Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I am speaking on behalf of the Minister of State, Deputy Calleary, who was at a committee earlier and asked me to stand in for him.

In his contribution to the debate, the Minister of State, Deputy Richmond, detailed the Government's proposal for a timed amendment of 12 months for the Bill to allow for the conclusion of an in-depth examination of the national minimum wage's sub-minima rates by the Low Pay Commission. The sub-minima rates are provided for under the National Minimum Wage Act 2000 and the National Minimum Wage (Low Pay Commission) Act 2015. In providing for the setting of a national minimum wage, these Acts also allow that in specified circumstances a reduced sub-minimum rate might be applied. The examination was requested by the then Tánaiste and Minister for Enterprise, Trade and Employment in February 2022. Writing to the chairperson of the Low Pay Commission, he noted some debate relating to the youth rates of the national minimum wage, including the introduction of a Private Members' Bill under discussion today that seeks to remove such rates. He requested the commission examine the issues around retaining or removing the youth rates and for it to make recommendations on the matter.

As related earlier, the current sub-minimum rates came into effect in March 2019 following a previous examination of the rates undertaken by the Low Pay Commission in 2016 and 2017. The earlier examination of the rates by the Low Pay Commission found that of 26 OECD countries that have a statutory minimum wage, just over half have sub-minimum rates for younger people. On concluding its examination in 2017, the Low Pay Commission recommended the abolition of the then-existing system of training rates and the simplification of the youth rates structure. In advising against the outright abolition of youth rates, the commission echoed some of the conclusions that underpinned the original establishment of the sub-minimum rates in the early 2000s that the minimum wage rate would then no longer offer any recognition of the difference between a young inexperienced worker and a more experienced colleague, which could lead to employers seeing less value in hiring young people and a potential impact on youth employment rates. The commission also concluded abolishing youth rates could potentially act as an incentive for young people to leave education and take up employment, which could have a negative impact on their long-term prospects.

Since the request for a re-examination was made in early 2022, the Low Pay Commission has commissioned research from the ESRI on the matter. This informs a broader, well-functioning research partnership the commission maintains with the Economic and Social Research Institute, ESRI, to develop the evidence base on low pay matters in Ireland and inform its advice and recommendations to Government. This research is well advanced and will be completed in the near future by a stakeholder consultation the commission will be holding on the issue. Both the final ESRI analysis and consultation findings will be considered by the commission in the coming months with a view to preparing its own final report and recommendations for Government before the end of this year. If progressed further today, the Bill would pre-empt the work of the Low Pay Commission, which has undertaken critical work on low pay and national minimum wage rates since its establishment in 2015.

The commission's mandate is to advise Government on the setting of a legally-enforceable minimum wage that is fair and sustainable for low-paid workers and that will not have significant negative consequences for employers and competitiveness and indeed a possible long-term impact on young workers themselves. At present the commission is chiefly engaged in the important work of ensuring the Government decision to progress to a living wage by 2026 - by which we mean a wage set at 60% of the hourly median wage - is fulfilled. This forms part of the wider suite of workers' rights reforms introduced by the Government in recent years, including the introduction of statutory sick pay, the right to request remote working and the introduction of an additional public holiday. The Low Pay Commission is supported in its work through a representative membership, including members with an understanding of the interests of employees, particularly those in sectors with a high composition of minimum-wage and low-paid workers as well as those with an understanding of the interests of employers, especially SMEs and those operating in low-paid sectors. There are also members who have a particular knowledge and expertise of labour market economics and employment trends in the economy. This broadly-based and representative membership ensures a holistic and informed approach in the work of the commission and its advice to the Government.

The Government is supportive of the Low Pay Commission and the work it has carried out since its foundation. The Government respects its independence and expertise in advising on matters of low pay and the national minimum wage. This current examination of sub-minima rates reflects the strongly evidence-based approach to arriving at its recommendation and how it is obliged to consider the likely effect the proposed national minimum wage recommendation will have on levels of employment and unemployment, the cost of living and national competitiveness. A timed amendment is proposed to allow the Low Pay Commission complete its re-examination of the issues for the Minister for Enterprise, Trade and Employment to consider the commission's recommendations on this matter. It is not appropriate to make a fundamental change to the rates, as proposed in this Private Members' Bill, without receipt and consideration of the Low Pay Commission's findings and recommendations.

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