Monday, 5 ^th March 2007

HOTEL CHIEF CALLS FOR ADHERENCE TO
PARTNERSHIP AGREEMENT ON NATIONAL MINIMUM WAGE

The Irish Hotels Federation (IHF) today called on the Government to adhere to the pay terms set out by the National Agreement “Towards 2016” in determining future increases in the national minimum wage rate. The IHF stated that the two most recent revisions were based on recommendations from the Labour Court which does not have to explain or reconcile its recommendations with the objective of maintaining competitiveness in the Irish economy. The IHF reiterates its belief that the Labour Court is not the appropriate vehicle to determine the national minimum wage rates and it’s recommendations should not be permitted to override those already agreed under “Towards 2016”.  It warns that if this practice continues, it will undermine the competitiveness of labour intensive industries such as the hospitality sector.

According to John Power, Chief Executive, IHF, a key purpose of the National Social Partnership Agreements is to deliver a structured programme of national wage adjustments and to take into account amongst other things the objective of maintaining national competitiveness and inflation in the economy. 

“The hospitality sector is labour intensive where and labour costs can exceed 40% of turnover. Continued increases in the statutory minimum wage, exceeding those agreed in the National Agreement, will continue to have a significant negative impact on competitiveness in the hospitality sector. A case in point being the recent Labour Court recommendation approved by the Government to increase the national minimum wage to €8.65 per hour from July 2007. This places Ireland within two cents an hour of Luxembourg which has the highest minimum wage rate in the EU. In a competitive international tourism environment, Ireland’s wage costs is frequently compared with countries such as Spain and Portugal where the national minimum wage rates are €3.12 and €2.23 per hour respectively and the equivalent of €7.90 an hour in the UK,” stated Mr Power.

“The Irish hospitality sector is particularly vulnerable to wage increases as payroll costs represent a much larger percentage of turnover than in others industries. Implementation of the increase in July 2007 will push wage rates further towards an unsustainable level,” he says. “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,” concluded Mr Power.

The IHF represents over 1,000 hotels and guesthouses throughout the country. Its members employ 60,000 staff.

FOR INFORMATION:

Siobhan Molloy / Avril Collins                         Tel: 01 6760168
Weber Shandwick                                          Mobile: 086 8175066 / 086 3964368