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Bruton announces reforms to JLC/REA systems printable version

28 Jul 2011: posted by the editor - Ireland

Minister for Jobs, Enterprise and Innovation Richard Bruton TD today announced reforms to the Joint Labour Committee and Registered Employment Agreement wage settling mechanisms, following Government decision last Tuesday (26th July). The measures will radically overhaul the system so as to make it fairer, more competitive and more flexible so as to increase job-creation in these sectors. They will also reinstate a robust system of protection for workers in these sectors in the aftermath of the recent High Court ruling.

The principal measures include:
· The number of JLCs will be reduced from 13 to 6;
· JLCs will have the power to set only a basic adult rate and two higher increments to reflect longer periods of service. JLCs previously set over 300 different wage rates;
· JLCs will no longer set Sunday premium rates or any other conditions of employment covered by universal standards provided for in existing legislation, but the special position of Sunday working will still be recognised;
· Companies will be able to derogate from EROs in cases of financial difficulty;
· In setting rates, JLCs will have to take into account factors such as unemployment rates, competitiveness and wage trends here and in our major trading partners;
· Record-keeping requirements for employers in these sectors will be reduced;
· The constitutionality of EROs will be restored through inclusion of robust principles and policies.

Making the announcement, Minister Bruton said: “There is no adjustment as traumatic for any worker as the loss of a job, and the sectors covered by these agreements have suffered a haemorrage of job losses over the past three years. The urgent need to protect and create jobs in these sectors has driven my determination over the past four months to see through comprehensive and radical reform in this area. The recent High Court ruling, which undermined the position of workers in these sectors, created an additional urgency.

“The Duffy Walsh report found that these systems require “radical overhaul so as to make it fairer and more responsive to changing economic circumstances and labour market conditions”. The package of reforms arising from that report which has been agreed by Government represents a fair and balanced solution to that need. It will ensure that proper protection is restored to workers in these sectors, while also radically reforming and streamlining the systems so as to ensure that they are no longer an obstacle to job-creation and job-retention.

“Heads of Bill have been prepared by my Department, agreed by Government, and communicated to the Attorney General, and she has agreed to give the highest priority to drafting this legislation in the coming weeks. Preliminary discussions have been held with the EU/ECB/IMF on this action plan, and these discussions will continue as the drafting process continues. The intention is to have a Bill ready to introduce to the Oireachtas at the earliest possible opportunity next term so that workers can be protected and jobs created in these sectors with the utmost urgency.”

“With the numbers out of work at record levels it is vital that we do all we can to protect those currently in jobs and to give those out of work the best chance possible to get back in to work. To do that it is necessary to make our economy more flexible, more competitive and more productive. These proposals will help achieve that ambition. Crucially, they are also fair and balanced to those two types of workers in our economy - those with jobs and those without jobs.”

ADDITIONAL INFORMATION
Among the major changes are that JLCs will no longer set Sunday premium rates. Instead, Sunday working in these sectors will be governed by existing employment legislation, which currently provides protection for Sunday working across the entire workforce. The Organisation of Working Time Act 1997, which will continue in force, requires that employers recognise Sunday working in one of three ways:
· Sunday premium payment
· Increased hourly rate across the whole week
· Time off in lieu.

Furthermore, the Minister will request the LRC to prepare a statutory Code of Practice on Sunday working in these sectors, which will provide guidance to employers and employees on compliance with this Act.

Another significant change is a reduction in the number of wage rates set by JLCs, which currently set more than 300 different rates of pay. Under these reforms, each JLC will be permitted to set one adult basic rate, and will have discretion to set two additional minimum rates to reflect experience.

Companies in sectors covered by JLCs will be permitted to derogate from the terms of EROs and REAs in cases of financial difficulty. This facility did not exist under the previous system. National wage deals and the National Minimum Wage Act have provided for different forms of such derogations that could serve as a model in this case.

It will be possible to adjust REAs in certain circumstances event where there is no agreement

ACTION PLAN AGREED BY GOVERNMENT:
1. Reducing the 13 Joint Labour Committees currently in place to about half that number, through a process of abolition or amalgamation.

2. Making legislative provision for companies to derogate from the terms of EROs and REAs in cases of financial difficulty (“inability to pay” mechanism – a facility that exists in National Minimum Wage legislation and in past National Wage Agreements).

