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Labour Party and SIPTU Capitulate on Low Pay

From Paddy Healy 086-4183732
Mandate Trade Union and Unite the Union have roundly condemned the Government proposals to cut the low pay of over 200,000 employees.
The proposals will give rise to reduction of JLC rates generally, elimination of Sunday premium, and allow employers to claim inability to pay.
Thousands face pay cuts after JLC reforms are published
From Daily News Digest of Unite The Union
“The government published its proposed reforms of the JLC structure yesterday. In a move which the Minister admits will lead to a ‘lowering of hiring costs’, the number of JLC’s will be reduced from 13 to six and there will be only one rate with two additional discretionary ones. The premium for Sunday pay will be swept away to be replaced on paper with guidelines for employers, and bosses will now be able to seek derogation through a new inability to pay clause. This is terrible news for all low paid workers and those whose wages will be set with reference to them, as well as for the economy which will now have less money, less tax and little prospect of anything other than increased unemployment.—-
UIONS NOT AT ONE OVER JLC REFORMS
UNITE sees the reforms of the JLC structure as a dark day for those on low pay and for all working people. That view is broadly shared in the Irish Times analysis but not fully across the union movement.”
“The trade union Unite said last night it would not rule out industrial action in protest at the Government’s planned measures. The plan was also strongly criticised by Mandate, the union representing retail workers.” Martin Wall Irish Times, July 29
But following the surrender of the Labour Party in Cabinet, SIPTU has described the proposals as “relatively positive” on RTE Television News, July 28 and has given the government plan “a cautious welcome” (Martin Wall, Irish Times July 29).
This is a dark day for Irelands biggest union which was built by Larkin and Connolly
The trade union affiliation of the new government appointees to the board of Solas (replacing Fás) will be of considerable interest
The extent of the attack on the low-paid can be gauged from the remarks by John Douglas, General Secretary , MANDATE, on Morning Ireland, to-day, July 29
“This is devastating for 200,000 workers- following increases in gas prices, mortgages, food prices, thousands will be driven over the edge- majority are women earning no more than 9.50 an hour trying to put food on table-this is not to create jobs but to lower pay and conditions-it won’t create a single extra job. When Margaret Thatcher dismantled the wage councils in England ,it did not create one extra job-the research shows this despite the ministers claims”

