Dáil Éireann Debate, Wednesday - 27 October 2004
233 Mr. Morgan asked the Minister for Enterprise, Trade and Employment the cost to the State of removing the age restrictions in relation to the minimum wage and increasing the minimum hourly wage to €8; and if he will make a statement on the matter. [25997/04]
View answerThe ESRI has conducted two surveys of private sector non-agricultural firms on behalf of the Department of Enterprise, Trade and Employment since the introduction of the minimum wage in April, 2000. The ESRI estimate that just 1.9% of employees are being paid the subminimum rates. Subminimum rates of the national minimum wage apply where an employee is under age 18 or in the first two years after the date of first employment over age 18 or undergoing a prescribed course of study or training.
Surveys have highlighted that the most frequently used subminimum rate is that which applies to employees under 18 years of age. Employees under the age of 18 are entitled to 70% of the national minimum wage. This percentage was recommended by the national minimum wage commission to strike a balance between ensuring that young employees are not exploited and ensuring that the rate of pay does not encourage students to leave full-time education.
The national minimum wage commission recommended that subminimum rates should also apply to employees in the first two years of employment over age 18 and to those undergoing structured training. The commission expressed the view that employers should be encouraged to focus on training and that the structure of the national minimum wage should provide encouragement and inducement for employers to take on unskilled staff and to involve them in training. There are no plans to amend the national minimum wage legislation to abolish the sub-minimum rates.
The minimum wage was increased to its current rate of €7.00 per hour on 1 February 2004, as recommended by the social partners. The parties to the mid-term review of part two of Sustaining Progress — pay and the workplace have agreed to request the Labour Court to review the national minimum wage and to make a recommendation to the Minister to apply with effect from 1 May 2005.
While information on the cost to the State of abolishing subminimum rates and increasing the minimum wage to €8 per hour is not available, an assessment, in accordance with the national minimum wage legislation, will be undertaken of the impact of a new rate that may be recommended by the Labour Court to take effect on 1 May next.
234 Mr. Morgan asked the Minister for Enterprise, Trade and Employment the estimated cost to the State of removing the provisions which disqualify those over the age of 66 from the terms of the Redundancy Acts; and if he will make a statement on the matter. [26001/04]
View answerThe Redundancy Review Group Report of July 2002, which produced recommendations for the up-dating of statutory redundancy legislation, considered that increasing the upper age limit of 66 for redundancy qualification purposes would not be a priority in the short term if resources were scarce. It could be argued, therefore, that the age cap should remain unchanged to maintain consistency with the Unfair Dismissals Acts 1977 to 2001 and the Employment Equality Act 1998.
The group recognised, however, that the labour force is becoming older and that participation in the labour force by older people, if desired, should be facilitated. Accordingly, it was recommended that consideration should be given in the medium term to removing the age cap or raising the age cap in conjunction with similar changes to unfair dismissals, equality and social and family legislation as recommended by the Equality Authority.
On 18 July 2004, the upper age limit of 66 for bringing claims under the Unfair Dismissals Acts 1977 to 2001 was removed by the Equality Act 2004. However, the Unfair Dismissals Acts will still not apply to dismissed employees who, at the date of dismissal, had reached the normal retirement age in that employment, that is, if it is the policy in an employment to retire employees at a certain age, then the new provisions would not apply.
There are no plans at present to remove the upper age limit in respect of statutory redundancy. However, in the light of the evolution of age-related legislative provisions, it will be necessary to review the age-related provisions of the Redundancy Payments Acts. This will have to be done prior to making legislative proposals for submission to Government.
In the absence of any such review, it is impossible to estimate the potential cost to the social insurance fund of the removal of the upper age limit of 66.