3. Legislating to permit JLCs to set a basic adult rate and two supplementary minimum rates to reflect varying levels of service. This would substantially reduce the number of rates applying across all EROs from over 300 different mandatory rates of pay while acknowledging the freedom of JLCs to establish two higher rates for experienced employees. Sub-minimum rates expressed as fixed percentages of the adult basic rate will apply, as in the case of the National Minimum Wage, to employees aged under 18 years, first time job entrants, and employees undergoing training. All other rates of pay e.g. for experienced workers with long service or for workers with particular skills, would be agreed at firm level, based on normal labour market rates and dynamics.

4. The standardisation of benefits in the nature of pay – including overtime – across sectors either by means of a nationally agreed Social Partnership protocol or, failing that, a statutory Code of Practice.

5. Legislating for a comprehensive review of the scope of each individual remaining JLC to be undertaken to ensure that the range of establishments to which they apply remains appropriate, with consequent changes to their Establishment Orders if necessary, with such reviews to be undertaken at regular intervals in future.

6. Legislating for new criteria to be observed in the making of EROs. These will take the form of principles and policies (having regard to the decision of the High Court in John Grace Fried Chicken Ltd and others .v. The Catering Joint Labour Committee, The Labour Court, Ireland and the Attorney General, delivered on 7th July) and could include regard for competitiveness factors, average hourly rates set in comparable sectors in Ireland’s main trading partners, employment and unemployment rates, etc. Whenever proposals for a variation of the ERO are made, these criteria must be used in determining the validity of any variation.

7. Legislating for changes in the decision making process of JLCs, including obliging the Chairman to have regard to a relevant Labour Court recommendation in the event of a casting vote being exercised.

8. Reducing the record-keeping requirements for employers under EROs and REAs.

9. Legislating to remove provision for a Sunday Premium and other conditions of employment that are already covered by universally applicable standards established under legislation from the scope of EROs while preserving workers’ entitlements under Section 14 of the Organisation of Working Time Act, 1997.

In order to support the rights of workers employed in sectors covered by JLCs in relation to Sunday working the Minister will exercise his right under statute to request the Labour Relations Commission to devise a new Code of Practice on Sunday Working (similar to the 1998 Code of Practice on Sunday Working in the Retail Trade) to provide guidance to employers, employees and their representatives in sectors covered by Employment Regulation Orders on arrangements that may be put in place to comply with the options specified at Section 14 of the Organisation of Working Time Act, 1997. This Code of Practice would subsequently be given the status of a statutory instrument by the Minister.

The new legislation will refer to the new Code of Practice on Sunday Working and the Minister intends to advise JLCs that EROs applying in sectors characterised by Sunday working arrangements should include a reference, for information purposes, to the existence of this Code of Practice.

An employee, their Trade Union or an employer would be able to bring a complaint to a Rights Commissioner about any breach of the Code of Practice governing Sunday working, and to appeal to the Labour Court in the event of non compliance with a decision of a Rights Commissioner]

10. In the light of the decision of the High Court in John Grace Fried Chicken Ltd and others .v. The Catering Joint Labour Committee, The Labour Court, Ireland and the Attorney General, new proposals for ERO must be submitted by JLCs in accordance with the principles and policies to be set out in the new legislation. In the event that there is no agreement by both parties within the JLC on the content and rates proposed in a revised ERO, new adjudication procedures will be applied by legislation whereby the matter can be referred to the Labour Court for a recommendation and the casting vote of the Chair of the JLC can only be exercised having regard to that recommendation.

And, specifically in relation to Registered Employment Agreements (REAs):
11. Establishing a time-bound process by which the terms of an Agreement may be varied in certain circumstances without necessarily obtaining the consent of all parties to the Agreement.

12. Defining more clearly what “substantially representative parties” mean in the context of being entitled to make such Agreements.

13. Clarifying circumstances when a Registered Agreement may be cancelled where either the trade union(s) or employer parties have ceased to be substantially representative of workers or employers in the sector concerned and/or for other reasons related to substantial change in the sector concerned such that the continued registration of an Agreement would be undesirable.

The Minister also proposes the following actions to better police these sectors and to mitigate concerns:
(i) The LRC will be asked to prioritise claims arising, since the High Court ruling, in relation to Sunday.
(ii) A targeted employment rights awareness campaign to be implemented in JLC sectors in relation to the new provisions for Sunday working. To supplement NERA’s general employment rights information service, a joint initiative will be undertaken by NERA and LRC to improve workers’ and businesses’ awareness of their rights and responsibilities.
(iii) NERA and the LRC will undertake joint initiatives with non-governmental agencies to tackle breaches of contractual rights and boosting workers’ confidence in taking action through the industrial relations redress procedures

Tags: Joint Labour Committee, Registered Employment Agreement

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