The Government is to step up efforts to ensure that workers are entitled to a living wage rather than the national minimum wage, Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar told the Dáil today.

Mr Varadkar said the Low Pay Commission which currently recommends the National Minimum Wage, could be transformed into a Living Wage Commission to make recommendations on what a living wage should be.

However, he cautioned that this would not happen until after a public consultation period and further engagement with employers and unions.

The current National Minimum Wage of €10.10 per hour is set to rise to €10.20 from 1 January.

However, the Living Wage as calculated by the Vincentian Partnership stands at €12.30 and is calculated on a different basis which would be more favourable to workers.

Mr Varadkar told the Dáil that the Covid-19 pandemic had laid bare some of the "weaknesses and inequalities" in the way the economy was structured.

"It has prompted us to re-evaluate the value of people's work, the importance of so-called low-skilled workers in our everyday lives, our preconceptions and our approach to public policy," he said.

He said the Government had sought to act quickly on areas requiring immediate intervention, and pledged to introduce legislation for statutory sick pay after a public consultation period and engagement with the Labour Employer Economic Forum. 

Mr Varadkar referred to the commitment in the Programme for Government to progress to a living wage over the lifetime of the Government.

"I am looking at how we might transform the Low Pay Commission into a Living Wage Commission, a commission that collects data on the cost of living in an evidence-based way," he told the Dáil, adding that he would welcome submissions on the matter.

The most recent Low Pay Commission recommendation was for a €0.10 increase in the minimum wage which will bring the rate to €10.20 from 1 January.

However, two trade union members of the commission - Irish Congress of Trade Unions General Secretary, Patricia King and Mandate General Secretary, Gerry Light - resigned after describing the recommended increase as inadequate.

Today Ms King welcomed the proposed initiative to progress to a living wage "if it comes to pass".

However, she cautioned that moving to the living wage would not be an easy job, given the scale of employer resistance to even modest increases in the current National Minimum Wage.

A spokesperson for the Department of Enterprise, Trade and Employment said the idea was at an "early stage of development", but said it was envisaged that the terms of reference would be changed to reflect this new purpose.

The composition of any possible new Living Wage Commission has not yet been decided.

Employers group Ibec says that the elements which are considered in calculating a Living Wage and a National Minimum Wage are very different. 

In a statement, it said: "Given the number of factors included in the development of a Living Wage that are outside the control of any employer, such as childcare, housing and transport costs, any consideration of a Living Wage should, Ibec believes, be addressed within the wider social dialogue frameworks and in conjunction with the work of the Commission on Taxation and Social Welfare.  

"A Living Wage Commission established on a similar basis to the Low Pay Commission could not address the range of policy failings that existed long before Covid, including the exorbitant cost of childcare and the absence of effective solutions for the housing crisis."