The Minister for Jobs, Enterprise and Innovation, Richard Bruton, recently announced the framework which will govern the long awaited reforms to the JLC/REA systems of wage setting. 

The principal measures include:-

  • A reduction in the numbers of JLCs currently in existence from 13 to 6.
  • JLCs will have the power to set a basic adult rate of pay and to award 2 higher increments to reflect longer periods of service.  In setting these rates, JLCs will be able to take into account factors such as unemployment rates, wage trends here and in our major trading partners and competitiveness.  Previously JLCs had set over 300 different wage rates. 
  • Legislating for new criteria to be followed in the making of EROs. This is as a result of the outcome of the recent High Court decision in John Grace Fried Chicken Limited and Ors v the Catering Joint Labour Committee and Ors, delivered on the 7 July last.  It is likely that these new criteria will take the form of principles and policies and may include such factors set out above such as unemployment rates, competitiveness etc.
  • JLCs will no longer determine Sunday premium rates or other conditions of employment that are already covered by universally applicable standards established under employment legislation.  Instead Sunday working in these sectors will be governed by existing employment legislation.  This currently provides protection for Sunday working across the entire workforce.  The Organisation of Working Time Act 1997 (as amended) requires employers to recognise Sunday working in one of three ways - Sunday premium payment, increased hourly rates across the whole week or time off in lieu.
  • In order to assist employers and employees to comply with these provisions, the Minister has requested the Labour Relations Commission to prepare a statutory code of practice on Sunday working in these sectors.
  • There will be legislative provision for companies to derogate from the terms of EROs and REAs in circumstances of financial difficulty.  This is similar to the "inability to pay" mechanism which already exists under the National Minimum Wage legislation.
  • A procedure will be established by which the terms of REAs may be varied in certain circumstances without necessarily obtaining the consent of all parties to it. There will also be more clarity around the definition of "substantially representative parties" in relation to those who are entitled to make such agreements.

It is likely that the upshot of the reform plans is that the pay rates of thousands of workers employed in certain sectors in the future will be lower. The Minister indicated that the new proposals would not affect existing workers as they are covered by their existing contractual arrangements. Nonetheless, it is probable that we will see some employers seeking to alter the existing arrangements.

This latest announcement, following hot on the heels of the recent High Court ruling, shows a firm commitment by the Government to prioritise reform of this area. The Government indicated last week that it is their intention to have a Bill ready to introduce to the Oireachtas at the earliest possible opportunity next term. Given the speed at which the proposed reforms are progressing, it is likely that the Government will abide by this timeframe. We will bring you further updates on this matter as and when they happen.