Proposed changes to the JLC system
Minister Bruton claims the u-turn on JLC reforms is down to the fact he seeks a balance between protecting low-paid workers and helping small businesses survive
Print16 January 2012
On 7 July 2011, the High Court found in favour of the Quick Service Food Alliance and deemed the Joint Labour Committee 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.
Previously, JLCs and the Labour Court formed sectoral agreements known as Employment Regulation Orders (EROs) to set minimum wages and other terms and conditions of employment across various sectors. These EROs often set minimum wage rates and Sunday premiums significantly higher than the statutory minimum, as well as other terms regarding unsocial hours and paid breaks, which reduced the competitiveness of the businesses concerned.
On 22 December, 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.
Caroline McEnery
Since July, many employers have re-negotiated the JLC terms and conditions with their existing staff due to financial constraints on their businesses, while some have left the terms and conditions as they were under the JLC. Staff employed since July have been offered terms and conditions in line with the minimum legal standards. When this proposed legislation is enacted, there may be further upheaval for employers as they may be required to change the terms and conditions of their employees in line with the new legislation.
Minister Bruton stated that in introducing these reforms he has been determined to strike a balance between protecting vulnerable workers and providing reforms that would make the systems more competitive and more flexible so as to allow for the creation of jobs in these sectors.
There is strong opposition to the reintroduction of the JLC system especially as the retail sector has been suffering due to the economic downturn. Nonetheless, it appears as though it will be enacted as published in the beginning of 2012.
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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