Seán Sherlock (Cork East, Labour)

The programme for Government states:

We will reform the Joint Labour Committee structure beginning with the appointment of independent chairpersons to JLCs who will retain a casting vote. Reform options will examine the rate of pay for atypical hours.

To inject some context into the debate and, perhaps, give an account of the conclusions of the Duffy-Walsh report, the so-called independent review, I will speak to some of the facts as they pertain to that report.

The basic framework of the current JLC-REA regulatory system should be retained, the report concludes. However, the system requires overhaul to make it fairer and more responsive to changing economic circumstances and labour market conditions. The overriding purpose of the recommendations of the report is to create a framework within which greater efficiencies and necessary adjustments in payroll costs can be achieved in the affected sectors.

Lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment, the report concludes. Having investigated the size of the wage differential in some detail, the review team did not find evidence of substantial wage premiums. Even to err on the side of the strand of the literature that finds the largest negative effects from minimum wages on employment, the results imply that cutting minimum wages lowers total earnings of low wage workers and has potentially important distributional consequences. However, as is clear for all to see, the minimum wage has been restored.

Those who advocated abolition of the current system pointed to the significant body of employment rights legislation now in force as providing adequate legal protection for employee rights and interests. However, the review team concludes that it is not accurate to suggest that the body of primary employment rights legislation currently in force adequately covers matters dealt with by EROs and REAs. Most of the EROs provide for overtime payments and premium payments to those required to work on Sundays. These provisions are a source of significant concern to employers in sectors which normally trade on Sundays. They contend that the cost of employing staff on Sundays is now prohibitive. Independently of the JLCs, the obligation to provide additional compensation for Sunday working is derived primarily from section 14 of the Organisation of Working Time Act 1997. The review team believes, however, that the mode of compliance with that provision should be addressed to ensure uniform and fairer arrangements across the affected sectors.

There are potentially substantial competitive gains that could be realised in some of the affected sectors by reforming the structure of decision making in JLCs so that the system is more flexible and responsive to the needs of particular sectors. Competitiveness can also be enhanced by simplifying the system in a way that reduces the burden of supervision and compliance and by providing a degree of co-ordination and oversight over the system that ensures arrangements across sectors are reasonable and proportionate.

Nothing in the Duffy Walsh report is radical, depending on one's point of view. It speaks to the issue of a greater degree of flexibility but also to the issue of reform in regard to examining the rates for atypical hours, which is dealt with in the programme for Government. A process is under way in which all the stakeholders have been consulted, including trade union interests, and I understand there has been extensive consultation in that regard. I hope this will bring about a measured solution so that all parties, whether workers or employers, can find a middle ground in order that there is a degree of satisfaction on all sides.

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