Dáil Éireann debate -
Wednesday, 22 Jun 2011

Vol. 736 No. 2

Workers’ Remuneration: Motion (Resumed)

The following motion was moved by Deputy Clare Daly on Tuesday, 21 June 2011:

That Dáil Éireann:

noting that:

the Report of Independent Review of Employment Regulation Orders and Registered Employment Agreement Wage Settling Mechanisms by Mr. Kevin Duffy and Dr. Frank Walsh to the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, concludesinter alia: “We have concluded that lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment” and “we conclude that it is not accurate to suggest that the body of primary employment rights legislation currently in force adequately covers matters dealt with by EROs and REAs”;

according to the OECD, Ireland suffers from some of the highest levels of low pay; over 21% of full-time employees are low paid, compared to a Eurozone average of 14.7% and European Commission data show that labour costs, including wages and employers' contributions, in the food and accommodation sector in Ireland are 6% below the EU 15 average;

very many people covered by Joint Labour Committee-Employment Regulation Orders, JLC/EROs, and Registered Employment Agreements, REAs, are vulnerable people such as immigrants and young people and those working in small employments not amenable to trade unionisation;

the majority of workers covered by the JLC-EROs and REAs system are women and that any reduction in remuneration in this sector will widen the gender income gap contrary to national and EU policy;

due to the serious and disproportionate reduction in male employment, female workers form a higher proportion of primary bread winners and that reduction in female earnings would have a major impact on household and child poverty contrary to national and EU policy;

reduction in the remuneration of already lowly paid employees will result in a reduction in revenue to the State through PAYE and VAT and will lead to an increase in claims for family income supplement payments;

any reduction in remuneration to employees covered by JLCs and REAs will transfer income from the lowly paid to employers and-or investors, including some large multinational companies;

any reduction in remuneration to affected employees who spend their entire income in Ireland will reduce demand in the economy and accelerate the elimination of jobs caused by the policies of the previous Government and the support by the current Government for the measures contained in budget 2011;

it is this reduction in demand in the economy that is destroying jobs, not JLC-ERO rates; and

any provision for derogation from JLC-ERO and REA rates of remuneration in individual employments is likely to lead to a collapse of the system as a whole and the reduction of already low wages generally, further reduction in demand and increased job elimination in the economy as a whole;

deplores any proposal of the Minister, Deputy Bruton, to enact any of the following measures:

reduction of JLC and-or REA rates;

reduction or abolition of extra pay for working unsocial hours such as on a Sunday;

allow employers to claim "an inability to pay";

reduction in overtime rates;

removal of protection for young workers under 18 years of age;

removal of annual increases for years of service;

removal of recognition of craft grades;

reduction of the number of EROs and end coverage of working conditions such as sick pay; and

allowing employers not to keep proper employment records, which would make it easier to evade the law; and

calls on the Government as a whole to abandon these measures and believes that if Labour Party Deputies in particular vote against this motion, they will be in breach of the principle of solidarity with the lower paid and the best traditions of Larkin and Connolly.

Debate resumed on amendment No. 1.

To delete all words after "Dáil Éireann" and substitute the following:

"noting:

that this Government reversed the recent cut in the national minimum wage within its first three months in office;

that the restoration of the national minimum wage is the result of negotiations by the new Government with the EU-IMF, because it is committed to a fairer approach to solving our country's difficulties;

the commitment in the Programme for Government, and in the revised Memorandum of Understanding (MOU) with our external partners in the European Commission, the ECB and the IMF, to reform the existing Joint Labour Committee (JLC)system;

that the Report of Independent Review of Employment Regulation Orders and Registered Employment Agreement Wage Settling Mechanisms by Mr. Kevin Duffy and Dr. Frank Walsh recommends a ‘radical overhaul' of the system to make it ‘fairer and more responsive to changing economic circumstances and labour market conditions';

that this Government will continue to support fair terms and conditions for the lowest paid workers, in the context of more modern, flexible wage-settling mechanisms;

the huge competitive pressures and the catastrophic collapse of employment in many businesses in the sectors affected; and

the opportunity for employment creation in the sectors affected, particularly in the labour intensive tourism area;

endorses the need for reform of the JLC and Registered Employment Agreement (REA) systems;

endorses the process of consultations undertaken with the social partners; and

supports the introduction of a balanced set of reforms at an early date."

—(Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton).

Deputy Seán Crowe

I wish to share time with Deputy Peadar Tóibín. I thank the Technical Group for giving us the opportunity to speak on this hugely important issue that affects a great number of families throughout the country.

I wish to put on record that Sinn Féin will vigorously oppose any attempt by this Government to abolish the joint labour committees. This reprehensible and shameful policy is directed at some of the most vulnerable people working in this State. It is immoral and wrong that the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, should even consider introducing measures that would result in low-paid workers having their meagre wages reduced further. These proposals are being considered at a time when the cost of living is spiralling through the roof and the gap between rich and poor is always widening.

Earlier this month I was part of a Sinn Féin delegation, including Deputies, which met in Leinster House with trade union officials and workers employed in the service sector who were campaigning courageously to retain the JLCs. At that meeting we made clear our determination to oppose the implementation of what we see as aggressive change in employment legislation which would have far-reaching implications for thousands of families. The findings of the Duffy Walsh review into JLCs and registered employment agreements, REAs, must be published without delay or further equivocation by the Minister.

As Dr. Michelle O'Sullivan, an industrial relations expert at the University of Limerick, told the Commercial Court in March, the conditions that led, some 60 years ago, to the establishment of a system for setting minimum pay and conditions for 190,000 vulnerable low-paid workers still exist. It is also the case that only six of every 100 workers in the catering sector are members of trade unions. The joint labour committee system provides a negotiating forum for workers who would otherwise be denied a voice. JLCs are an important mechanism for protecting the wages and conditions of low paid workers who, for the most part, earn under €10 an hour and are already scraping the bottom of the pay scale. If they are abolished there would be a disproportionate impact on women, many of whom are employed in the service industries. The big worry is that, without the proper checks and balances, there will be a dramatic increase in the working poor. More families will be subjected to abject poverty and low-paid workers will be forced into competing with one another as they race to the bottom.

The big fear is that the Minister, Deputy Bruton, will ignore the findings of the Duffy Walsh report and plough ahead to end wage protection for those on low incomes. This is a policy that makes no sense on many different levels. It will greatly reduce people's spending power, with resulting implications for the local economy. It will also force low-paid workers into the social welfare system where they will become more dependent on the State as well as decreasing the country's tax base. It is important to dispel the myth that abolishing JLCs will increase competitiveness. This is simply untrue. The reality is it will result in a race to the bottom with employers being given the freedom to pay wages that are ever more derisory. Most ethical employers will be obliged to follow suit in order to compete. The JLC system not only benefits vulnerable workers but also ensures employers are guarded against unscrupulous business rivals who undercut wages, an action that very quickly leads to an erosion of standards in areas such as catering and the security industries.

Sinn Féin is not against reforming and improving JLCs and REAs but we will not accept vulnerable sections of our society being made to pay for the greed of bankers and developers. Neither will we support changes in employment legislation that will further increase the gap between those who are well paid and low-paid workers who have never had the chance of a decent wage.

Deputy Peadar Tóibín

Go raibh míle maith agat, a Cheann Comhairle, as an seans bheith ag labhairt anseo agus ba mhaith liom mo bhuíochas a ghabháil leis an nGrúpa Teicniúil Group freisin.

Many Members on the seats opposite would have entered Government with the view of being involved in evidence-based policy development. Unfortunately, however, that noble idea was jettisoned very quickly after entry to government. As Members will know, a report was commissioned — the Duffy Walsh report. This states early in its content: "We have concluded that lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment", and goes on to state, "We have investigated the size of the wage differential in some detail and do not find evidence of substantial wage premiums". The report states further, "Even if we err on the side of the strand of literature that finds the largest negative effects from minimum wages on employment, we should note that the results imply that cutting minimum wages lowers total earnings of low-wage workers and has potentially important distributional consequences".

During an earlier debate I asked the Minister, Deputy Bruton, if he intended that this action would lower wages; he said it would do so. I asked him whether he had any evidence to show that lowering wages would actually increase the number of jobs. I paraphrase the Minister, who said there was no hard evidence that extra jobs would be created as a result of this policy. He stated he "believed" jobs would be created. I also spoke to the Minister on poverty issues. Social Justice Ireland stated there are 100,000 working poor in this country. Given the so-called reforms of the JLCs will affect those on the margins of poverty, any drop in their wages must push more people into poverty. I asked the Minister how many people would be pushed in this way; he replied that he did not know. Here, evidence-based policy development is being thrown out and replaced with so-called belief-based policy development.

