Wednesday, 20th December 2006

IHF CHIEF EXECUTIVE ALARMED AT DECISION TO INCREASE MINIMUM WAGE

The Irish Hotels Federation (IHF) yesterday expressed alarm at the Government’s decision to approve the Labour Court's recommendations to increase the national minimum wage, particularly the second phase increase to €8.65 in July 2007. The IHF is reiterating its belief that the Labour Court is an inappropriate vehicle for determining the national minimum wage.

John Power, Chief Executive, IHF, stated, “This decision is incredulous as it will have a massive negative impact on competitiveness, particularly in the hospitality sector where payroll costs now exceed 40% of turnover. Implementation of an €8.65 an hour rate will place Ireland 2nd only 2 cents an hour behind Luxembourg, in having the highest minimum wage rate in the EU.”

“We can not understand how either the Labour Court in its recommendation or the Minister in arriving at the decision have taken into account the competitiveness in the Irish economy and particularly in the service sector. In future, if national partnership is to have any meaning, the review of the national minimum wage must be part and parcel of any general wage agreement and not referred to the Labour Court as has been recent practice,” added Mr Power.

In the competitive international tourism market, Ireland’s costs include a wage rate of €8.65 per hour while competing with countries such Spain at €3.12, Portugal at €2.23 and even the UK at an equivalent of €7.90.

ENDS

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