Jerry Kennelly reinforces the importance of entrepreneurship for Ireland’s return to growth
Over 100 business professionals who attended a William Fry breakfast briefing this morning heard how outdated agreements – Registered Employment Agreements (REAs) and Employment Regulation Orders (EROs) – are impeding growth in employment across Ireland and, in some cases, creating ‘cozy cartels’. Both pieces of legislation are currently under review in Ireland at the request of the EU and IMF and were most recently challenged as to their constitutionality in the High Court by the fast food industry.
“REAs and EROs were brought into legislation by the government in 1946 with the intention of preventing exploitation at a time when there was effectively no legislation protecting employee’s rights. Since then we have the plethora of employment legislation designed to protect employees rights, such as the Unfair Dismissal, Equality, Minimum Wage and many more Acts and regulations.
In fact employment is probably the most regulated sector within the whole country.
The reality is, that these REA’s and ERO’s are a hotchpotch of outdated agreements between employers and unions that are legally binding, not just on the parties to the agreements, but also to the sectors in which they operate and in some cases to certain apply to limited geographic areas”, said Boyce Shubotham, Head of the Employment & Benefits Department at William Fry.
“These were created on an ad-hoc basis and in many cases are clearly anti-competitive.
The agreements typically set out minimum rates in excess of the National Minimum Wage and often include incremental increases for no reason other than length of service. The REAs and EROs are applied to diverse sectors from hairdressing to electricians. For example, in the retail trade, they apply to any employer wholly or mainly engaged in the retail grocery trade but, exclude butchers. Or depending on where your business is based, for example a hairdressers in Dun Laoghaire, is governed by the agreement but, the same business in Balbriggan is not.” Mr Shubotham added.
“A stark example is that anyone who employs an electrician has to pay that electrician €1,166.91 a week or €60,682 per annum and if you don’t it is a criminal offence. You have to question why electricians need to be protected by legislation that is supposed to protect employees from being exploited.”
Guest speaker at the William Fry breakfast briefing, Jerry Kennelly – Founder and CEO of Tweak.com – said: “The appetite for entrepreneurship across Ireland is at an all time high. New business ideas are being generated in every corner of the country. The fact is that Irish businesses and business people are the crucial component and foundation in Ireland’s return to growth – and legislation needs to support rather than hinder this. Ireland, as part of the global business community, still punches above its weight and we have a huge amount of respect around the world.”
This morning’s William Fry Breakfast Briefing – ‘Building for the Future-Key Employment Law Considerations’ – was hosted by William Fry’s Employment & Benefits Department and was part of the firm’s spring / summer 2011 series.