There is no doubt that if the wages of certain people were lowered certain employers might be able to employ more employees at any given time. Nor is there doubt, given the severe strain particular businesses are under, that they would jump or grab at any decrease in their costs, as a drowning person grabs at a life raft. It is important, however, to look at the net effect that will be brought about by this policy, especially when one understands it will affect up to 300,000 people. When that many people are affected it is not good enough that a policy be based on intuition alone. When it pushes real families into poverty it is not good enough that policy is based on hunch alone.

The reason small businesses in this State are on the floor is that demand has been severely punctured by four years of continuous austerity. The money in circulation in this State has reduced and therefore there is less money to go around and we are in what is called a debt trap. Every year, the Government cuts back to pay off private debts and every year the economy shrinks so that the following year it is less able to pay off those debts and must cut back further. At some stage the Deputies and Ministers on the far side must gain the guts necessary to change this policy and provide a real Keynesian stimulus to the economy. The fact of the Labour Party's involvement is very difficult to understand. It is important to remind people that the average JLC worker earns about €18,000 while the average Deputy earns five times that amount. The average Minister earns, or at least takes home, ten times more than the average JLC worker. It is very difficult to understand the effects these cuts will have on the average JLC worker unless one is on the same wage. It is clear that some public sector workers and professionals in sheltered sectors who are paid hundreds of thousands of euro remain untouched by the Government's policy in this area. When Fianna Fáil, Fine Gael and the Labour Party decide to make cuts, why do they start on each occasion with the most vulnerable individuals who are living on the edge? When Opposition Deputies criticise this approach, we are shouted down by shriller and shriller Labour Party Deputies, especially backbenchers, who are increasingly sensitive about the moral compromises they have made in recent weeks. I ask the Government to take serious heed of workers in the State who are providing an enormous service for their employers. Government Deputies should understand that if they take money from those who spend all of their money, all they will achieve is a further reduction in the amount of money in circulation and the GDP of the State. Impím ar na Teachtaí ar an taobh eile smaoineamh ar na hoibrithe ar a bhfuil siad ag gearradh siar agus a meoin ar an ábhar seo a athrú.

Deputy Paschal Donohoe

I would like to share time with Deputies Hannigan, McHugh, McCarthy, Heydon, Mitchell, Dowds and O'Mahony.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Deputy Paschal Donohoe

I would like to respond to some of the points made by Sinn Féin. It was suggested we were not taking any action to deal with the wages of senior public servants. It was announced today that such action was to be taken. That is a fact. Under the plan announced today, the salaries of staff at the top of the Civil Service and those running large semi-State organisations will be reduced. That was done today.

Deputy Peadar Tóibín

The point I was making——

Deputy Paschal Donohoe

One of the Deputies opposite called for the Duffy Walsh report to be published

Deputy Peadar Tóibín

——related to the people who were affected first when cutbacks were made.

Deputy Paschal Donohoe

I am correcting the Deputy.

Deputy Peadar Tóibín

No, the Deputy is correcting a point I did not make.

Deputy Paschal Donohoe

The Duffy Walsh report has been published.

Deputy Dominic Hannigan

Does Deputy Tóibín sound a little shrill?

Deputy Peadar Tóibín

The Deputy would recognise it.

Deputy Paschal Donohoe

If Sinn Féin's point is that we should abate the shrillness, perhaps its Deputies might listen to themselves. We are taking the time to correct some of the inaccurate points they have made.

It has been suggested the Government is attacking the poor. The Government reversed the cut in the minimum wage, despite the Opposition's assertions that we would not do so. The Government has stated it will not reduce social welfare payments during its term. It has been claimed that we are abolishing JLCs, but that is not happening. Nobody on this side is saying we will abolish them. We want to put in place a plan to reform them, with the consent of the Government as a whole. It has to be made clear that the plan does not involve abolishing them.

The Government is grappling with the reality that 446,000 people are unemployed. No amount of talk about the smart economy strategy will get many of them back into employment. The sectors of industry covered by JLCs have suffered job losses of between 20% and 40%. Employers have contacted me to say that if a way to reform this mechanism is found, they will keep the people they are currently employing under their current contracts. They have said they will continue to operate the JLC agreements which they are legally bound to uphold and additionally hire new people under the reformed JLC arrangement. That is what people are telling me.

Like other Deputies, I regularly meet unemployed people who come into my constituency office to say they are looking for work. That is a fact. I assure those who think this is a question of the abolition of the JLC programme that it is anything but. Some wish that was the course of action being taken by the Government, but it is not. We are trying to find a way to encourage employers in the industries most likely to make a dent in the unemployment rate to offer jobs to some of the 440,000 unemployed at wages they can afford and that are sufficiently attractive for the jobs to be taken up. That is what is being proposed.

I emphasise that the Duffy Walsh report has been published. I am struck by the number of assertions made in the report on the basis of literature. What about the three to four years of data, examples or evidence of what has been happening in the State? Why was such reference material not used in the report? That anything is being abolished is patently untrue. It has been suggested the Government is trying to attack the poor, including the working poor. Our track record over the past 100 days and more shows we are doing the opposite. We are trying to find a way to re-energise the service industries which offer people the most likely way of getting off the dole queues. That is what we are seeking to do.

Deputy Dominic Hannigan

In the programme for Government the Labour Party and its coalition partners agreed to reform the JLCs. We are committed to pushing forward with such reform, which is an agreed part of the original and revised memorandum of understanding. However, we do not believe it should go hand and hand with a loosening of workers' rights. Some 150,000 workers across the economy, predominantly in vulnerable sectors which are traditionally characterised by low pay and poor terms and conditions, are covered by JLCs and registered employment agreements.

Since the publication of the Duffy Walsh report, the issue of the reform of these agreements has been raised on many doorsteps in my constituency when I have called to canvass opinions. No other issue of reform has been raised so often with me since the formation of the Government. It seems to be the key issue about which people are concerned. I have spoken to many people about this matter, including a bus driver in Ashbourne who is concerned about the impact the removal of Sunday working premiums would have on his ability to pay his mortgage. I have met retail workers who are worried about the impact of such cuts on their ability to put food on their families' tables. People like them can tell the real story when it comes to employment wage setting agreements.

When we talk about reforms, we have to make sure they are balanced and fair. We have to examine the facts. The Duffy Walsh report concluded that reductions in basic JLC rates would have very little impact on employment. It also concluded that the effect would be "insignificant". In 2010 the World Economic Forum stated labour costs were not an issue as regards the competitiveness of the economy. From the perspective of competitiveness, people are much more concerned about the country's basic infrastructure and its macroeconomic stability. It is not because of Sunday premiums that we are uncompetitive. Sunday premiums do not have an effect. We have seen no compelling evidence from any sector of society that suggests the removal of Sunday pay structures would benefit the economy.

The JLCs were first put in place in the 1940s, when there was less regulation and legislation in place to protect employees. They have played a good and a necessary part in employment law since. However, times change. It is important that we continue to review and update our legislation to ensure it is fit for purpose and reflects the needs of today rather than those of the past. In that respect, none of us has a problem with reforming JLCs or updating legislation to ensure it is fair and equitable. The Government is actively pursuing the rates of pay in this and other areas.

I would like to return to something Deputy Tóibín mentioned. The Minister for Public Expenditure and Reform, Deputy Howlin, announced earlier today that the money paid to top public servants and semi-State executives would be reformed. The Government announced recently that it intended to hold a referendum to seek to reduce judges' pay by €50,000. Rather than targeting one sector, we need to ensure fair cuts are made across society. As I said, there is no compelling evidence to suggest cuts in the Sunday premiums provided for by the JLCs would benefit anybody. I urge the Minister to bear this in mind when he reviews the JLCs.

Deputy Joe McHugh

I will focus on the tourism sector in the short time available to me. I have not necessarily taken a local or parochial option. The national tourism industry has a great opportunity to help us to get out of the mess we are in. The recent legislation providing for a reduction in the service VAT rate must be welcomed in that context.

Twenty-one of the main EROs and REAs, with a range of 242 different rates of pay, are specified across the sectors and workers they cover. There are 20 different rates applying to hotel workers alone. As far as hoteliers and the management of hotels are concerned, this can turn into a bit of a bureaucratic headache to run small hotels in rural areas. These reforms will create four different hotel rates, thus reducing the record keeping requirements for employers in the market and recognise the additional rates. Hoteliers will pay extra for experienced staff. From my contact with many employees throughout the hotel industry in recent weeks, many of whom who have been employees in these hotels for 20 or 25 years, they must be included as an important component of the tourism sector because they are the front line and the important components of promoting tourism in this country.

