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JLC ‘reform’… June 28, 2011

Posted by WorldbyStorm in Economy, Irish Politics.

There’s a report in today’s Irish Times by Deaglán de Bréadún that posits that Minister for Social Protection Joan Burton is going to point out to Minister for Enterprise Richard Bruton some basic issues as regards his plans to ‘reform wage setting mechanisms’.

Ms Burton was not available for comment last night but other Labour sources said that, if the Minister for Enterprise presented his original proposals, she would be highlighting the implications for her budget in the event that wage-cuts were imposed on the sectors in question.
There would be a prospect of additional claimants becoming eligible for Family Income Supplement whereby workers on low pay are entitled to significant extra payments.

Nice if true and indicative of the complexity that the blunt category of ‘reform’ faces when it engages with actuality.

But, reading the piece this caught my eye.

The EU-IMF bailout agreement specifies that the system must be reformed but Labour TDs want to ensure any cuts in wages are minimised.
The programme for government includes a commitment to reform the JLC structure and to “examine the rate of pay for atypical hours”.

Actually the first part is incorrect.

Here’s the relevant passage from the EU/IMF Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding issued on December 3rd 2010.

An independent review of the Framework REA and ERO arrangements will be initiated by the end of Q1 2011. Terms of Reference and follow up actions will be agreed with European Commission Services.

And here, from the Report on Joint Labour Councils are the terms of reference under which it laboured:

First up the genesis…

But the report on the Joint Labour Councils

1.1 The National Recovery Plan, 2011 to 2014, published by the Government on 24th November, 2010, commits to a range of structural reforms to the labour market aimed at removing barriers to employment creation and disincentives to work; and at re-orientating activation measures. In this context, the Government committed to legislate for a reduction in the hourly rate of the National Minimum Wage. It also made a commitment to review the framework of ERO and REA wage-setting mechanisms within a period of 3 months.

And here in the context of the EU-IMF programme.

1.2 On 28th November 2010, in the context of its announcement of the joint EU-IMF programme for Ireland, the Government reiterated its commitment to this review, stating that the terms of reference would be agreed with the European Commission Services.

And finally the terms of reference of the review.

1.3 The following terms of reference were issued in February 2011:

Terms of Reference
The following are the agreed terms of reference:

1. The review will take account of:-
The shared employment maintenance and creation objectives, of the Government, employers and trade unions, both within the regulated sectors and in the wider economy; and the possible renewal of the Private Sector Protocol by IBEC and ICTU.

•The common desire to see the continued orderly conduct of industrial relations across the economy and the relevant sectors;
the continued protection of employee rights and interests;

•The current levels of domestic competition and international competitiveness of the sectors covered by EROs and REAs; price and wage movements in the economy and in major trading partners; and the impact of EROs and REAs on labour market flexibility and sustainable employment across the economy.

•Independent external economic and labour market evidence.

•The views of Members of the Houses of the Oireachtas and of stakeholders including IBEC, ICTU and the CIF, and of all of the parties directly involved in the current mechanisms in the context of evolving private sector pay policy.

2. The review shall provide an assessment on the following points

•The continued relevance, fairness and efficiency of the current ERO and REA mechanisms and of individual Orders and Agreements, and in particular:
o Whether and to what extent the function played by EROs in ensuring protection of minimum wages and conditions overlaps with that of the statutory national minimum wage system introduced in 2000; whether minimum wages and working conditions more stringent and over and above those guaranteed by the national minimum wage for the worker categories covered by EROs are justified on the grounds of fairness;
o the economic function played by REAs in the collective bargaining framework of Ireland and their legal status, including in relation to the definition of designation of REAs “collective agreements or arbitration awards which have been declared universally applicable” under Article 3 of Directive 96/71/EC on the Posting of Workers and the public policy obligations underpinning the statutory framework for REAs having regard to EU Treaties and
in particular, Article 28 of the Charter of Fundamental Rights of the European Union, the Solemn Declaration on Workers’ Rights, Social Policy and other issues, and relevant ILO conventions;
o whether and to what extent EROs and REAs contribute to nominal wage rigidity in the covered sectors and occupations, with potentially relevant effects on employment during weak economic conditions and on the adjustment of labour markets across sectors, occupations, and geographical areas.
o the adequacy of the process for the registration of ERO proposals, in particular with reference to the constitution of Joint Labour Committees, their operation and governance, and their role played in the process.
o the appropriateness of the process and criteria applied by
the Labour Court for the acceptance of REA proposals for registration;

3. Make recommendations on the following issues:
o The continued relevance, fairness and efficiency of the current ERO and REA mechanisms and of individual Orders and Agreements;
o Possible legislative amendments to the existing framework for the regulation of terms and conditions of employment to ensure that the framework is fit-for-purpose in the current economic climate, including to remove anomalies and obsolete provisions, and to move to a more streamlined, transparent and flexible wage setting model.
Without prejudice to any findings in relation to the above, and after assessing compliance with internationalconventions and EU labour directives, recommendations for reforms may include:
o The introduction of derogations to EROs and REAs in case of financial difficulties of employers and with a view to protect employment;
o The introduction of more flexible and responsive variation mechanisms in the pay conditions established by EROs and REAs;
o The conditions for registration, enforcement, amendment and cancellation of EROs and REAs;
o Simplification of compliance requirements for employers covered by EROs and REAs;
o The penalties in case of breach of obligations relating to EROs and REAs.

4. The Review will be conducted jointly by Kevin Duffy and Dr Frank Walsh having regard to the need for the Review to draw both on (a) particular knowledge of the operation of wage setting mechanisms and (b) independent economic expertise.

5. The government is committed to taking urgent action, including making any legislative provision which may be necessary, following its consideration of the recommendations of the review.

As can be seen the key term above in all documentation is ‘review’, not ‘reform’ and the review when it was issued was clear that doing away with JLCs wasn’t sensible – though it did argue for certain changes.

But such rhetorical confusions on the part of those who are paid to report these things correctly are now a part and parcel of the discourse.


1. dmfod - June 28, 2011

David ‘Doughnut’ Davin Power just did the exact same thing on Six One, saying the JLCs have to be reformed by the autumn or we’ll be in trouble with our ‘masters’ in the EU/IMF. This kind of media reporting is of course convenient for the government which gets to blame everything on the deal, even things that aren’t actually in it. Bravo RTE.

Joan Burton’s statement that more people would become eligible for FIS means that pay cuts will apply to existing employees, rather than only to new employees as FG keeps claiming in the face of all evidence. It also indicates they don’t expect enough people to be taken off the live register as a consequence of the increased employment supposed to flow from the ‘reforms’ to compensate for increased FIS payments i.e. as we all know this is really about transferring wealth from workers to employers rather than creating jobs.


WorldbyStorm - June 28, 2011

It’s interesting how they can’t even get the story straight, or be bothered to.

Re your second point, absolutely agree re the supposed increases in employment outweighing compensating people for loss of incomes, I hadn’t thought of it that way.


EamonnCork - June 28, 2011

David Davin Power is fantastic. I will cherish forever his authoritative statement on Morning Ireland that Bertie Ahern had got through the dodgiest bits of his tribunal evidence well and wasn’t going to be in danger for some time. A few hours later Bertie resigned. The confidence with which DDP spoke was the most impressive thing.


2. Tomboktu - June 29, 2011

One tangential point about this that really annoys me is that few — if any — of the reporters or columnists who are paid by the national media will do the kind of research you did with this post. </end_rant>


3. Alan - June 29, 2011

Lies in journalism and media are like rat droppings in clear soup: not only are very noticeable but they are repugnant and disgusting.


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