Minister Killeen receives Labour Court Recommendation on the National Minimum Wage
Minister for Labour Affairs Tony Killeen, T.D. today (29 November 2006) received the Labour Court’s recommendation in relation to the national minimum hourly rate of pay. The Labour Court has recommended that the minimum hourly rate of pay should be increased to ¤8.30 per hour with effect from 1 January 2007 and ¤8.65 with effect from 1 July, 2007.
‘I thank the Labour Court for their consideration of this matter, which I understand has included a thorough consultation process’ the Minister said. ‘I am conscious of the very tight deadlines to meet the wish of the social partners, as expressed in the Partnership Agreement Towards 2016, that the minimum wage be adjusted with affect from 1 January 2007 and I appreciate the Court’s commitment in considering the relevant issues and completing the process in this timeframe’
Minister Killeen indicated that under the National Minimum Wage legislation he must now take into account the impact the proposed rate may have on employment, the overall economic conditions in the State and national competitiveness, when considering the Court’s recommendation.
(Copy of this Press Release also available on the Departments website at www.entemp.ie)
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Notes for Editors
Under the Social Partnership Agreement Towards 2016 ICTU and IBEC agreed to propose to Government that the National Minimum Wage be adjusted with effect from 1 January 2007. The parties indicated their intention to make, by 1 September 2006, a joint recommendation to Government as to the amount of the increase. In the event agreement was not reached on a proposed amount and ICTU referred the matter to the Labour Court in October.
Rate at introduction
The National Minimum Wage was introduced in Ireland in April 2000. The National Minimum hourly rate of pay was set at £4.40 (¤5.59 per hour). Since then there have been four increases to the rate, the last of which saw it increase to its current rate of ¤7.65 per hour from 1 May 2005.
Sub-minimum Rates
Sub-minimum rates of the National Minimum Wage apply where an employee is:
- Under age 18 or
- In the first two years after the date of first employment over age 18 or
- Undergoing a prescribed course of study or training.
Employees under the age of 18 are entitled to 70% of the national minimum wage. This percentage was recommended by the National Minimum Wage Commission to strike a balance between ensuring that young employees are not exploited and ensuring that the rate of pay does not encourage students to leave full-time education.
The National Minimum Wage Commission also recommended that sub-minimum rates should apply to employees in the first two years of employment over age 18 and to those undergoing structured training. The Commission expressed the view that employers should be encouraged to focus on training and that the structure of the national minimum wage should provide encouragement and inducement for employers to take on unskilled staff and to involve them in training.
Number on minimum wage
In their most recent survey on the impact of the minimum wage, the ESRI estimate that 5.2% (or c. 70,500) of those employed in private sector non-agricultural firms are earning the minimum wage.
30,000 or 2.2% on sub-minimum rates
+ 40,500 or 3.00% on actual minimum
= 70,500 or 5.2% on minimum wage
The percentage of workers on the national minimum wage has reduced substantially from 21% in 1999 to 5.2% in 2005/6.
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Last modified: 29/11/2006
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