose contracts had been agreed under the JLC system and who the Government said would not be affected by the court ruling, the hearing was told.
John Douglas, general secretary of Mandate trade union, had “large reports of reductions in hours for people whose wages were set under the JLC rules, and their hours being given to new entrants being paid the minimum wage”. Some had seen pay packets fall by almost €100 a week as a result.
Patricia King, vice president of Siptu, said the union had carried out a survey of 390 workplaces across the State. “The result, especially in Dublin, was that pay had been cut to the minimum wage. There has been a move since July to lessen conditions and lessen wages,” she said.
She said the cost factors hurting businesses were lack of credit, upward-only rents and local authority charges, and labour costs were after these.
Walter Cullen, regional co-ordinator of Unite trade union, said the most important factor hurting businesses was “the 30 per cent collapse in consumer spending”. Driving down the wages of the lowest paid would exacerbate this.
Ms King said the new legislation must “pass the decency test”.
