Dáil Éireann Debate, Thursday - 12 October 2023
2. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment if he has plans to future-proof sectoral employment orders, employment regulation orders and registered employment agreements, REAs, in response to increases in the minimum wage. [44354/23]
View answerThe sectoral employment orders, employment regulation orders and registered employment agreements are an essential part of the industrial relations make-up of the State. They are routinely and regularly challenged in the courts and that renders them, in some cases, ineffective. Is the Minister of State aware of any plans or discussions to future-proof them, by which I mean against those challenges specifically in the context of the rising rates of the minimum wage, as it comes closer to the sectoral employment rate?
I thank Deputy O’Reilly for the question. I think she knows my strong belief in these orders and support for them. In Ireland, there are three such mechanisms for setting wages in particular sectors, which all include flexibility to take into account the minimum wage conditions in place both now and into the future.
First, an employment regulation order, ERO, sets the minimum rates of pay and conditions for workers in a specified sector. The order is drawn up by a joint labour committee through a process of voluntary collective bargaining. In this case, the worker and employer representatives at the joint labour committee will bargain on the basis of the economic conditions in place for the sector at the time, including the legal minimum wage provisions.
Second, a registered employment agreement, REA, is a collective agreement between a trade union and an employer which covers the pay or employment conditions of specified workers. An REA is registered with the Labour Court and is only binding on the parties that subscribed to it, such as the worker, employer and trade union. As is the case with an ERO, the parties negotiating the agreement will do so on the basis of the specific conditions applicable to them, including minimum wage conditions.
Third, a sectoral employment order is made following a request to the Labour Court to review issues such as the pay, pension or sick pay scheme for workers in a particular sector. The request to the Labour Court can be made separately or jointly by organisations that substantially represent employers or workers, including trade unions. When conducting such an examination, the Labour Court will invite representations to be made to the court from any interested parties. These parties may submit evidence on the impact of the national minimum wage on their sector to the court if they so wish. Under law, the Labour Court must “have regard to the terms of any relevant national agreement relating to pay and conditions for the time being in existence” when making its recommendation.
In each of these cases, we are setting the minimum wage in these sectors. This is the floor and not the ceiling. In many of these sectors, taking construction as an example, where I recently accepted a Labour Court recommendation for a new SEO, this saw the minimum wage in the sector rise to between €19.35 to €21.49 an hour. That is clearly greater than the new minimum wage approved this week of €12.70.
The Government strongly supports Ireland’s industrial relations wage-setting mechanisms. I believe collective bargaining is an important element of ensuring industrial relations stability in Ireland. While minimum wage setting mechanisms should not replace traditional collective bargaining between autonomous employee and employer representatives, they play an important role in strengthening industrial harmony.
I commend the work of the trade union movement and all it does in bringing these agreements and orders into place. A lot goes into the discussion only to have an employer swan into court, who has not been part of the negotiations or any other part, and challenge it.
Recently, a challenge was withdrawn by the security industry. The increase in the minimum wage will bring it to €12.70. The ERO rate for security workers was only going to be €12.90. It was very cheap for them to withdraw that. Unfortunately, that leaves workers in the security industry who have their employment order very close to the minimum wage in a situation where it does not mean that much to them. I am asking that consideration be given to ensuring that when the minimum wage moves, the relativity is maintained. It is easy to talk about sectors where the wage is more than €20 but that is not so for these workers who are sailing very close to the national minimum wage. The relativity that would have been there is now eaten up by the increase in the minimum wage.
I will make three points on that. First, people are always open to challenge in the courts. We believe in that as a democracy and we have to accept that, even when an order is agreed by employers and employees. There will always be some who want to challenge for whatever reasons. Second, I acknowledge the rates in security are very tight but, again, it is the minimum. It is the floor and not the ceiling. We want to see the average wages in those sectors, like construction, moving so much higher that they are not trying to get €12.70 or €12.90 an hour but are far greater. Third, on relativity, it goes both ways. These are always open to renegotiation and for new orders to be brought in. The Government stands ready with the agencies in the State to work with employees and their trade union representatives, but equally with employers, to move with the need. We are in an extremely tight labour market and employers and employees know the need to move wages up to reflect that.
Tuesday saw the mechanical SEO struck down. It is greed that is motivating this. The Minister of State says it is the minimum but for many workers it is what they will get. It may be a minimum and there may be an aspiration towards a higher wage but it does not happen. For these workers, the minimum, which is their wage, will be set and it will be struck down. The Minister of State should be under no illusions. It is greed and only greed that is motivating employers to go down to the courts. We are not talking about large sums of money or workers who are making vast sums.
Where there is movement in the minimum wage and the relativity is not respected, it becomes meaningless. It is €12.90 for the workers and €12.70 in the minimum wage, a 20 cent difference for workers who are doing work for which they are trained, skilled and regulated. Workers in the security sector are very heavily regulated, yet they see an employer who was not at the table being allowed to withhold from them a very modest pay increase. The threat has been withdrawn but when the minimum wage increase comes in, they will find themselves better off by 20 cent an hour for semi-skilled work which is highly regulated.
We can set a new order for that sector as soon as January. It was six months in previously. I encourage employers and employees to get around the table and start working towards that. These SEOs are done with the full co-operation of employers and employees and their representative bodies. Both sides come to the table and work out something and these work very well in the large majority of cases. There is always the option for parties to take legal challenges and we have to respect that and we have to respect their motivations. The Deputy might say it is greed but it is not always that. We must respect that it is their democratic entitlement and there is no point in dismissing it.
The Deputy mentioned the SEO that was knocked down this week. We will look to get a new SEO in place for that sector as quickly as possible and in a robust manner.
I return to my original point that the State is strongly supportive of these SEOs. They work well for workers and employers alike and we will continue to facilitate their progressive movement being reflective of any increases in the minimum wage or otherwise.
