Tuesday, 29 May 2018
National Minimum Wage (Removal of Sub-minimum Rates of Pay) Bill 2017: Second Stage
I move: "That the Bill be now read a Second Time."
I welcome the Minister to the Chamber. The purpose of this Bill is very simple. If enacted, it will end sub-minimum rates of pay for workers over the age of 16 unless the worker is engaged in an apprenticeship. We are delighted to be co-hosting this Bill with the Civil Engagement group. We believe the intention of this Bill is based on a reasonable and justified request on behalf of the 22,700 workers in Ireland who are currently being exploited by loopholes in the legislation.
Sinn Féin is delighted to have the support of the Mandate trade union, the Union of Students of Ireland, the National Youth Council of Ireland and Youth Work Ireland, all of which respect the principle of equal pay for equal work and have endorsed this Bill.
I note the significant amount of work and research done on this issue in recent years and I pay tribute to those concerned. Included is the substantial research carried out by the ESRI and the Low Pay Commission, in addition to submissions by the Irish Congress of Trade Unions, the National Women's Council of Ireland and the Vincentian Partnership for Social Justice.What was evident throughout this large body of research was that exploitation through sub-minimum rates of pay is actually quite widespread, affecting almost 23,000 workers. This widespread abuse was also evident through the social media feedback that we received after launching this Bill in April.
I want to read out a few testimonies to the Minister. One worker wrote: “I’ve been working for over a year and I am on €6.68 an hour. It was my intention to save money for college, but that is just not going to happen. This is slave labour in disguise.”
Another wrote: “There are people in my workplace being paid less than the national minimum wage working alongside those who are on the national minimum wage, but they are doing the same work. This is leading to a lot of tension and conflict between staff.”
A final testimony read: “I am 20 years of age, working for a major sports retailer in Dublin city centre and I am on €7.64 an hour. It is up to the staff to request at the end of each year to be put onto the wage we’re entitled to."
These stories offer us a glimpse into the reality of the workplace for young people, particularly in the context of precarious, temporary, if-and-when employment practices where young workers will be intimidated into not demanding what they are entitled to for fear of losing hours or their jobs. Mandate trade union also provided, in its submission, evidence of employers hiring workers in their 20s on 80% of the national minimum wage, and then letting them go after two years, only to hire another worker on the lower rate in their place. If passed, this Bill would outlaw these practices.
The Bill is very short, containing just two amendments to the principal National Minimum Wage Act. The first amendment is to section 14 of the principal Act. Currently, this section stipulates that a worker under the age of 18 is not entitled to the national minimum wage and can instead be paid as little as 70% of the minimum wage. Our Bill would amend that section to ensure that a worker would be entitled to the national minimum wage at the age of 16. The second amendment is to section 15 of the principal Act which currently stipulates that a worker is only entitled to the national minimum wage once that worker has been in the workforce for over two years. That worker can be paid as little as 80% of the minimum wage in their first year and 90% in their second. Our amendment would remove these two rates of pay and replace them with penalties for employers.
We believe that under current Irish equality legislation, these sub-minimum rates of pay constitute age discrimination with regard to pay. We currently have thousands of workers in their 20s being paid 20% below the minimum wage. These same workers do not get a 20% reduction in their cost of living, or their rent. Many of them may be living on their own or living in another city to their family, and are working part-time to pay off their third level fees. Many young people from working class backgrounds are expected to work and make contributions to their households. This is the reality for young people in Ireland in 2018.
I am sure many of those in the Chamber will remember the arguments in favour of Senators Warfield and Ruane's Bill seeking to give those aged 16 the right to vote. However, I will reiterate some of the points. One pays tax at 16. One can leave school. One is legally recognised as an adult at 18. One has a statutory right to vote, to drink, to get married, to own a gun and to leave home. Yet, there is no age at which one has a statutory right to the national minimum wage. For some people they will not have that right until their mid-20s. This is particularly worrying when one considers that the number of young people engaged in temporary, part-time, and if-and-when work is making up and an ever-growing share of the labour force. This trend and the absence of a statutory right to the national minimum wage is leaving young workers increasingly exposed to exploitation, and we cannot allow this to continue. The Government's very own special rapporteur on child protection, Mr. Geoffrey Shannon, said that these rates of pay constitute unjust discrimination and in his 2015 report he recommended that these rates be abolished completely. We agree with Mr Shannon that no worker should be expected to be exploited by the market in order for them to get their foot in the door.
