IBEC calls for abolition of Joint Labour Committees

Joint Labour Committees (JLCs) - regulatory bodies setting minimum pay and conditions in a number of industries - are being reviewed during 2005, based on a commitment under Ireland's current national pact, Sustaining Progress. The Irish Business and Employers Confederation (IBEC) has demanded the abolition of JLCs, while the trade unions and dispute-resolution institutions insist that they should be retained.

A review of Ireland’s Joint Labour Committee (JLC) system - which sets minimum pay and employment conditions in a range of sectors - has been commissioned by the Labour Relations Commission and conducted by two academic researchers, Michelle O’Sullivan and Joseph Wallace, of the Department of Personnel and Employment Relations, University of Limerick. The central conclusion of the researchers' report, published in October 2005, is that: 'The JLC system should be retained but needs to be modernised. We are conscious that in making recommendations these cannot find universal approval. This is because there appears to be minimal agreement between employer representative bodies and the trade union side.'

The review of the operation of JLCs (of which there are currently 19) is one of three overall reviews arising out of a mid-term review under the current national social partnership pact, Sustaining Progress (IE0301209F and IE0304201N). The other two reviews focused on the reform of employment rights bodies and the resourcing of the Labour Inspectorate (IE0504204F)

The following terms of reference were set for the JLC review:

• to consider the relevance of the JLC system in determining terms and conditions of employment and minimum pay rates in specific sectors;

• as appropriate, to make recommendations on the operation of the JLCs, including their structure and membership; and

• as appropriate, to examine individual JLCs and make recommendations on whether they should be retained, amended or abolished, or whether new JLCs are required for specific sectors.

JLCs 'no longer relevant'- IBEC

Submissions to the review were received from a range of interest groups. The position of the Irish Business and Employers Confederation (IBEC) is that the JLC system 'is no longer relevant and should be abolished'. One of the many complaints raised by IBEC is that the presence of the National Minimum Wage (IE0107170F) and other protective employment legislation 'negates the need for sector-specific minimum rates, as provided for by the JLC system.'

Employers do not have the option of pleading 'inability to pay' or seeking cost-offsetting measures (IE0312204F) - which are available to employers generally through the Sustaining Progress procedures - under the JLC system. The JLC system has to be compared with the significant rise in wage levels arising from national agreements and the minimum wage, IBEC states, adding: 'There is a need for care in using a statutory platform for collective bargaining negotiations, given the low levels of union density in some of the sectors that are involved in JLCs. If the system is to continue, IBEC’s view is that the system needs a radical restructuring to meet the needs of the modern workplace.'

JLCs vital - unions

Not surprisingly, the Irish Congress of Trade Unions and Ireland's largest union, the Services Industrial Professional and Technical Union (SIPTU), take a very different slant, viewing the continuation of the JLCs as 'absolutely vital' to prevent a 'race to the bottom'. ICTU does not support the abolition of any individual JLC. Indeed, it indicates that domestic employment and child-minding are two areas that might require new JLCs. According to ICTU, 'there is a zone where JLCs are effective; they are above minimum rates and they are below unionised rates. The whole collective nature of the JLC is a very good way for collectively vindicating worker rights.'

The JLCs are also of benefit to some employers, ICTU argues: 'The good employer will recognise that one of the benefits of the JLC system is not only does it provide rights for workers and protect workers; it provides a level playing field for employers. It means that employers are less likely to be undercut by unscrupulous competition.'

Enforcement is a constant bone of contention for ICTU: 'it is all very well to have ... good systems for protecting workers, but if it is not enforced, it is the same as having no system'. Nor does the ICTU believe that the current level of penalties and fines act as sufficient deterrent.

JLCs should stay - Labour Court

Significantly, the overriding view of the Labour Relations Commission and the Labour Court is that JLCs should be retained. According to the Labour Court: 'JLCs provide protection in areas that workers wouldn’t otherwise have, such as overtime, shift allowances, pensions, sick pay. The National Minimum Wage and legislation has partly replaced the JLCs. However, given the package of protection they provide on other issues, it is difficult to see them being replaced in the short run. Even where wages are just 10 or 15 cents above the NMW level, workers would expect to retain that. In the security industry rates are 10%-20% higher ...'

