Vol. 458 No. 5
27 Mr. D. McDowell asked the Minister for Enterprise and Employment if he has satisfied himself with the current operation of minimum wage provisions; and the plans, if any, he has to extend the provision on a sectoral or national basis. [14831/95]
I assume the Deputy is referring to the minimum wage provisions which are set out in employment regulation orders and registered employment agreements. Employment regulation orders are drawn up by joint labour committees which are bodies representative of employers and workers in certain employment sectors. The orders set out statutory rates of pay and conditions of employment for workers in those sectors of employment. Registered employment agreements are collective agreements registered with the Labour Court, concerning the pay or conditions of employment of a particular class, type or group of workers. When registered, the provisions of the agreement become legally binding.
There are currently 16 joint labour committees in operation. About 150,000 workers are covered by joint labour committees and registered employment agreements. While the legislation does allow me as Minister to apply to the Labour Court for establishment of new JLCs, the long-standing practice has been that such applications are normally initiated by workers or their representatives and this practice should continue. The Labour Court has the role of finally determining whether a new JLC should be established for any particular sector and also for registering new employment agreements.
Employment regulation orders and registered employment agreements (REAs) are enforced by the labour inspectorate of my Department. Routine inspections are undertaken to ensure that employers are complying with the terms of the EROs and REAs. In addition, inspectors pursue reported breaches of the orders and agreements. Last year nearly 5,000 inspections were carried out and £250,000 in arrears was collected on behalf of workers. I am satisfied with the current operation of the labour inspectorate and the level of enforcement activity carried out.
I am grateful to the Minister of State for her reply, she will know that in a previous manifestation I was a solicitor. That is one of those sectors which is governed by a joint labour committee and where minimum wages are set for legal executives and legal secretaries. I am not aware that employment in that sector has been adversely affected by the existence of a minimum wage. Will the Minister of State agree that as a general principle there is no evidence to suggest that the existence of a minimum wage, as she rightly points out governing 150,000 workers, has adversely affected employment in that sector?
Minimum wages in the legal secretary-legal assistants sector are there to prevent exploitation of an unorganised group of workers and have not prevented employment in those sectors. However, that does not mean I agree that the widespread application of minimum wage legislation would necessarily have the same effect.
I am not sure if I understand the implications of the reply. Is the Minister of State implying that in some other sectors where the joint labour committees and the minimum wage regulations exist that employment is adversely affected?
No, I am saying that we have been careful in this country in the application of minimum wage legislation. The minimum wage legislation, under joint labour committees and employment regulation orders, has a role in preventing exploitation. However, I do not believe that a more widespread application of the principle of a national minimum wage would adversely impact on employment. The best way of increasing wages is to improve the take-home pay of those on low pay — we did this in the last two budgets by a particular focus on the lower paid — and to ensure that their earnings are improved by enhancing their skills and productivity.
I note that the Minister of State does not approve of extension of the minimum wage to any other sector, she has said that quite clearly. How does the Minister of State feel about the major statement four weeks ago of the Leader of Democratic Left, Deputy De Rossa — to which I think Deputy Derek McDowell was referring — in which he said he would strongly advocate, presumably at Cabinet, and seek to implement the minimum wage sector by sector? That major speech and his demands about social welfare show that he is flexing his muscles at Cabinet and that he is taking the lion's share of authority and decision making. The Minister of State said on the one hand — I do not necessarily disagree — that she does not envisage the extension of the minimum wage to any more sectors and on the other hand that her partners in Government say it should be introduced sector by sector. Will the Minister throw some light on that dilemma?
I believe it is up to workers, sector by sector, to come forward with proposals if they wish to have a joint labour committee or a registered employment agreement and that that should be put to the Labour Court which, under our present law, has the final say.
The Minister of State said it would adversely affect——
That would be my approach to a sector by sector group of workers. If a particular group of workers comes forward with a proposal, it will go to the Labour Court and will be examined on its merits. I do not believe, nor does Deputy De Rossa, that the time is right or appropriate to introduce a national minimum wage. These issues have to be examined on the merits, sector by sector, to see whet an issue of exploitation is involved. That is the issue——
The Minister of State has changed her tune.
No, I have not. Our existing legislation addresses the issue of exploitation of unorganised worked.
The Minister of State said it would adversely affect employment.
No, I am clear about what I said.
Does the Minister State believe that minimum wages could have a detrimental effect on some sectors?
This depends on the level at which minimum wages are set If one sets a minimum wage of £10 per hour and a person's ability to earn only £4 per hour one would lose job which are priced between £4 and £9.9 per hour. They have a limited role to play in preventing exploitation but I do not believe a national minimum wage the best strategy to address the problem of low pay. The best strategy to address that problem is to increase the earning power of those in low paid employment and to increase the share of those earn is ings which they can take home. The Government's strategy during the last number of budgets has been to focus budgetary reductions in taxation at the lower paid by the introduction of the PRSI tax allowance for workers, by expanding the family income supplement, by reducing the rate of mar ginal relief from 48 per cent to 40 per cent and by expanding allowances and particularly, income tax exemption limits. The focus of tax reform must continue to be on the lower paid so that they can take home more of their income.
Will the Minister of State accept that the least we require as Opposition spokespersons, with an interest in this subject, is a definite Government policy position when the Minister of State with responsibility for labour affairs speaks on this matter? In her earlier contribution we heard some of her ideas regarding the minimum wage, on which she has now expanded. Will the Minister of State accept she is doing a disservice to the House by initially expressing her personal views on this matter which differ radically from those of the Minister for Social Welfare, Deputy De Rossa? I referred to this confusion in the past and I repeat my concern. Will the Minister of State agree that to improve the plight of workers, especially the low paid, there must be a tax reduction and also a reduction in employers' PRSI? Finally, does the Minister agree with the principle of the extension of the minimum wage provisions?
I agree with the Deputy that it is important to reduce the tax burden on lower paid workers. We placed great emphasis on that issue in Government with our current partners and with the Deputy's party. That is the best way of increasing the earning power and take home pay of people in low paid employment. It is also extremely important to raise the earning power by improving skills and productivity. That is the most important long-term and effective strategy.
The question of minimum wages should be examined issue by issue and sector by sector. The current practice is that if the workers' representatives in a particular sector believe exploitation is taking place, those workers can apply to the Labour Court to establish a joint labour committee or they can make an employment agreement which is then registered. That system has worked well for unorganised workers and it is one I fully support.
I agree with the Minister of State's emphasis on the prevention of exploitation. Does she agree that rates of pay below, say, £2.50 per hour are in all circumstances exploitative?
I certainly would not like to have to live on wages of less than £2.50 per hour.
The Deputy was not asking the Minister of State to do that; he was asking her about her departmental obligations in that regard. I must make the observation that the power of De Rossa is pervasive — it enables the Minister of State to change her answer.
It was more subtle than that.
On a factual note, when was there last a change in a category or sector, in the enlargement of the number of sectors and the number of workers involved in such an enlargement process to bring them into the minimum wage net?
I am unable to give the Deputy that information here but I am aware a committee has been sitting on Dublin catering since 1992.
Will I tell the Minister of State the number of years it is sitting?
That committee has not yet reported.
It has not and there has not been any extension in the minimum wage provisions.
