IBEC - Newsroom - Major reform of JLC pay system needed

Wednesday, 10 June 2009

IBEC, the group that represents Irish business, today said that the Joint Labour Committee (JLC) system, which determines the pay and conditions for approximately 170,000 workers in the country, was out of date, totally inappropriate for the current economic circumstances and in need of a radical overhaul. The call was made in advance of a major IBEC employment law conference in Clontarf Castle, Dublin.

IBEC said that the rationale for the JLC system largely disappeared in 2000 with the introduction of the national minimum wage, and it was now acting as barrier to employment. The JLC system sets even higher legally enforceable minimum pay and conditions in specific industries, including catering, contract cleaning and the hotel sector.

IBEC Director of Industrial Relations Brendan McGinty said: "It is time to reform the outdated way we set pay and conditions in these industries. Some of these systems were set up in the early part of the last century and are no longer appropriate or necessary.

"The system is not flexible enough to protect jobs and enterprise, especially in the face of the worst economic downturn since the foundation of the state. Unsustainable wage levels and unduly restrictive practices make it too difficult for us to compete with other countries. The UK equivalent of the JLC system, the Wage Council mechanism, was abolished in 1993 and has not been replaced.

"For enterprises and employees covered by Joint Labour Committees, there is no provision for an employer who cannot afford the set rate of pay to obtain any exception. This is in contrast to the National Minimum Wage Act 2000, which contains a mechanism for exception from the minimum wage where the employer is in financial difficulty." The JLC rate is the rate of pay specified in an Employment Regulation Order made by the Labour Court on foot of a proposal by a JLC.

Employers who have unwittingly found themselves with a liability to implement terms and conditions set by the JLC system; often due to lack of awareness of premium payments, may now be faced with massive bills for arrears. Prior to the advent of NERA (National Employment Rights Authority), many employers were not fully aware of their obligations under the JLC system. They operated what they understood to be compliant mechanisms for calculating pay.

"However, the creation of NERA and the expansion in the number of inspectors has led to a situation where NERA inspectors are finding fault with various matters (including the calculation of overtime pay). We now have a greater emphasis on employment rights awareness and compliance than at any time in our history and employers are required to comply with the directions of NERA inspectors on pain of criminal prosecution.

"While some reforms have been agreed over recent years, these have been insufficient. If employers are to be persuaded to support a JLC system, there are some minimum reforms that should be introduced immediately," said Mr McGinty.

"Firstly, there should be an established means by which an employer can apply to the Labour Court for a temporary exemption from an Employment Regulation Order on foot of financial difficulty.
"Secondly, the retrospection period for claims should be brought into line with the limitation periods under the Payment of Wages Act 1991 – namely a maximum of one year.
"Thirdly, instead of chairpersons who vote, Joint Labour Committees should be ‘chaired’ by professional industrial relations officers from the Labour Relations Commission who would be non-voting and conciliate between employer and employee members to achieve true agreement, not the sort of unrealistic imposed orders we have come to expect."

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IBEC - Newsroom

Major reform of JLC pay system needed

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