Dáil Éireann debate -
Thursday, 3 Dec 1998

Vol. 497 No. 7

Adjournment Debate. - National Minimum Wage Report.

Mr. Broughan

With other Opposition Deputies I was very disappointed that my priority question on this matter was ruled out of order. When I spoke earlier I made strong remarks about the questions office staff and said that I felt they had misunderstood the issue. I now withdraw those remarks. Like all Deputies I find the staff of the Houses extremely helpful and supportive and many of them have become my friends.

However, although the report is dated October 1998, the Tánaiste and Minister for Enterprise, Trade and Employment in a previous question said she would publish it. We had no chance to read the document before today's Question Time and to ask the Tánaiste to comment. I was justified, therefore, in raising the question.

The issue of the delay in the introduction of a national minimum wage remains unresolved and is of deep concern. The Labour Party and I strongly support the campaign of the Irish Congress of Trade Unions and the Dublin Council of Trade Unions to have the national minimum wage implemented as soon as possible. I ask the Minister why this demand, articulated yesterday by the secretary if the ICTU, Mr. Peter Cassells, cannot be accepted. The Government could introduce a national minimum wage at 75 per cent of median earnings immediately. Nothing I have read in this report would prevent this measure being introduced in the spring of 1999 at the latest if the Government wished. The basis of the legislation is laid down. I could introduce a Bill to this effect based, for example, on the British Bill and it could be implemented after Christmas.

Yesterday, the Minister for Finance introduced major tax cuts for companies while our low-paid employees receive no such bounty or protection. The scandal of low pay remains throughout the economy. A survey conducted by third level students in Dublin found the following rates of pay: secretary, £3.50 per hour; waiting staff, £2.50 per hour; restaurant staff, £3.90 per hour; shop assistants, £3.46 an hour, forecourt attendants, £3 an hour, factory workers in a meat factory in Kildare, £4 an hour, shop staff in a petrol station, £4.25 an hour, factory work in a chocolate factory in East Wall, £4 an hour, shop assistants in a shop in Santry, £3.50 an hour, and so on. I have lists of jobs in my possession and I will not embarrass the entrepreneurs and businesses concerned by reading their names into the record. As recently as a few months ago scandalous rates of £2 to £2.50 were being paid in a number of restaurants.

The Minister of State, Deputy Treacy, and his colleagues gave a commitment in the general election that they would emulate the Labour Government in the UK and introduce a national minimum wage. The Minister of State said he was a year in power. In fact, the Government has been in power for a year and a half and we are still waiting. I fear the real strategy is to retain this issue as a topic of debate over the next few years by which stage the Government could be out of office. In that case it would be the responsibility of the Labour Party and others coming into office to implement the national minimum wage. Perhaps the Minister of State had some intention of introducing it but the Tánaiste, Deputy Harney, and the Progressive Democrats definitely did not and that is the major issue.

I do not accept the timetable of this interim report. It is unnecessary to wait until next spring for legislation and then have a further 18 months of preparation for the introduction of the minimum wage. I appeal to the Minister of State to introduce the legislation and implement the minimum wage.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I wish to clarify what I said on Question Time. I had been in office one year, since 9 October 1997.

I thank the Deputy for raising the matter on the Adjournment and apologise on behalf of the Tánaiste that she could not reply due to other commitments. Yesterday's budget was the most radical and reforming the country has seen in many years. It reflected the most significant transformation of the income tax system in a generation and delivered the largest package of tax reductions ever for workers, especially the low paid. More than 80,000 employees will be removed from the tax net in one fell swoop.

One of the principal aims of the budget is to maintain social inclusiveness, and its social inclusion provisions deliver and exceed the Government's commitments under Partnership 2000. The budget provisions have been warmly welcomed by the Irish Congress of Trade Unions and many other representative groups. The introduction of a national minimum hourly wage is a key priority of the Government as part of its assault on exclusion, marginalisation and poverty. This is an issue on which the Government acted immediately on coming into office. In fairness to the Tánaiste and her colleagues in Government, she has been enthusiastic about this, has taken ownership of it and driven it strongly, and credit is due to her. The Government appointed the National Minimum Wage Commission in July 1997 to advise it on the best way to implement its commitment in the programme for Government and the report of the National Minimum Wage Commission was published in April this year.

The interdepartmental group of officials was established by the Government following the report of the National Minimum Wage Commission with the remit to formulate proposals and a plan of action on implementation of a national minimum wage. The Tánaiste recently received the interim report of the interdepartmental group which she has had published, and welcomed its comprehensive examination of the practical issues to be addressed in the implementation of the national minimum wage, especially the enabling legislation. The work of this group is building on the valuable work of the National Minimum Wage Commission.

The group was of the view that its main task was to undertake a technical assessment of the consequential implications and effects of the implementation of the commission's recommendations and to identify solutions to any problems which may arise. It did not consider its function to repeat the inquiries and investigations undertaken by the commission.

The interim report of the group outlines its progress to date and identifies a range of issues requiring further consideration. These issues include the role of the social partners in implementing the minimum wage, the scope and exceptions of the minimum wage and variations and options for enforcement. One of the important steps taken by the group has been to commission the ESRI to undertake an impact study on those sectors of the economy most affected by the recommended national minimum wage and on the economy as a whole. This study will be completed in March 1999 and the information obtained will allow the group to assess the recommendation of the commission, that the initial rate set should take into account employment, overall economic conditions and competitiveness.

The report highlights the need to ensure claims for the restoration of relative pay differentials following the introduction of a national minimum wage are not entertained. It welcomed the ICTU suggestion that a joint statement be agreed with IBEC and Government to this effect. This is an extremely critical issue and further discussions with the social partners will be necessary in an attempt to identify an effective mechanism to ensure compliance with such a statement.

The interim report has been widely circulated and the group has invited submissions from interested parties. The issues identified in the report provide a sound basis for ongoing consultations with the social partners. The Tánaiste expects to receive the final report from the inter-departmental group in May 1999. The group regarded the outcome of the impact study as critical to determining the final shape of the minimum wage provisions. However, it considered that drafting of the primary legislation could be progressed substantially in the interim. The detailed work of the interdepartmental group is important to ensure the introduction of a national minimum wage benefits workers while minimising any negative impact on employment and competitiveness which is vital for sustainability in our economy.

The Tánaiste intends to have a statutory national minimum wage in place by the target timescale recommended by the National Minimum Wage Commission on the expiry of Partnership 2000 beginning in April 2000.

Mr. Broughan

The Government will be out of office by then.

Mr. Treacy

If the people had an opportunity to endorse us today, they would double our size. We have set a target, critically analysed the situation, await the final report and will implement it.