Gerald Nash (Louth, Labour) | Oireachtas source

The living wage concept is grounded in the idea that a person’s wage should be sufficient to maintain a safe, decent standard of living within the community without the need for substantial recourse to the welfare system.

The national minimum wage in Ireland is considered to be relatively high by international standards. The most recent figures published by EUROSTAT show that Ireland’s rate is the fourth highest among the 21 EU member states that have a national minimum wage. When the cost of living is taken into account, Ireland’s rate is the fifth highest.

The decision to restore the national minimum wage to €8.65 per hour, after the cut by the previous Government, with effect from 1 July 2011, together with the decision to put the joint labour committees, JLC, system on a more secure legal and constitutional footing and reinstate a robust system of protection, represents a significant commitment by this Government to protect the lowest paid and most vulnerable workers.

The Statement of Government Priorities 2014-2016 contains a commitment to establish a low pay commission on a statutory basis as an independent body to make annual recommendations to the Government about the appropriate level of the national minimum wage and related matters. I am currently developing proposals to implement that commitment.

The Government is moving on a number of other fronts relating to wage setting.

The Industrial Relations Acts provide a framework within which employers and employee representatives, through the JLC system, can come together voluntarily and negotiate terms and conditions of workers in their respective sector. Pay rates negotiated in the JLC fora have tended to be above the national minimum wage and the JLCs operate in areas where collective bargaining is not well established and wages tend to be low.

For vulnerable workers, the advantage of JLCs is that they see fair terms and conditions such as wage rates, sick pay and so on agreed and given effect by employment regulation orders. For some employers, the advantage of the JLC system, based as it is on the principle of self-governance, means that they can agree and set minimum pay and conditions and agree on work practices which are custom-made to their industry; a flexibility which cannot be achieved by primary legislation. Where both parties to a JLC see commonality of purpose and outcome an agreement may emerge that is of benefit to both.

In addition, the Government recently approved the drafting of the legislation to provide for a revised legislative framework to replace REAs, as I stated earlier in response to Deputy Tóibín.

In the UK, where neither systems of REAs or JLCs exist, London is often highlighted as an area that has recognised the concept of a living wage and has put that in practice in many respects. It is voluntary and, as such, does not prevent UK employers paying the national minimum wage rate of £6.50 per hour in the UK context. However, it does recognise the costs of living in London.

In addition to Ireland's national minimum wage, JLC and REA structures, we have a system of supports through the Department of Social Protection supporting low income families. The Department avails of every opportunity in its engagement with employers and jobseekers to build awareness of the availability of FIS.

Based on the question and appreciating the sincerity of Deputy Calleary tabling it, I very much welcome Fianna Fáil's Pauline conversion to the notion of higher rates of pay for lower paid workers.

See this speech in context