In its 2002 Concluding Observations, the Committee expressed concern over the inadequacy of the minimum wage introduced in 2000. The national minimum wage is set at €8.65 per hour for experienced workers over 18 and a lower rate of €6.06 is paid to workers under 18.1 Workers without experience in their first year of employment are entitled to €6.92 per hour increasing to €7.79 for the second year meaning that many young adults will earn below the national minimum wage despite having the same living costs. The National Employment Rights Authority (NERA) is tasked with enforcing the payment of the national minimum wage;2 in 2013, there were seven prosecutions under the National Minimum Wage Act 2000 where a court imposed a sanction.3 NERA’s policy is ‘to seek voluntary compliance where breaches of employment law are detected’ and to work with employers to allow them ‘every reasonable opportunity to rectify breaches in preference to prosecution’.4 This means that although there were other instances of non-compliance in relation to minimum wage, comprehensive data is not available to demonstrate the prevalence of the problem.
The current level of the minimum wage was first set in 2007 and following a cut of €1 under the initial Troika agreement, the Government reinstated it to €8.65 in 2011.5 However, the adequacy of the minimum wage has been undermined by a number of measures. The impact of austerity budgetary policies between 2009 and 2014 resulted in a 12.5 per cent reduction in the disposable income of the poorest households.6 These measures include changes in direct taxation including a Universal Social Charge on all annual incomes above €10,036, changes to social welfare rates and the introduction of other charges such as a Carbon Tax and increases in Value Added Tax (VAT) from 21 to 23 per cent.
Despite having a relatively high minimum wage in comparison to other EU Member States,7 Eurostat found that one in five workers in Ireland were classified as low-wage earners or in other words earning less than the low-wage income of €12.20 per hour.8 Even though some of these workers may be earning more than the basic minimum wage, in 2013 earnings overall declined by 0.7 per cent while inflation rose by 0.5 per cent resulting in a loss of real wages for many low-income earners. This reflects the ‘significant cumulative reduction in real wages’ since the beginning of the recession.9 Workers in low-wage sectors find it difficult to cope on minimum wage salaries.
In 2014, 16 per cent of working adults fell below the poverty line.10 An adequate living wage for Ireland has been calculated to be €11.45 per hour (€446 per week) ‘based on the concept that work should provide an adequate income to enable individuals to afford a socially acceptable standard of living’.11 The minimum wage is not sufficient to address the needs of many workers and in particular is insufficient for low-paid lone parent households or single people living alone even with the person receiving any social welfare or tax entitlements.12
The JobBridge National Internship Scheme – a scheme providing work experience placements for interns for a six or nine month period – has been the subject of criticism as interns receive their weekly basic social welfare payment and an additional €50 from the Department of Social Protection. By the end of 2012, some 27 per cent of participants were under 25 years of age;13 from January 2014, interns of this age are receiving a combined weekly payment of €150, meaning that the rate of pay would equate to €5.00 per hour for those working the minimum of 30 hours a week or €3.75 per hour for those working the maximum 40 hours per week, much less than minimum wage. The main issues centre on potential employers attempting to exploit the scheme so as to avoid paying fair wages, and the question mark over the quality or nature of some internships on offer, where the intern would end up stacking shelves,14 for example, or where highly qualified candidates are sought for a skilled position.15 Both the Minister for Education & Skills and the Minister for Social Protection have expressed concern at the use of the JobBridge scheme by schools seeking teaching staff and Special Needs Assistants as this could lead to job displacement while noting that advertisements for school cleaners do not constitute a quality internship.16 It is also notable that the highest number of placements is in the services, retail and sales industry.17
People with disabilities
In paragraph 15 of its 2002 Concluding Observations, the Committee raised concerns about the status of people with disabilities working in sheltered workshops, as they were not deemed to be employees and therefore could not qualify for the minimum wage; where they did receive minimum wage, then they were not entitled to free medical care18 under special arrangements for people on disability-related payments. In 2009, the National Disability Authority (NDA) published a policy advice paper reiterating the need for the progressive closure of sheltered workshops and recommended that they be replaced with alternative opportunities for persons with disabilities.19 It noted that the absence of legislation meant that people in sheltered workshops continued to be treated as service users and lacked the legal protections afforded to employees such as regulated working hours and proper rates of pay.20 There are different types of sheltered workshops in Ireland, including those used for therapeutic reasons, commercial workshops where a person may be in receipt of a social welfare payment but may also receive a discretionary top-up payment, or sheltered ‘work-like’ work where the service-user is given a top-up payment.21 In 2010, there were 1521 people with a disability working in commercial sheltered workshops.22
A ‘zero-hour’ contract is a type of employment contract where the employee is available for work but does not have specified hours of work, resulting in a precarious employment situation as well as insecurity of income.23 Employees working part-time hours are more prone to experience in-work poverty as well as being less likely to have access to non-pay related employee benefits, training opportunities or social protection coverage.24 While there are no official statistics indicating the number of people working on zero-hour contracts in Ireland, statistics released by the Central Statistics Office on the number of ‘underemployed’ persons give a good indication of the extent of the issue. Since 2008, the percentage of persons recorded as ‘underemployed’ has risen by 50.5 per cent compared to the EU average increase of 31.9 per cent in the same period.25 In Ireland, 53 per cent of employers with at least ten employees require at least part of their workforce to work fifteen hours or less a week and to be flexible with their availability.26 The Minister for Jobs, Enterprise and Innovation when questioned about zero-hour contracts stressed that employees should enter into such contracts voluntarily27 but this may not be an option for someone without other employment options. Zero-hour contracts can often impose unfair conditions of work such as inadequate notice, a lack of transparency and terms of employment placing an unfair burden on the employee that he or she feels compelled to accept, rather than have his or her contract terminated.28
The Organisation of Working Time Act 1997 specifically allows for zero-hour contracts and requires a person to ‘make himself or herself available to work for the employer in a week’ for a specified number of hours or when required.29 This means that a person may be provided with insufficient paid work to cover their financial outgoings while at the same time being unable to make other necessary arrangements or engage in other activities such as training or other available casual work.
