Enterprise, Jobs & Innovation Minister Richard Bruton has said he plans to introduce far-reaching reforms of the Joint Labour Committee system of setting sectoral wages because it is no longer fit for purpose.
He said he anticipated that the changes would be introduced before the end of the year. The JLC system has been strongly criticised by employers, who say the agreements set unaffordable but legally binding wage rates and employment conditions.
Unions argue that the system provides protections for vulnerable workers in low paid sectors including contract cleaning, catering and hairdressing.
An independent review of the system was recently completed by Labour Court chairman Kevin Duffy and UCD Economist Dr Frank Walsh.
Speaking in Athlone, Mr Bruton said that the system required a radical overhaul to make it fairer and more responsive to changing economic circumstances and labour market conditions.
He intends to bring the Duffy/Walsh report to Government this week and will then set up an action plan to make the system more responsive and fit for purpose in the context of a modern economy.
Minister Bruton said there had been convulsions in the jobs market in recent years, with areas like retail, hotels and catering among the hardest hit. He said 20% of jobs in those sectors had disappeared over the last three years.
He also highlighted disparities of between 25% and 30% in certain sectors competing directly with the UK market. Mr Bruton pointed out that pay rates in key sectors covered by JLCs had increased up to 20% faster than the national minimum wage.
He said the Duffy/Walsh report formed the basis for radical reforms in this area. Among the issues referred to by the Minister were pay rates for Sunday working, the complexity of JLC regimes, where overtime rates and other employment terms can vary significantly, reducing the number of JLCs and making them more flexible in responding to changing circumstances in sectors.
Mr. Bruton suggests that companies and workers will see a simplified and more easily understood pay system.
He said the action plan would be developed following discussions with the European Commission, in line with the EU/IMF programme, and other stakeholders.
