Dáil Éireann Debate, Thursday - 23 February 2023
72. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the number of young people 16 to 19 years of age in work, excluding those in training or apprenticeships, who are being paid below the minimum wage; if he intends to legislate to remove sub-minimum rates of pay; if there will be a public consultation on sub-minimum rates of pay; and if he will make a statement on the matter. [9171/23]
View answerMy question relates to sub-minimum rates of pay and workers aged between 16 and 19, excluding those in training and apprenticeships, who are being paid below the minimum wage. Does the Minister intend to legislate to remove sub-minimum rates of pay? Will he enter into a public consultation on the issue and, most important, on the impacts they have on workers? It is unfair to suggest these people work only for pocket money or that they do not make a contribution to the family budget.
The minimum wage for those aged 19 and under is less than the minimum wage for those aged 20 and over, given that sub-minimum, or age-based, pay rates are in force. The latest figures available from the Central Statistics Office, CSO, using the labour force survey quarter 3 of 2022, show that there are an estimated 91,000 employees aged between 16 and 19. Of these, the CSO estimates 19,600 earn less than the full minimum wage. In most cases, 16,400 to be precise, this is because they are earning the relevant sub-minimum, age-based rate of the national minimum wage. The Low Pay Commission previously undertook a review of the sub-minimum, or youth, rates as part of its work programme and recommended, in 2017, abolishing the training rates and simplifying the youth rates by moving to age-related, as opposed to experience-based, rates.
The Low Pay Commission's recommendations were accepted by the Government and were introduced as part of the Employment (Miscellaneous Provisions) Act 2018. The commission commissioned its own research, carried out by the Economic and Social Research Institute, ESRI, and consulted widely on this matter before making its recommendations. As some time has passed and we want to ensure our legislation will be fit for purpose, last year, the then Tánaiste and Minister for Enterprise, Trade and Employment requested the Low Pay Commission to again examine the issues relating to retaining or removing the youth rates and to make recommendations on the subject. To inform its work, the commission has asked the ESRI to conduct background research on this issue under the terms of the Low Pay Commission-ESRI research partnership agreement.
The Low Pay Commission report and recommendations on sub-minimum rates are expected later this year. I do not want to pre-empt its work or suggest a course of follow-up action, given the Minister and his officials will consider the commission’s report and recommendations when they have been received later this year. While the issue of sub-minimum youth rates is being considered, the Government will continue to be guided by the recommendations of the Low Pay Commission with regard to any changes to the national minimum wage.
Trade unions and member-led organisations representing young people have consistently highlighted the manner in which sub-minimum rates of pay can be used to exploit workers. In my previous question, I referred to people working on the shop floor. They will tell you that if additional hours are available, those hours are more likely to go to the person with the shortest service because that person will be the cheapest person, in contrast to the person with the longest service. That is happening and it is not fair on young workers. It is also not fair on more established workers, who are losing out on hours.
This is exploitation and goes against the principle of equal pay for work of equal value. Nobody at any stage has suggested the sub-minimum rates of pay equate to sub-minimum rates of work. They just do not. Workers are expected to turn up and work as much as anybody else. Excuses for this have suggested the work was for pin money or pocket money for people, but in the middle of this cost-of-living crisis, these people are making a substantial contribution to the family budget. The sub-minimum rates of pay are being used on both sides whereby they exploit the worker, and that worker is then used to the detriment of the longer serving worker to pay cheaper hours.
It is a combined response to this question and the previous one. We both have to be careful in our language when we are talking about reports or anecdotal evidence versus empirical evidence. We do not want people to go out thinking that this is used across any sector, retail or otherwise, as suggested in terms of lower pay and the way hours are being allocated. There have been some reports of that, but having genuine, empirical evidence with real thorough research is very important in the context of this and the previous question. That is what the Low Pay Commission will undertake to obtain in the coming months. The commission will report back to the Government later this year with a suggestion. It is worth remarking on the fact that the minimum wage is €11.30, whereas it was €7.65 in 2010. There has been movement more generally in this area. As already stated, however, this is something that will be looked at. When it is looked at, the evidence will be taken into account by the Government in determining whatever action is needed.
Sinn Féin introduced legislation on this matter in 2018 and 2021. We believe that the practice is exploitative. If what the Minister of State is saying is true and it is not happening, it would not make a blind bit of difference if the Government legislated for it. It is fair to say that it is happening. It is not happening everywhere, there are many good employers, but it is happening, and the anecdotal evidence is there. We can also see that these workers continue to be employed. Sub-minimum rates of pay have been abolished in Germany, Spain, Korea, Canada and Belgium. It is time that we moved quickly to follow suit. In the middle of a cost-of-living crisis, it is unfair to have available a reservoir of workers who are paid less than others. There is no sub-minimum rate of work, hours or effort; there is only a sub-minimum rate of pay. These people do the same work as others. The principle of equal pay for work of equal value should apply.
The Deputy knows all the arguments from the Low Pay Commission as well as I do. She knows the reasoning as to why this was introduced in the first place. She knows what the response would be to the points she has made about other jurisdictions that have changed this. What I will repeat is that the Low Pay Commission has been asked to look at the matter by the previous Minister. It will look at it and report to the Government by the end of this year. The Government will take those recommendations on board and act accordingly.
