Minister for Business and Employment, Ged Nash, recently announced the formation of a new Low Pay Commission (LPC) which is being established to advise the Government on the appropriate rate of the National Minimum Wage on an annual basis. The new Commission, once up and running, will seek to raise the national minimum wage where it can, without risking jobs, and will be comprised of a nine member panel, namely:
- An independent chairperson
- Three people with a deep understanding of the interests of low paid workers
- Three people with a deep understanding of employer interests
- Two members with experience of economics, labour market economics, statistics or employment law
Focus The LPC is currently a non-statutory body but that may change next year with the expected amendment to the National Minimum Wage Act coming into play. The LPC’s key area if concern will be the national minimum wage, but aside from this they will also be working on other areas like monitoring trends in low paid employment and as well working conditions. Their argument is that low paid employment is an area that needs to be more closely monitored, as this area is without the same type of strength in its position that highly skilled roles have from the sheer competitiveness factor in industries. Progressive Increase in the Minimum Wage The Minister’s recent statement that he wishes to see “the minimum wage level progressively increase”, and the word ‘progressive’ suggests that slow rises in low paid areas may become a key feature for employers in the future. But this in turn would no doubt have a knock on effect for employers in their overall wage bill and would obviously add further pressure on employers who are finally in a state of financial recovery or, indeed, are still struggling to compete. Employer Concerns For example, in a lot of service industries where a lot of employees may be on the minimum wage, any increase in the wage bill will have to be passed on to customers which in turn could have an adverse impact on incoming business. This could lead to employers having to move towards situations they may have been close to considering, but perhaps have been threading water on in recent years and barely avoiding. Outsourcing roles to cheaper employment areas could again rise as it did initially during the boom times, thus increasing the need for redundancies or the need to make reductions in hours as alternative to redundancy. It was the steady increases in the basic rate of pay payable to employees under EROs and REAs which ultimately led to those agreements being challenged before the High Court and Supreme Court and one would hope that changes to the National Minimum Wage would only ever occur in a well-reasoned and economically savvy manner. Employment Law Developments If you factor the potential for progressive increases in the National Minimum Wage together with the proposals to legislate on collective bargaining in Ireland by mid-2015, employers are strongly advised to keep abreast of employment law developments over the coming year. If you wish to discuss any element of this article or have any queries in general then please do not hesitate to contact the Peninsula 24 Hour Advice Service on 01 855 50 50.