As legislators, we set minimum standards for employment law. The idea that we would set sub-minimum standards for some groups is nothing short of facilitating the exploitation of others. I do not imagine anyone in this Chamber would believe it acceptable to allow for a sub-minimum rate of pay for those with a disability, a category of the workforce which is hugely under-represented in employment. However, the Minister may be surprised to learn that these archaic sub-minimum rates for disability do exist in America and South Korea. Fortunately, momentum is now building in America to remove those discriminatory rates of pay. I hope that South Korea will follow. In fact, since these sub-minimum rates were introduced into Irish law in 2000, they have subsequently been negotiated and totally removed from all sectoral collective agreements. They have been abolished in Germany, Spain, Canada and Belgium. These countries have each rejected the argument that we may hear tonight, which is that if we remove these rates of pay there would then be no recognition of a difference between a young, inexperienced worker and a more experience colleague. I believe this statement perhaps best represents the difference in ideological thinking on this subject between the left and the right. What should be happening is that the recognition of a difference should be represented in the experienced worker being on a wage higher than that of the minimum wage, rather than the inexperienced worker being on a wage below the national minimum wage. That is what the minimum wage is there for. It should be reserved for inexperienced workers entering the workforce, not for their experienced colleagues.
I also want to speak briefly to the recommendations of the Low Pay Commission, published last December, and I want to put on record that I recognise that the commission made an effort to resolve the existing exploitation. This is reflected in the recommendation that all workers who have attained the age of 20 should be given a statutory right to the national minimum wage. However, I cannot overlook the fact that the proposed new structure reflects a step backwards for all workers under the age of 20. In fact, the new system would mean that a worker aged 19, regardless of how many years of experience her or she has, whether three or four years in a restaurant or bar, would still only be entitled to 90% of the minimum wage, and the worker at 18 would only be entitled to 80%. We are talking about adults here, who are not being given any adequate protection under the National Minimum Wage Act. I call on the Minister to consider what we are proposing here this evening as a alternative solution to what the Low Pay Commission have offered.
All we are asking for here is equal pay for equal work. I was genuinely surprised to hear my colleague in the Chamber tell me that Fine Gael is going to oppose this Bill. I cannot believe that it does not agree with the principle of equal pay for equal work. I ask that the Minister seriously consider that and agree to move this Bill forward. We are open to amendments, if necessary, on Committee Stage. What message is sent to young people if Fine Gael is opposing the principle of equal pay for equal work? If one does the same job, regardless of how old or young one is, regardless of disability, regardless of whether one is in Dublin or Donegal, one should get the same pay. I hope we can find some cross-party support for that principle in the Chamber this evening.
I am proud and delighted to be seconding this important legislation today and to follow the lead of Senator Gavan, who has been such a strong supporter of labour rights in his time in the Seanad. I would like to express my strong support for the Bill and the equality principles that underlie it, and I hope to see it attract cross-party support here this evening.
This is a short but important Bill that would amend the National Minimum Wage Act of 2000 to end the practice of paying those under the age of 18 and those in their first and second years of employment below the national minimum wage. At its core, I believe this Bill is tackling an equality issue, in which age-based discrimination has been entrenched in our laws. The inequalities of our current situation send a clear message to our young people that their contribution to our economy is valued less than their colleagues, that an arbitrary ground like age can be invoked to devalue and diminish their work, and that no matter their individual circumstances or the quality of experience, it can all be waived in favour of slotting into arbitrary categories where how much you are paid is based solely on the passage of time. It invites employers to treat their younger employers differently from the outset, allows for a situation where young people starting their working lives are at a disadvantage, and is insulting, belittling and unfair.At a time we are actively pursuing State policies to eradicate pay inequalities in so many areas, whether it be along gender lines or pension inequality, or removing differential pay for our teachers, the Bill fits neatly into the growing national and international movement recognising the importance of equal pay for equal work. That says to our young people that we value them and the efforts and contributions they make.
The inequality of the current system and the disrespect and dismissal it shows to our young people, their work and experiences, is an unfortunate trend across many State policies. It has been said to me previously that Ireland is no country for young people, and we can sometimes be guilty of alternately glorifying or infantilising young people and their contributions without truly engaging with them, their issues and desires. Young people need to feel valued, understood and supported by the State, and the passage of the Bill would demonstrate this in a tangible and material way.
These sub-minimum rates were introduced with the national minimum wage. As Senator Gavan mentioned, two justifications were given for them at the time. It was argued that the State had a responsibility to disincentivise early school leaving and that the State could make young people more financially competitive in the job market to balance their inexperience. I do not believe either of these two factors are adequate justification for continuing the pay differentials the would be reformed by the Bill. The factors that can lead to a young person leaving school early are many and complex and it is naive to think it can be prevented simply by introducing legal pay inequality and financially penalising individuals to prevent it. A wide range of socioeconomic, psychological and family pressures can and do result in early school leaving, many of which are outside the control of the young person who leaves school, and it is unfair to punish the individuals for them. Having worked with many school leavers I guarantee the sub-minimum rates are incentivise more young people to work more, as the lower rates mean they must work more hours. It is a heavy, blunt and ineffective tool to try to prevent a complex and multifaceted social phenomenon and needs to end.
