Martin Heydon (Kildare South, Fine Gael)

We are living in extraordinary economic times which require radical actions to ensure our struggling businesses can be more responsive to changing economic circumstances and labour market conditions. Agreements that were appropriate for a different economic climate must now be reviewed to ensure they provide sufficient flexibility for employers, protection and legal rights for existing employees and, most important, the possibility of opportunities to protect threatened jobs and, we hope, the expansion and creation of new ones.

Let us be clear, the current proposals for reform of wage agreements do not call for adjustments in specific wage rates for the sectors covered by the JLCs or REAs. Many of the existing wage agreements were negotiated before the current protections of employment rights legislation were fully in place. Such protections now exist to ensure all employees are fully protected in their work environment whether covered by JLC agreements or REAs.

Our commitment and subsequent decision to restore the national minimum wage to €8.65 per hour shows our commitment to the lowest paid workers in the economy. EUROSTAT figures in Jan 2011 confirm that our minimum wage is the second highest of 20 EU member states with such legislation. Monthly minimum wages varied widely, from Bulgaria, at €123 per month, at the bottom to Luxembourg, at €1,758, at the top of the scale. Ireland's monthly rate of €1,326 ranked second highest of these 20 countries.

It is obvious the difficulty lies not merely with the minimum wage rate, which is generous by EU standards, but with the standard of living that buys us here in Ireland. When adjusted for differences in purchasing power, the disparities between the countries lessened. Ireland showed the most remarkable change, according to EUROSTAT, moving from second position of 20 when ranked in euro to fifth in purchasing power terms. This highlights the real problem here, our expensive cost of living. Constantly increasing wage rates at the expense of viable businesses is not the solution to our problems. We need to cut our cost of living and then our minimum wage can be seen as it is - one of the highest in Europe.

Those whom we need to help most urgently are the 440,000 unemployed individuals currently signing on to the live register. Ireland's unemployment rate of 14.8% is well above the EU and eurozone average of 9.9%. Radical action is now needed to tackle that statistic. It is only by getting people back to work that we will start to increase our intake of PAYE and other taxes as most money flows throughout the economy.

Those sectors that have suffered most reduction in jobs in the past three years are the very sectors that are governed by labour agreements, be it construction, hospitality or retail. The current proposals are that all EROs, agreed by JLCs, will be revised under new criteria which better reflect our current economic circumstances. We must acknowledge that existing agreements were based on a different economic climate.

JLC reforms will help to reduce employer payroll costs. Employers will be allowed to opt out of the terms and conditions set by JLCs or REAs if they can conclude a collective agreement at local level. I had a recent local example of this in the bloodstock industry. This is a seven day a week operation which requires specific agreements with staff through their representative group, the Irish Stable Staff Association. The current proposals on derogation would allow racehorse trainers enter into collective bargaining with the Irish Stable Staff Association without being bound by the restrictive terms of the agricultural workers employment regulation orders, EROs. The Stable Staff Association and its members are aware this is a seven-day per week lifestyle and are willing to work around this in association with the trainers if given the opportunity. A thoroughbred racehorse does not realise it is a Sunday when it needs to be fed or trained.

The current proposals will benefit employers through a less restrictive and clear regulatory framework and reduced record keeping requirements which are currently placed on employers covered by EROs and registered employment agreements, REAs. Retail Excellence Ireland stated the reforms are right for the retention and creation of employment, with potential for 7,000 new jobs in the retail industry if significant reforms of the Joint Labour Committee system are implemented. In a recent survey of restaurants by the Restaurants Association of Ireland, some 85% of restaurants surveyed stated they would take on an additional two staff if EROs were abolished. That would amount to 4,000 new jobs. We must trust entrepreneurs and business people who inform us that they can create more jobs. Let us give them the opportunity to prove it.

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