I thank the committee for the opportunity to contribute. I note there was discussion regarding what the meeting was about but we have responded to the way the invitation was given to deal with low pay, the JLCs, employment rights and collective bargaining. I am accompanied by a number of colleagues who have more expertise than I have in some of these areas and I may call on them.
Low pay is something we are trying to avoid rather than increase. That is our broad approach and the issue should be considered from the point of view of income poverty. If this is defined as all those earning €9.77 per hour or less, according to the statistics available to us, the minimum wage does not get anywhere clearing that hurdle. No matter how low pay is defined, it is very much located in particular areas and sectors such as the hotel, restaurant and retail sectors. Speakers referred to this earlier. There is a high incidence of low pay in these sectors, whether reflected in the minimum wage or otherwise.
We have to deal with the concept of the living wage because, at the end of the day, one does not have to be a trade unionist to embrace the fact that one cannot have a life on €300 or €400 a week in our economy given the way it has developed. I very much understand the appreciation members have expressed on that point. It is a simple fact of life, not an ideological position. It is probably instructive to acknowledge that even the Tories in Britain and the Mayor of London, Mr. Boris Johnson, have promoted the living wage as a better concept. This is not a question of an affordable option; it is a necessity for people who find themselves in the lower quartile. According to European statistics published in January 2009, Ireland's minimum wage is ranked sixth, not second, in Europe and when this is also taken on board, we begin to get a truer picture. Against that backdrop, one would wonder why anybody is talking about reducing the minimum wage. To date, section 41 of the National Minimum Wage Act 2001 has not been invoked to seek derogation.
When discussing JLCs earlier, a scenario was painted that in some sectors people on the minimum wage do a great deal of work whereas up the line four or five managers, some of whom might be owner-managers, are on substantial salaries. We have no issue with entrepreneurship, that is what keeps the show on the road, whether in small, medium or large enterprises but, we have an issue with fairness. There are several ways in which wages can be regulated. It can be left to the market, it can be by agreement among the group on a voluntarist basis or, it can be regulated by law. In the absence of voluntary collective bargaining or leaving it to the market forces, one of the mechanism by which one tries to bring people above the irreducible minimum, which is reflected in the minimum wage as described earlier, is through better regulation. One of the ways that is done is through the joint labour committee, JLC, and also through the registered employment agreement, REA, system. The JLC and the REA systems have a long provenance and have been developed over time to build in a floor for wages, conditions and workers' rights. The joint labour committee goes right back to the trade boards system which was based on the works councils in England. They operated by consensus and were one of the better ways to regulate a reasonable rate in certain industries, which traditionally had been weak economically or weak in terms of pay and conditions. The other principal point about the JLC and REA systems is that they provide a level playing pitch for everybody so that some employers do not undercut decent employers, thereby creating a downward spiral ending up in the law of the jungle, from which very few benefit. It is of benefit to both employers and employees.
We recognise the need for modernisation and my colleague, Mr. Gerry McCormack has spent a great deal of time in the past two years engaging with the employers and with the State in modernising, updating and in some cases reducing the number of JLCs to streamline the system. This was achieved not by argument or by contest but by agreement through the national agreements, Towards 2016 and through the Transitional Agreement 2008-2009. There was a commitment to legislative proposals to further modernise and rationalise the JLC system, and legislation was drafted, the Industrial Relations (Amendment) Bill 2009 [Seanad]. Unfortunately, the Minister has indicated that he will bring forward an amendment that will allow a clause to plead inability to pay. The effect of that at the median point will be to nullify the purpose and effectiveness of the JLC system. If employers are allowed to drop below the JLC rate, we will return to the situation where workers are left without that protection and the idea of a level playing pitch goes. What will happen is that if one or two employers in a particular sector manage to secure a derogation, that is the basis on which contracts will be tendered for and that will seriously undermine and nullify the real effect of the JLCs and REAs and employment regulation orders, EROs. There are other difficulties around that which we have detailed here.
