28:3:2000

The National Minimum Wage Act 2000 will come into effect on 1 April 2000. Set out herein are guidance notes to members on its implications.

Minimum Hourly Wage Rates:

The minimum hourly wage rates has been set, with effect from the 1st April 2000 at £4.40 per hour subject to the following variations: Employees under 18 years of age are entitled to a minimum wage rate of not less than 70% or £3.08 per hour. An employee who is 18 years or over who goes into employment for the first time is entitled to a rate of not less than 80% of the National Minimum Wage, or £3.52 per hour in the first year, after having commenced employment and a rate of not less than 90%, or £3.96 per hour in their second year after having commenced employment.

It should be noted that there is no minimum duration of employment in either the first or second year to determine this entitlement. Therefore, once an employee has a record of work for however short a period in any year, he or she is deemed to have worked during that year.

TRAINING RATES

The Act provides that where an employee, having reached the age of 18 years, undergoes a prescribed course of study or training within the workplace or elsewhere, during normal working hours, the following percentages of the national minimum hourly rate of pay will apply:
(a) In respect of the first one-third period (but not exceeding 12 months) 75% of the national minimum hourly rate or £3.30 per hour
(b) In respect of the second one-third period (but not exceeding 12 months) 80% or £3.52 per hour and
(c) In respect of the third one-third period (but not exceeding 12 months) 90% or £3.96 per hour.

PRESCRIBED STUDY OR TRAINING

In order for an employer to apply the sub-minimum rates of the national minimum hourly rate of pay, the employer must provide prescribed training or study. A pre-requisite for qualifying for training or study will be set out in a Statutory Instrument which is anticipated will follow on the following lines:
1. The employees participation in the course of study or training has been directed or approved by the employer
2. The course of the study or training must take place during the normal working hours of the employee and may take place within the employees workplace or elsewhere.
3. The duration of the course of study or training for a minimum period of three calendar months
4. The course of study or training must involve at least 10% of direct study or training
5. If the employee's participation in the course of study or training has been directed by the employer, the employer must pay any fees concerned with the employee's participation in the course of study or training
6. The employer should, as appropriate, advise the employee of any facilities including any time off, to be given to the employee during the period of the employees participation in the course of study or training, to enable the employee to successfully complete the course of study or training. The employer should also advise the employee of any changes to the employees working arrangements during the period of the employee's participation in the course of study or training.
7. The course of study or training must comprise the following elements:
(i) Enable the acquisition of skills, and/or knowledge, expected to enhance the work performance of the employees at the end of the course of study or training
(ii) Directed study or training
(iii) Workplace training
(iv) Supervision during workplace training
(v) Record system
(vi) Assessment and certification procedures or written confirmation of the employees completion of the course of study or training, identifying the levels of employee attainment against the objectives, which must include the employees signature
8. A written document exists detailing the following information of the course of study or training:

(i) Title and purpose
(ii) Objectives
(iii) Outline plan, duration and approach
(iv) Record system
(v) Assessment and certification procedures or arrangements concerning written confirmation of the employees completion of the course of study or training, identifying the level of the employees attainment against the objectives which must include provision for the employees signature.

All the above records of activity must be retained for 6 months after the employee's participation in the course of study or training.

If there are any changes to the details herein members will be informed.

It should be noted that the rates prescribed in the JLC will be amended by the shortening of training period to a maximum of three years and to apply the reduced rates, the appropriate training and study schemes and records must be in place. Otherwise, with the exception of first time job entrants, all employees, over the age of 18 will be entitled to the full statutory minimum wage rate.

JLC RATES

Set out, in the attached schedule 1, is an indication of the impact of the National Minimum Wage Act on the current Hotels JLC Rates. It should be noted, that a meeting of the Hotels JLC will take place during the month of April and members to whom the JLC is applicable will be advised of the outcome.

Reckonable and Non-Reckonable Pay:

In calculating the Statutory Minimum Wage Rate, the following items will be taken into account as being reckonable:

1. Basis salary or wage
2. Shift premium
3. All productivity related payments such as piece and incentive rates, commissions and bonuses
4. Allowances for special or additional duties including those of a post
   of responsibility
5. The monetary value of board with lodgings or board only or lodgings only, not exceeding the amount, if any, prescribed for the purpose of this item (see paragraph on Board and Lodgings)
6. The amount of any service charge distributed to the employee hrough the payroll
7. Any payments under Section 18 of the Organisation of the Working Time Act 1997 (Zero Hour Protection)

