Written answers

Tuesday, 26 February 2019

Department of Employment Affairs and Social Protection

Income Inequality

Photo of John CurranJohn Curran (Dublin Mid West, Fianna Fail)
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628. To ask the Minister for Employment Affairs and Social Protection the steps she is taking to provide stronger protections for workers here to reduce inequalities in view of a new economic report (details supplied); and if she will make a statement on the matter. [9641/19]

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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I understand that the Report on Cherishing all Equally 2019 was published on 20 February. The Report examines a number of issues in relation to inequality, including inequality in wealth, education, health and employment. In response to the Deputy's specific question regarding high incidence of low pay and weak labour protection, I would point out that the Government continues to work to protect vulnerable employees. Ireland has a robust suite of employment legislation to ensure this is the case.

The most recent figures published by Eurostat (January 2019) show that Ireland has the second highest national minimum wage of any country in the EU at €1,614 per month, behind only Luxembourg whose minimum wage is €1,999 per month (for comparison purposes Eurostat converts countries’ hourly or weekly rates into monthly rates). It ranks in sixth place when allowing for purchasing power standards. However, it is important to note that these figures do not take into account the recent increase in the minimum wage to €9.80 per hour from 1 January 2019. While the percentage of earners on the national minimum wage in Ireland is higher than some other EU Member States, this is due, at least in part, to the presence of a large number of Multi-National Corporations which, typically, drive up the median wage rate.

The results of the ESRI research study “The Impact of a Change in the National Minimum Wage on the Distribution of Hourly Wages in Ireland”, published in July 2018 indicate that without the minimum wage change, approximately 10 percent of workers in 2016 would have earned on or below €9.15 per hour. However, following the increase in the minimum wage, just 6 percent of workers had an hourly wage in this range. Therefore, the minimum wage change resulted in a four percentage point reduction in the number of workers earning on or below €9.15 per hour.

The setting of wages is a matter between employers and employees, which takes place in the context of the market, and Government does not interfere unduly in the process. More generally, this area comes within the remit of my colleague the Minister for Business, Enterprise and Innovation, through her Department’s responsibilities for industrial relations issues generally and wage-setting mechanisms such as Registered Employment Agreements (REAs), Joint Labour Committees (JLCs) and Sectoral Employment Orders (SEOs).

At an individual level the resources required to achieve a minimum essential standard of living is very dependent on family circumstances and the interaction of individual earnings with household income. State-provided supports such as Child Benefit, Working Family Payment (WFP) as well as supports available in relation to housing, education and health, all contribute to an individual’s standard of living.

Specifically, the WFP is an in-work support, which provides an income top-up for employees on low earnings with children. WFP is designed to prevent in-work poverty for low paid workers with child dependants and to offer a financial incentive to take-up employment. There are currently over 54,000 families with more than 122,000 children in receipt of WFP. The estimated spend on WFP in 2018 is in the region of €431 million. The Department also provides an extensive system of social welfare support which facilitates recipients taking up some employment while permitting them to maintain their social welfare payment. These include the Back to Work Family Dividend, Jobseekers Allowance, Jobseekers Transitional Payment, and the One-parent Family Payment.

The evolution of the main elements of labour law in Ireland relating to employment rights, employment protection and non-discrimination, reflects a strong focus on the enactment of legislation based on clearly identified needs at the national level and arising from wider European Union developments. In the formulation and development of labour law there has been a clear policy focus aimed at finding the appropriate balance between the security which employees require on the one hand, in terms of conditions of employment etc., and the flexibility required by employers on the other, in terms of organisation of work, work practices etc.

Employment rights legislation was recently strengthened by the addition of the Employment (Miscellaneous Provisions) Act 2018, which is one of the most significant pieces of employment legislation in a generation. The Act delivers on the Programme for Government commitment to address the challenges of increased casualisation of work and to strengthen the regulation of precarious employment. The key objective of the Act, which comes into effect on 4 March, is to improve the security and predictability of hours for those working in less secure employment arrangements and those working variable hours.

Under the Workplace Relations Act 2015, the State's workplace relations structures were streamlined, resulting in a new two-tier system involving the Workplace Relations Commission (WRC) and the Labour Court. This greatly improved the complaint adjudication and appeal process for both employees and employers alike, in addition to the excellent service provided by the WRC conciliation, mediation and Inspectorate functions.

The WRC is mandated to secure compliance with employment rights legislation. Where an individual believes they are being deprived of their employment rights, they may refer a complaint to the WRC where the matter can be dealt with by way of mediation or adjudication, leading to a decision enforceable through the District Court. WRC Inspectors can also be asked to investigate certain breaches of the legislation.

I hope this clarifies the matter for the Deputy.


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