Written Answers. - National Minimum Wage.
Mr. G. Reynolds
Tánaiste and Minister for Enterprise, Trade and Employment
the number of people receiving a level of minimum wage based on the fact that they are training in the job; the number of inspections which have been carried out to ascertain if the minimum wage is being paid; the number of companies which have been found to be in default of paying the minimum wage; and if she will make a statement on the matter.
Thomas P. BroughanQuestion:
Tánaiste and Minister for Enterprise, Trade and Employment
the progress to date in monitoring the implementation of the National Minimum Wage Act, 2000; the number of inspectors engaged in monitoring its implementation; the number of possible breaches reported to her Department; the estimated number, if any, of job losses reported to her Department, having regard to the warnings from some organisations that it could lead to tens of thousands of job losses.
I propose to take Questions Nos. 43 and 72 together.
The National Minimum Wage Act, 2000, became law on 1 April 2000. It applies "with some exceptions" to the generality of employees whether they be full-time, part-time, temporary or casual workers. The national minimum hourly rate of pay is £4.40, which sum must be paid, by way of a minimum hourly average rate of pay, to all experienced adult employees. Hourly rates of pay of lesser amounts than £4.40 may be paid to certain categories of employee – as, for instance, to persons under 18 years of age, to first-time job entrants or to those engaged in training or study. It is estimated – source: ESRI impact study on the NMW – that the number of employees who will materially benefit immediately from operation of the NMW is 163,000.
By Government decision of last December an additional seven inspectors were authorised for allocation to the labour inspectorate of my Department for purposes of enforcing the NMW. These additional inspectors took up their appointments in April, bringing the numerical strength of the inspectorate to 17. All 17 inspectors are engaged in NMW enforcement activity and in the enforcement of employment legislation generally. In their conduct of this work they have available to them wide-ranging powers of inspection which are laid down in the NMW Act itself and in a variety of other labour law statutes. The conditions of employment attaching to the position of labour inspector render the individual inspector liable for out-of-normal-office-hours work including night work. It is intended that some of the investigative/inspection duties to be performed by the inspectors in respect of both the NMW and other labour legislation will be carried out at night-time.
The newly-appointed inspectors are still very much in the learning phase of their jobs. Their initial/formal training programme has been completed but on-the-job coaching, involving their participation in a pairing-type working arrangement with the established inspectors, will continue until mid-July. Only at that point will they commence independent inspection operations in an unassisted capacity.
It had always been foreseen that new legislation as substantive and as far-ranging in its application as the NMW Act has been would give rise to understandable teething difficulties and misunderstandings as to interpretation in the early stages of the operation of the Act. For this reason the initial enforcement strategy of the labour inspectorate in respect of the NMW is characterised by an approach which, while duly checking on the compliance of employers with their obligations and responsibilities under the Act, is focused primarily on the ‘education' of employers in their new obligations and on rendering all possible assistance in resolving and rectifying such misunderstandings and teething difficulties as are found to arise in individual places of employment. Plans for a more intensified, sustained and targeted enforcement exercise, focused on strict implementation – through legal action as necessary – are being finalised at present with a view to effective operation as and from July. Of course, a very important and indeed quite successful element of the initial NMW enforcement strategy was the publicity and information campaign conducted through the media – press, radio and television – in the immediate aftermath of the launch of the Act.
In order to assess the effectiveness over time of the operation of the NMW Act in the achievement of its intended purposes, the Tánaiste established a special monitoring group to monitor and assess its implementation and to report its find ings and recommendations to her in due course. This group is tripartite in its composition, its membership including representatives of ICTU, IBEC and the Department of Enterprise, Trade and Employment. Its inaugural meeting takes place tomorrow, 14 June.
In the period 1 April to 31 May, 245 inspections for compliance with the NMW Act were carried out by the labour inspectorate. These were concentrated in the footwear/drapery and retail/grocery sectors. A very small, almost negligible, number of infringements were identified. These infringements – all very minor in nature and the result more of misinterpretation of the legislation than of deliberate culpability on the part of the employers involved – were all rectified at the time of the inspection through the intervention of the visiting inspectors. In the same period seven written complaints alleging non-compliance by employers with NMW pay rate requirements were filed direct with the inspectorate by aggrieved employees. These are under investigation at the moment. Apart from these, some letters of inquiry, less than ten, merely seeking information in relation to applicability of the NMW in individual instances were received and responded to: these did notper se imply or allege non-compliance. In addition, 12,032 telephone inquiries in relation to the Act were made to the Department during April and May.
A recent press report indicated preliminary figures of ICTU as revealing that 108,000 of the estimated 163,000 identified as immediate beneficiaries under the National Minimum Wage Act, still have not had their wages increased to the legal rate. When Department officials approached ICTU on this matter to seek from them such evidence as they had to substantiate this assertion and to secure whatever help or leads ICTU might be in a position to provide to assist the inspectorate in the way it might organise its NMW enforcement activities, ICTU was unable to produce any such evidence and advised the Department that the press report had misrepresented it.
The number of redundancies notified to the Department in respect of the months of April and May were 1062 and 950, respectively. It is not possible to say if any of these redundancies were attributed to the operation of the NMW. In the case of one of the written inquiries referred to above the writer, an employer, indicated that he had let go 30 of his staff owing to his inability to pay them the NMW.
There is no information available to the Department as to the number of employees receiving the training-related sub-minimum pay rates provided for in the National Minimum Wage Act.