In a behaviour and attitudes survey conducted by Mandate Trade Union in 2012,30 it found that the majority of its members were working on part-time contracts for an average of 22 hours per week; more than half of its members work these hours over a five-day period.31 It also found that more than half of part-time workers had their hours changed at least once a month, while only one-third had stable working hours. Twenty-five per cent of the workers expressed a desire to have greater certainty in their working hours. While there has been some media focus in relation to this issue, the State should collate statistics on the number of zero-hour contracts in operation.
FLAC urges the Committee to recommend that the State:
Increase the rate of the minimum wage to ensure an adequate standard of living.
Give due consideration to the findings of the Living Wage Technical Group and take appropriate measures to work towards the introduction of a living wage.
Increase the amount paid to persons taking up internships under the JobBridge scheme and encourage employers to also make a contribution to the payment with a view to providing that all persons participating in the scheme are paid at least the minimum wage.
Ensure all JobBridge placements involve a substantial element of learning and experience that will be of future benefit to those taking part in the scheme.
Review the use of ‘zero-hour’ contracts and regulate the use of such contracts to ensure that fair conditions of work are observed by employers.
1 National Minimum Wage Act 2000 (Section 11) (No. 2) Order 2011 (SI 331/2011).
2 NERA was set up on an interim basis in 2007 as an office of the Department of Jobs, Enterprise and Innovation but will now form part of the Workplace Relations Commission when the legislation is enacted later in 2014. NERA comprises Inspection Services which monitors breaches of employment law.
3 National Employment Rights Authority (2014) Annual Review 2013, Carlow: NERA, pp.15-30.
4 National Employment Rights Authority (2014) Annual Review 2013, Carlow: NERA, p.8.
5 National Minimum Wage Act 2000 (Section 11) (No. 2) Order 2011 (SI 331/2011).
6 T. Callan, C. Keane, M. Savage and J.R. Walsh (2014) Distributional Impact of Tax, Welfare and Public Service Pay Policies: Budget 2014 and Budgets 2009-2014, Dublin: Economic and Social Research Institute, p.8.
7 L. Kelleher, ‘Ireland has the 7th highest minimum wage pay’, Irish Examiner, 28 April 2014.
9 Nevin Economic Research Institute (2014) NERI Quarterly Economic Facts: Summer 2014, Dublin/Belfast: NERI, p.56.
10 Social Justice Ireland (2014) Policy Briefing: Poverty and Income Distribution, Dublin: Social Justice Ireland, p.1.
11 A Living Wage Technical Group has been established by a number of organisations including the Vincentian Partnership for Social Justice, the Nevin Economic Research Institute, Tasc, Social Justice Ireland, Unite Trade Union and the Services Industrial Professional and Technical Union. See www.livingwage.ie for details [accessed on 8 July 2014].
12 Vincentian Partnership for Social Justice (2014) Minimum Essential Standard of Living 2014 Update, Dublin: Vincentian Partnership for Social Justice, pp.9-12.
13 Indecon International Economic Consultants (2013) Indecon’s Evaluation of JobBridge: Final Evaluation Report, Dublin: Department of Social Protection, p.24.
14 A. Barry, ‘Tesco stands behind JobBridge advert’, TheJournal.ie, 16 September 2011.
15 B. Byrne and J. Fagan, ‘Wanted: PhD grad to work for €50’, Irish Independent, 17 January 2014.
17 Indecon International Economic Consultants (2013) Indecon’s Evaluation of JobBridge: Final Evaluation Report, Dublin: Department of Social Protection, p.16.
18 UN Committee on Economic, Social and Cultural Rights (2002) Concluding Observations of the Committee on Economic, Social and Cultural Rights: Ireland, Geneva: OHCHR, para. 26.
19 National Disability Authority (2009) From Sheltered Employment to Open Employment for People with Disabilities in Ireland, Dublin: NDA, p.4.
20 National Disability Authority (2009) From Sheltered Employment to Open Employment for People with Disabilities in Ireland, Dublin: NDA, p.9.
21 Department of Health (2012) Value for Money and Policy Review of Disability Services in Ireland, Dublin: Department of Health, pp.264-265.
22 Inclusion Ireland (2013) Submission on the Comprehensive Employment Strategy for People with a Disability, Dublin: Inclusion Ireland, p.4.
24 International Labour Organisation (2011) Working time in the twenty-first century: Report for discussion at the Tripartite Meeting of Experts on Working-time Arrangements, Geneva: ILO, p.56.
25 E. Lynch (2014) Regulating for Decent Work: Combatting Unfair Terms in (Zero-Hour) Employment Contracts, Dublin: Irish Congress of Trade Unions.
26 International Labour Organisation (2011) Working time in the twenty-first century: Report for discussion at the Tripartite Meeting of Experts on Working-time Arrangements, Geneva: ILO, p.54.
27 Richard Bruton TD, Minister for Jobs, Enterprise and Innovation, Parliamentary Questions: Written Answers, [3086/14], 22 January 2014.
28 E. Lynch (2014) Regulating for Decent Work: Combatting Unfair Terms in (Zero-Hour) Employment Contracts, Dublin: Irish Congress of Trade Unions.
29 Section 18(1) of the Organisation of Working Time Act 1997.
30 Mandate Trade Union represents over 40,000 members working in bar, retail and administrative work.
31 Mandate Trade Union (2012) Decent Work? The Impact of the Recession on Low-Paid Workers, Dublin: Mandate, p.4.
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