Ibec denies ‘massive contradiction’ in position on minimum wage-setting

Employers’ group questioned on call for pause to future minimum wage increases at Oireachtas committee

Representatives of the employers’ group Ibec have told an Oireachtas committee that there is no contradiction in its position on current wage-setting mechanisms and its call for future increases to the national minimum wage to be paused.

Appearing before the Joint Oireachtas Committee on Enterprise, Trade and Employment on Wednesday morning, Maeve McElwee, the lobbying body’s executive director for employer relations, argued there was no need for new legislation to be passed in order for the Government to transpose the EU’s minimum wage directive.

The directive, which must be transposed into law by November, obliges the Government to ensure the proportion of workers represented in collective bargaining grows to 80 per cent. In member states such as the Republic that have statutory minimum wages in place, the directive also requires the Government to put in place the conditions for the minimum rate to be “set at adequate levels”.

Ms McElwee told the committee that the Low Pay Commission, which “examines the national minimum hourly rate of pay and makes a recommendation to the Government”, is “in line with the directive and providing clear and stable criteria for minimum wage-setting”.


However, Louise O’Reilly, Sinn Féin spokeswoman on employment, said there was a “massive contradiction” in Ms McElwee’s support for current wage-setting mechanisms and the open letter to the Government penned by Ibec chief executive Danny McCoy.

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In the letter, published on Monday, Mr McCoy called for a pause on further increases in the national minimum wage and other labour policy measures planned by the Government that he claimed will add more than €4 billion to the annual wage bill of Irish companies and risk “employment and business viability”. The letter specifically highlighted the Coalition’s commitment to introducing a national living wage – 60 per cent of hourly median wages – by January 2026 through incremental increases in the minimum wage, as recommended by the Low Pay Commission.

Asked by Ms O’Reilly how she would “square that circle”, Ms McElwee said: “I don’t think there is necessarily a contradiction in that because the challenge is not [with] the national minimum wage. I think what employers are finding is there is a really significant uplift in the amount of cost arising from legislative provisions that the Government have given effect to into the course of this year.”

Ms O’Reilly said she recognised those concerns but said she did not understand why “the burden of that is going to be shifted on to the lowest-paid workers in the State”.

Owen Reidy, general secretary of the Irish Congress of Trade Unions (Ictu), told the committee: “The Irish State has been, at best, a passive, disinterested bystander on collective bargaining and, at worst, has facilitated its denial to many.”

He said negotiations between various European bodies and groups such as Business Europe, of which Ibec is a member, are “over” and “this is the outcome. It’s now [a question of] implementation. It’s not a second cut for people to take out things that they don’t like.”

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times