Changes to JLC rates

Supermac workers protest against attack on wages: The Restaurant Workers Action Group, established by the Migrant Rights Centre Ireland (MRCI), staging a protest back in 2010 responding to Supermac's, which is part of Quick Service Food Alliance, legal challenge to the Joint Labour Committee system which sets wages in the restaurant industry

Changes to Joint Labour Committee pay rates are being introduced. Caroline McEnery of HR & Business Solutions explains what the changes will entail

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On 7 July 2011, the High Court found in favour of the Quick Service Food Alliance and deemed the Joint Labour Committee (JLC) system unconstitutional. The implications of this meant that existing employees retained the terms and conditions imparted from the JLCs whilst newly hired employees were subject to terms and conditions set out in the legislation, specifically the National Minimum Wage Act, 2000 and the Organisation of Working Time Act, 1997.

On 22 December 2011, Minister Bruton announced the introduction of legislation to reinstate elements of the JLC system of wage setting mechanisms. The Industrial Relations (Amendment) (No. 3) Bill 2011, when enacted, will implement the programme of reforms to the JLC/REA systems agreed by Government in July.

The principal measures in the legislation include:

• JLCs will have the power to set a basic adult rate and two additional higher rates, based on length of service in the sector or enterprise concerned as well as the standards and skills recognised for the sector concerned.
• JLCs will no longer set Sunday premium rates. In order to recognise the special status of Sunday working a statutory Code of Practice will be prepared by the LRC following submissions from employers and trade unions. 
• This code will provide guidance to both parties in the sectors covering EROs on the compensatory arrangements, including such additional amounts as are reasonable, for Sunday working and on the procedure to apply in the event of disputes concerning the varying entitlements to Sunday working.
• Companies will be able to derogate from EROs and REAs in cases of financial difficulty. For this to occur, the Labour Court must satisfy itself that specified criteria have been met. Such derogation will be granted, for a limited period, in cases of proven economic difficulty, following consultation with the employees. 
• In setting rates, JLCs will have to take into account a series of economic and industrial relations factors.
• The burden of compliance and record-keeping requirements for employers in these sectors will be reduced.
• Providing for Ministerial involvement in the supervision of JLCs and in the making of orders to vary or revoke EROs.
• Providing for use of civil remedies rather than an exclusive reliance on criminal sanctions.
• The constitutionality of EROs and REAs will be restored through inclusion of robust principles and policies.
• The Minister also announced his intention to proceed with a series of complementary reforms to the JLC/REA systems which can be implemented without the need for legislative change, including:

• Reducing the number of JLCs from 13 to six
• Standardising benefits such as overtime through a nationally agreed protocol or Code of Practice, through the normal process of consultation with the employers and trade union interests.

On 24 July 2012 President Higgins signed this amendment into being therefore it is likely that changes are coming for all JLC industries. As part of the amendment certain clearly defined factors will have to be taken into consideration when formulating any new JLC or ERO. Those are:

•  Employment in the sector 
• Competitiveness
• The financial interests of the employer
• Wage levels in comparable sectors
• Wage rates in other EU jurisdictions

In future, where the members of the JLC are unable to reach agreement on minimum terms and conditions, then the matter will be referred to the Labour Court which will issue a recommendation that must be taken into account by the JLC chairman when exercising a casting vote. The matter will then be referred back to the Labour Court for it to issue the ERO, if it so agrees. This is subject to subsequent Ministerial ratification. Furthermore, the Oireachtas may annul an ERO within a specified time period.

The next step for the reintroduction of the JLC is that the Minister must issue a Commencement Order which is likely to happen very soon.

Caroline McEnery of HR & Business Solutions specialises in HR advice for the retail sector. For advice on the impact of the JLC changes to your business or any other HR guidance, contact Caroline on 087-9694837 or caroline@hrbusinesssolutions.ie.

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