It is just not good enough for the State to accept that if young people are not experienced enough to compete in the jobs market the appropriate response is to make it legal to pay them less to make them more attractive to employers. The State must take greater responsibility for the education and training of our young people and ensure they have the targeted tools they need to compete. Our response should and must be proactive, empowering and positive rather than simply facilitating a race to the bottom in labour standards.
The Bill has the potential not only to allow for younger workers to be brought up to equal pay on a par with their colleagues, but it can also be a positive facilitator of strong work ethics and the fostering of greater responsibility among our younger cohorts of workers. Pay equality, especially for those under 16, will instil a sense of responsibility, the importance of hard work and allow for positive behaviours and habits to be reinforced before reaching adulthood. It would positively inspire progressing with education as they will have awareness of work and the pay standards to expect.
At a time we are giving greater consideration in the House to the experiences of young people such as the recent proposal to lower the voting age and the debate on the digital age of consent, we need to have greater understanding of the nuances needed to legislate for how the State protects children and young people. We also cannot be accused of being hypocrites. The Government has committed to a referendum on lowering the voting age to 16. Most Senators agreed 16 or younger to be an appropriate age to consent to the use of their data. We need to ensure those of the same age do not experience inequality in the workplace.
Some Senators may feel that sub-minimum rates can be justified, especially the rates for those under 18. Perhaps they know young people who work in shops in rural or urban Ireland who are happy and content to be paid less, which suits the owners, but just because an arrangement works does not mean we cannot do better. Today we can send a message to young people who, in my experience, are depressingly quick to state they do not feel represented in the Oireachtas that they are worth more than 70% of someone two years their elder, and that equal pay for equal work is a fundamental principle that we are willing to apply irrespective of age, gender, race or status. If none of this convinces, consider this. We could in the near future be living in an Ireland where 16 year olds are eligible to vote. What will they make of politicians willing to take their first preference but not to legislate for their protection in the workplace? I hope all Senators support the Bill on its passage to Committee Stage.
I welcome the Minister to the House. I thank Senators Gavan and Ruane for putting forward the Bill because it creates a debate on this issue. I am a former employer of many young people over many years, who were glad to get work near their homes and in their localities and who did not have to emigrate during the summer holidays or at Christmas. The current position is that the lower rate is paid to those under 18 years of age in a first-time job and those over 18 who are on a prescribed course or duty of training. The maximum period of training ranges from three months to three years and the training most be certified and paid for. The Government intends to bring forward, in line with the Low Pay Commission's recommendation, rates whereby employees under 18 years would receive a minimum of 70% of the national minimum wage, employees aged 18 would receive a minimum of 80% of the national minimum wage, employees aged 19 would receive a minimum of 90% of the national minimum wage and employees aged 20 and over would receive the full national minimum wage. This is a reasonable position from the Government's point of view and the country's point of view.
An employer will ask whether he or she is better off with an experienced person or taking on young people. There is no incentive for an employer to take on a young person, whether it be for the summer holidays, Christmas, Easter or weekends, under the system proposed by Senator Gavan. The Government's proposals are fair and they would be acceptable to employers and employees. We must look at the employer's point of view as well because many people aged under 18 have no experience of work. Surely they cannot demand the same wage as an experienced person. Great credit is due to the many employers who take on these young people and provide employment for them when they are in secondary school or while they are looking for full-time employment. The Government's position is fair and employers will buy into it. They will give employment to young people in their communities, and help them to stay at home rather than emigrating during the summer vacation and at Christmas. There has to be a differentiation between a person starting out for the first time at work and a person who is a full-time employee. There has to be a differential in the rate and there has to be an incentive for the employer to take on these people. I fully support the position the Government has taken on this.
Fianna Fáil will support the passage of the Bill to Committee Stage. Its aim is to amend the National Minimum Wage Act 2000 and end sub-minimum rates of pay for those who have attained the age of 16 or those entering their first two years of employment. Fianna Fáil has always protected citizens in the State who are on low pay.We introduced a National Minimum Wage Act in 2000 that gave employees a legal entitlement to a minimum wage. During our time in office we progressively increased the national minimum wage rate six times. The national minimum wage increase under Fianna Fáil was 37% from 2000 to 2011, far outstripping inflation.