It is also remarked by the Court that JLCs 'may offer advantages to some employers. It absolves them from needing to consult with their workers directly. It also creates a level playing field for reputable employers.' Meanwhile, the Department of Enterprise, Trade and Employment/Labour Inspectorate view is that 'JLCs are relevant in particular sectors. They cover those areas of employment where the natural structure of them means that the people employed in establishments are not quite in the same negotiating position, same strength of relationship (with their employer) that people in large factories for example would have. There would be a question as to how those workers would be represented if JLCs were discontinued?'

A significant concern for the Department is the wording of the Employment Regulation Orders (EROs) issued by JLCs: 'JLCs produce material, which seems consistently open to differing interpretation that regularly requires the Labour Inspectorate to seek legal opinion on what a word means and if an alternative interpretation put forward by the employer has any validity.'

As a means of securing greater transparency, the Department believes 'there is scope for a general template of EROs to be generated across JLCs', adding that 'modernisation is an absolute requirement'. The Department does not suggest that any particular JLC should be abolished, but that there should be an assessment of how often JLCs meet and what the nature of those meetings is: 'There are questions as to whether some JLCs are just an administrative exercise in realigning rates with movements in the NMW and whether or not they exist simply because nobody has assessed their relevance?'

Main conclusions

The review's authors state that: 'There is no consensus amongst representative bodies on the retention or abolition of JLCs, there is, however, a strong majority view that the system should be retained.' The authors found that representative employer bodies are generally in favour of the abolition of JLCs. Representative worker bodies are in favour of JLC retention, as are the vast majority of individual JLC worker members. Thus, the authors recommend that the JLC system be retained, as this is the majority wish.

In relation to IBEC’s call for inability to pay and cost-offsetting provisions to be applied to JLCs, the authors suggest that 'allowing employers to plead inability to pay would appear to have the potential to undermine the legally binding nature of EROs'. They advise that such matters be considered by a Department of Enterprise, Trade and Employment working party. As for the issue of abolishing certain JLCs, the authors recommend that 'enabling legislation be introduced allowing the Labour Court to dissolve a JLC following appropriate and defined procedures for prior consultation with employers and workers in the industry and employer and trade union representative bodies.' Furthermore, enabling legislation should be introduced allowing the Labour Court to amalgamate JLCs.

In terms of creating new JLCs, it is advised that a Department of Enterprise, Trade and Employment working party review the criteria under which JLCs may be formed and that they keep under regular review the need for new JLCs to be formed. The authors observe the general consensus amongst representative bodies that the enforcement of EROs is inadequate, and recommend that consideration be given by the Department to reviewing the role of labour inspectors and to locating inspectors outside of Dublin, on a regional basis. Changes to the nature of penalties should also be considered by the Department, they suggest - for instance, whether penalties need to be set at a higher level in order to constitute an effective deterrent to breaches of EROs.

All representative bodies believe that the dissemination of information on EROs is inadequate and that greater efforts should be made to promote awareness. In view of this, the authors advise that substantially increased resources be made available to the Labour Court to improve the advertising of EROs and that simple guides to the EROs be developed.

Commentary

There are clear differences between employers and trade unions on the future framework of Joint Labour Committees setting minimum pay and terms and conditions of employment in certain sectors. A key issue of debate is whether the existence of a National Minimum Wage for all employees - now EUR 7.65 per hour - renders the JLC system obsolete. Employers are clearly not happy with the JLC system as it stands. In contrast, unions want to retain the fundamental thrust of the system. Significantly, at a time when trade union density has declined in the private sector in Ireland to around the 20% mark (IE0510201F), unions no doubt see the continued presence of JLC regulations as a means of keeping their 'foot in the door' in the private sector. (Tony Dobbins, Industrial Relations News)