We have a problem across the Border with competitiveness, especially with labour costs. As politicians, we are caught between a rock and a hard place. EU legislation specifies that we must go through the open EU e-tendering process which means we are losing quite a substantial amount of work to Northern Ireland. We are losing a substantial amount of work owing to the different rates. Basic UK construction pay is €16 per hour compared with €20 in Ireland. UK accommodation and food services pay is €9.33 per hour compared with €12.34 in Ireland. Here we are faced with a dilemma. Something that we need to address vehemently and aggressively is how we introduce social contracts into tendering in this country. Whether it is road contracts or public buildings contracts that we are losing to Northern Ireland, we are not ensuring we have a social contract or an obligation to local workers in this country. That is something about which we must be careful and take cognisance.

The proposed plan would be introduced as part of a broad package of employment enterprise reform that is designed to increase competitiveness and advance the interests of workers and employers. The Government recently increased the minimum wage which had been cut by the previous Government and, as I stated earlier, recently introduced the lower rate of employers' PRSI.

As far as the debate on competitiveness is concerned, as I stated earlier, we are between a rock and a hard place with respect to not being able to compete with Northern Ireland. That is an issue that we should keep on the agenda in the future.

Deputy Michael McCarthy

I thank the Leas-Cheann Comhairle for the opportunity to speak on the motion before us. It is obviously a pressing political issue and one of deep concern to many people.

I say from the outset, lest anyone assumes a decision has been made, that the reality of the matter is this. The Duffy Walsh report is being looked at by sectoral interests. When that goes back to Cabinet, it will make a decision that will become Government policy. Let us not at this stage presuppose or presume what the outcome of that process will be.

Deputy Joan Collins

Where is Deputy McCarthy's red line?

Deputy Michael McCarthy

There is a commitment in the programme for Government to reform the JLC structure. About that there is no doubt.

There are many other issues that Government needs to look at, apart from the rates of lower paid workers on a Sunday, such as the issue of legal and medical fees. In the current economic turmoil, there are still higher professionals who are charging sums of money more akin to the Celtic tiger. Those are two of the areas that should be on the table, not merely issues such as the Sunday premium.

In terms of Government making decisions, definitely there will be difficult and unpalatable decisions to be made and certainly no one in Government will walk away from the responsibility of making such decisions. I, along with my colleagues, will not turn my back on those working in such sectors as catering, hairdressing and security. These are people who have disproportionately carried the burden of the economic collapse. These are people who have inordinately suffered because of right-wing politics and ideology in this country over recent years and the excesses of vulture capitalists during the Celtic tiger era. That being said, I want to give the following commitment in this House this evening. Unpalatable decisions will be made and let us not presume that these decisions will affect the lower paid.

Deputy Joe Higgins has a cheek to mention the spirit of Connolly and Larkin in his motion. Deputy Joe Higgins was a member of the party of Connolly and Larkin and, in line with his political behaviour, he could not behave himself and he was expelled. That stands out in my mind as one of the finest decisions ever made by the Labour movement in this country. Any lectures from a tired Trotskyite about solidarity will be dealt with and absolutely ignored, as we should do with those of anyone whose political career is characterised by divisiveness, driving a wedge between small groups of people, running off to the European Parliament and coming back here as a United Left Alliance candidate having stood as an Independent Labour candidate in Mulhuddart in 1999. Up there with the decision to abolish third level fees——

Deputy Joan Collins

I hope it went okay for them.

Deputy Michael McCarthy

——one of the finest decisions ever made by the Labour movement was to throw that man out of the Labour Party. I advise Deputy Joe Higgins, when he has the opportunity of raising issues on Private Members' time in future, to pick an issue that will stick.

Deputy Martin Heydon

We are living in extraordinary economic times which require radical actions to ensure our struggling businesses can be more responsive to changing economic circumstances and labour market conditions. Agreements that were appropriate for a different economic climate must now be reviewed to ensure they provide sufficient flexibility for employers, protection and legal rights for existing employees and, most important, the possibility of opportunities to protect threatened jobs and, we hope, the expansion and creation of new ones.

Let us be clear, the current proposals for reform of wage agreements do not call for adjustments in specific wage rates for the sectors covered by the JLCs or REAs. Many of the existing wage agreements were negotiated before the current protections of employment rights legislation were fully in place. Such protections now exist to ensure all employees are fully protected in their work environment whether covered by JLC agreements or REAs.

Our commitment and subsequent decision to restore the national minimum wage to €8.65 per hour shows our commitment to the lowest paid workers in the economy. EUROSTAT figures in Jan 2011 confirm that our minimum wage is the second highest of 20 EU member states with such legislation. Monthly minimum wages varied widely, from Bulgaria, at €123 per month, at the bottom to Luxembourg, at €1,758, at the top of the scale. Ireland's monthly rate of €1,326 ranked second highest of these 20 countries.

It is obvious the difficulty lies not merely with the minimum wage rate, which is generous by EU standards, but with the standard of living that buys us here in Ireland. When adjusted for differences in purchasing power, the disparities between the countries lessened. Ireland showed the most remarkable change, according to EUROSTAT, moving from second position of 20 when ranked in euro to fifth in purchasing power terms. This highlights the real problem here, our expensive cost of living. Constantly increasing wage rates at the expense of viable businesses is not the solution to our problems. We need to cut our cost of living and then our minimum wage can be seen as it is — one of the highest in Europe.

Those whom we need to help most urgently are the 440,000 unemployed individuals currently signing on to the live register. Ireland's unemployment rate of 14.8% is well above the EU and eurozone average of 9.9%. Radical action is now needed to tackle that statistic. It is only by getting people back to work that we will start to increase our intake of PAYE and other taxes as most money flows throughout the economy.

Those sectors that have suffered most reduction in jobs in the past three years are the very sectors that are governed by labour agreements, be it construction, hospitality or retail. The current proposals are that all EROs, agreed by JLCs, will be revised under new criteria which better reflect our current economic circumstances. We must acknowledge that existing agreements were based on a different economic climate.

JLC reforms will help to reduce employer payroll costs. Employers will be allowed to opt out of the terms and conditions set by JLCs or REAs if they can conclude a collective agreement at local level. I had a recent local example of this in the bloodstock industry. This is a seven day a week operation which requires specific agreements with staff through their representative group, the Irish Stable Staff Association. The current proposals on derogation would allow racehorse trainers enter into collective bargaining with the Irish Stable Staff Association without being bound by the restrictive terms of the agricultural workers employment regulation orders, EROs. The Stable Staff Association and its members are aware this is a seven-day per week lifestyle and are willing to work around this in association with the trainers if given the opportunity. A thoroughbred racehorse does not realise it is a Sunday when it needs to be fed or trained.

The current proposals will benefit employers through a less restrictive and clear regulatory framework and reduced record keeping requirements which are currently placed on employers covered by EROs and registered employment agreements, REAs. Retail Excellence Ireland stated the reforms are right for the retention and creation of employment, with potential for 7,000 new jobs in the retail industry if significant reforms of the Joint Labour Committee system are implemented. In a recent survey of restaurants by the Restaurants Association of Ireland, some 85% of restaurants surveyed stated they would take on an additional two staff if EROs were abolished. That would amount to 4,000 new jobs. We must trust entrepreneurs and business people who inform us that they can create more jobs. Let us give them the opportunity to prove it.

Deputy Olivia Mitchell

Last night, I listened to the Opposition debate this motion. I will respond to some of their comments. The main theme was that low-paid workers were being targeted while bankers and developers appeared to be sailing off into the sunset. To be honest, it is difficult to disagree with that. It is a perfectly human reaction to resent that and I do so. However, the reality is that even if the bankers paid for the sins they visited upon us in the morning and even if we could somehow get back the assets that some developers were able to salvage and pass on to their wives, wage rates would still be uncompetitive and the existing situation would not create one single job. That is the sad reality. Unless we make Ireland more competitive again there will be no more jobs and if there are no jobs there will be no growth. That is the simple equation and no amount of railing against the unfairness of it all will change it, however annoying it may be.

Lower-paid workers are not to blame for what happened to the country but it does not change the reality that unless people wish to buy the goods and services they produce and sell then more jobs will be lost. We must be at least as competitive as other countries. We have already lost 340,000 jobs. These have simply disappeared and it is not recognising reality to take the view that although costs throughout the economy have gone down, somehow the wages and conditions of a mere 25% of private sector workers can somehow be immune. If they are immune, the reality is that fewer and fewer of them will be employed at that rate.