Fianna Fáil supports abolishing zero hours and has supported this Bill since it was introduced by Senator Gavan. It supports enhancing job security for the lower paid. The party is working to ensure that the Employment (Miscellaneous Provisions) Bill, currently going through the Dáil, will give workers added job security and bring weekly predictability to their working hours.
As a party, we believe that all workers should be paid a fair and decent wage and are committed to improving the working conditions for all. The idea that we can pay the youth of Ireland and those who are starting out on their journey through employment a lower wage and compare them with someone who is experienced and on the minimum wage is not believable. If someone has experience and has worked in a position for a while, they will not be on the minimum wage. If that was the case, they would not stay with an employer long, or that is my experience of employing many people over the years, which thankfully I continue to do. The least to which people are entitled when they work is the minimum wage when they are putting in the effort and are of use to the business. It is not even what is referred to as a living wage. It is the least we can do, even in the current economic climate.
I welcome the Minister to the Chamber and commend Senators Gavan, Ruane and Warfield on tabling this Bill. I am delighted to speak strongly in its support.
We are dealing with a very basic principle here, which is that of equal pay for equal work. It is the same principle underlying recent pushes to close the gender pay gap, and ensure that women are paid as much as their male colleagues. It is a crucial part of much of our anti-discrimination legislation, which states that no one should be paid less on the basis of their religion, sexuality, race, disability status, and so on. However, we also include age as a factor here, because we know that young people deserve that same protection against discrimination.
In its 2018 budget submission, the National Youth Council of Ireland spoke up for the rights of young people and stated very clearly that sub-minimum rates of pay fly in the face of this commitment and are fundamentally discriminatory in nature. The Government’s own special rapporteur on child protection, Dr. Geoffrey Shannon, who has done fantastic work on the alcohol issue and so many other areas, made the same point in his report in 2015. He said the rates we are debating today constitute unjust discrimination and he is absolutely right.
One of the most important achievements of the labour movement over the past century, in this country and elsewhere, has been in forcefully making the case that there are basic standards in any society that must always be respected, including a decent income and working conditions. In a fair system, there should be a moral floor below which no one will fall. A proper, widely applicable minimum wage is a vital part of that. It sets that lower limit and offers key protections for workers. It ensures they will not be pitted against one another and exploited, driving wages down and people into poverty.
Unfortunately, young workers are increasingly obliged to fight against this sort of exploitation. We are witnessing a wider cultural shift in which unpaid or underpaid work is becoming a rite of passage for young people, seen as a standard step towards full-time employment. This is a discriminatory, exclusionary practice that wrecks social mobility. If one comes from a well-off family and can afford to work for free for a year or two then avenues are open to one but if one does not have those same resources, if one needs to be paid for one's time and efforts, then these opportunities are off-limits. We need to question the assumptions behind such thinking.
When key welfare rates are cut for those under 25 years, or justifications are presented for paying them less than the minimum wage, it seems we are assuming that they have the resources and family supports needed to take up the slack. Many people do not. This point has been strongly made by the National Youth Council of Ireland, which has emphasised the need to maintain supports for young people in lower-income households in particular, especially those most at risk of poverty and social exclusion.
During debates on this issue often hear about early school leavers but that misses the point. Empowerment for those young people is not delivered by pitting them against one another and scaring them off with substandard wages, it is delivered by investing properly in social supports and getting serious about economic inequality. It is delivered by addressing the deeper educational disadvantages at the root of early school leaving, not by cutting wages by 30%.
Mandate and other trade unions have highlighted the type of discrimination that results, particularly as companies struggled to deal with a crippling recession in recent years. In too many cases, young people were seen as the easy answer to a problem they did not create. Employers would hire young workers on JobBridge schemes or below minimum wages, let them do the work for a year, and then simply replace them with another young person waiting in the wings. This is exactly the kind of race to the bottom the minimum wage was introduced to protect against and this Bill is an important step in that direction. I offer it my full support today.
I am pleased to support this Bill. It is simple and straightforward legislation, which I believe can help to make our workplaces more equal. The statutory minimum floor is the floor beneath which no worker should be allowed to fall. The principle of a legal minimum rate of pay is a critical one and something that must be protected.
The establishment of the Low Pay Commission in 2015 was a very important expression of the value that the then Government placed on maintaining a baseline of decency for Irish workers. I was interested to hear Senator Davitt’s remarks regarding Fianna Fáil’s record on the national minimum wage. He refrained from reminding the House that when the crash came, among the first victims were the considerable number of workers in this society who were on the national minimum wage rate.
Unfortunately Fianna Fáil felt it necessary, on the instructions of those they invited into the country, to slash the rate of the national minimum wage by €1 per hour. Unfortunately, that calls into question Fianna Fáil’s supposed credentials as a social democratic party.
