A confidential review of legally binding wage-setting mechanisms has said the system should be maintained to protect reasonable employment standards for vulnerable workers.
However, the review of Joint Labour Committees and Registered Employment Agreements, carried out by Labour Court Chairman Kevin Duffy and UCD Professor of Economics Frank Walsh, says the system needs a radical overhaul in order to make it fairer and more responsive to changing economic circumstances.
Employers have argued that the system of sectoral agreements hampers competitiveness and job creation, and is unaffordable in the current economic crisis.
Joint Labour Committees and Registered Employment Agreements govern pay and conditions for around 200,000 workers across a range of sectors.
They were identified by the IMF/EU/ECB delegations as a key competitiveness issue.
But this review says abolition would not lead to an increase in employment.
The review also finds that existing employment rights legislation would not adequately cover matters dealt with by JLCs and REAs.
Instead the authors advocate reform.
Overtime and Sunday premium payments should be streamlined across the various sectors.
Employers opposing JLCs had argued that the agreements make it prohibitive to employ people on Sundays because of excessive overtime and premium entitlements under the sectoral agreements
If the national minimum wage is cut in future, JLCs should consider revising their rates.
The review finds no justification for separate JLCs based on geography - for example in the catering, hotels and hairdressing sectors.
It would abolish some JLCs in the sectors of aerated water and wholesale bottling, provender milling, and clothing.
Crucially for unions, it says the JLC system should only operate where - for whatever reason - collective bargaining does not take place.
Crucially for employers, it says there is a case for allowing employers under pressure to derogate from a JLC, provided it would not distort competition in the sector, or lead to displacement of workers elsewhere.
The Government is due to issue its own proposals shortly.