Last night Deputy Healy stated that the problem of job losses and closure of shops and restaurants was due to a lack of demand, which is altogether true. However, it is putting the chicken before the egg. It was a supply side problem long before demand collapsed. Demand collapsed for a reason: because all our goods and services were too dear. This was for many reasons, including that we were paying ourselves too much. We must accept that the JLC system is no longer relevant or appropriate. Someone stated it was set up 60 years ago. It is preventing recovery. It served its purpose but it preceded all employment legislation which protects workers. We continue to pass legislation that improves the working conditions of workers and this process is ongoing. However, we have not repealed the 60 year old JLCs. It is nonsense to have collective bargaining, a national minimum wage and sectoral and regional agreements which differ from place to place.

If we are to discuss fairness there is no reason 25% of private sector workers should have a special position when 75% of the private sector do not.

Almost all speakers stated that we were attacking the most vulnerable members of society.

A Deputy

I suppose they are lucky to have a job.

Deputy Olivia Mitchell

The most vulnerable members of society are those without jobs and those on the minimum wage. It is not true to say that these workers are the most vulnerable, although I accept they are among the lower paid.

Sunday working is another area which has attracted comment. I appreciate that in the past Sunday was a special day. However, nowadays many people work on Sundays and some businesses must work and open on a Sunday. That is the nature of the catering business in particular where jobs are being lost hand over fist. Jobs are being lost in areas where there is no hope of replacement jobs in villages and towns throughout the country. This is destroying our tourism industry. When one closes on a Sunday it jeopardises the rest of the business because the catering industry outside Dublin is only a weekend business and only operates on Fridays, Saturdays and Sundays. If incontrovertible proof were required of the need for change it is that restaurants are closing almost every day in the country and thousands of jobs continue to be lost.

Deputy Robert Dowds

I fully support the reforms of the JLC system as laid out in the Duffy Walsh review and as committed to in the programme for Government. To go beyond the remit of that review to lower the wages of some rather low-paid workers in society is not a course of action which should be followed.

I have sympathy for retailers and others struggling to keep afloat day after day in a tough trading environment. However, there is clear economic evidence that one of the main reasons retailers are struggling is that there has been a total collapse in domestic demand and consumer spending. This collapse has been ten times greater in Ireland than in other eurozone countries. Many thousands have lost their jobs while many others have managed to hold on to gainful employment but have stopped spending money due to the uncertainly that pervades society and the fall in consumer confidence. People on low incomes tend to spend a higher proportion of their income than those on higher incomes. Those on lowest incomes spend most of what they earn because they cannot afford the luxury of saving for a rainy day. Therefore, they spend what they have. Many of them are covered under joint labour committees and the other systems in place to protect them. To lower their wages would further depress domestic demand and given the pro-cyclical nature of such a move this would inevitably lead to more closure and job losses. If we are to help struggling retailers let us focus on the swift implementation of the measures announced in the jobs initiative. Let us give those in gainful employment every reason to have faith in the future so that they can once again spend their wages in the knowledge that their livelihood is not under threat. To encourage a race to the bottom is no way to engender such confidence. I trust the Cabinet will make the right decision in this regard.

On the question of Sunday working, those who work on Sundays should receive some recompense for it. There are different ways of doing this. The traditional way is to give extra time for Sunday. Another option could be to spread the extra money they receive across the week. I argue the point strongly because Sunday is a special day in society. Traditionally, it is the day when people attend to their religious duties. However, whether one attends to one's religious duties, it is an important family day. One might be involved in training a football team or in doing something with one's children. I accept entirely some people must work on a Sunday but those who do should get some allowance for it in one way or another.

Deputy John O’Mahony

Since I have only a brief time I will cut it to the minimum and I will not go into too many facts and figures. I welcome the debate. It is emotive and because of the emotion on all sides many facts have been forgotten. We all seek to protect lower-paid workers. This was demonstrated by the Government in the restoration of the minimum wage. We also seek to give low-paid workers who have lost their jobs in recent years the chance to get back into the jobs market. There are streams of people who want jobs and who are willing to work. People want to work but the jobs are not available. I have been to towns and villages where restaurants and hotels are closed on certain days of the week because their owners cannot afford to provide the service. Demand may be down, but the reality remains that there are issues in regard to the JLCs. The system cannot remain as it is; something must be done to amend it.

In return for the implementation of these provisions, hotels and restaurants have promised, and have put that commitment in black and white, to increase their employment by thousands. This should be put to the test in the same way as the abolition of the travel tax is putting the airlines to the test. If the promised jobs do not materialise after a period, then some of the Opposition's arguments will be proved credible. The relevant employers have also given an undertaking that current workers' contracts will not be affected by the changes. We must have an opportunity to put these undertakings to the test.

In regard to the construction industry, as referred to by Deputy Joe McHugh, I am encountering a constant line of small-scale contractors who cannot compete with contractors from outside the State who are submitting low tenders for jobs and, in many cases, paying workers black economy rates to get the work done. The livelihood of these small-scale contractors must be protected. If there is some reform and re-organisation of this system, the jobs of the lower paid in the construction sector can not only be protected but can be secured for the future. If the situation is left as it is, however, the necessary supports for low-paid workers will not be in place.

Deputy Joe Higgins

It is deeply shameful that we are seeing a combined assault of millionaires and even billionaires against some 250,000 workers who are among the lowest paid in this land, with the intention of further driving down their already low incomes and pushing them into further poverty. We have the spectacle of those who live in mansions and palaces with rolling acres demanding that workers who can barely survive should be put in an even more invidious and difficult position. That the political establishment in this State and in this Parliament rows in with them is also deeply shameful but, I suppose, predictable.

The reality is that the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, himself a millionaire rancher from the plains of Meath, lives light years removed from the conditions of life of working-class people who face an enormous struggle to survive in current circumstances. Make no mistake, wage cutting is the agenda of the Minister and the Government. Never mind the talk of flexibility, reform and all the rest. One need only consider what the Minister told Harry McGee, political correspondent of The Irish Times, a month or two ago:

Some 60,000 workers are currently on the national minimum wage and Mr Bruton said the savings achieved by employers by cutting the rate would be very small. By contrast, he said, some four times more people benefited from the JLC structure and reforming it would have a greater and more immediate impact on wage costs.

What is this but a straight argument for the slashing of the wages of workers under the JLC system?

We had monstrous distortions from the Minister, Deputy Bruton, last night. For example, he claimed that sectors and occupations in the economy where the greatest job losses have occurred are those sectors where minimum wage and sectoral agreements are prevalent. In other words, the Minister is trying to give the impression that the catastrophic loss of hundreds of thousands of jobs in recent years had something to with the rights of workers and the level of their wages. What a monstrous distortion when we have, in the United States and in Europe, a financial market system which imploded under the weight of the speculation and profiteering of the preceding period, where the speculators, vampire banks and various sharks in the markets were given a free hand through deregulation and privatisation to profiteer and racketeer at will, putting the very structures of society at risk as a result of their grab for private profit. As a result of that, the system inevitably imploded and brought the real economy crashing down with it. Hundreds of thousands of Irish workers and millions internationally are the victims of that diseased capital market.

Did the Minister, Deputy Bruton, raise a single question about the need radically to change the system that has caused this catastrophe? Not a word. Rather, we had an attack on the lowest-paid workers in the country. Did he say anything about how we should perhaps talk about production and financial systems which would benefit society and cater for the needs of the majority rather than the greed of the minority? Not a word. We have a Government of Fine Gael and the Labour Party which has capitulated lock, stock and barrel to the diktats of the International Monetary Fund, the bureaucracy of the European Union and the European Central Bank which is, in turn, representing the naked interests — and blatantly so — of major German, French, British and other banks and various and assorted speculators who gambled in Irish property and lost. They are faceless, unaccountable and unelected, but the Government puts their interests, their profit and their preservation ahead by miles of the fate of the lowest-paid workers in our country.

The Government diverts billions of taxpayers' funds to these speculators and banks which, if invested in the creation of jobs through major public infrastructural projects, for example, would create tens of thousands of jobs, revive and regenerate the economy and therefore allow our services to be developed, the pensions of elderly and retired workers to be defended and so forth. Instead we have a delusion that cutting the wages of the lowest paid will create more jobs when all the evidence is that the austerity carried out so far has been a catastrophe, as many Deputies on the left have already pointed out in this debate.