Notwithstanding that, I recognise the contribution that Fianna Fáil did make regarding the introduction of the national minimum wage in the first place, which was introduced by the then Minister for Enterprise, Trade and Employment, Mary Harney, to her credit.
The Low Pay Commission is very important institutional protection for people on low pay and is a bulwark against the scourge of low pay and the damage that it can do to citizens, families and society. One reason why the Low Pay Commission was introduced was to ensure that we, as a society, can guard against any political opportunism that may arise in the future or, when the next crash comes, that whatever parties happen to be in government at the time cannot simply decide at the stroke of a pen to reduce the rate of the national minimum wage and that one must go through the Low Pay Commission first and examine the evidence base that it creates in defending and protecting the principle and the philosophy of the national minimum wage.
I worked to establish the Low Pay Commission, which was established in 2015, and it is something that of which I and the Labour Party are proud and of which the previous Government can be proud. One task I asked it to undertake then was a review of the appropriateness of the continuation of subminimal rates as they apply in law to young and inexperienced workers and to those who are undergoing courses of training. I have long been of the view that there is no legitimate reason, economic or social, that a young person who is in work should be paid any less than an older work colleague. Furthermore, I never believed it should ever be State policy, enshrined in law as it is now, that young people on the national minimum wage should be disadvantaged in the way that the National Minimum Wage Act, as currently constructed, allows them to be. We know that good policymaking requires evidence, and the evidence produced by the Low Pay Commission, through its research engagement with the ESRI, is very interesting. I hope contributors to the debate have taken the time not just to read that information, but also to digest it and apply it to what we are trying to achieve this evening. There is no evidence that paying the adult rate to young workers would incentivise them to drop out of school or education. We know, as alluded to by Senator Ruane earlier, that the key drivers of retention of students in school, on post-leaving certificate, PLC, courses or in third level education are usually related to socio-economic factors, academic ability and interest and confidence in the student's own ability. The evidence suggests that the impact of national minimum wage policies one way or another on retention rates in education is small and weak.
We have more evidence and hard data on the national minimum wage now than we have ever had in the past, thanks to the work of the Low Pay Commission and its engagement with the ESRI on its behalf, and the work the CSO does through the data it collects in the quarterly national household survey, QNHS. What these figures tell us is interesting. They suggest that the use of the sub-minima rates is exceptionally low, with about 5,800 employees telling the QNHS in 2016 that they were on an age-related sub-minima rates, with about 5,500 young workers stating they were on a training rate. We also know anecdotally - and trade unions and others have evidence to suggest this - that the training rate has been abused wholescale over the years. The Low Pay Commission recognised this in part 2 of the report it published last year, which recommends the total abolition of the training rates because they are being abused to lower wage costs - and not in the context of any recognised, structured or meaningful training opportunity or series of programmes that would be provided to young people. Will the Minister let the House know whether she intends to table an amendment to legislation to abolish the training rates as provided for in the National Minimum Wage Act 2000?
There is also fundamentally an inarguable, unanswerable case for getting rid of, and not tweaking or simplifying, the sub-minima rates, as the Low Pay Commission suggested in part 2 of its report. In the interests of the principles of equity, fairness and equality, and that critical principle for the labour movement of equal pay for equal work, we should dispense with the discrimination in the application of sub-minima rates to young people and consign those rates to history once and for all. I would be interested to hear the Minister’s view on this proposition.
I am happy to have this opportunity to address the Seanad on the issue of sub-minima rates of pay under the National Minimum Wage Act. The existing rates provide for reduced rates to be paid in certain circumstances to particular groups, for example, younger workers and trainee workers. It might be useful to outline the role of the Low Pay Commission in this area. I emphasise that it is an independent body that was established by statute by the former Labour Party and Fine Gael Government and comprises eight members and an independent chairperson. Under the provisions of the National Minimum Wage (Low Pay Commission) Act 2015, when it was established, we asked the commission to make recommendations to the Minister that are designed to set a minimum wage that is fair, sustainable and, when appropriate, adjusted incrementally in order that, over time, it is progressively increased to assist as many low-paid workers as is reasonably practicable without creating significant adverse consequences or challenges for employment or competitiveness. The commission has done an outstanding job in recent years.
In November 2015, the then Minister, Senator Gerald Nash, requested that the commission be asked to examine the appropriateness of sub-minima rates as provided for in the National Minimum Wage Act with particular regard to their impact on youth unemployment rates and participation in education. I ask the House to note that the commission has members who have an understanding of employers' interests, employees' interests and a particular expertise in labour market economics, as well as the independent chairperson. It would be useful for the House to note that the commission is charged with taking evidence-based approaches, paying full regard to a range of economic factors while also taking into account the views of stakeholders and the general public as a whole. The commission's strength is its independence and the evidence-based approach it is required to take when coming to conclusions and recommendations to give me or any other sitting Minister. This approach ensures that the issues are thoroughly examined in a fair hearing and that the commission is given to all points of view. The commission tells me, as I am sure it has told previous Ministers, that there are different views around its table on every discussion and topic before it. It is clear that the commission has extensive expertise and could be considered expert when it comes to the principal Act that this Bill seeks to amend.
