Striking down of pay deals has led to race to bottom, say unions

Striking down of wage-setting mechanisms that set a floor on terms and conditions for tens of thousands of workers in particular sectors has led to an unsustainable race to the bottom, the Irish Congress of Trade Unions has said.

Addressing the Oireachtas joint committee on Jobs, Enterprise and Innovation, vice president Patricia King said many workers had experienced a worsening of their situations on foot of the Supreme Court ruling to declare as unconstitutional registered employment agreements which laid down down minimum terms and conditions in a number of sectors.

She said that on foot of the court decision, registered employment agreements in these sectors no longer had any application beyond the parties that agreed to sign up to them.

Ms King said that as a consequence, employers who had previously abided by these collective agreements in particular sectors were now refusing to do so.

“It has created an unsustainable race to the bottom based on unfair competition,with tenders for work based on bids that provide wages, terms and conditions below the registered employment agreement rate, threatening the livelihoods of workers and standards in the industries affected.”

She said Congress welcomed new legislation in this area which, she said, represented a significant step toward

The head of the Labour Relations Commission (LRC), Kieran Mulvey, said competition between companies on the basis of labour costs in some parts of the economy was "inimical" to harmonious industrial relations.

He suggested that competition should be based on quality of products, quality of service and the skill of the staff.

He said the structure provided by wage-setting mechanisms such as registered employment agreements, if they could be agreed across sectors of the economy, were important to their effective operation.

“The construction industry, for example, has always been an industry characterised by competition between employers for business .

“I think most employers and trade unions would agree that the achievement of reasonable levels of industrial peace in this industry through various cycles has been largely attributable to the existence of a structured capacity on the part of parties to remove the cost of labour from otherwise intense competition across the sector.”