Gerald Nash (Louth, Labour) | Oireachtas source

I am pleased to point out to Deputy Boyd Barrett that wages are increasing across the economy, though not perhaps at a rate that would satisfy him and his colleagues. After years of extreme difficulty in this country, that development illustrates how far we have come. We have a way to go before we reach a point where everybody can share in the accelerating economic recovery. There is no denying, however, that the evidence shows wages are rising across the bulk of our economic sectors.

Section 5 of the Bill sets out a comprehensive and challenging set of factors that the Low Pay Commission must take into account in any year in coming to a recommendation as to the appropriate rate for the national minimum wage. Amendment No. 7 seeks to assign additional factors that the commission must take into account when recommending a minimum hourly rate of pay, including a requirement to reduce the incidence of low pay and support the phased introduction of a living wage. I would have been happy to address the issues of overtime and Sunday premiums, as dealt with in amendments Nos. 6 and 8, but unfortunately those amendments were ruled out of order.

Deputy Tóibín's amendment No. 9 seeks to have the Low Pay Commission, in addition to its obligation to issue an annual recommendation on the national minimum hourly rate of pay, be required to make an annual recommendation to the Minister on a living wage. I have spoken in the past, both here and elsewhere, about my support for the concept of a living wage. However, we need to differentiate between the application of a national statutory minimum wage and the living wage movement, which is a societal movement that would see employers volunteer to pay - indeed, be proud to pay - what is agreed to be a living wage. I have looked very closely at the operation of the living wage concept in the United Kingdom and how it has evolved in recent years. That initiative grew out of a very successful grassroots civil society campaign and draws its strength from the fact it has cross-society and cross-economy support. Some 1,500 employers have signed up to and endorsed that approach. As I said, it is a concept the Tánaiste and I support.

There were interesting developments yesterday in the House of Commons when the Chancellor of the Exchequer, George Osborne, made some compelling remarks on the living wage. Whatever about the flaws in his overall approach, we should at least appreciate that efforts are finally being made in the neighbouring jurisdiction, limited as they might well prove to be, to tackle low pay. What the Chancellor has done does indeed seem, on the face of it, like the political masterstroke some have described it as. However, when one chisels away at it and looks under the bonnet, it is, like all tactical masterpieces, found wanting in many respects. People have not reflected on the impact that cuts such as the withdrawal of tax credits will have on the working poor in the UK. Those cuts seem to be a quid pro quofor the more positive changes that are being introduced.

What Mr. Osborne has done, in effect, is set out on a journey towards an annual increase in the national minimum wage, which is what the Low Pay Commission in the UK would have been doing anyway. In other words, he has really just rebranded the national minimum wage as a living wage and has, in fact, put a ceiling on that payment of £9 up to 2020. I am not prepared to impose any such restriction on the thinking of the Low Pay Commission in Ireland. It is a flawed approach to impose any such curtailment on an independent statutory body, but it is what is happening in the UK. Nobody should be seeking to strangle an important civic society movement or trying to occupy that space. As I said, Mr. Osborne's initiative amounts simply to a rebranding of the national minimum wage, but that is a discussion for another day and a matter for our colleagues across the water. As Deputy Tóibín noted, I have indicated my intention to host a forum on the living wage in the autumn, to which we will invite civil society organisations, trade unions and employers to discuss how a living wage might be applied in this country.

Amendment No. 10, from Deputy Calleary, would require the Low Pay Commission each year to research and recommend to the Minister national minimum rates of pay for youth and apprentice categories, and to research and recommend to the Minister national minimum rates of pay for female workers. The sub-minimum rates provided for since 2000 under the National Minimum Wage Act were originally recommended by the National Minimum Wage Commission, which was appointed to advise on the introduction of a national minimum wage. The commission recommended that employees under the age of 18 be entitled to 70% of the national minimum wage, with a view to striking a balance between ensuring young employees were not exploited and ensuring that the rate of pay applicable to them would not encourage students to leave full-time education. The National Minimum Wage Commission also recommended that sub-minimum rates apply to employees in the first two years of employment over age 18 and to those undergoing structured training. The commission was of the view that employers should be encouraged to focus on training and that the structure of the national minimum wage should provide encouragement and inducement for employers to take on unskilled staff and involve them in training. The rationale underpinning these provisions is that, all else being equal, an experienced employee is of more value and more productive than a new entrant or trainee. It is equally important that those seeking employment are not prevented from having an opportunity to enter work because of their lack of experience or training.

Apprentices have been excluded from the scope of the national minimum wage provisions since their introduction in 2000. The reason for this is that there had been a separate long-standing statutory wage-setting mechanism covering apprentices, namely, registered employment agreements. While the REA system was struck down in 2013 by the Supreme Court, the Industrial Relations (Amendment) Bill 2015, which has been passed by this House, will provide, inter alia, for the possibility for sectoral employment orders covering statutory pay and pension provisions for workers in particular sectors, including provisions for apprenticeship rates. These are important issues which may be appropriate for the Low Pay Commission to examine in the context of a future work programme. However, I do not propose to include them as part of the commission's ongoing annual recommendations.

