Labour ministers are holding talks with Richard Bruton, the jobs, enterprise and innovation minister, to avert a backbench revolt over his reform of pay rates in hotels, bars and the services sector.
Bruton brought proposals to cabinet last week to stop premium Sunday pay rates being set by Joint Labour Committees (JLCs), a move some Labour TDs fear will result in a cut in pay for 190,000 workers.
The cabinet did not sign off on the changes as Labour ministers demanded more time to tweak the overhaul of labour-market controls, which must also be approved by Ireland’s bailout lenders.
Under Bruton’s plan, workers would have to negotiate new Sunday rates with their employers, or accept “time off in lieu”, instead of the JLC premium rates negotiated between trade unions and employers for sectors of the economy.
Bruton has also proposed that the complex structure of different hourly pay rates for trainees, new staff and experienced workers be abolished, and replaced by a single pay rate for each sector. JLC pay rates apply to catering industry workers and also to hairdressers, security workers and some retail and farm workers.
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A number of Labour deputies have told The Sunday Times they will vote against Bruton’s legislation in the autumn if it reduces take-home pay for Sunday workers. Others say they are waiting to see what proposals emerge from cabinet.
A cabinet source said: “It will be over the line next week. We are liaising with the [European Union, International Monetary Fund and European central bank]] troika now to see what’s the bottom line. Effectively the JLC system is gone.”
Labour sources say shuttle diplomacy between Bruton and their party’s backbenches is still under way, and TDs could vote against the legislation in the absence of concessions from Bruton. “A number of deputies told Bruton clearly last week this won’t pass on a vote,” said one deputy.
Eamon Gilmore, the Labour leader, yesterday moved to reassure TDs that tough decisions taken in the national interest would be rewarded by the electorate if they helped to restore the economy. He told party members in Kilkenny that Labour ministers were “experienced, capable, hard-working and willing to make difficult decisions”.
“As a people — and as a party — we will not succeed in regaining our economic sovereignty, and in fixing what is broken in our country, if every single spending cut and every single reform is resisted,” Gilmore said.
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However, Joanna Tuffy, a Labour TD in Dublin, has pointed out that the Duffy Walsh report, on which Bruton’s plan is based, does not look for negotiations about Sunday payments to be taken out of JLCs. “Duffy Walsh was warning against that; it leaves the individual person at the mercy of unscrupulous employers and potentially leads to unrest,” she said.
About 25 Labour backbenchers attended a briefing from Bruton in the party rooms 10 days ago. The minister said existing workers would be protected from his planned reforms by the terms of their contract, but Alex White, an employment-law barrister and TD for Dublin South, said there were “100 ways” for an employer to get a worker out of his contract.
Colm Keaveney, a Galway East TD and former trade union official, told the meeting that employment had fallen after the minimum wage was reduced by the previous government, and that consumer confidence could be further damaged.
“Keaveney and White dismantled Bruton,” one backbencher said. “They were asking for evidence-based argument to support his claim that getting rid of the JLCs would increase employment. His answer seemed to be ‘I am an economist, I know what I am talking about’.”
Government sources said that after the British government abolished wage councils in 1993, there was an increase in employment of a couple of percentage points in sectors affected and wages did not fall dramatically.
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“Employers are slow to drop pay rates because it has a demoralising effect on the workforce,” said one senior government figure.
“In Ireland they are cutting jobs or hours rather than pay rates.”
Bruton told Labour backbenchers that creating 10,000 jobs would benefit the exchequer by at least €135m through reduced social-welfare payments and increased tax revenues. This did not include any consumer spending impact.
A spokesman for Bruton said separate proposals to reform the labour-relations machinery will help to reduce waiting times for some redress mechanisms.
Bruton plans to merge the Labour Relations Commission, Rights Commissioner Service, National Employment Rights Authority, the Equality Tribunal, and the Employment Appeals Tribunal.