Richard Bruton (Dublin North Central, Fine Gael)

Amendments Nos. 16 and 17 address different aspects of the variations in the sub-minimum rates that will apply henceforth to different categories of worker under employment regulation orders in line with the statutory differentiation of sub-minima that has applied under the National Minimum Wage Act 2000 in respect of first-time job entrants and those engaged in structured training.

Section 12 inserts a new section 42A(5) in the 1946 Act that clarifies the relationship between the adult wage rates that may be proposed by a JLC and the sub-minimum wage rates under EROs. This relationship is expressed as the same fixed percentage of the minimum hourly rate of remuneration as set out in sections 14, 15 or 16 of the National Minimum Wage Act in respect of employees aged under 18 years, first-time job entrants, including first-time entrants aged over 18 years, and employees who are over 18 years who are undergoing a prescribed training course during normal working hours.

Amendment No. 16 would remove those employees that enter employment for the first time after reaching 18 from the sub-minimum category. This provision is consistent with section 15 of the National Minimum Wage Act 2000. It provides, inter alia, that an employee aged 18 or over, and who enters employment for the first time after reaching that age, must be paid not less than 80% of the experienced adult rate in the first year of having commenced employment after reaching 18 years and 90% in the second year.

Differentiated minimum wages are applied to particular occupational categories, such as first-time entrants to the labour market, by several EU member states as a means to enhance or keep labour demand. The principle behind this type of revision is that job entrants without experience should be paid at a lower rate than the rate for an experienced adult worker. It takes some time for a person entering the workforce for the first time to build a relationship of mutual trust with an employer. All other things being equal, an experienced employee is more valued by an employer than a new entrant. Whereas the National Minimum Wage Commission had originally recommended a three year period for new entrants, the provision in the Act of 2000 fixed the duration of the reduced rate for job entrants at a maximum of two years. The same arrangements as regards the duration of reduced rates and fixed percentages will apply in the sub-minimum rates set under EROs.

Deputy O'Dea's amendment seeks to amendment a new subsection (6) in the new section 42A. He explained on Committee Stage that the purpose of the amendment is to introduce into the Bill a time limit for the length of a course of training or study that an employee could undertake to be covered by the sub-minimum trainee rate. The Deputy is concerned that in the absence of such a provision, people could be categorised as trainees indefinitely, with indefinite training as justification for reduced rates of remuneration. Specifically for trainees, section 42A(5)(d) provides that proposals for EROs shall provide that a worker who has attained the age of 18 years and during normal working hours undergoes a course of study or training prescribed in those regulations made by the Minister under the National Minimum Wage Act 2000 shall be remunerated at an hourly rate reduced to the percentage set out in section 16 of the Act. In this regard, it is important to stress that under section 16 of the National Minimum Wage Act, such period of training is for a maximum of three years. Deputy O'Dea's concern that employees could be categorised as trainees indefinitely so that an employer could continue to pay a lower rate is misplaced.

An employee undergoing a prescribed course of training or study must be paid an hourly rate not less than 75% of an experienced adult rate in the first period of training, 80% in the second period and 90% in the third. The National Minimum Wage Act 2000 regulations that prescribe courses of study or training set down the comprehensive criteria a course of study or training must satisfy for the purpose of section 16 of the National Minimum Wage Act. The same criteria will also apply to training courses under the JLC system. The criteria include the requirement that the training must enable the acquisition of skills and-or knowledge expected to enhance the work performance of the employee at the end of the course. Other criteria are that the duration of the course is for a minimum of three years, the course includes an assessment or certification procedure or written confirmation of the employee's completion of the course, the need to identify the level of employee attainment against the objectives, which must include the employee's signature, and the need for the course to include a system of recording the progress and results of the employee.

These provisions exist to provide opportunities for younger people who do not have experience to access the labour force. There is provision that a lower percentage would be paid, in recognition of the lack of experience such a person might have. It is a lower or pre-entry level. This has been very much a young person's recession in that they have been worst affected. Most countries that are considering the challenge of youth unemployment have accepted that having staged lower entry points into the workforce for younger workers supports the opportunity for them to get into the workforce. The balance which we have essentially imported from the National Minimum Wage Act 2000 is just as relevant now as when it was framed. It is a reasonable measure.

I accept the point the Deputy is making on an equality basis about picking out 18 year olds, but that is not the case. In the labour market there is a catch-22 in that as a person does not have experience, he or she is not given the same hearing. Everyone is looking for people with experience of one, two or three years. The measure is designed to deal with this and was proposed by the commission which examined the matter in the first place. This is not an effort to undermine equality of treatment, it is in place because it reflects the way in which labour markets are working and gives young people a better opportunity to enter the labour market at a time when they are not as attractive to an employer as an experienced person.

See this speech in context