Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) - Ireland (Ratification: 1930)

Article 1 of the Convention. Minimum wage fixing. The Committee notes that, further to the major financial difficulties encountered by Ireland in the context of the current economic crisis, the Government requested assistance from the European Financial Stabilization Mechanism (EFSM). It notes that the Memorandum of Understanding signed on 16 December 2010 by the European Commission and the Government defines the economic policy conditions which accompany the granting of the financial aid, including amendments to the legislation on minimum wages in order to promote job creation, particularly for the categories of workers most at risk in terms of unemployment, and to avoid distortions in wages between economic sectors. The Committee notes that, as part of the implementation of this Memorandum of Understanding, the Government reduced the amount of the national minimum wage in December 2010, decreasing the hourly minimum wage from €8.65 to €7.65. However, it notes that the Government renegotiated the Memorandum of Understanding in 2011 with the competent European authorities and that the hourly minimum wage was subsequently restored to €8.65.

The Committee further notes that, in a decision of 7 July 2011, the High Court declared that a number of provisions of the 1946 and 1990 Industrial Relations Acts concerning the fixing of minimum wages, for certain sectors of the economy, by employment regulation orders (EROs) and registered employment agreements (REAs) are unconstitutional. It notes that, further to this decision, the Parliament adopted the Industrial Relations (Amendment) Act 2012 (hereinafter “Act of 2012”), which came into force on 1 August 2012. One of the novel aspects of this Act is the introduction of precise factors which must be taken into account by the Joint Labour Committees (JLCs) and the labour courts for determining applicable minimum wage rates (new section 27(3B) and section 42A(10) of the Industrial Relations Act 1946 (hereinafter “Act of 1946”), introduced by sections 5 and 12 of the Act of 2012).

The Committee notes that these factors include, in particular, the legitimate financial and commercial interests of the employers; the desirability of having fair and sustainable minimum rates of remuneration; the desirability of maintaining harmonious industrial relations in the sector in question and of maintaining that sector’s competitiveness; the levels of employment and unemployment; and, where enterprises in the sector in question are in competition with enterprises in another Member State of the European Union, the general level of wages in that State, taking into account the cost of living in the State concerned. Recalling that the fixing of minimum wages enabling workers to meet their needs and those of their families is a key element for decent work, particularly in periods of economic crisis, the Committee requests the Government to supply information in its next report on the impact of the measures taken as part of the implementation of the Memorandum of Understanding concluded with the European Commission in the area of minimum wages, and on the application in practice of the provisions of the Act of 2012, which call for pre-established criteria to be taken into account in the fixing of minimum wages through EROs or REAs.

Differentiated minimum wage rates based on age. Further to its previous comment, the Committee notes the explanations provided by the Government to justify the application of lower minimum wage rates for workers under 18 years of age or having less than two years’ experience. However, it again draws the Government’s attention to the importance of the principle of equal pay for work of equal value and therefore considers that it would be desirable to reduce the scope of the provisions fixing lower minimum wage rates, for example by limiting the application of a differentiated rate of this sort to the first year of employment and by taking account of periods of employment before the age of 18 years. The Committee hopes that the Government will re-examine this question, in consultation with the social partners, in the light of the preceding observations and requests it to keep the Office informed of any further developments on this point.

Article 3(2). Binding nature of minimum wage rates. Further to its previous comment, the Committee notes the Government’s indication that no valid request for a temporary exemption from the obligation to pay the minimum wage has been submitted to date under section 41 of the National Minimum Wage Act, 2000 (hereinafter “Act of 2000”). It notes that sections 9 and 14 of the Act of 2012 introduced possibilities for exemptions similar to those established by the Act of 2000, for the parties to an REA (new section 33A of the Act of 1946 and for employers to whom an ERO applies (new section 48A of the Act of 1946), respectively. However, the Committee notes that, contrary to the requirements laid down by the Act of 2000, these new provisions state that, under certain conditions, the exemptions requested because of economic difficulties faced by the enterprise may be granted even if the majority of the workers concerned or their representatives, or a trade union representing the majority of the workers, are opposed to those exemptions. Furthermore, whereas an exemption may be granted only once under the Act of 2000, the abovementioned provisions of the Act of 2012 state that an exemption may be granted once every five years. The Committee further notes that, under new section 28(10) of the Act of 1946, introduced by section 6 of the Act of 2012, an employer to whom an REA applies who is not a party to the agreement may apply to the labour court to vary the agreement in its application if the applicant demonstrates that there has been a substantial adverse change in the economic circumstances of the sector to which it relates.

While being fully aware of the constraints that the economic crisis imposes on employment and the difficulties faced in this context by numerous enterprises, the Committee draws attention to the risks posed by the extension of “inability to pay” clauses in the national legislation, especially as exemptions may now be granted despite opposition from the majority of the workers, their representatives or the trade unions concerned. Recalling the need for minimum wage rates to be binding once they have been fixed, as prescribed by Article 3(2) of the Convention, and the fundamental nature of the principle of participation on an equal footing of representatives of employers and workers in the application of minimum wage fixing machinery, the Committee hopes that the Government will take steps as soon as possible to restrict the scope of “inability to pay” clauses, and requests it to keep the Office informed of any decisions taken in this matter. The Committee also requests the Government to attach to its next report a copy of the information contained in the register of exemptions granted pursuant to the new section 33A of the Industrial Relations Act, 1946, the keeping of which register is compulsory under section 33A(15).

Article 4 and Part V of the report form. Implementing measures. The Committee notes that, under new section 45A of the Act of 1946, introduced by section 13 of the Act of 2012, a worker may present a complaint to a rights commissioner in the event of an alleged contravention by the worker’s employer of an ERO in relation to the worker. An appeal may be made to the labour court against the decision of the rights commissioner. It also notes the information supplied by the Government concerning the number of inspections conducted, infringements recorded and prosecutions instituted by the labour inspectorate. The Committee requests the Government to continue to supply information on the results of the activities of the labour inspectorate regarding the application of the provisions relating to the fixing of minimum wages, and to send any available information on the implementation of the new procedure for bringing a complaint before the rights commissioner as established by the Act of 2012.

Finally, the Committee wishes to take this opportunity to recall that, on the basis of the recommendations of the Working Party on Policy regarding the Revision of Standards, the ILO Governing Body considered that Convention No. 26 and the Minimum Wage Fixing Machinery (Agriculture) Convention, 1951 (No. 99) were among the instruments which were no longer up to date, even though they were still relevant in certain respects (GB.283/LILS/WP/PRS/1/2, paragraphs 19 and 40). The Committee therefore suggests that the Government contemplate the possibility of ratifying the Minimum Wage Fixing Convention, 1970 (No. 131), which introduces certain improvements in comparison with Conventions Nos 26 and 99 ratified by Ireland, for example by providing for a wider scope, the setting up of a minimum wage system and the adoption of certain criteria for determining minimum wage levels. The Committee requests the Government to keep the Office informed of any decision taken in this regard.

[The Government is asked to reply in detail to the present comments in 2013.]