Mary Lou McDonald (Dublin Central, Sinn Fein)
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112. To ask the Minister for Jobs, Enterprise and Innovation if he will detail the impact of the recent Industrial Relations Act on the wages of low paid workers; and the way his Department monitors the wages of highest paid workers to ensure cost competitiveness. [18617/13]

Richard Bruton (Dublin North Central, Fine Gael)
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The Industrial Relations (Amendment) Act 2012 came into effect on 1 August 2012. The main purpose of the Act is to implement the commitment in the Programme for Government to reform the Joint Labour Committee system. The Act provides for a radical overhaul of the system so as to make it fairer and more responsive to changing economic circumstances and labour market conditions. It reinstates a robust system of protection for low paid and vulnerable workers in these sectors in the aftermath of the July 2011 High Court ruling in the John Grace Fried Chicken case.

Workers that were in employment in a JLC sector prior to the July 2011 judgment, continue, unless otherwise agreed with their employer, to be covered by their individual contracts of employment and enjoy the terms set out in the ERO that was in place up to 7 July 2011. Workers who commenced employment in those sectors after 7 July 2011 are covered by the full suite of employment rights legislation, including the National Minimum Wage Act, the Organisation of Working Time Act and the Payment of Wages Act. The 2012 Act also provides that a Review of each Joint Labour Committee be carried out by the Labour Court. The aim of the review is to ensure that the range of sectors and enterprises to which they apply remains appropriate, with consequent changes to their Establishment Orders if necessary. That Review was completed on 12 April 2013.

The review assisted the Labour Court’s deliberations as to whether any JLC should be abolished, maintained in its current form, amalgamated with another JLC or its establishment order amended and the Labour Court is required to make recommendations to me to this effect. The Labour Court submitted its report of the review and recommendations in relation to the 10 existing JLCs to me only yesterday, 22 April. The report is detailed, comprehensive and complex and will require careful examination and consideration. I would hope to be in a position to indicate my response shortly.

It will ultimately be a matter for each Joint Labour Committee to negotiate the terms and conditions of employment for workers in their respective sectors and to be set out in proposals for Employment Regulation Orders which will require a Ministerial Order to be given legal effect. Under the terms of the EU/IMF Programme of Financial Support for Ireland, the Government will report to the Troika by end June 2013 on the impact on the labour market of reforms to sectoral wage setting mechanisms undertaken under the programme of financial assistance. Forfás is currently carrying out this review.

The National Competitiveness Council reports on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland’s competitive position. The most recent report, while acknowledging an improvement in Ireland’s competitiveness, identified a number of issues which need to be addressed in order to achieve sustainable, long-lasting competitiveness gains. Ireland must maintain focus on implementing a range of structural reforms across all sectors of the economy including issues relating to the labour market, competition policy, taxation, education and skills.

A recently published (April 2013) Forfás report “Costs of Doing Business in Ireland 2012” indicates that labour costs in Ireland have fallen marginally since 2008 and when compared with the Euro area, where labour costs have been rising in recent years, our competiveness position in this area has shown a significant improvement. However the report also indicates that labour costs in Ireland have started to increase, albeit at a lower rate than elsewhere in the Euro area. The report makes a number of recommendations which can improve the operation of Ireland’s labour market, encourage employment creation and maximise labour supply. I and my colleagues in Government, will consider the recommendations set out in this report and develop appropriate policy responses to ensure that Irish labour costs remain competitive.