Analysis
The EU-IMF deal commits the Irish Government to a “review of wage setting mechanisms”. There may have been additional secret assurances given by the previous government but the EU-IMF Deal does not specify any particular measure.
Bruton had made his proposals before the JLC system was struck down by the courts on constitutional grounds. The changes to pay rates, conditions of service and terms of reference in the proposals have nothing to do with the decision of the court. The proposals for these changes pre-date the courts decision. There are changes in procedures which are genuinely required in the light of the courts decision. In the wake of the court decision there are no legally enforceable Employment Regulation Orders (ERO) in existence in the state. The process of establishing new constitutional EROs will have to commence from scratch. This will take several months during which no legally binding EROs will exist.
If the Fine Gael/Labour Government were interested in protecting the 200,000 employees covered by the original EROs at the earliest possible date, they would have introduced the procedural measures contained in the proposals published yesterday before the Dail was adjourned for the summer one week ago or alternatively, they could have kept the Dail in session to deal with the matter.
Government “spin” to the effect that the measures were announced yesterday to protect workers in the light of the court decision is entirely false and misleading.
The way that the matter has been handled ensures that workers will remain unprotected by EROs for several months and when new EROs are produced their provisions will be far inferior for workers to the ones that have been struck down by the courts.
Job Creation?
The Minister and the employer body IBEC continually argue that pay and conditions under EROs must be reduced in order to create jobs. There is no evidence for this. Indeed, the Duffy/Walsh Report to the Minister for Enterprise, Employment and Innovation concludes inter alia : “We have concluded that lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment.” and “ we conclude that it is not accurate to suggest that the body of primary employment rights legislation currently in force adequately covers matters dealt with by EROs and REAs.” According to the OECD, Ireland suffers from some of the highest levels of low‐pay. Over 21% of full‐time employees are ‘low‐paid, compared to a Eurozone average of 14.7% and EU Commission data shows that labour costs (include wages and employers’ contributions) in the Food & Accommodation sector in Ireland are 6% below the EU-15 average.
Despite the fact that the above information has been contained in several statements by trade unions and ULA TDs , Minister Bruton was allowed to repeatedly assert that the measures would to create jobs in interviews on Drivetime and RTE News without the contrary evidence being put to him. IBEC spokespeople have also been allowed on all media to claim that 40% of restaurants do not open on Sunday “due to the Sunday premium”. Of course many restaurants have always remained closed on Sunday because their trade depends on demand from locally employed people who do not work on Sundays. Restaurant closures, limited opening hours and increased Sunday closing is due to the reduction in demand caused by increased unemployment and income reductions due to recent budgets. The IBEC claim is a gross abuse of dubious statistics based on surveys of restaurant owners. “They would say that, wouldn’t they?”
Key Measures
The Minister asserts that new JLC rates will be lower. This is because the terms of reference for the wage setting process have been changed to the disadvantage of the worker side. “These include competitiveness factors, average hourly rates set in comparable sectors in Ireland’s main trading partners as well as employment and unemployment rates” Martin Wall, Irish Times,July 29. For example, the employer side will now be able to argue that pay rates should be lowered due to the extent of unemployment. This is a classic use of unemployment by employers to drive down wages. It has no justification except capitalist greed. It will now be supported by statutory terms of reference agreed by the Labour Party.
The Minister claims that these new lower rates will not affect existing workers who are protected by the terms of their current employment contracts. The minister knows well that existing employees can be pressurised in many ways to agree to reductions in existing pay rates if these are not legally binding. That is a major reason why legally binding JLC rates exist. Employers have many ways of discriminating in favour of new cheaper workers (eg allocation of overtime, denial of promotion, assignment to easier or more pleasant job etc). In addition, a new businesses paying lower rates will be able to undermine existing businesses paying higher rates. This is also the case in relation to the new provision of allowing businesses to claim inability to pay. An employer being undermined by competitors can then pressurise employees to accept the lower legal rate or face closure and unemployment. The original JLC system was designed to prevent this “race to the bottom” in competing businesses dependent on finite demand.
The new JLCs will be precluded from setting a Sunday premium. The suggestion that the provisions of The Working Time Act is an adequate replacement to protect workers is completely false. Under that Act the employer can simply give another day off instead. This effectively means that staff can be made to work at the flat rate. Sunday premium has been simply abolished.
————————————————————————————————

The article below from Irish Independent July 27 (below) indicates that the Labour Party has agreed to Government attacks on the low-paid at the cabinet meeting held yesterday.
In a time-honoured and cowardly manner, the deal was done and announced while the Dail was not sitting and just before the ministers went on holiday. This will form a precedent for further attacks on the incomes of all employees. The 100 Euro tax on homes was also agreed at the cabinet meeting. Though net financial assets (exclusive of houses and land) increased by 27 billion Euro in 2009 and are expected to have increased by a similar amount in 2010, no tax whatever has been placed on these assets
Paddy Healy 086-4183732 paddy.healy@eircom.net
Member National Steering Committee United Left Alliance
A fuller report from Irish Independent July 28 (below) on the Labour capitulation on Low Pay is carried below.
Not alone has the Labour Party agreed to the scrapping of the Sunday premium for low paid workers, it has also agreed to allow employers to claim inability to pay and ,if successful, to pay a lesser rate for normal working days. In circumstances in which demand is being continuously removed from the economy by government, this can only lead to continuous reduction in the direction of the minimum wage and the effective collapse of the system. Compliant employers will be progressively undermined by those paying a lower rate.
The scrapping of the Sunday premium will simply add to the profits of highly successful multi-national retail chains at the expense of their employees.
The 100th anniversary of the founding of the Labour Party in Clonmel by Larkin and Connolly in 1912 which will be held next year will be a in the nature of a wake.
The actions of the Labour Party are an insult to the memory of Larkin and Connolly. Larkin is rightly celebrated for his heroic battles on behalf of the low-paid. In addition, Connolly is celebrated for his heroic stand for Irish Independence and sovereignty. But the Labour Party is allowing internatonal financiers to suck the lifeblood out of Ireland and even allowing them to dictate cuts in low pay under the EU-IMF Deal. When it is considered that cuts in low pay will actually worsen the national finances by lowering the tax take, the capitulation of Gilmore on the JLC issue must be the most abject surrender of Irish sovereignty conceivable.
Paddy Healy 086-4183732
Member of National Steering Committee, United Left Alliance

