Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The Living Wage concept is grounded in the idea that a person’s wage should be sufficient to maintain a safe, decent standard of living. At an individual level the resources required to achieve a minimum essential standard of living is very dependent on family circumstances and thus the interaction of individual earnings with household income and State-provided supports such as Child Benefit, Family Income Supplement as well as supports available in relation to housing, education and health all contribute to an individual’s standard of living.

It is important that Ireland’s statutory National Minimum Wage and the Living Wage concept are not conflated.

In Ireland, the Low Pay Commission is the statutory body established under the National Minimum Wage (Low Pay Commission) Act 2015, to examine the national minimum hourly rate of pay and to make an annual recommendation to the Minister.  The Commission is tasked with ensuring that all recommendations are evidence based, fair and sustainable, and do not create significant adverse consequences for employment or competitiveness.

The Commission submitted its first report in July 2015. Its recommendation to increase the minimum wage from €8.65 to €9.15 per hour was accepted by Government and the increase came into effect on 1st January 2016.  The Commission’s second report was submitted to Government in July 2016 and the recommendation made by the Commission for an increase to €9.25 per hour was approved by Government in the context of Budget 2017. The increase came into effect on 1st January last. The next review of the minimum wage is underway and the closing date for submissions to the Commission falls this week.

The Living Wage must be seen as a voluntary societal initiative centred on the social, business and economic case to ensure that, wherever it can be afforded, employers will pay a rate of pay that provides an income that is sufficient to meet an individual’s basic needs, such as housing, food, clothing, transport and healthcare.  The Living Wage has no legislative basis and is therefore not a statutory entitlement. This is different to the National Minimum Wage which is a statutory entitlement and has a legislative basis.

Deputy you will be aware of the existence of a number of other wage setting mechanisms that were legislated for in recent years to assist workers in sectors that were traditionally characterised as low paid. Orders made under these provisions can set minimum rates that are higher than the national minimum wage.

The Industrial Relations (Amendment) Act 2012 provides for a revised framework for the making of Employment Regulation Orders.

A Joint Labour Committee (JLC) discuss and agree proposals for terms and conditions to apply to specified grades or categories of workers in the sector concerned. When it reaches agreement on such proposals for terms and conditions, the JLC publishes details and invites submissions from interested parties.  If, after consideration of any submissions received, the Committee adopts the proposals it will submit them to the Labour Court for consideration.

The Labour Court will then make a decision on the adoption of the proposals. If the Court decides they should be adopted it will forward a copy of the proposals to the Minister. If it is considered appropriate to do so, an Employment Regulation Order giving effect to such proposals will be made by the Minister. 

There are JLCs for the following sectors - Agriculture; Security; Retail Grocery and Allied Trades; Hairdressing; Contract Cleaning and Catering.

Two Employment Regulation Orders relating to the Security and Contract Cleaning Sectors came into effect on October 1st 2015. (An amended ERO for the Contract Cleaning Sector was made in October 2016).

The Industrial Relations (Amendment) Act 2015 provides for a mechanism whereby, at the request, separately or jointly from organisations substantially representative of employers and/or of worker, the Labour Court can initiate a review of pay and pension and sick pay entitlements of a class, type or group of workers in particular sector.   

If deemed appropriate the Labour Court can make a recommendation to the Minister on the matter. If satisfied that the process provided for in the 2015 Act has been complied with by the Labour Court, the Minister will make a Sectoral Employment Order. Where such an Order is made it will be binding across the sector to which it relates, and will be enforceable via the Workplace Relations Commission.  

The 2015 Act also provides for the reintroduction of a mechanism for the registration of employment agreements between an employer or employers and trade unions governing terms and conditions in individual enterprises.  Such agreements, known as Registered Employment Agreements (REAs), are legally binding on the subscribing parties.