New law for wage agreements approved

Friday 01 August 2014 22.39
The new law will change sectoral wage-setting mechanisms and alter work conditions for some employees
The new law will change sectoral wage-setting mechanisms and alter work conditions for some employees

The Government has given the go-ahead for the drafting of new legislation to replace sectoral wage-setting mechanisms which were struck down as unconstitutional last year.

The new legislation will reinstate some enhanced terms and conditions for workers in sectors including electrical contracting and construction. 

However, as of yet, it is unclear when the new legislation will be drafted or enacted.

In May 2013, the Supreme Court ruled that the Registered Employment Agreements (REA) system which sets pay rates for certain sectors, was illegal.

Many workers lost some of the REA protections negotiated by employers and unions.

The Department of Jobs, Enterprise and Innovation confirmed today that the Cabinet has approved the drafting of new legislation to reinstate REAs on a constitutionally secure basis.

Under the new legislation companies in financial difficulty will be apply to for a temporary derogation from the legally binding terms of the REA, for the first time.

Previously, employers could face criminal sanctions if they breached the REA, no matter what their economic circumstances. 

The Government says the new mechanism will deliver flexibility in response to changing economic circumstances, and will prevent Irish firms from being undercut in tendering for contracts.