Wages are too high, retailers tell Oireachtas

Business in the convenience/CTN sector has dropped off by between 15% and 23% this year. Retailers seek to pay the minimum wage to new employees instead of elevated JLC rates

Retailers tell Oireachtas enterprise committee that wages still represent the greatest difficulty for businesses to overcome

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The Joint Oireachtas Committee on Enterprise, Trade and Employment heard from a group representing retailers last month, in an investigation into obstacles to business in the Dublin commuter belt.

Retailer David Bagnall and Vincent Jennings and Joe Mannion of the CSNA told the committee that wages still represent the biggest difficulty for retailers in the convenience/CTN sector, specifically the legally enforced JLC rates above the minimum wage and Sunday premium.

Jennings told the committee that retailers are “not seeking a race to the bottom” and “would never” seek a reduction of the minimum wage, but wish to be able to pay the national minimum wage to new employees entering the sector. “Retailers who have a net retail space of less than 400 sq m, which is 90% of the retail environment, should be removed from the statutory requirement to pay the JLC rate for newcomers,” he said.

Bagnall and Mannion confirmed the difficulty JLC rates are causing businesses in the present economic environment. “The reality is that business in our industry is down between 15% and 22% to 23%,” Bagnall said, “On the next [wage] increase that comes up, if business remains at the same level, it simply means that I will have to let somebody else go.”

Following the meeting, the committee agreed to make recommendations to the Minister for Enterprise, Trade and Employment and the Minister for Finance regarding other issues raised by Jennings. It is recommending that “action needs to be taken to ensure that banks provide adequate financial support to viable businesses.”

In addition, it is proposing that: energy efficient equipment should be included in the Advanced Capital Allowance in the next Finance Bill; the issue of upward only rent clauses needs to be addressed, as “retailers need support and protection” when seeking rent reviews; and affordable broadband should be made available to all rural businesses.

The committee also agrees that, in any code of practice (voluntary or statutory), the Government and all state bodies “should be part of that code, answerable to it and agreeing to be bound by findings that may be held against them.”

Several proposals have been forwarded to various other Oireachtas committees, including the issue of commercial rates and the cost of excise licences. The committee mentioned no plans to further address the subject of JLC rates however.

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