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Historical context

Economic crisis and the restructuring of wage setting mechanisms for vulnerable workers in Ireland Thomas Turner and Michelle O’Sullivan ICTU Women’s Conference 1 st March 2012 michelle.osullivan@ul.ie. Historical context. Trade Boards were predecessors to JLCs

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Historical context

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  1. Economic crisis and the restructuring of wage setting mechanisms for vulnerable workers in IrelandThomas Turner and Michelle O’SullivanICTU Women’s Conference1st March 2012michelle.osullivan@ul.ie

  2. Historical context • Trade Boards were predecessors to JLCs • Designed to protect low paid workers where collective bargaining was inadequate • The Industrial Relations Act 1946 • Renamed JLCs • Widened powers

  3. Employees covered by JLCs

  4. First challenge to JLCs • Constitutional challenge against Catering JLC from Quick Service Food Alliance 2008 • Research on employers’ reasons for legal challenge: • Improved enforcement by NERA • Higher detection of underpayments • Employers critical of overtime pay, particularly Sunday pay

  5. Second emerging challenge • Economic crisis • Arguments that JLC pay rates were “costing jobs” • IMF/EU/ECB bail-out • Commitment to review JLC system • “Need to increase flexibility and facilitate re-adjustment in the labour market”

  6. Paper objectives • To examine the structure of earnings & hours of low paid workers • What groups more likely to earn JLC wages? • Examine extent of overtime & shift working • Examine extent of overtime earnings, shift allowances and bonuses to low paid workers • Comparison of low paid and higher paid workers re overtime etc. earnings

  7. Methodology • 2007 National Employment Survey (NES) in the private sector • Dependent measure is average hourly earnings • Approximately 75 per cent of respondents (44,861) in the private sector • Grossed up to the employed labour force of approximately 1.7 million employees.

  8. How many employees are low paid? • Median hourly earnings €16.29 • Low pay work as two thirds of median hourly earnings - €10.86 or less • 25% private sector workers (323,912) are low paid • JLC range - €8.23 to €9.68

  9. Low pay earnings

  10. Who are JLC workers? • Female • twice as likely • Account for 63% of JLC workers • Less educated • Part-time • 3 times more likely • Under 25 years of age • 3 times more likely • Non-Irish • Twice as likely

  11. Who are JLC workers? • Manual or routine service type work • 7 times more likely • Non-union • Low levels of employment service • 72% of workers less than 5 yrs • Work in the hotels/restaurant and whole/retail sectors

  12. Selected characteristics of workers covered by JLC rates

  13. Distribution of overtime hours, earnings and shift allowance

  14. Working time & earnings • Workers who work no overtime and receive no shift allowance or bonuses more likely to be covered by JLC rates • Workers who get no shift allowance twice as likely to work shifts.

  15. Conclusion • Evidence does not support the argument that extra payments such as Sunday premiums, shift allowance and over-time payments to workers covered by JLCs represent a major cost to employers in general.

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