IBEC, the group that represents Irish business, today met with representatives of the EU Commission in Brussels to outline employers' concerns that proposals by the Minister for Enterprise, Jobs and Innovation Richard Bruton to reform wage rules do not go far enough. The meeting took place ahead of an Irish Government decision on the future of the Joint Labour Committee (JLC) wage setting mechanisms (see note below).
Speaking after the meeting in Brussels IBEC Director of Industrial Relations and Human Resources Brendan McGinty said: "Ireland needs to show the world it is serious about economic reform and getting labour costs back into line. Foreign observers clearly see that our wage rules are a barrier to job creation, growth and recovery. Major reform is a key part of the programme agreed with the EU and IMF. Now is not the time for government to shirk from the hard decisions.
"Existing wage rules are making it difficult for many businesses to stay afloat. The JLC system has contributed to jobs being lost in many sectors and has contributed to a reduction in hours worked by those who have held their jobs. The current proposals from Government do not go far enough, the system should be abolished in its entirety.
"Pay rates for new workers in unregulated sectors have fallen by about 25% in recent years. This shows the labour market is responding to an economic and unemployment crisis. All sectors of the labour market must be allowed to make the costs adjustments necessary to keep businesses afloat and get people back to work.
"Significant job creation potential exists if the JLC system was abolished. 37 percent of restaurants remain closed on Sunday’s because of Sunday premiums and 4,000 jobs could be created in the sector if the JLC system were abolished. In the retail sector, 50,000 jobs have been lost since the start of the recession and many more are at risk. Seven out of ten hotels have reduced staff numbers and/or hours in 2010, but 21,000 jobs could be created if we restore competitiveness in that sector."