The following items shall be deemed not reckonable components

1. Overtime premium
2. Call out premium
3. Service pay
4. Unsocial hours premium
5. Any amount distributed to the employee of tips or gratuities paid into a central fund, managed by the employer and paid through the payroll.
6. Public holiday premium, Saturday premium and Sunday premiums where such holidays or days are worked
7. Any payment of expenses incurred by the employee in carrying out his or her employment, including travel allowances, subsistence allowances, tool allowance and clothing allowance
8. On call or standby allowance
9. Any payment for, or in relation to a period of absence of the employee from the workplace, such as sick pay, holiday pay, payment for the health and safety leave under the Maternity Protection Act or pay in lieu of notice but not including a payment under Section 18 of the Organisation of the Working Time Act 1997 (Zero Hour Protection)
10. Any claim by way of an allowance or gratuity in connection with the retirement or resignation of the employee or as compensation for loss of office
11. Pension contributions paid by the employer on behalf of the employee
12. Any payment referable to the employees redundancy
13. Any payment in kind or benefit in kind, except board and lodgings, lodgings only or board only.
14. Any payment to the employee otherwise than in his or her capacity as an employee
15. Any payment representing compensation to the employee, such as for an injury or loss of tools and equipment
16. Any amount or award under staff suggestion scheme.
17. Any loans to employees.
18. Long service payments.

Allowances for Board & Lodgings

We are informed that the Minister for Enterprise, Trade & Employment will introduce by, Statutory Instrument, an allowance in respect of board with lodgings, board only and lodgings only, equivalent to the amount presently provided for in the Employment Regulatory Order, JLC. This puts a value of £41.18p per week or £5.88 per day for full board and lodgings, £24.45 per week or £3.49 per day for full board only and £16.73 per week or £2.39 per day for lodgings only. It will be allowable to deduct the foregoing amounts in calculating the Statutory Minimum hourly wage rates.

Sunday Premium

As you are aware the JLCs provides that work performed on a Sunday, which forms part of the 78 hour fortnight roster shall be paid for at double time. The extra pay which is additional to normal pay will be based appropriate rate without board and lodgings. In reality, this means that staff who work a ten day fortnight with every second Sunday off are entitled to an extra 10% premium on their weekly wage rates to compensate for working every second Sunday. To ensure compliance with the Organisation of Working Time Act 1997, we have continuously recommended that our members include a premium of 10% on the wage rates of all employees who are requested to work on Sundays (irrespective of the number of hours which they work) and that this entitlement be clearly stated in their letters or contracts of employment.

Employees Not covered by JLC

As all employees are covered under the new National Minimum Wage Act, we must also ensure that the pay rates for other sectors such as managers, trainee managers, receptionists, office staff, maintenance etc comply with the requirements of the National Minimum Wage Act.

We can also apply the sub-minimum rates to any of these sectors for which a training or study programme is in place, provided it meets the conditions for training and study programmes as set out above. Set out in Schedule 2 a guideline as to what the minimum wage rate should be for employees not covered by the JLC and the reduced training rates if applicable.

Future Amendments to the Statutory Minimum Hourly Wage

The recently completed Programme for Prosperity and Fairness contains an agreement that the basic National Minimum Wage Rate of £4.40 per hour will be adjusted from the l July 2001 to £4.70 per hour and from 1 October 2002 to £5.00 per hour.

Further documentation and guidance notes will be provided as or deemed necessary to help members implement the provisions of the National Minimum Wage Act. However, if you have any queries or are uncertain of any interpretation do not hesitate to contact Northbrook Road.

JOHN POWER
Chief Executive
Email: powerj@ihf.ie

This memo is not intended as a statement of the law on any topic, and any member with a query should obtain detailed professional advice.

28:3:2000

The pay and conditions of employment aspects of the above programme have now been agreed. In summary they are as follows:

Implementation and Duration
Except where otherwise agreed at local level, the agreement will come into force on the expiry of the pay agreement on the Partnership 2000 in each individual employment or industry and it shall last for two years and nine months.

Pay Element
It is agreed by the parties that the basic pay shall be increased by the following amounts:
- 5.5% of basic pay for the first 12 months of the agreement as it applies in each particular employment or industry;
- 5.5% of basic pay for the second 12 months of the agreement as it applies in each particular employment or industry;
- 4% of basic pay for the next 9 months of the agreement as it applies to each particular employment or industry.

Where the application of this formula would result in increases, in basic pay for full time adult employees of less than:
- £12. per week in the first phase;
- £11. per week in the second phase;
- £09 per week in the third phase

the appropriate percentage increase for these particular phases will be adjusted to these levels. These minima will apply on a pro-rate basis to part-time employees when its existing agreements apply more favourable terms.

There is a statement in the agreement which states that the wage rates set out should be negotiated by employers and unions through normal industrial relations machinery, due regard being had to economic, commercial and employment circumstances of a particular firm, employment or industry, whether arising from exchange rate movements or otherwise. The need for ongoing co-operation with change and continued adaptation and flexibility accepted by the parties may include necessary measures to sustain competitiveness in employment.

If members need any further details of the Programme for Prosperity and Fairness. do not hesitate to contact Northbrook Road.
JOHN POWER
Chief Executive
Email powerj@ihf.ie

This Memo is not intended as a statement of the law on any topic, and any member with a particular query should obtain detailed professional advice.