Since its establishment, the commission has examined and compiled reports on the preponderance of women on the national minimum wage and the allowances provided for board and lodgings under the national minimum wage as well as two reports on the subject of sub-minima rates, the second of which was submitted to me in December 2017. In its first report, to which Senator Gerald Nash referred, the Low Pay Commission was of the view that there was insufficient up-to-date data available on which it could make an evidence-based recommendation to the Minister. The commission at the time chose to delay making its recommendations until the result of a pilot question on the national minimum wage included in the CSO quarterly national household survey was available to the commission. I genuinely urge Members to note that this deliberative approach - to obtain the relevant information and data - is probably the most appropriate approach to policymaking in this important area.
The second report the Low Pay Commission gave us on sub-minima rates sets out a clear evidence base and rationale for its recommendations. The commission also commissioned research by the ESRI, which examined international practice in respect of the national minimum wage and sub-minima rates. The ESRI research found that of the 26 OECD countries, out of a total of 34 countries, that have a statutory national minimum wage, just over half included sub-minima rates for younger people. The numbers in employment on age-based rates are extremely low. An average of just 1.5% of all employees reported earning less than the "adult rate" of the national minimum wage, and approximately one quarter to one third of those reported being on age-based rates as per the CSO data. The commission considered that there is little evidence of any significant abuse of the sub-minima rates per se. The commission has found that following the economic crisis, European policymakers have put particular focus on NEETs, young people who are not in employment, education or training, and the need to integrate or reintegrate them into the labour market. According to a recent study undertaken by Eurofound, NEETs face a greater risk of poor future employment outcomes and social exclusion. The same study found that Ireland's high proportion of NEETs is out of line with the majority of central and northern European countries. Given this fact, the commission was cognisant of the need to ensure changes to the sub-minima rates of the national minimum wage do not negatively impact on the prospects of these young people gaining access to the labour market. This is probably the most important conclusion in the commission's second report to us, and I ask Members to note it seriously.
The report considers the abolition of youth rates but concluded that the rates 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 no longer seeing the value in hiring young people. This could potentially have an impact on our youth employment rates, which are still stubbornly too high for anyone's liking. The commission also concluded that abolishing youth rates could potentially act as an incentive for young people to leave education and take up employment, which would have a negative impact on their future prospects of getting a better job and then, it would be hoped, a career. I acknowledge some Members disagree with this, but it is the view of the commission, which has the experts and the recommended people, both employers and employees. More recently, the OECD, in its recent jobs strategy, published in January this year, specifically recognises the use of sub-minima wages for youth. The strategy states. "Governments should also ensure that the cost of hiring youth reflects their productivity through the use of wage-subsidies, the design of non-wage labour costs or a sub-minimum wage."
Again, I emphasise that the commission's conclusions and recommendations are evidence-based. Having examined all available evidence and submissions from a range of individuals and groups, and considered a range of options, the commission made two recommendations.The commission set out a clear evidence base and rationale for its recommendation to abolish the training rates. It noted that the rates were not widely used in the first instance but, second, having regard to the lack of clear definitions around training, the lack of a formal system of notification of the use of training rates leaves the rates open to possible abuse. In reality, they were more open to possible abuse. The commission outlined that it had heard evidence in submissions of the training rates being paid in order to reduce wage costs rather than being part of a structured training programme. The commission outlined its belief that the employee should not receive less than the statutory minimum wage unless the employee was part of a proper apprenticeship programme approved by the State. All available evidence shows that training rates are not widely used - less than 0.5% of employees indicated that they were on a training rate.
The commission also wanted us to simplify the youth rates. With regard to the age based and first employment rates, it recommended that the rates should be retained but that we should simplify them to improve both compliance and ease of operation. It recommended retaining the age based rates for younger workers and it acknowledged both the statutory restrictions that apply in respect of the working hours and conditions of employees under 18 years of age and the need to ensure younger workers can gain work experience. I agree with the commission’s conclusion that the simplification of the rates to a purely age-based system will assist employers in that it will be administratively simpler to operate. It will also benefit slightly older employees, for example, those moving on to a first job while in or leaving university at perhaps 20 to 23 years of age insofar as they will no longer be subject to the sub-minimum rates.
