Monday, 7th March 2011

UNFAIR JLC SYSTEM MUST BE ABOLISHED – OR MORE JOBS WILL BE LOST
Programme for Government Pre-empts Review of JLC Currently Underway

The Irish Hotels Federation (IHF) today urged the incoming Government not to pre-empt the current review of the Joint Labour Court (JLC) process. The IHF states that JLC system should be abolished as it is incompatible with the current economic situation and fundamentally inequitable as it is only applicable to certain sectors of employment. According to the IHF, the Programme for Government published yesterday could prejudice the review process that is currently underway and under which submissions from industry, including the hotels sector, are being assessed. The IHF maintains that the national minimum wage should be the sole statutory minimum wage in Ireland so as to provide fairness for all employers and foster job creation. This would replace the array of legal wage rates established by the JLC process which imposes legally binding conditions of employment to which other economic sectors are not subject.

Speaking at the IHF’s annual conference in the Slieve Russell Hotel in Cavan, Tim Fenn, Chief Executive states that the current JLC system results in an effective minimum wage ranging from €9.09 to €10.26 per hour for hotels and guesthouses nationwide with the exception of Dublin City, Cork and Dun Laoghaire. He says, “The current system makes absolutely no sense for our country as we try to work our way out of the depths of an economic crisis. The economic situation in Ireland has changed dramatically but the JLC system has not taken this into account in any way.  It is forcing hotels, which are struggling to survive and in many cases operating at loss, to pay a premium over and above the national minimum wage.”

Payroll costs are the single largest cost for Irish hotels and guesthouses, accounting for 42 per cent of turnover which is substantially higher than other European holiday destinations – they are 30% higher than Britain our nearest competing market.  The JLC rates create minimum wages for the hotels sector that place Ireland 2nd highest in Europe**, thereby penalising a sector of the economy that should be supported to secure future growth in employment.

A survey of IHF members reveals that 8 out of every 10 hotels and guesthouses are concerned about the viability of their business for 2011. Results indicate that, last year alone, 72% of hotels reduced their staff. The reality is that Ireland is not competing effectively with other destinations and labour costs are leading to significant job losses estimated at 11% within the hotels sector in 2010.

As a highly labour-intensive industry, the hotels sector is particularly vulnerable to wage increases which have a knock on effect on the ability of hotels and guesthouses to stay commercially viable. The current situation in which an array of legal wage agreements exists under the JLCs undermines that ability. A single statutory binding minimum wage would give increased stability and visibility to businesses while still providing employees with the same legal protection of the extensive existing labour legislation already in place.

Mr Fenn states that an overwhelming requirement exists to reform employment legislation to foster and nurture job creation. He states, “There have been radical changes to Ireland’s economic and regulatory environment over the past century which have made the JLC system obsolete, particularly in light of the National Minimum Wage Act 2000 which has provided Ireland with the second highest gross minimum wage in Europe.  Employment law should be created by legislation introduced by the Oireachtas and apply to all employments. It should not be created by organisations such as the Joint Labour Committees or the Labour Court which is currently the case.”  

FOR INFORMATION:
Siobhan Molloy / Eoin Quinn                       Press office:       064 66 38443.
Weber Shandwick                                           Dublin office:     01 6760168
                                                                                Mobile:                086 817 5066 / 087 233 2191

NOTES:
* The JLC system was established under the Industrial Relations Act 1946, but has its origins in the Trade Board Act 1909.  

** The Irish Hotels Federation represents almost 900 hotels and guesthouses throughout the country, which in turn employ 54,000 people.