A range of measures by Government to support businesses are set to be confirmed by the Cabinet on Tuesday.
The measures, described by Minister for Enterprise, Trade and Employment Peter Burke as “15 clear wins”, include postponing the date for the implementation of the “living wage”, an hourly rate that aims to provide employees with sufficient income to afford a socially acceptable standard of living.
Unions have said any delay by Government in moving the national minimum wage to the proposed living wage level of 60 per cent of average hourly median earnings across the economy would be “a breach of trust” and represent an imposition of austerity on low-paid workers.
What is being proposed in relation to employees?
The Government committed to establishing the living wage by 2026 back in November 2022. Increases to the minimum wage since have taken account of the need to progress to the 60 per cent figure – a threshold it met when introduced 25 years ago.
Another increase above the general rate of pay awards across the economy was expected this year but now seems to be less likely, with the 2026 deadline to be pushed back.
Mr Burke has already confirmed the number of statutory sick days employers are obliged to pay workers will not increase from five to seven as had been intended, but the long-awaited introduction of auto-enrolment – the new pensions system to which employers, employees and Government are all to contribute – is now also set to be paused by at least a number of months from a planned start date at the end of September.
A commitment contained in the Programme for Government to increase the amount of leave available to new parents also seems set to be shelved.
How many people will be affected?
Almost 200,000 people working in Ireland are paid the minimum wage, but the wages of tens of thousands more are in effect linked to it – with companies paying more to attract or retain workers, and recognise service or seniority. All of these workers would be affected by any delay to implementing the living wage.
Auto-enrolment is intended to apply to almost all workers not already in a company pension scheme, although in the short term a delay would leave them better off as they, like their employers, will start to pay 1.5 per cent of their salary in contributions once the scheme gets started unless they opt out.
What have trade unions said?
Irish Congress of Trade Unions general secretary Owen Reidy said any delay to the living wage’s introduction would be a “breach of trust” by the Government. He said the organisation would seek urgent engagement with Ministers on the issue.
He said employers were using the issue of tariffs as “opportunistic cover” to push the Government to renege on previous commitments.
“This despite the fact that the minimum wage primarily impacts on sectors like hospitality and retail which are not sectors that are involved in the export trade,” said Mr Reidy.
The changes, he said, were coming from a Government – or its main two parties – that had “spent a decade narrowing the tax base”.
Siptu deputy general secretary Greg Ennis suggested there was a “clear shift in the Government’s attitude towards workers over the last couple of years as the opinion polls moved in their favour”.
What have employers said?
Speaking at an event organised by business representative group Ibec last week, the organisation’s executive director of employer relations Maeve McElwee said costs related to regulatory changes had been a big concern to business before the tariffs issue, but that there was greater economic uncertainty at present.
“Every piece of legislation on issues like sick pay, the minimum wage or auto-enrolment requires us to look at the prevailing economic circumstances,” she said.
“There were so many things with commencement dates falling at the same time that they posed an unrealistic burden.
“It’s not a case of using the tariffs to argue against things; we were already challenged with costs but we do have to be more mindful of the issues involved.”