The Minister said last night that existing workers will not be affected by the changes, which will only apply to new employees. We object in the first instance to yellow-pack workers of any kind who are on lesser terms than those working beside them. However, let us consider what is stated in the Duffy Walsh report on this particular point:

For their part, employer bodies told us that they would not seek to unilaterally change contractual rates of pay or other conditions of existing staff in the event of the JLC system being abolished. They did, however, indicate that employers would seek to change the conditions of current employees by agreement.

The report goes on to state:

A proposal was put forward by [the business organisation] IBEC whereby transitional statutory protection could be provided ... While this proposal has merit, in separate submissions to the review, the representatives of employers in three of the major sectors affected by employment regulation orders indicated that they would be unwilling to engage in collective bargaining with trade unions. They told us that they would deal directly with their staff, either individually or collectively, with a view to seeking agreement on reduced terms subject to statutory minima.

That statement alone would send a chill down the spines of the workers concerned who know very well, being in vulnerable positions, they would be put under relentless pressure to agree to cut their wages. All one needs to do is to look across the road at the example of the workers in the Davenport Hotel, who found themselves in that position.

Members have heard the lamentable and embarrassing input of Labour Party Deputies to this discussion and their perfunctory attendance and attention to this debate is quite shameful. There has been a despicable distortion of the United Left Alliance's decision to vote against the Social Welfare and Pensions Bill, allegedly because we did not wish the cut in the minimum wage to be restored to workers when of course we were defending the right of workers to have a pension under the current arrangements. We stand on our record of the defence of the most vulnerable and low-paid workers. Members should enter into their computer search engines the words "Gama" and "2005" and they will see how the left in Ireland overturned a monstrous regime of industrial-sized exploitation of migrant workers, that is, those who are among the most vulnerable. We do not need to answer the spurious and despicable distortions of the Labour Party Members, who must of course cover up the fact that they will come into this Chamber tonight to vote for the weasel words of the Government amendment in opposition to the clear stand taken in this motion by the United Left Alliance.

The United Left Alliance seeks to protect the wages and rights of those workers who are among the lowest paid in Ireland. The Government amendment means words, under cover of which wages cuts would be carried out and rights eroded. A Leas-Cheann Comhairle, I put the Government on warning that it will be resisted. In particular, I put Labour Party Deputies on warning because they received an endorsement from some trade unions and some of them claim to have some links with the tradition of the great Jim Connolly and Jim Larkin. If they had a commitment to the solidarity and the traditions of Connolly and Larkin, they would vote with the United Left Alliance in this Chamber tonight.

An Leas-Cheann Comhairle

Go raibh maith agat a Theachta.

Deputy Joe Higgins

Confronted with a system in crisis, they should not give Members weasel words about difficult decisions that must be taken. Instead, like the United Left Alliance says and like Connolly said, the time is long past for patching up the capitalist system. It must go, especially when it means further impoverishment for workers.

Deputy Thomas Pringle

I support this motion and am glad to be able to contribute to this debate. I commend the Members of the United Left Alliance and the Technical Group on tabling the motion. When listening to the debate in the Chamber, it was interesting to hear Labour Party Deputies attack Members from the United Left Alliance and the Technical Group for introducing the motion and for the words they have used in its support. Nevertheless, when one listened to what they had to say, they went on to speak in favour of the motion and engaged in a charade to the effect that they will protect low-paid workers and, as Deputy Higgins has observed, that by voting for the Government amendment tonight, they will in some way protect the low-paid and low-paid workers in our society. There is no way this will happen because on the removal of the JLC system, employers will move immediately to cut the wages of workers and the most low-paid in our society.

I wish to revert to comments made by the Minister in his contribution last night and by Deputy O'Mahony earlier this evening regarding the difficulties experienced by contractors when competing for construction contracts against companies from Northern Ireland or foreign companies in particular. Their solution is to cut the wages of workers working in this State for those contractors as though this were a magic bullet that would make them competitive with foreign contractors. The point is there are laws on our Statute Book with which all contractors tendering for public contracts in this State must comply. A contractor that works for more than 180 days in this State must register with the Revenue Commissioners and must acquire PPS numbers for all its employees, who are obliged to participate in the construction industry pension scheme. However, local authorities, public bodies and the Government do not enforce their own legislation on such tendering companies because they are pursuing the lowest price at all costs. Consequently, they let them away with it, which explains why companies from this State are not competitive when they tender for projects, as they do not do so on a level playing field. The role of the Government and all public authorities should be to ensure the levelling out of this playing field by ensuring that foreign and Northern Ireland-based companies comply with the law in this jurisdiction before being allowed to accept a contract in the first instance.

Deputy Tom Fleming

The joint labour committees were introduced in 1946. Since then, they have been composed of employers and unions representing the workers. They make recommendations to the Labour Court, which then makes an employment regulation order. It is well-known that this is a tried and tested procedure, which has been highly successful down the years. It has survived the test of time and has contributed enormously to industrial peace in many sectors of employment in Ireland. Before the establishment of joint labour committees, many industrial and services sectors paid their staff peanuts and furthermore, insisted on highly anti-social working hours. The JLCs have introduced an element of civilisation into the wage structures and conditions of employment in the work system. Employers and employees in certain industries are involved in a highly disciplined fashion by the labour regulations. Low-paid workers were often unrepresented by trade unions and the JLCs were introduced to give them a floor for wages and employment conditions in a civilised manner.

The JLCs have served the country well and any changes contemplated will affect detrimentally the pay and conditions of employment of approximately 200,000 employees who are covered at present by employment regulation orders. Consequently, I support fully the motion being proposed by the Technical Group.

Deputy Maureen O’Sullivan

It has been proven both scientifically with sociological studies and in other ways that countries with a narrow social gap are much better. They are healthier and more stable and there is little unrest with a happier society. Those countries with wide social gaps are places of unrest, much disturbance and much abuse of human rights with mental health issues, increases in prison population and levels of violence. However, given the various cuts to date, the proposed cuts and charges and this debate, I fear we are creating the kind of society in which the gaps between the various classes are becoming increasingly wide.

This motion concerns an attack upon low-paid workers. Why is the Government starting with the low-paid? I do not wish to be told that people at the other end of the scale have taken cuts. While they may have so done, they are not proportionate to what is being proposed in respect of the low-paid workers. If one considers the Dáil, one is paid €10,000 to chair a committee, even though Members are aware the bulk of the work is carried out by the staff. Where is the fairness in such an arrangement? While this issue will no doubt appear on an election manifesto for the next election, it will not be tackled now as an unjust payment to those who are well paid.

I do not believe there is hard evidence that cutting JLCs will create jobs in the hospitality sector. Many of those who work in this sector have trained with Fáilte Ireland or CERT as it used to be called. They have a variety of craft skills, such as chef, waiter, waitress, management and so on. The courses in question vary in length, involve great work experience and offer people good and varied qualifications when they come out.

Cutting JLCs will have a detrimental effect on these high standards. Workers in the hospitality sector need to be supported in acquiring these skills which will be of help in continuing to attract visitors to the country.

The jobs initiative has introduced certain measures to assist the hospitality sector such as a lower VAT rate, a reduction in PRSI and getting rid of the travel tax. We should wait to see what effect these measures will have without first going after the low-paid. The tax incentives to the hotel industry had a negative effect, with every Tom, Dick and Harry of a speculator building hotels. This had a detrimental effect on family-run, long-established hotels with high standards. It certainly was not low paid workers who were responsible for our difficulties.

Any further reduction in the incomes of low paid workers will have a significant effect in a number of areas. Cuts will lead to a further strain on health and social services, an increase in claims for family income supplement and to community welfare officers, and a drop in revenue and tax revenue. People will not spend money. They are not spending it now, which is affecting businesses. Therefore, if their incomes are reduced further, even less will be spent and there will be more job losses.

A negotiated adjustment to Sunday pay rates brings them from double time to time and one third. Sunday working is considered unsocial, which must be recognised, as it is in other European countries which make special provision for Sunday working.

The shareholders in Bank of Ireland had a meeting last week and there was reference to the same old staggering salaries paid at the top and the complete disregard for ordinary people who had lost money. The board members continue to fly the flag for the elite. We allow this to continue, not to mention the obscene payout to a former AIB managing director. There is much fumbling in the greasy till, but it is not adding the halfpence to the pence, rather it is adding a nought. Therefore, what does it matter if it is three, four or five noughts when one is at the top end of the scale? We have to introduce income equality and not exacerbate the problem. Therefore, I am very happy to support the motion.

