Martin Ferris (Kerry North, Sinn Fein)
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Question 197: To ask the Minister for Enterprise, Trade and Innovation the position regarding claims made by employers to the Labour Relations Commission seeking to avoid paying agreed wage increases and to opt out of wage orders; and if he will make a statement on the matter. [2916/11]

Dara Calleary (Mayo, Fianna Fail)
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I assume the Deputy's question relates to wage rates provided for in Employment Regulation Orders (EROs) made under the Joint Labour Committee (JLC) system. JLCs are statutory bodies established under the Industrial Relations Acts, 1946 to 2004 to provide machinery for the fixing of minimum rates of pay and the regulation of conditions of employment. JLCs are composed of representatives of employers and workers in a particular sector and they meet periodically to discuss and agree terms and conditions to apply to specified workers in that sector. The pay and conditions agreed by the JLCs are given the force of law in EROs made by the Labour Court on foot of proposals made to the Court by the JLCs.

There is currently no provision in the Industrial Relations Acts which allows an employer in a sector covered by an ERO to seek a derogation from the obligation to comply with the terms of an Order. Moreover, a proposal to amend or revoke an ERO may not be submitted by a JLC to the Labour Court unless the Order has been in force for at least six months.

However, I have already announced my intention to introduce an "inability to pay" provision for EROs. I intend to include such a provision in the Industrial Relations (Amendment) Bill 2009 by means of an amendment at Committee stage in the Dáil. Such a provision would go some way to balancing the current demands of both trade unions and employers by continuing to modernise and streamline the JLC system, while also alleviating the pressures that employers in these sectors currently experience as a consequence of the absence of a mechanisms for processing claims for "inability to pay".

While it is intended that the inability to pay mechanism will be modelled on the provisions at Section 41 of the National Minimum Wage Act, 2000, I believe that there is scope for improving both the flexibility and the safeguards that can be incorporated in such a provision. I am satisfied that an updated mechanism can be framed so as to take into account issues raised in the course of consultations with the social partners and during the debate in the Dáil on the Industrial Relations (Amendment) Bill, especially as regards the dangers of unfair cost competition and the desirability of maintaining a level playing field for enterprises where wage costs are a major component of overall costs.