Changes have recently been made to the system for the making of Employment Regulation Orders (EROs) and Registered Employment Agreement (REAs) under new legislation. The changes follow a High Court ruling in July 2011 which held that the Joint Labour Committee (JLC) wage setting mechanisms were unconstitutional. In addition, the EU/IMF Programme of Financial Support for Ireland and the Government’s Programme for National Recovery 2011-2016 highlighted the need for reform.
Reforms to the JLC and REA mechanisms for setting wages and conditions of pay may be summarised as follows:
- The scope of each JLC will be reviewed by the Labour Court every five years to ensure its application continues to be appropriate. The first review is expected to commence in the coming months.
- JLCs will continue to have the power to set minimum rates of pay for employees in certain industries; however this is limited to a basic hourly rate of pay and two additional higher rates relating to either service or skills.
- JLCs will no longer set Sunday premium rates. However employers must remember their obligations under the Organisation of Working Time Act 1997.
- JLCs must have regard for specified “principles and policies” when formulating proposals for EROs, including the level of wages in comparable sectors and the national minimum wage.
- Employers not originally party to an REA but who are subject to it, can now apply to the Labour Court to vary its terms.
- The Labour Court must have regard to specific “principles and policies” when deciding to register an REA.
- Employers may now be exempted, for a maximum of 24 months, from paying the REA or ERO rate of pay where it can show the business is “experiencing severe economic conditions”.
Contributed by Maryrose Dillon.