Deputy Luke ‘Ming’ Flanagan

On Monday I had the honour of being asked to visit Abbey national school in Roscommon town to give a talk to 196 young school lads between the ages of six and 12. I was asked to explain the position I thought Ireland would be in ten years. The idea was that many of the children listening to me would be adults in ten years going out into the world to look for work by which time it would be their country. After I had explained to them where I thought we could be and where we probably would be if we kept going the way we were, there was a question and answer session. A nine year old lad asked me my view on JLCs. I thought he had been put up to it, but after listening to him, I discovered that his concern had to do with his father and the cut in his wages. The child was worried that his father would not be able to buy him a birthday present if this happened. This is an example of the real effect if we cut the wages of people already put to the pin of their collar. What benefit would accrue in making such a cut? If wages are cut, people will probably need family income supplement and, in some cases, rent allowance. Has the State done a cost-benefit analysis of this decision and how much extra it will end up costing us? Will it do us any good in the long term?

Reference was made by a previous speaker to a survey undertaken by the credit unions to show how much income was available to people once they had paid all their bills. A large number virtually had no excess income. Many others with some income left over will no longer have this income if their wages are cut and they will be unable to spend money in service industries. How will employment be increased by doing what I instinctively think the Government is going to do, which is to try to cut low paid workers' wages?

People do not necessarily want high wages. The average person would be happy living on €10 a week if he or she could actually survive on €9 a week, buy all he or she needed and have a good quality of life. It is not about high wages, rather it is about what one can afford to buy on these wages. As a result of the previous and this Government's policy of bending the knee to the European Union, the amount of money people will have in their pockets will be less, regardless of how high wages are. They will have to pay back in taxation. Deputy Joe Higgins is a man who did not deserve to be insulted by the sniper talker who ran away after he had said his piece. It does not make sense for the Government to take money off people in one way and to then tell them it will reduce their wages. They cannot live on that amount of money.

People have no control over their high mortgages. Mortgages need to be reduced to their real level and negative equity must be done away with in order that people can start spending again. Then if the Government wanted to cut people's wages, perhaps they might be able to afford to live on them. As a result of everything being completely out of sync, we need to recalibrate the whole system. I understand employers have been badly hit by this decision which is not sustainable. If it costs a person so much money to live in this country, what are workers meant to do? Much of this problem can be solved if we get rid of much of the debt and reduce mortgages and living costs. People would then be able to live on the wages employers could afford to pay them.

Deputy Mick Wallace

I refer to a statement made by the task group:

We endorse the conclusions reached by Kevin Duffy and Frank Walsh that reducing JLC rates to the minimum wage level will have important distributional consequences without having any substantial effect on employment. We are concerned that recent proposals reportedly made by Minister Bruton are not in line with the Duffy Walsh report. The evidence presented in the report should not be ignored. Minister Bruton's proposals, if implemented, would reduce the pay of low earners. These workers, by necessity, spend a higher proportion of their income on consumption and consequently, cutting their wages will significantly reduce spending in the economy at a time when the savings rate is already very high and domestic demand has collapsed. Any amendments to wage setting mechanisms should ensure that the incomes of vulnerable low earners are fully protected and that demand in the economy is not further impaired.

I commend Deputy Willie O'Dea for highlighting the fact that wage cuts are adding to some of our problems and causing domestic demand to fall. I employ 52 people in the restaurant industry and can assure the House that JLC rates are not my problem. I have other problems in that the position has been very difficult for restaurants in the past couple of years. However, under no circumstances have the rules of the JLCs been causing problems for our business. I do not expect people to live on less then they are already earning. There is a big difference between people working in the restaurant industry and low paid jobs and those working in the construction sector. Such people need the protection of the State. We cannot depend on big business, or any business for that matter. There are plenty of good, decent business people, but workers will not be treated fairly by everybody. That is not rocket science.

Given the problems, the restaurant industry is going through a tough time. However, rates have reached a point where they are equal to 20% of the rents payable. There is still no connection between rates and the markets. I also have huge energy costs. In the case of one of my restaurants, I am paying €18,000 a year in energy costs, plus insurance and maintenance costs. My waste disposal costs have decreased recently because they were astronomical. I hope the Government will not allow a monopoly to develop in the waste management sector in the city because this was the case in the past. The rates charged have now been halved because the market has been opened to competition in the past couple of years. However, there is a threat that it could be closed again.

The notion that somebody working for €365 a week, who might be married with a child and might need a car to get to work, would have any extras he or she might earn threatened is outrageous. I cannot understand where that thinking is coming from.

There is a view that big money is paid for working on Sundays. The rate is time plus one third; it was never double. If an employer pays €2 an hour over the minimum wage and has a contract with an employee, he or she does not have to pay a rate of time and one third for Sundays. An employer can pay the basic rate across the board if he or she pays €2 above the minimum wage. An employer cannot complain about Sundays.

A Deputy on the other side of the House claimed that only Friday, Saturday and Sunday are busy days in this country. That is not true. I can tell her that Wednesday, Thursday, Friday and Saturday are more lucrative days than Sunday in Dublin and Wexford. Deputy McHugh claimed the minimum wage in the construction sector was €20 per hour. It is actually €13.77.

Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy John Perry)

I thank all the Deputies who have contributed to this debate. A number of important issues were raised, arising from the report of the independent review of our statutory wage setting mechanism. An agenda for a radical overhaul of the ERO and REA systems from my colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, includes proposals dealt with in the report and other issues raised by it. I am convinced that the implementation of the range of reforms the Minister set out in his outline proposals would mean that employers would benefit from having a stable, less restrictive and clear regulatory framework in this area. This is not an agenda for scrapping any protective measures, rather it is about bringing simplification and clarity to our statutory wage setting mechanism. The burden of compliance with detailed requirements established under the statutory instrument will be eased and this will apply in particular to the record-keeping requirements currently placed upon employers covered by EROs and REAs. We must ensure there are more jobs, that it pays to work and that we have a stable and proportionate regulatory framework which makes complying with the law simple.

I wish to address a number of points that arose during the course of this debate. Deputies Daly, Collins, Healy, McGrath, Ferris, Tóibín, Pringle, Higgins, Fleming, Sullivan and Flanagan claimed that the proposals constitute an attack on the low paid and most vulnerable workers in our society by reducing their wages. The report of the implementation review does not recommend specific adjustments in wage rates for the sectors covered by JLCs and REAs, nor are the actions outlined by the Minister designed to reduce the current rate of pay for anyone covered by a JLC, rather they are designed to ensure the labour market is working efficiently. Workers are protected by contracts of employment and, if these proposals are implemented, they would not change the terms of contracts. What is proposed would have the effect of changing the way pay and conditions are set in order to make the system more flexible and, more importantly, prevent businesses being left behind by the changing economic circumstances. There are 250,000 companies employing 700,000 people in the domestic economy. The changes do not propose to eliminate the Sunday premium. Instead, the provisions of the Organisation of Working Time Act would apply, which is essentially the law of the land that applies to all workers. Existing employees will continue to be entitled to enjoy the terms set down in the ERO and any variation is a matter between the employer and the worker concerned in the context of his or her contract of employment.

NERA inspectors will continue to have the power to ensure appropriate records are in place to prove employers compliance with the Organisation of Working Time Act. A number of Deputies also suggested that the proposed reform will open the floodgates for the exploitation of vulnerable workers. Let us be clear; Ireland's existing corpus of employment rights legislation provides a comprehensive and strong body of rights. The State supports the strong legislative foundation through the industrial relations and employment rights institutions that assist in the vindication of workers' rights and the resolution of disputes. Workers covered by JLCs and REAs will continue to enjoy the protection provided under this Bill and support is available through the dispute settling and adjudication and mechanism of the state. The role of NERA is to foster and enforce a national culture of employment rights compliance in the State. To this end, NERA undertakes a range of functions including information, inspection, prosecution and enforcement, and its primary objective where breaches of self-employment rates legislation are detected is to seek compliance and rectification of any breaches identified, including redress for the individuals concerned.

The Bill will protect existing jobs in the most vulnerable sectors of the economy and increase the likelihood of employment in those sectors. It will restore competitiveness, which is critical, in key sectors of the economy, including the hospitality sector which is crucial for our tourism product offering. This Government restored the minimum wage to €8.65. We have a relatively high national minimum wage which provides an adequate floor for lower paid workers. I commend the amendment to the motion to the House.

Deputy Catherine Murphy

I wish to share time with Deputy Boyd Barrett.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Deputy Catherine Murphy

The programme for Government aspired to a more equal society which is the value I support. However, equality is not something to which we can aspire and postpone until sometime in the future when the coffers of the State are more plentiful. In dealing with the crisis, it is essential that the mistakes of the past are not repeated and we rebuild towards a better future.

