Michael Noonan (Limerick East, Fine Gael)

I support the amendment. The case Deputy Penrose makes has considerable merit. As a case has not been made for reducing the minimum wage, my party will oppose section 13. Notwithstanding its opposition, if the legislation is passed by virtue of the Government exercising its majority, it is important that the measure does not have unforeseen consequences. This is the issue the Deputy's amendment addresses.

Less than 4% of the labour force is on the minimum wage. With almost 1.9 million people at work, the number involved is not significant - the Minister can do the maths. Those on the minimum wage are, by and large, young people and immigrants working in hospitality and the wider service industry. Most of them do not have formal contracts. While the Minister intends that the measure will not apply to existing employees on the minimum wage and will apply only to new staff taken on by employers, that is not what will happen in the real world. Many of those on the minimum wage work behind the counter in shops, serve in bars and restaurants or are employed in similar casual jobs. Some are students and many work part time. My fear is that they will be let go because it will cost €40 per week more to keep them than it would to employ someone else on the new rate.

The rights of existing employees must be protected. Not all employers who employ people on the minimum wage are altruistic. Like all employers they are trying to cut costs. This means Mary may be told she is not needed next week and within three weeks her employer will replace her with another young lady. Given that, under the proposed change in the law, a new employee can be paid €1 an hour less than an existing employee, current employees will be shown the door on some pretext or other.

The effect of the amendment would be to ensure an unforeseen consequence would not arise that would affect the privileges or obligations of employees. Specifically, it would preclude "any contract of employment entered into before the coming into operation" of the legislation from being interfered with in any way.

There is a difference between the theory and practice. While I do not wish to cast aspersions on any group of employers, there is a genuine fear that people on the existing minimum wage will be let go and replaced by others earning the new minimum wage, which is €40 per week less that the current rate. I ask the Minister to address the issues we have raised.

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