Some 170 food businesses, including fast food groups Supermac’s, McDonald’s and Burger King, are to take a constitutional challenge over the way in which minimum rates of pay and employment conditions are set in the industry.
The Quick Service Food Alliance (QSFA) said today it had initiated a High Court challenge to the rights of the Catering Joint Labour Committee (JLC) to set conditions for workers in the catering industry.
Conditions for workers in certain sectors, including the security industry, hairdressing and contract cleaning are determined by JLCs. There are currently 17 JLCs and each is composed of worker and employer representatives from the relevant industry.
Under the State's industrial relations law, a JLC submits its proposals to the Labour Court and if they are approved, the court makes an Employment Regulation Order which legally binds employers to pay the wage rates and provide conditions of employment no less favourable than those in the order.
But the QSFA said today that with the existence of the minimum wage and 25 other pieces of legislation protecting employees’ rights, there was “no need for JLCs”. It said the agreement in the catering trade dated back to a time when such fast food businesses didn't exist, apart from the "local chipper".
The body said its case includes the argument that section 15 of the Constitution states that the sole and exclusive power to make laws is vested in the Oireachtas and no other authority has power to make laws for the state.
Chairman of the organisation, John Grace from Cork, said: “The making of Employment Regulation Orders (EROs) by the Labour Court is, therefore, an unconstitutional delegation of this law-making function which should be reserved for the Oireachtas.”
Mr Grace said the application of JLC rates to employees where the minimum wage standard had been previously applied will put further competitive pressure on the sector and lead to job losses and closures.
“Raising prices is not an option as this would have a similar impact in an already extremely competitive market.”
“The application of the JLC on their business represents an approximate 20 per cent increase in labour costs. This is compounded by the proposals for sick pay and paid breaks.”
Mr Grace told The Irish Timesthis was the approximate cost of implementing the latest JLC rate to his own fried chicken business in Cork.
He said the application of the new proposed JLC rates, which included paid breaks, extra time for Sunday work and three weeks’ certified sick pay, would represent a 10 per cent additional cost burden initially, and a further 10 per cent if the entitlement to sick pay was fully utilised.
The latest JLC pay rate, set in December, is €9.31 per hour.
Mr Grace said he was aware of a number of businesses that were now forced to close on Sundays because they could not afford to pay double time under the established JLC rates. It had also hit pubs and hotels.
"The quick food sector is not recession proof, contrary to some commentators, and all our members report a downturn in business.”
The JLC system had been in existence for 30 years, but some aspects of it were not being implemented until the establishment of the National Employment Rights Authority, which had begun to enforce the employment conditions laid down in the industry, Mr Grace said.
He added that at the time of the formation of the catering JLC, fast-food premises of the type represented by his group were non-existent but for the “local chipper”.
“Job descriptions such as cook/chef, barman/barmaid, waiter/waitress are given to jobs to which a formal training exists. There is no such training required for employees in the quick service industry. Employees do not wait on tables, set tables, silver service, wash-up…or need chef training as systems are automated.”
Mr Grace said the food alliance's case had been accepted by the Chief State Solicitor's office in January and that it hoped to have a date for hearing before the end of this year, possibly in the autumn law term.
"It has been acknowledged that the JLC system has been open to this kind of challenge for quite some time," he said.
Individual businesses, and companies such as Subway, Abrakebabra, Supermacs, Bagel Factory, McDonald’s, Burger King, Eddie Rockets, Nosh and Coffee are members of the newly formed alliance.
Trade union Siptu claimed the food body’s challenge had been prompted by “the fact that the National Employment Rights Authority has started carrying out inspections of fast food operators and finding widespread abuse of the workers”.
“The record speaks for itself. Last year NERA inspected 1,059 catering establishments and found 73 per cent of them were in breach of the law,” said Siptu national industrial secretary Gerry McCormack.
“It recouped €682,239 in underpayments for staff. No wonder this new breakaway organisation for employers want the law changed.”
Mr McCormack said that contrary to the food alliance’s claims, the Employment Rights Orders it wished to quash were not “outmoded anachronisms from the past but are regularly updated”.
“In fact Siptu is meeting the main employer bodies on Thursday discuss an adjustment of the ERO, including a reduction in rates for Sunday working from double time to time-and-a-third, but this is obviously not enough for the Quick Service Food Alliance.”