The reason I support reducing income inequality is because there is ample evidence to show that not only is it good for society, it is also good for the economy. Equality is an economic necessity. Income inequality cannot be countered if one starts cutting from the bottom. We do not know the Government policy on the Duffy Walsh report but we know there appear to be differences between Fine Gael and the Labour Party. One only has to listen to the debate over the past two days. It is obvious for all to see.

From the submission made by TASC, an equality think tank concerned by the increasing levels of inequality leading to the economic crisis in 2008, there is evidence that inequality may have contributed to the current crisis. For example, Kumhof and Rancière of the IMF argue that most of the major economic crises in the past century were preceded by a sharp increase in income and wealth inequality and a similarly sharp increase in debt and income ratios among lower and middle income households. They found that the financial crisis was the ultimate result of increasing inequality, driving a sharp increase in debt to income ratios. They concluded that redistribution policies that prevent excessive household indebtedness can reduce the possibility of a crisis and therefore promote macroeconomic stability.

The excellent book by Richard Wilkinson and Kate Pickett, The Spirit Level, which was based on years of research, points out that almost everything from life expectancy to mental illness and violence to illiteracy is affected not by how wealthy a society is but how equal it is. A society with a bigger gap between rich and poor is bad for everyone, including the wealthy.

The TASC submission states that higher wages, especially for those on low incomes, stimulate aggregate demand and, through this mechanism, can protect existing jobs. Low income earners, out of necessity, spend all their income. Reducing wage rates, particularly for those already on low incomes, will further dampen aggregate demand through reduced consumption. The reduced spending in the economy will create a further pressure for existing businesses and will ultimately lead to job losses and lower economic growth. The cost-cutting approach will also cost the Exchequer money because of direct and indirect losses of tax receipts and through increased Government expenditure on social protection, such as family income supplement, mortgage interest supplement and so on.

Many of the sectors that fall under the remit of JLCs are low paid. They do not constitute a small group. In the region of 200,000 workers, many of whom are in the JLC system, are in the category of the low paid. When one extends that to their dependants, one finds it is a very sizeable proportion of our population. Many are understandably concerned by all the uncertainty. I am in favour of taking good ideas from elsewhere if they can be adapted to our situation.

The low pay commission established in Britain could be replicated here in a modified version. TASC seeks such an approach and states:

The role of a commission might be to monitor, evaluate and review the low paying sectors on an annual basis and recommend to government on areas such as competitiveness and its impact on the various wage floors, the equality impact, the labour market impact and the poverty impact.

I very much hope the Minister will take the submission seriously. Not only does it make good economic sense but, just as importantly, it makes good social sense. It contains a vision of the kind of society we are building.

The programme for Government states that by the end of its term in office, Ireland will be recognised as a modern, fair, socially inclusive and equal society supported by a productive and prosperous economy. The restoration of the minimum wage was a positive move. While there is much to be welcomed in the Duffy Walsh report, if it ends up being used beyond its stated intention and if cuts in the incomes of some of the lowest paid workers are imposed, the equality society that the programme for Government aspires to can be thrown in the bin along with the hopes and quality of life of many vulnerable workers we are talking about in this debate.

Deputy Richard Boyd Barrett

No matter how one tries to dress up the Government's review or reform of the JLCs — many Government Deputies have done so — it is nothing more than a despicable attack on the lowest paid, vulnerable workers in our society. It is an attack that has been dictated by the EU-IMF vultures who are demanding that working people and the vulnerable in society should pay off the gambling debts of bankers and speculators. The same super-wealthy elites who caused the crisis in the first place are now taking advantage of it to make the poor poorer and ensure that the rich get richer.

This review is not designed to create jobs, as the Minister, Deputy Bruton, and the Government have suggested. Quite frankly, only the deluded or the completely dishonest would suggest that it is. The review will not create jobs, but it will create unemployment. Deputy Donohoe asked us to look at the facts. We should look at them and they will bear out what I and other Deputies in the United Left Alliance and Technical Group have said.

Following newspaper leaks that came from within the IMF, we know the fund wanted the abolition of the JLCs and EROs altogether. We also know that multimillionaire owners of fast-food chains and hotels, as well as employers' organisations such as the Irish Hotels' Federation, want the JLCs and EROs to be weakened or destroyed. Meanwhile, they moan about the need to cut wages. The review pressure therefore is not coming from a desire to protect the pay and conditions of ordinary workers; it is coming from those who want to dismantle the few inadequate protections that exist for ordinary workers. Such workers in retail outlets, hotels, hairdressing salons and the construction sector most certainly need protection. The facts bear this out.

Government Deputies have not responded seriously to a survey by the Migrants Rights' Centre. This showed that in 2007, 53% of the workers surveyed earned less than the minimum hourly wage, 45% worked nine or more hours per day, 44% did not get rest breaks, 85% did not receive extra pay for Sunday work or overtime pay, 48% did not receive bank holiday pay, 34% did not receive their annual leave entitlements, 51% did not receive a pay-slip and 84% did not receive a contract or terms of employment. It goes and on. These workers need more protection from unscrupulous employers, yet this review is about removing the utterly inadequate protections for downtrodden, vulnerable and exploited workers.

The IMF and EU want to suck dry these vulnerable workers in order to pay off the bankers' bad gambling debts. It is utterly shameful that politicians in this Chamber, who are paid €92,000 a year, plus expenses of €2,000 a week for a Deputy, €3,000 for a Minister and €4,000 for the Taoiseach, want to cut the wages of workers who must live on €200, €300 or €400 a week. The same politicians never work on Saturdays or Sundays, but they want to cut the wages of workers who are earning virtually nothing. These workers have to work every day, including Sundays, cleaning toilets. In addition, they are washing plates in the same restaurants enjoyed by well-paid politicians and bankers. The central justification that is put forward for all this is that it will create jobs, but it is dishonest nonsense to claim that is its real motivation.

On a number of occasions, the Minister, Deputy Bruton, has suggested that there is some sort of connection between wage rates in the sectors covered by JLCs and REAs, and the fact that there is massive unemployment in these sectors. It is utterly dishonest to suggest that somehow there is a connection between these workers' wages and unemployment. The Minister and everyone else knows that there is unemployment in those sectors because of the economic collapse brought about by the reckless gambling and speculation of bankers, developers, speculators and the super-wealthy elite who have brought this country to its knees. The situation has been worsened by the austerity demanded by the European Central Bank, the European Union and the International Monetary Fund which are sucking money from the pockets of poor people, the low paid and middle-income families. Consequently, they cannot spend it in shops and businesses.

One does not have to be an economics expert to see what is happening. One only has to walk though any village, town or city centre to see that consumer demand has collapsed. That is because ordinary working people who used to spend in those shops and businesses no longer have the money to do so. They have lost their jobs, their social welfare has been cut and the universal social charge has been imposed on them, so they have no spending money. As a result, the shops and businesses they used to frequent have had to sack workers. That is the problem. The idea that sucking more money from the pockets of low-paid works will improve the situation is utter nonsense and the Minister knows it. It will make the situation much worse by accelerating a downward spiral into an economic black hole. We are all worried about small and medium-sized enterprises experiencing difficulties and struggling to cope. We accept that they have difficulties but we know that the way to deal with that is not by attacking low paid workers. Why does the Minister not deal with the rates issue? Why does he not do something about that if he wants to give these small businesses a break? Why do we not have progressive rates? Is it right that small businesses that are struggling pay the same level of rates as multinational chains such as McDonalds, the banks and big multiples such as Tesco? Why does the Minister not jack up the rates applying to, for example, Tesco, which is making hundreds of millions in profits, to reduce the rates applying to small businesses that are struggling to cope and being driven out of business? One need not be a radical or a socialist to do that. It is done in France and Scotland and it has helped sustain and stimulate the small business and small shop retail sector.

Moving beyond that, if the Minister is to deal with the unemployment crisis and, if, as we all know, the unemployment crisis arises from a collapse in demand, the only way he can resolve it is by stimulating demand. He has to put money back into people's pockets and he has to stop handing over the investment funds that could be used to stimulate the economy and develop industry. He has to stop sending that money to bank vaults in France, Germany and Britain where it is being hoarded; the super wealthy generally are hoarding money and strangling economies like ours.

This is unbelievable. People who voted for the Labour Party voted for it because they, including these vulnerable workers, expected that of all people the Labour Party could be trusted to protect their interests. Now it is backing a move that attacks their pay and conditions, which is based on the idea that the super wealthy multiple chains owned by millionaires should have an inability to pay clause. I ask the Labour Party where is the inability to pay clause for working people who cannot take any more, who are being crucified by its cuts, who cannot pay the bills at the end of the week, who cannot pay their mortgages or rent and whose children are being forced to leave the country? Where is inability to pay clause for those people? There is none, but we have to give an inability to pay clause to millionaires. It is shameful. I appeal to the Labour Party Deputies to remember their roots, to remember who elected them and put them in here because the people will not forget if they betray them on this issue.

