I reiterate some of the comments made by our colleagues, which we support. On behalf of the Irish Congress of Trade Unions and the 800,000 workers we represent across the island of Ireland, I thank the Chair and the committee for the opportunity to speak to this topic. My remarks today are supplemented by our briefing document submitted to the committee.
Data for the tourism and hospitality sector indicates it is characterised by low wages, increased part-time work and precariousness, and along with qualitative research and Workplace Relations Commission reports, we can add bad employment practices, breaches of employment law, exploitation and mistreatment to that list. These facts alone make this sector a challenge for anyone considering applying to work within it, and if we add limited career pathways and progression, to us the reasons for the difficulties facing employers are self-evident.
Current labour force statistics indicate a growth in employment and a shift towards jobs with on-average higher wages but a recent Nevin Economic Research Institute, NERI, paper suggests shortages in this sector were not as previously indicated at 40,000, with employment during summer 2021 merely 1% below 2019 figures and the first quarter of 2022 figures indicating a reduction of just 3% during a time when the sector did not fully reopen until after the third week.
Improving the realities of working in the sector should be prioritised over perception abroad, where decent conditions, well-paid workers and good career prospects will result in better outcomes for workers and for business. Instead, the sector seems fixated on low productivity, low value and low wages, resulting in it being the lowest paid out of 13 sectors with over half of the workers classed as low-paid, with the entire sector only accounting for 1.8% of gross value added to the Irish economy and one in 12 employees. That is according to a NERI blog from last September.
In the past two years the sector has taken significant State support in taxpayers' money for business grants and employee subsidies and it continues to enjoy reduced VAT rates, the benefits of which are enjoyed by neither workers nor consumers. There is acknowledgement of "record levels of funding for the tourism sector" by the Government in 2022 but there seems to be a lack of connection between the working environment and difficulties in recruitment and retention. It is therefore illogical to allow State money to continue to subsidise and bolster businesses that ignore State employment legislation by evidence of breaches, disengage from the State's JLC system and effectively veto its operation, and employ workers on low wages and precarious contracts, thus forcing workers to rely on State subsidies in the form of HAP and other social welfare benefits rather than on earnings.
Congress believes employers who receive State subsidies and public moneys should, at a minimum, adhere to all employment legislation, engage in State collective bargaining structures and provide decent and sustainable employment terms and conditions. At a recent hearing of this committee, Congress noted the industry comment made to "convince school leavers that a viable career path exists in the pub sector" and that "students will go on to hold senior well-paid positions within the trade". We suggest that rather than trying to convince students of a viable career, the sector should provide clear data as evidence that bears out that the sector highly values employees through improved wages and terms and conditions and opportunities are created to attain lengthy well-paid careers in the industry.
This committee should therefore act on the following key recommendations to this end. It should seek to strengthen the joint labour committee, JLC, system. There is a clear urgency to rectify the legislation governing the JLC system, which has enabled employers to effectively veto the functioning of these committees, thus preventing engagement, negotiation and progress. The committee should support calls to amend this legislation, which will afford all stakeholders the opportunity to negotiate best employment practice, prohibit competition on wages and thus prevent a race to the bottom in terms of employment conditions and employee welfare. Past experience of the JLC system proves that it worked for employers, employees and the reputation and outcomes for the sector. As a labour-intensive sector, the solution to these problems is not to seek new markets for low-paid employees but quite simply to improve the conditions for those providing the services, as all the evidence suggests.
We also recommend expanding the provision of apprenticeships. The range of regulated apprenticeships should be expanded to provide ongoing development, decent levels of pay and clear career progression, which may help to eradicate the sector's current reputation as one of low wages and precariousness. The sector should guarantee delivery of decent working conditions and pay commensurate with such qualifications, including the most recent addition, the bar manager degree apprenticeship.
We also recommend the improvement of legislative oversight. The committee should explore all issues of non-compliance with employment legislation in the sector and ensure the hospitality sector is prioritised for inspection, the commitments already made regarding increasing the number of labour inspectors in the Towards 2016 national agreement are delivered and that the WRC increases the number and expands the remit of unannounced labour inspections. That would no doubt inform further recommendations for action.
We also recommend improving wages in the sector. It is particularly important for Ireland to increase wage floors, as the better option of negotiating wages across sectors is neither available through widespread collective bargaining nor through co-ordinated sectoral bargaining systems such as JLCs. Given the cost-of-living crisis, the committee should press for a shorter implementation of the living wage, representing 66% of the median wage, which was the calculation for the national minimum wage back in 2000. As noted in the briefing document, a significant increase in the minimum wage would have the effect of reducing employer costs, such as recruitment, retention and lost productivity costs, thereby also reducing pressure on prices. Such increases aligned with consumer spending will help to protect enterprises through increased productivity.
Economic commentators have reiterated that increased wages will not fuel inflation further and therefore increasing wages will alleviate the danger of workers slipping further into poverty, help to address gender inequality and reduce the gender pay gap. Inflation has skyrocketed, with the result that the cost of living has soared for all workers, but it has produced particular difficulties for those workers on low and minimum wages, making it much more difficult for them to make ends meet.
We also recommend that the committee supports the inclusion of all social partners in the implementation of the EU directive on minimum wages and collective bargaining because, as we know, wider collective bargaining coverage has a positive impact on wages and terms and conditions and produces excellent labour market outcomes.
Our final recommendation relates to inclusion of stakeholder engagement. Congress and affiliates representing workers across the sector should be included as members in all sectoral stakeholder forums, such as the hospitality and tourism forum, Fáilte Ireland’s careers oversight group and any other such forums which may be established.