By Fionnan Sheahan and Lise Hand
Irish Independent Wednesday July 27 2011
Low paid workers will be entitled to slightly more than the minimum wage working on a Sunday under a new deal to replace the existing system of setting wages.
New rules governing the wages in the catering, hotels, retail, grocery, contract cleaning and some other sectors were agreed by the Government yesterday.
Jobs Minister Richard Bruton is understood to have struck a deal with Tanaiste Eamon Gilmore on the contentious issue of the Joint Labour Committees (JLCs).
The Government agreed yesterday to draw up new laws to reform the area after the High Court ruled the wage setting agreements were unconstitutional.
Coalition sources said the current rates of Sunday premium pay will be done away with, but employees working on a Sunday will still be entitled to slightly more than the minimum wage — just not as much as they are currently paid.
However, what has yet to be determined is how much more than the minimum wage will be paid.
After attacking Mr Bruton on his proposals to reform the area, the Labour Party was said to be keen to get the legislation in place to provide protection to workers following the High Court case. A spokesperson for the Labour Party said the legislation was agreed on by the Cabinet.
Last night Mr Bruton said: “It will be a system that will protect workers, it will be robust but will introduce the reforms so that we can exploit the opportunities for employment.”
– Fionnan Sheahan and Lise Hand
Employers can claim an ‘inability to pay’ under wage reforms
By Fionnan Sheahan and Anne-Marie Walshe
Irish Independent, Thursday July 28 2011
Employers will be allowed to claim an inability to pay the rates agreed under the wage-setting system for low-paid staff, the Irish Independent has learned.
Sunday premium pay for those covered by the Joint Labour Committees (JLCs) will also be scrapped.
The controversial new rules governing the wages in the catering, hotels, retail, grocery, contract cleaning and some other sectors will be announced today.
Ahead of the publication, the Labour Party was accused last night of capitulating in an attack on the low paid.
Under the reforms to the JLCs, low-paid staff will be entitled to the same protection as other employees for working on a Sunday.
The existing Organisation of Working Time Act allows for staff to be compensated for working on Sunday through the negotiation of extra pay, an increased average wage across the week or a day off in lieu.
In reality, though, the scrapping of the Sunday premium payments will mean a pay cut for staff in those sectors who work on that day.
The number of JLC agreements is also widely expected to be reduced substantially.
Jobs Minister Richard Bruton is understood to have struck a deal with Tanaiste Eamon Gilmore, granting some concessions from his original proposals.
After coming under attack from the Labour Party, Mr Bruton is believed to have got through the bulk of his proposals.
The minister’s hand was strengthened substantially by a High Court ruling that JLCs were unconstitutional and pressure from the IMF and EU to reform the area.
The new deal will have to be cleared with the troika lending Ireland the €85bn bailout.
The Government is also believed to have accepted the recommendation on the introduction of an inability-to-pay clause for employers.
The expert report on the area said there should be a “derogation on economic grounds” introduced, where the employer can claim it would damage the viability of the firm and cause job losses if they had to pay the rates agreed.
The United Left Alliance said the deal was done “in a time-honoured and cowardly manner”, announced while the Dail wasn’t sitting and just before ministers took holidays.
– Fionnan Sheahan and Anne-Marie Walshe

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