Dáil Éireann Debate, Thursday - 18 April 2024
82. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment his views on the possibility of the State providing supports for businesses in meeting their obligations as regards a living wage, where the business in question has taken a case to the Labour Court under section 41 of the National Minimum Wage Act 2000. [16751/24]
Amharc ar fhreagraThe Labour Court may exempt an employer from the obligation to pay the National Minimum Wage if the employer can demonstrate financial difficulty under the provisions of Section 41 of the National Minimum Wage Act 2000. If an employer cannot afford to pay the minimum wage due to financial difficulty, the Labour Court can exempt them from paying the minimum wage rate for between three months and one year, where the employer has not previously applied for such an exemption.
Where an exemption is sought, the employer must have the agreement of a majority of employees and employees must consent to abide by any decision on the application that the Labour Court may make. The employer must be able to demonstrate that they are unable to pay the minimum wage and that, if they were compelled to pay, they would need to lay off or dismiss employees.
The State does not intend to provide further supports to compensate firms for meeting their commitments in paying the National Minimum Wage. However, the Government has and is providing a number of supports to firms to aid them in adjusting to rising costs they may be facing more generally and to boost their productivity and competitiveness and help firms to adjust to the green and digital transitions. Indeed, where an employee is in receipt of an increased earnings this represents a transfer which provides for a rise in consumer expenditure.
My Department, in collaboration with the Department of Social Protection, assessed the cumulative impact of changes to working conditions, including Auto-Enrolment Retirement Savings Scheme, Parent’s Leave and Benefit, Statutory Sick Pay, the Additional Public Holiday, the Living Wage, and Remote Working. This report was published on the 5th March. The paper recognises that businesses may face rising costs, in particular in the short term. Reflecting the findings of this assessment, a range of measures are being brought forward to assist businesses in adjusting to these increased costs as well as more generally to improve cost competitiveness of firms.
These measures include making available up to €15 million to Local Enterprise Offices to enable a top up payment of up to €3,000 in the Energy Efficiency Grant for businesses in the hospitality and retail sectors bringing the grant up to €8,000. In addition, an options paper on the application of the lower 8.8% rate of Employer PRSI contribution is currently being prepared and we will also take steps to reduce red tape and the administrative burden on business, including: an enhanced SME Test; accelerating the roll out of a fully functioning National Enterprise Hub with staff available to provide immediate advice and support to vulnerable firms. This is in addition to a €257 million package for the Increased Cost of Business grant.
The Government recognises that there is an increased cost burden on firms arising from these measures, however, there is also a need for balance in considering the current position of enterprise. The PwC Insolvency Barometer reveals a current annual failure rate of 28 companies per 10,000. This remains lower than pre-pandemic levels. While there has been an increase, business failures remain at historically low levels. The pre-pandemic level of insolvency was 36 per 10,000 recorded in 2019. Recent research from the Central Bank of Ireland has shown that unit profits of Irish firms continued to increase throughout the energy price crisis.
This Government has adopted an active approach in supporting Irish businesses across multiple crises over the last number of years. My Department is fully committed to supporting businesses and the measures included in Budget 2024, and more recently in the measures announced following the publication of the ‘Assessment of the Cumulative Impact of Proposed Measures to Improve Working Conditions in Ireland’ reflect this.
