Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the National Minimum Wage (Low Pay Commission) Bill 2015. In its statement of priorities for the period 2014 to 2016, the Government gave a commitment to establish a low pay commission on a statutory basis as an independent body charged with making annual recommendations to the Government of the day on the appropriate level of the minimum wage and related matters. I welcome the introduction of the Low Pay Commission as I strongly believe it will protect those working at the minimum wage rate and also give clarity to employers, particularly in SMEs which have been the backbone of the current economic recovery. I am particularly pleased that both employers and employees will be represented on the commission. The commission will have nine members, including an independent chairperson, three members with a particular interest in and understanding of low paid workers, three members with a particular interest in and understanding of employers and two members with relevant academic backgrounds.

The principal function of the Low Pay Commission will be to investigate and report to the Minister of the day on an annual basis regarding the national minimum wage and the rate at which it should be applied. The commission will also have other functions including examining matters related to the functions of the commission under the legislation. I agree with the ESRI's 2006 analysis of a Labour Court recommendation proposing an increase to the national minimum wage. The ESRI concluded that adjusting the minimum wage rate by a substantial amount on an irregular basis, as happened in the past, is more likely to have a detrimental impact on employment and to contribute to uncertainty for employers and employees. The establishment of the commission should ensure that this situation does not arise in future.

As a former employer and employee, I consider that work should always pay at a fair and reasonable rate. There is no doubt that a job that pays a fair and reasonable wage is the most effective protection against poverty. Time and again, I have seen in my clinics in Dundalk and surrounding areas the immediate impact securing full-time employment has on a person and his or her family. We are now seeing the benefits of the many sacrifices the Irish people have made over the past number of years. With the economy now starting to recover and grow, we must not forget that the recovery is not being felt in all areas of our society. We must ensure therefore that the benefits of the economic recovery are felt by all sectors of society.

I was surprised to learn that the national minimum wage in Ireland is high by international standards. The most recent figures from EUROSTAT show that Ireland's minimum wage rate is the fifth highest in the EU. When the cost of living is taken into account, Ireland has the sixth highest rate among our European partners. The most recent figures from the Central Statistics Office show that 4.5% or fewer of all employees were being paid the national minimum wage of €8.65 per hour in the third quarter of 2014. That is approximately 71,000 workers earning the minimum wage. It is our responsibility and duty to protect the low paid workers of this economy who are not getting the full benefits of the continued economic improvement. Unfortunately, not all areas and sectors are seeing the benefits of recovery. The Low Pay Commission will be of great benefit to the low paid workers of our economy and ensure that the balanced statutory minimum pay rate is fair and assists the low paid and vulnerable workers. I particularly like the idea that the commission will have total independence, which will no doubt take the politics out of the setting a minimum wage rate.

We must not forget the employers, especially the many SMEs and small family businesses that have been the backbone of this economic recovery.

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This legislation will be of significant benefit to these employers and their employees and will offer clarity and certainty as we move forward.

I welcome the establishment of the Low Pay Commission. I look forward to its first report in the coming months and I am sure the many people who earn the minimum wage or less will also look forward hearing the recommendations of the commission's first report.

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