I ask the House to note that the commission’s recommendations were not intended to disenfranchise young workers in any way or to leave them in an unequal position to their colleagues. They were designed to ensure that young workers continue to have a way to gain access to, and experience in, the labour market, while also ensuring that they are not incentivised to leave school any earlier than they should to pursue full-time employment. I hope all of us would agree with those objectives.
Due to the complexities of the issues it examines, the members of the commission have not always been able to agree. In fact, they have never all agreed on any position since the commission was established in 2015. Some Members of this House have been involved in the labour movement for many years, seeking employees’ rights and the recognition that there should be decent pay for a decent day’s work. I wish to emphasise that there was no disagreement in the commission’s recommendations to me in December with regard to sub-minimum rates. All nine members of the Low Pay Commission, all from different sides of the spectrum, agreed on the recommendations that the trainee rates should be abolished and that the permitted sub-minimum rates of the national minimum wage should be simplified.
I decided to accept the recommendations of the Low Pay Commission and the Government gave its approval to my proposals regarding their implementation, which were that they would be put forward as amendments to the Employment (Miscellaneous Provisions) Bill 2017. That Bill was debated on Committee Stage two weeks ago and every party and Independent Member in that committee agreed with the recommendations of the Low Pay Commission. The amendments were passed on Committee Stage as part of the employment Bill by all the parties.
I ask Members to reflect on the report provided by the Low Pay Commission. The commission was established in good faith and with huge principles by the Labour Party in 2015 and it has served us incredibly well in the years since then. Given the unanimous decision by the commission I would be loath to question its evidence based recommendations to me. The commission was quite correct that such issues should be informed by an independent expert committee. I am sure Members will join me in supporting the recommendations of the commission. Those recommendations are evidence based and well researched through the ESRI and the OECD.
This Bill is at cross-purposes with the amendments to the Employment (Miscellaneous Provisions) Bill 2017 that were passed last week. I thank the Low Pay Commission for its excellent work on this report and for all its work over the years. In this case it made a unanimous decision, the recommendations were accepted by the Government and they were implemented in the amendments to the employment Bill. For those reasons I oppose the Bill and I ask Members to reflect and consider supporting me in that regard.
I thank the Chair for facilitating my contribution to this debate. I was with the Seanad reform implementation group earlier so I am grateful for the chance to speak. I will be brief.
I welcome the Minister and commend her on and thank her for her work in the campaign to repeal the eighth amendment.
I am proud to support the Bill proposed by my colleague, Senator Gavan. He enhances the discourse in the House by championing workers’ rights, and I commend him on doing so. The Bill upholds the ideal of a fair day’s pay for a fair day’s work. Many of the views during this debate will have cast aspersions that employers rely on this rate to bring in employees and that we are somehow seeking to undermine SMEs by bringing this Bill forward. I did not hear the debate but if that was the case my response is that if we want to create a society in which our young workers are paid far below a living wage, we are truly in a race to the bottom. We will also leave a swathe of our young workers open to poverty and accept that as an inevitability.
This House should never shirk from its responsibility to eliminate poverty and injustice. Sub-minimum rates of pay and similar measures make poverty a certainty. They do not work to the mutual benefit of employer and employee, only to the benefit of the employer. I have spoken many times previously about how the economic downturn and subsequent austerity decimated workers’ rights, particularly those of young workers. There was a consistent depreciation of young people’s value in the labour market by means of pay cuts, job losses and precarious and casual work, often with institutional support. Alongside that there were drastic cuts to social welfare rates for those under 26 years of age. The stark realities facing young people were either to stay and get caught in a poverty trap or to emigrate. These stark realities still remain. The home to vote movement made our diaspora a live issue for many of us.
The average first wage for a graduate worker has remained stagnant for decades while the cost of living has grown exponentially. We are failing to provide good opportunities for our young people, only opportunities that cost and impoverish them a great deal. Much of this debate will be mired in thinly veiled ageism and the notion that young people are immature and somehow deserve less. The social welfare policy for those under 26 years of age represents that school of thought. That notion has been present in public policy for many years. I hope speakers will address that during this debate.
We should be mindful of that and we should aim to create a society where emigration is a choice, not a necessity, and in which we do not subjugate young people as lesser in their contribution. We should create a fair and just society for them to inherit. The living wage for 2017 was €11.70 per hour. The living wage, while still aspirational, is the lowest bar we should seek to attain. It is based on the lowest wage one can earn to provide a minimum acceptable standard of living. The sub-minimum wage for a person under 18 years of age is €6.41, which is 55% of the income required for a minimum standard of living. We presume all of these workers are dependent on parents, but that is not the case. In fact, it further marginalises the most vulnerable such as those without dependants and those brought up through care systems.