Amendment put.

The Dáil divided: Tá, 96; Níl, 41.

Tá

• Bannon, James.
• Barry, Tom.
• Breen, Pat.
• Broughan, Thomas P.
• Bruton, Richard.
• Burton, Joan.
• Butler, Ray.
• Buttimer, Jerry.
• Byrne, Catherine.
• Cannon, Ciarán.
• Collins, Áine.
• Conaghan, Michael.
• Conlan, Seán.
• Connaughton, Paul J.
• Conway, Ciara.
• Coonan, Noel.
• Corcoran Kennedy, Marcella.
• Costello, Joe.
• Coveney, Simon.
• Creed, Michael.
• Creighton, Lucinda.
• Daly, Jim.
• Deasy, John.
• Deenihan, Jimmy.
• Doherty, Regina.
• Donnelly, Stephen.
• Donohoe, Paschal.
• Dowds, Robert.
• Doyle, Andrew.
• Durkan, Bernard J.
• Farrell, Alan.
• Feighan, Frank.
• Ferris, Anne.
• Fitzpatrick, Peter.
• Flanagan, Terence.
• Gilmore, Eamon.
• Griffin, Brendan.
• Hannigan, Dominic.
• Harrington, Noel.
• Harris, Simon.
• Hayes, Brian.
• Hayes, Tom.
• Heydon, Martin.
• Howlin, Brendan.
• Humphreys, Heather.
• Humphreys, Kevin.
• Keating, Derek.
• Keaveney, Colm.
• Kehoe, Paul.
• Kenny, Seán.
• Kyne, Seán.
• Lawlor, Anthony.
• Lynch, Ciarán.
• Lynch, Kathleen.
• Lyons, John.
• McCarthy, Michael.
• McEntee, Shane.
• McGinley, Dinny.
• McGrath, Mattie.
• McHugh, Joe.
• McLoughlin, Tony.
• McNamara, Michael.
• Maloney, Eamonn.
• Mathews, Peter.
• Mitchell, Olivia.
• Mitchell O’Connor, Mary.
• Mulherin, Michelle.
• Murphy, Dara.
• Murphy, Eoghan.
• Nash, Gerald.
• Naughten, Denis.
• Neville, Dan.
• Nolan, Derek.
• Noonan, Michael.
• O’Donnell, Kieran.
• O’Donovan, Patrick.
• O’Dowd, Fergus.
• O’Mahony, John.
• O’Sullivan, Jan.
• Penrose, Willie.
• Perry, John.
• Phelan, Ann.
• Phelan, John Paul.
• Reilly, James.
• Ring, Michael.
• Ross, Shane.
• Ryan, Brendan.
• Shortall, Róisín.
• Spring, Arthur.
• Stagg, Emmet.
• Stanton, David.
• Timmins, Billy.
• Tuffy, Joanna.
• Wall, Jack.
• Walsh, Brian.
• White, Alex.

Níl

• Boyd Barrett, Richard.
• Browne, John.
• Collins, Joan.
• Collins, Niall.
• Colreavy, Michael.
• Crowe, Seán.
• Daly, Clare.
• Doherty, Pearse.
• Dooley, Timmy.
• Ellis, Dessie.
• Ferris, Martin.
• Flanagan, Luke ‘Ming’.
• Fleming, Sean.
• Fleming, Tom.
• Halligan, John.
• Healy, Seamus.
• Higgins, Joe.
• Kelleher, Billy.
• Kirk, Seamus.
• Kitt, Michael P.
• Mac Lochlainn, Pádraig.
• McConalogue, Charlie.
• McDonald, Mary Lou.
• McGrath, Finian.
• McGrath, Michael.
• McLellan, Sandra.
• Moynihan, Michael.
• Murphy, Catherine.
• Ó Caoláin, Caoimhghín.
• Ó Cuív, Éamon.
• Ó Fearghaíl, Seán.
• Ó Snodaigh, Aengus.
• O’Brien, Jonathan.
• O’Dea, Willie.
• O’Sullivan, Maureen.
• Pringle, Thomas.
• Smith, Brendan.
• Stanley, Brian.
• Tóibín, Peadar.
• Troy, Robert.
• Wallace, Mick.

Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.

Amendment declared carried.

Question put: "That the motion, as amended, be agreed to."

The Dáil divided: Tá, 96; Níl, 41.

Tá

• Bannon, James.
• Barry, Tom.
• Breen, Pat.
• Broughan, Thomas P.
• Bruton, Richard.
• Burton, Joan.
• Butler, Ray.
• Buttimer, Jerry.
• Byrne, Catherine.
• Cannon, Ciarán.
• Collins, Áine.
• Conaghan, Michael.
• Conlan, Seán.
• Connaughton, Paul J.
• Conway, Ciara.
• Coonan, Noel.
• Corcoran Kennedy, Marcella.
• Costello, Joe.
• Coveney, Simon.
• Creed, Michael.
• Creighton, Lucinda.
• Daly, Jim.
• Deasy, John.
• Deenihan, Jimmy.
• Doherty, Regina.
• Donnelly, Stephen.
• Donohoe, Paschal.
• Dowds, Robert.
• Doyle, Andrew.
• Durkan, Bernard J.
• Farrell, Alan.
• Feighan, Frank.
• Ferris, Anne.
• Fitzpatrick, Peter.
• Flanagan, Terence.
• Gilmore, Eamon.
• Griffin, Brendan.
• Hannigan, Dominic.
• Harrington, Noel.
• Harris, Simon.
• Hayes, Brian.
• Hayes, Tom.
• Heydon, Martin.
• Howlin, Brendan.
• Humphreys, Heather.
• Humphreys, Kevin.
• Keating, Derek.
• Keaveney, Colm.
• Kehoe, Paul.
• Kenny, Seán.
• Kyne, Seán.
• Lawlor, Anthony.
• Lynch, Ciarán.
• Lynch, Kathleen.
• Lyons, John.
• McCarthy, Michael.
• McEntee, Shane.
• McGinley, Dinny.
• McGrath, Mattie.
• McHugh, Joe.
• McLoughlin, Tony.
• McNamara, Michael.
• Maloney, Eamonn.
• Mathews, Peter.
• Mitchell, Olivia.
• Mitchell O’Connor, Mary.
• Mulherin, Michelle.
• Murphy, Dara.
• Murphy, Eoghan.
• Nash, Gerald.
• Naughten, Denis.
• Neville, Dan.
• Nolan, Derek.
• Noonan, Michael.
• O’Donnell, Kieran.
• O’Donovan, Patrick.
• O’Dowd, Fergus.
• O’Mahony, John.
• O’Sullivan, Jan.
• Penrose, Willie.
• Perry, John.
• Phelan, Ann.
• Phelan, John Paul.
• Reilly, James.
• Ring, Michael.
• Ross, Shane.
• Ryan, Brendan.
• Shortall, Róisín.
• Spring, Arthur.
• Stagg, Emmet.
• Stanton, David.
• Timmins, Billy.
• Tuffy, Joanna.
• Wall, Jack.
• Walsh, Brian.
• White, Alex.

Níl

• Boyd Barrett, Richard.
• Browne, John.
• Collins, Joan.
• Collins, Niall.
• Colreavy, Michael.
• Crowe, Seán.
• Daly, Clare.
• Doherty, Pearse.
• Dooley, Timmy.
• Ellis, Dessie.
• Ferris, Martin.
• Flanagan, Luke ‘Ming’.
• Fleming, Sean.
• Fleming, Tom.
• Halligan, John.
• Healy, Seamus.
• Higgins, Joe.
• Kelleher, Billy.
• Kirk, Seamus.
• Kitt, Michael P.
• Mac Lochlainn, Pádraig.
• McConalogue, Charlie.
• McDonald, Mary Lou.
• McGrath, Finian.
• McGrath, Michael.
• McLellan, Sandra.
• Moynihan, Michael.
• Murphy, Catherine.
• Ó Caoláin, Caoimhghín.
• Ó Cuív, Éamon.
• Ó Fearghaíl, Seán.
• Ó Snodaigh, Aengus.
• O’Brien, Jonathan.
• O’Dea, Willie.
• O’Sullivan, Maureen.
• Pringle, Thomas.
• Smith, Brendan.
• Stanley, Brian.
• Tóibín, Peadar.
• Troy, Robert.
• Wallace, Mick.

Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.

Question declared carried.