There is another point we need to remember. We all recognise the difficulties the country is in. This is no time to throw out the rule book. If we are to get through this crisis, we will get through it together by employers working with employees, by employers working with unions, with unions working with the State. We cannot end up with legislation that gives the semblance of protection but in real terms is a downward spiral of the pay and conditions of workers. Workers, as citizens, are entitled to a reasonable living wage and it is through that type of confidence in the system, albeit that the tide is going out economically, that there is a fair future for people. As far as the legislation is concerned, the fundament question is why we should have an Employment Law Compliance Bill 2008 at all? The reason is simple, it is that a significant number of employers, but not by any means a majority, did not abide by the minimum standards of employment rights legislation, never mind engage in collective bargaining. We only have to think of headline situations, such as Gama, to remember what gave rise to the Bill. The intent was not to burden hard working entrepreneurs or small or medium enterprises with more red tape. If employers had complied with the law there would have been no need for an employment law compliance Bill. One would have been inclined to ask what is so difficult to understand about the Employees (Provision of Information and Consultation) Act 2006 under the terms of which people are entitled to a statement of their terms and conditions after two months in a job. What is so difficult about the concept of ensuring that people would not be dismissed unfairly or that they are entitled to a wage slip? These are not complex concepts yet regrettably enough employers were undermining the position for the majority of employers through non-compliance. If I was an employer, perhaps I would make the points some of the Deputies and Senators have made, but one has to take the broad view that we are trying to maintain a fair society in the midst of this crisis and that requires people to abide by the normal rules, the same as most of us do. If we go out on the road, we are expected to obey the law. Employers are also obliged to abide by the law as far as health and safety are concerned and if they are in breach of employment legislation, then there needs to be some sanctions and some kind of inspection.
We are aware of considerable concerns with the Bill, which in substance was agreed between the employers, the unions and the State. It is somewhat surprising to say the least, that after the agreement was reached and the Bill was published a rear guard action was mounted, the effect of which was to almost pretend there was no need for the Bill in the first place. My understanding is that the current rate of compliance in the hotel sector is somewhere in excess of 80%. About 17% or 18%, almost a fifth of hotel employers are not complying with the law, notwithstanding all that has happened. In construction the compliance rate is in and around 75%. My understanding is that in contract cleaning it is 73% and I am not sure what the situation is in the security industry. I used to represent hardworking static guards in the security industry many years ago who had to put in very long hours to get a living wage and anybody who has worked in the security industry, even briefly, will know what I am talking about.
We are trying to work towards an effective mechanism. If somebody can find a way of reducing the red tape and retaining the effectiveness of the Bill in ensuring that employers behave themselves, that there is a real sanction, that there is a real inspection role, that there is access to records in the same way as there is in every other area, be it corporate enforcement or health and safety, well and good. We are insisting that the thrust of the Bill and the provisions that were agreed should be reflected in the end product. Light touch regulation, or "look the other way regulation", is one of the reasons for the financial and economic crisis which has dropped on our doorstep like a toxic mess. We must get away from the notion that if we bury our heads in the sand, apply a light touch to the pedal and look out the window everything will be hunky-dory. Ineffective regulation caused the current difficulties in financial services, banking and property speculation. We all know what happened in those areas. We need reasonable and effective regulation in employment because the people it affects are citizens and not inanimate objects. If there is a law, employees are entitled to know it will be enforced fairly and without favour. That is what we are talking about.
There has been much discussion about collective bargaining and union recognition. I am aware of the point made by the IBEC delegation. We must remind ourselves that the legal right to collective bargaining comes from the Constitution and from our international commitments. Ireland is a signatory to many International Labour Organisation conventions which underpin and underscore the right to collective bargaining. We are now a signatory to the Charter of Fundamental Rights. Unlike IBEC, we firmly believe that article 28 of the charter, which will soon have full treaty status, provides a legal underpinning of collective bargaining in this jurisdiction. We believe the Irish people, a majority of whom accepted the Lisbon treaty and, by implication, the Charter of Fundamental Rights, have voted for an extension of their fundamental rights. This provides an opportunity to legislate for collective bargaining. We do not see how it can be used by the Government to take some bits of the Lisbon treaty but not others. We are either in step with Lisbon and the Charter of Fundamental Rights or we are not. The people have decided we are in step. Issues surrounding our Constitution and Community law are resolvable through the medium of the Charter of Fundamental Rights.
Ireland is also a signatory to the European Convention on Human Rights. In a recent judgment in the case of Demir v. Turkey, the European Court of Human Rights said the concept of collective bargaining goes hand in hand with the right to form and join a trade union. One of the sequelae of the Good Friday Agreement was the European Convention on Human Rights Act 2003, which obliges Irish courts to take judicial notice of the decisions of the European Court of Human Rights. On this basis, the State can now legislate to underpin collective bargaining. Over time, this may help to dismantle some of the red tape people associate with this area. It is better for employers and employees, whether in small, medium or large enterprises, to sort their problems out across the table without having recourse elsewhere or looking over their shoulders at legislation. SIPTU has been in this business for 100 years. We know that if we can get into that position some of the fears of excessive legislation will fade into the background.
