Written answers

Thursday, 13 March 2014

Department of Jobs, Enterprise and Innovation

Living Wage

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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23. To ask the Minister for Jobs, Enterprise and Innovation his views on the introduction of a living wage and its benefits to employers and employees; and if he will make a statement on the matter. [12225/14]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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The UK Living Wage Foundation describe the Living Wage as an hourly rate, set independently and updated annually that is calculated according to the basic cost of living and paid by employers on a voluntary basis. The UK rate promulgated is £7.65 per hour. Ireland generally operates a voluntarist system of Industrial Relations where terms and conditions are negotiated freely. This has operated well. In addition, Ireland had certain provisions that apply with statutory effect.

The National Minimum Wage (NMW) in Ireland at €8.65 per hour, is relatively high by international standards. The most recent figures published by Eurostat show that Ireland’s rate is the fourth highest among the 21 EU Member States that have a National Minimum Wage. When the cost of living is taken into account, Ireland’s rate is the fifth highest. In addition to the NMW, Industrial Relations Acts provide a framework within which employers and employee representatives, through the Joint Labour Committee (JLC) system, can come together voluntarily and negotiate terms and conditions of workers in their respective sector. Pay rates negotiated in the JLC fora tend to be somewhat above the NMW and the JLCs operate in areas where collective bargaining is not well established and wages tend to be low (e.g. hairdressing, and hospitality sectors).

For vulnerable workers, the advantage of JLCs is that they see fair terms and conditions such as wage rates, sick pay etc. agreed and given effect by Employment Regulation Order. For some employers, the advantage of the JLC system, based as it is on the principle of self-governance, means that they can agree and set minimum pay and conditions, agree on work practices which are custom-made to their industry; a flexibility which cannot easily be achieved by primary legislation. Where both parties to a JLC see commonality of purpose and outcome then an agreement may emerge that is of benefit to both. The decision to restore the NMW to €8.65 per hour with effect from 1 July 2011, together with the decision to put the JLC on a more secure legal and constitutional footing and reinstate a robust system of protection for these represents a significant commitment by this Government to protect the lowest paid and most vulnerable workers.

Alongside these structures, the Department of Social Protection supports low-income families in work by means of Family Income Supplement (FIS). That Department avails of every opportunity in its engagement with employers and jobseekers to build awareness of the availability of FIS and how this payment may benefit potential employees with children.

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