The sub-minimum rates of pay were introduced in 2000 for two distinct reasons. First, the State assumed it would disincentivise early school leavers, but there is no tangible evidence that this has happened. In fact, it would be a far-fetched presumption to suggest that it has. Early school leaving has evidently increased since their introduction. Second, the State felt it should make young people financially competitive in the jobs market and balance out their inexperience. I find this reasoning particularly tragic. While it pre-dated the ill-fated JobBridge by over ten years, its flawed logic resonates with me. We exploit young people, deny them any financial fairness, do not pay them fair dues and then expect some miraculous affirmation of workers’ rights for fair wages to follow.
The point about how this State has failed our young people has been well made. We can continue the exploitation of young people and endorse it by upholding sub-minimum rates of pay, or we can support this Bill today. I encourage the Government to support it.
I thank the Minister for her detailed response. I can summarise the position by saying that we have a genuine difference of ideology, which will not come as a terrible shock. Sinn Féin is a party of the left, while it is fair to describe Fine Gael as a party of the centre-right. I am being generous by using the word "centre".
I would like to go through some key points in response to Senator Paddy Burke and the Minister, beginning with the point the Minister made about the Employment (Miscellaneous Provisions) Bill 2017 which is currently making its way through the Houses. It received all-party support and rightly so. We supported it because we acknowledged the fact that the recommendations of the Low Pay Commission represent some progress. It gets rid of the discriminatory rate for people in their 20s, for example. We support that Bill because it is practical. It has been consistent Sinn Féin policy for some time to eliminate sub-minimum rates of pay. It was endorsed at our Ard-Fheis and that is why this Bill has been brought forward.
I want to place on record my thanks for the broad support for this principle from across this Chamber. I welcome the support of Fianna Fáil and the points it has made. I recognise the fact that the national minimum wage was brought in initially by Fianna Fáil. I particularly welcome the support of Senator Ged Nash, who has expertise in this area, and like myself has a very close relationship with the trade union movement. I hope I am correct in saying that on the day the Minister was appointed, she made reference to the fact that her own father was a trade union activist. She will know that equal pay for equal work is a key and core principle of the trade union movement. That is what we are asking for here and I am genuinely surprised that a Minister cannot accept that principle, particularly when, as Senator Nash has said, the ESRI has pointed out that young people will not drop out of education.
Implicit in the Minister's speech and in the remarks by Senator Paddy Burke is the view that it is fine if an experienced worker gets the national minimum wage. It sums up the ideological differences neatly. We on the left do not believe that is okay. If a person is working a bar or restaurant and has done that job for a number of years, it is not fine that he or she is on the national minimum wage. Such people's experience should be recognised. It is not recognised by bringing down the rates paid to younger people, but rather by enhancing the rates for experienced workers. When one reflects that the living wage is some €2 ahead of the national minimum wage the difficulty becomes clear. The message Fine Gael is sending this evening is that it is absolutely fine for an experienced worker to be on the national minimum wage, even though it is recognised that the national minimum wage is some €2 below a living wage. We are collectively saying that it is not fine and that it is not okay to discriminate against younger workers.
I am genuinely surprised that this Government is opposing equal pay for equal work. I expected that we would get broad support across this Chamber, and that has been the case. The only party not in line with this is Fine Gael, and I am genuinely surprised by that.
I did not interrupt the Minister. This provision reflects unfortunately on the ideology of her party, because it implies that the national minimum wage is fine for an experienced worker. I do not believe it is fine. As someone who worked as a trade unionist for ten years I do not believe it is fine to find minimum wage workers working in our meat factories, for example. That system is propped up by the sub-minimum rates of pay. There is a collective recognition that something should be done about that this evening, and I urge Members present to support the Bill.
Catherine Ardagh, Frances Black, Lorraine Clifford Lee, Gerard Craughwell, Mark Daly, Paul Daly, Aidan Davitt, Maire Devine, Robbie Gallagher, Paul Gavan, Alice Mary Higgins, Colette Kelleher, Terry Leyden, Pádraig MacLochlainn, Michael McDowell, Gerald Nash, Grace O'Sullivan, Ned O'Sullivan, Niall Ó Donnghaile, Lynn Ruane, Fintan Warfield, Diarmuid Wilson.
Paddy Burke, Ray Butler, Jerry Buttimer, Maria Byrne, Paudie Coffey, Frank Feighan, Maura Hopkins, Billy Lawless, Anthony Lawlor, Tim Lombard, Gabrielle McFadden, Michelle Mulherin, Marie Louise O'Donnell, Joe O'Reilly, Pádraig Ó Céidigh, James Reilly, Neale Richmond.