Mr. John King:

I thank the Chairman and the members of the committee for their invitation to address them today. For the purpose of my presentation I will talk about the hospitality sector, a sector of the economy where workers are in a very unequal relationship with their employer, where pay at the level of the national minimum wage is the norm, where there are no other conditions of employment, and where the prevalence of zero-hour contracts is very high.

I will give the members some statistics. Central Statistics Office figures for workers confirm that the average hourly rate of pay at quarter four 2014 remains below the average hourly rate at quarter four 2010.

There was a significant increase in the numbers on the minimum wage between mid-2011 and mid-2014, and we know that at the end of 2013, 12.5% of all part-time workers claiming jobseeker payments worked in hotels and restaurants.

With regard to the employment created in the industry, CSO figures confirm that the recovery started in early 2011 and there has been a 23.1% increase in employment between 2011 and 2014. Part-time employment increased by 14.1% and full-time employment increased by 15.5%. Between 2011 and 2013, there was a reduced employer PRSI rate if an employer's workers earned less than €356 per week. The employers in the sector also have the favourable Government policy of a lower VAT rate and international tourism numbers are now at pre-recession levels. There were 7.6 million visitors to Ireland in 2014, a figure which increased by 9% on that of 2013. Domestic tourism numbers have increased by over 2.2%, with total spending in 2013 by tourists at €6.54 billion, which is an increase of more than 10% on the figures from 2013.

In the restaurant sector we have identified some organisations with considerable profits and in the hotel sector there is evidence from independent research indicating that 90% of hoteliers anticipated revenue growth in 2014. Occupancy levels in hotels also increased in the same year, along with average revenue per room and average profit levels per room. Our submission also has examples of significant sales and purchase transactions in the hotel sector, which is hardly evidence of a sector that is experiencing anything other than a boom.

In mid 2011, the Oireachtas approved a favourable VAT rate of 9% for this sector. A SIPTU survey in the restaurant sector indicates that the VAT rate was not passed on, to a significant extent, to the consumer by way of price reduction. The cost to the Exchequer in a full year of this VAT reduction is approximately €350 million, and the total will be approximately €1.4 billion by mid-2015. The line from the two organisations which look after employers in this sector is that the VAT rate has been solely responsible for the increase in employment, but that does not stand up. The recovery in the sector started prior to the VAT reduction and it is demand-led. It can be attributed to the significant increase in international tourism, primarily from the UK and North America, with such tourists spending more when they are here. These factors are related more to the exchange rate between the euro and sterling or the dollar.

The only way workers in this sector can have the issue of low pay addressed to enable them achieve a living wage and be able to gain or benefit equally from the recovery and be able to provide for themselves and their family is through the joint labour committee, JLC, process. This JLC process is enshrined in legislation approved by the Oireachtas in the Industrial Relations (Amendment) Act 2012. Following a review under this legislation, a statutory instrument was introduced, SI 28 of 2014, for the establishment of a hotels joint labour committee, with the JLC in place before 2011 for the catering industry remaining in place. However, hotel and restaurant owners are exercising a veto over this piece of Oireachtas-approved policy, which is having the effect of ensuring that tens of thousands of workers remain in work poverty. It also ensures the means by which employers continue to pass the obligation to the State of paying a living wage to these workers by way of welfare support. Not alone are these vested interest groups being allowed to exercise this veto over the will of the Oireachtas, they are also bringing Ireland and the State into breach of International Labour Organization conventions.