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This paper delves into the impact of economic crisis on wage setting mechanisms for vulnerable workers in Ireland, focusing on JLCs. It examines earnings structure, overtime, and shift working in the context of low paid workers. Through data analysis, it challenges misconceptions regarding the cost implications of JLC rates for employers.
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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
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
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
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”
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
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.
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
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
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
Distribution of overtime hours, earnings and shift allowance
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.
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.