On the question of requiring the commission to recommend national minimum rates of pay for female workers, the Deputy is aware that the commission may be asked to look at a range of related matters in the context of the minimum wage. The prevalence of female workers on or near the national minimum wage is well known and it is in this context that I see the Deputy's concerns better addressed.

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In any event, setting a minimum wage based on a person's gender would probably be in breach of equality legislation.

On amendment No. 11, I indicated on Committee Stage that I would bring forward an amendment to section 5 on Report Stage to amend the date on which the committee must submit its recommendations and report to the Minister. As the Bill is currently drafted, the date specified is 15 July of the year to which the examination relates. I propose to change this to the third Tuesday of July of the year to which the examination relates.

It had been my intention to bring this Bill back to the Seanad on 9 July following the completion of Report and Final Stages on 6 July, but I have been informed that this will not be possible for logistical printing reasons. Instead, it is now my intention to return to the Seanad on 13 July, with the intention of having the legislation finalised at that point. This presents some difficulties in terms of having the Bill on the Statute Book on or before 15 July. Accordingly, I have decided to move the reporting period back by four working days. The amendment also has the advantage of removing a specific date from the Bill and providing for a day that will fit the Government's schedule and with the general calendar of Government meetings. I wish to stress that this change to the reporting period is not associated in any way with the work of the commission, which I understand is making very good progress. The minor change is purely for logistical reasons.

Amendments Nos. 12 to 18, inclusive, provide for the addition of a range of factors to the already extensive list the commission is required to take into account when making a recommendation. I and my Government colleagues have given very serious consideration to the criteria set out in the Bill. Many of them have stood the test of time and are incorporated into national minimum wage legislation going back to 2000. They provide a balanced suite of issues and factors for the commissioner to consider. To add a further wide-ranging list of factors to be taken into account, as set out in these amendments, would make it virtually impossible for the commission to undertake the level of analysis required, and it would be very difficult to produce an agreed recommendation, or any recommendation at all, by a set date on an annual basis.

Some of the additional factors, such as issues surrounding decent work, are part of a wider decent work agenda that I am pursuing, with the introduction of sectoral employment orders and registered employment agreements and the work we are doing on zero- and low-hour contracts, or that already exists in the context of the Bills I mentioned, including the Industrial Relations (Amendment) Bill 2015. Previous references to changes in earnings have served us well and I do not consider it necessary to refer specifically to median earnings changes or proportions above or below particular proportions of median earnings. Specific expertise is available to the commission to properly interpret changes in earnings data.

Another amendment refers to Northern Ireland. Comparisons with it or other jurisdictions that have national minimum wages must involve the absolute values while also having regard to purchasing power parity. The commission has sufficient expertise available to it to make these distinctions. It would not be appropriate to specifically require the commission on an annual basis to analyse different welfare supports, health care provision, child care and social housing across different jurisdictions. I agree that fair wages should never be sacrificed for the creation of jobs that are exploitative or unsustainable. That is why section 4 of the Bill provides very clear objectives for the national minimum wage. In this regard, the commission will be obliged to ensure that any recommendations it makes on the minimum wage rate will ensure it is a rate that is fair and sustainable.

On bogus self-employment, as referred to in amendment No. 17, I share the concerns expressed by Deputy Boyd Barrett and others. This is an enforcement issue, rather than one that the Low Pay Commission should be required to take into account. Deputies will be aware that NERA inspectors carry out inspections of employers’ employment records and workplaces to determine compliance with employment law and employees' statutory entitlements. In 2014, NERA carried out more than 5,500 such inspections. The policy of NERA is to seek voluntary compliance where breaches of employment law are detected, and it works with employers and allows them every reasonable opportunity to rectify breaches. Allegations of non-compliance with employment rights legislation should be referred to NERA, which investigates matters that are brought to its attention. Deputy Boyd Barrett mentioned complaints he has received about alleged bogus self-employment, and I encourage him to report them to the relevant authorities. If he wishes, he can pass them on to me and I will address them on his behalf.

It is not within the remit of NERA to make determinations regarding the employment status of individuals vis-à-visemployment or self-employment; that is the responsibility of the scope section of the Department of Social Protection. The Revenue Commissioners also have a role to play. Where either of these bodies makes a determination on these issues, NERA, in accordance with the code of practice for determining the employment or self-employment status of individuals, will generally accept their decisions on the issue. Finally, the matter can also be determined by the courts. Whether any given situation is an abuse of the subcontracting or relevant contracts tax, RCT, systems is a matter for the Revenue Commissioners.

On the promotion of gender equality, it is important to note that the national minimum wage applies to all workers irrespective of gender. As such, it is the epitome of a measure that eliminates gender inequality in its application. However, as minimum wage workers tend to be predominantly female, by its very nature, a national minimum wage is more beneficial to female workers. Accordingly, I cannot accept amendments Nos. 7, 9 and 10 and 12 to 18, inclusive.

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