The Department of Jobs, Enterprise & Innovation has rejected suggestions that reforming wage-setting mechanisms for low paid workers would increase demands on the social welfare budget.
It has also rejected suggestions that Minister Richard Bruton's proposals to reform JLCs would automatically result in lower pay for around 200,000 workers.
Minister Bruton has proposed changes to the Joint Labour Committee system that would result in lower pay for workers in low paid sectors including cleaning, retail, security, hospitality and cleaning.
A spokesman said the reforms - including cuts in overtime and Sunday rates - will primarily affect employees hired in the future.
Current employees could still rely on their existing contract of employment incorporating the employment terms of a JLC, the spokesperson said, adding that those terms could only be changed with the agreement of the employee.
If the employer tried to force through lower terms and conditions, the employee could have redress to employment rights bodies or the courts.
Fears have also been expressed that Family Income Supplement claims would rise if the proposals were implemented.
A Department spokesperson said that figures from Forfás showed that for every 1,000 people who would enter employment following reform of the system, the State would save €13.5m in social welfare payments.
He said this would more than offset the cost of any increase in Family Income Supplement claims.
He said Mr Bruton's proposals were aimed at getting people back to work.
The Duffy Walsh review of wage-setting mechanisms recommended that they be retained to protect vulnerable workers.
It found that there would be no employment dividend from abolishing them, though the authors recommended that JLCs should be reformed where necessary.
Mr Bruton's reform proposals - which are viewed by many industrial observers as going beyond the Duffy Walsh recommendations - were discussed at Cabinet today.
It was decided to defer a formal Cabinet decision, partly because a significant High Court judgment on the issue is due to be delivered on Thursday, which could directly impact on the proposals.
However, sources said that a decision could be made at the Cabinet meeting this day week.
Aspects of the proposals are being opposed by Labour backbenchers.
This evening, Tánaiste Eamon Gilmore said that the Government would have to factor in the cost of changes to the JLC system to social welfare payments and the family income supplement.
He added that he was confident that the Government could agree a package of reforms of the JLC system.
