Minister Calleary says that statutory wage setting mechanisms may need to be re-balanced to take account of severe economic challenges at enterprise level

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Note for Editors

See full text of Minister’s address “The Potential of an All-Island Economy” on the Departments website at www.entemp.ie

National Minimum Wage Act 2000

The National Minimum Wage Act, 2000, includes a mechanism enabling the Labour Court to grant an employer in financial difficulties a time-limited, once off exemption from having to pay a number of employees the national minimum wage. Under Section 41 of the National Minimum Wage Act, 2000, it is provided that where an employer cannot afford to pay the national minimum wage due to financial difficulty, an application can be made to the Labour Court and it can, following an inquiry, exempt the employer from paying the rate for between 3 months and 1 year.

The employer must apply to the Labour Court for the exemption and be able to demonstrate that the proposed exemption has the consent of a majority of the employees, who must also agree to be bound by the Labour Court decision.

“Hardship” or “inability to pay” clauses are a feature of legally enforceable multi-employer sectoral agreements across a range of EU countries (including Austria, Belgium, France, Germany, Spain and Italy) and have been introduced to assist firms in crisis situations to respond, through temporary measures, to adverse labour market conditions and pressures to regain competitiveness.

Joint Labour Committees

Joint Labour Committees operate in areas where collective bargaining is not well established and wages tend to be low (e.g. agriculture, hairdressing, hotels and restaurants, retail stores).Minimum rates of pay, and other conditions of work, for workers in certain sectors are determined by Joint Labour Committees (JLCs). Currently, there are 17 JLCs in existence. Each JLC is composed of representatives of workers and employers in the sector concerned.

While JLCs are established by means of a statutory order made by the Labour Court, they are independent bodies which determine minimum rates of pay and conditions of employment for workers in their respective sectors. The pay and conditions agreed by the JLCs are given the force of law in Employment Regulation Orders made by the Labour Court on foot of proposals made to the Court by the JLCs.

When a JLC agrees terms and conditions, it makes proposals to the Labour Court on foot of which the Court can make Employment Regulation Orders (ERO). EROs are statutory instruments which set out terms and conditions applying to specified workers in a particular sector.

Registered Employment Agreements

Employment Agreements (provided for in the Industrial Relations Acts, 1946 to 2004), negotiated by the two sides in an industry or enterprise, may be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it will register the agreement. The effect of this is to make the provisions of the agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not a party to the agreement.

A Registered Employment Agreement may provide for future variation of any of its provisions; an application to vary the provisions of such an agreement must be made to the Court, which will consider the application and, if satisfied, approve it.Currently, there are 67 Registered Employment Agreements (REAs) on the Register maintained by the Labour Court.

Further information is available at www.labourcourt.ie

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