Gerald Nash (Louth, Labour) | Oireachtas source

In relation to amendment No. 18, section 6 inserts a new section 10D in the 2000 Act to the effect that:

10D.(1)Within 3 months of the date of receipt of a recommendation and report submitted to him or her under section 10C(2) and having considered the report and recommendation and having had regard to section 10C(3), the Minister may—(a) by order declare a national minimum hourly rate of pay—

(i) in the terms recommended by the Commission, or

(ii) in other terms,

or

(b) decline to make such an order.

Accordingly, the Minister will have the choice of either accepting, varying or rejecting the commission's recommendation. In these circumstances it is considered more appropriate to use the term "shall" rather than "may" to make it clear that the Minister must take one of the actions specified.

Amendment No. 19 provides that in addition to an allowance for board and lodgings, the national minimum wage shall provide for a prohibition or restriction on charges or reductions on fair hours of employment rules. I have considered the proposed amendment and concluded that it is not necessary. The Payment of Wages Act already provides a redress mechanism for unlawful deductions from wages, while the Organisation of Working Time Act regulates working hours.

Section 5(1) of the Payment of Wages Act allows an employer to make deductions required or authorised by law, for example, PAYE or PRSI, that is required or authorised by a term of the employee's contract, such as occupational pension schemes, for example, or indeed any deduction agreed to in writing and advanced by the employee such as trade union subscriptions or health insurance premia.

Section 5(2) of the Act places significant restrictions on employers in relation to deductions on the receipt of payments from wages of employees. Senators will also be aware that I have commissioned a study into zero and low-hour contracts, which is being undertaken by the University of Limerick. The study is expected to be completed in the autumn of this year. I look forward to considering its findings, and where the evidence points to some adjustments being required to the protections in place under employment law, these will be brought forward for consideration by the Government.

Amendment No. 20 seeks to ensure businesses will be allowed sufficient time to plan for any adjustment proposed in the national minimum wage. During Second Stage, Senator White stated she is supportive of the minimum wage but that it must be done in a planned way in order that companies can plan their business. I fully agree with that.

Senators may be aware that the ESRI, in its 2006 analysis of the previous Labour Court recommendation proposing an increase to the national minimum wage, concluded that adjusting the minimum wage by a substantial amount on an irregular basis with lengthy gaps between increases, as has happened in the past, is more likely to have a detrimental impact on employment and to contribute to uncertainty for employers and actual and potential employees than regular, smaller and fairly predictable upratings. A significant benefit of the establishment of the Low Pay Commission concept is that in the future the national minimum wage rates will be assessed annually and, therefore, where they occur, any adjustments in the future will be incremental and less destructive for businesses rather than the step changes we witnessed in the past that have been criticised by the ESRI in the review.

Moreover, the deadline of 15 July for submission of the commission's recommendations was designed specifically to allow time for consideration of the issue in the context of that year's budgetary considerations and to provide for any adjustment in a planned way. Consequently, this very structure achieves what the Senator is trying to achieve by the amendment.

The commission will also ensure any advice or recommendations it makes to Government is evidence-based and utilises agreed data, that it carries out research and consultations with employers, workers and their representatives, and it will, as has been the case in recent weeks, take written and oral evidence from a wide range of organisations. That is to ensure any suggested changes to the national minimum wage will have a minimum adverse effect on employment and competitiveness. The commission will consult people - workers and employers who are directly affected by the minimum wage, and the commission has been doing that for the past couple of months. The real lived experience, both of workers who are on the minimum wage and businesses which are operating in sectors associated with the minimum wage and low pay, will be vital for the commissioners when they are deciding on their recommendation to me on the rate of the national minimum wage. While I recognise the intent of the proposed amendment, I cannot accept it as I do not consider it necessary because of the structures that are being put in place.