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Labour market reforms in Ireland: background summary

The main developments in labour regulation in recent years include new legislation on the right to bargain collectively and reforming sectoral wage-setting mechanisms. New legislation also reformed the institutional framework that regulates Irish industrial relations and employment, creating a new body that merges the functions of five bodies. The national minimum wage was also increased on 1 January 2016, its first rise above its 2007 level.

New legislation on the right to bargain

  • The Industrial Relations (Amendment) Act 2015 gives employees the right to bargain collectively. Up until then, a worker’s right to join a union had been effectively been cancelled out by an employer’s right not to recognise a union for bargaining purposes. Where companies refuse to engage with trade unions to collectively bargain, claims can be taken to the Workplace Relations Commission.
  • The new law provides a definition of collective bargaining as voluntary engagement between an employer and trade union, or an ‘excepted body’ to which the legislation applies.
  • The aim of this legislation is to address the absence of collective bargaining law in Ireland.
  • There has been support from both trade unions and employers for this legislation. It came into force on 1 August 2015.

New sectoral wage-setting mechanisms

  • The Industrial Relations (Amendment) Act 2015 also set out new sectoral wage-setting mechanisms.
  • New Sectoral Employment Orders (SEOs) replace the former sectoral Registered Employment Agreements (REAs), which were declared unconstitutional by the Supreme Court in 2013.
  • Under the legislation, sectoral orders stipulating binding pay and conditions can be made, under which unions and/or employer organisations request the Labour Court to examine the remuneration, sick pay or pensions of workers in their sector. The Court will then make a recommendation to the Minister for Jobs, Enterprise and Innovation, who may confirm or reject the terms of the SEO.
  • In making its recommendation, the Labour Court has to take account of factors such as: the potential impact on levels of employment and unemployment in the sector; the terms of any relevant national wage agreement; the potential impact on competitiveness in the sector; remuneration in other sectors in which similar workers are employed; and that the SEO will be binding on all workers and employers in the sector. 

Institutional changes

  • The Workplace Relations Act 2015 established on 1 October 2015 the independent statutory body, The Workplace Relations Commission (WRC). The WRC assumes the roles and functions previously carried out by the National Employment Rights Authority (NERA), Equality Tribunal (ET), Labour Relations Commission (LRC), Rights Commissioners Service (RCS), and the first-instance (Complaints and Referrals) functions of the Employment Appeals Tribunal (EAT).
  • The WRC has responsibility for promoting the improvement and maintenance of good workplace relations, promoting and encouraging compliance with relevant legislation and codes of practice, conducting reviews of and monitoring developments in workplace relations, conducting or commissioning research into workplace relations, advising the government on the application of employment regulation and providing information to the public in relation to employment.
  • The Commission has a board consisting of a chairperson and 8 members appointed by the Minister for Jobs, Enterprise and Innovation.

National minimum wage

  • The first rise in Ireland's National Minimum Wage (NMW) above its 2007 level was implemented on 1 January 2016. This follows a recommendation by the Low Pay Commission to increase the NMW by 50 cents per hour to a new hourly rate of €9.15.
  • It is estimated that some 124,000 workers will benefit from the increase.
  • The NMW had been cut by €1 an hour on 1 February 2011 in response to the financial crisis. This cut was reversed later that year by an incoming Fine Gael/Labour coalition government.
  • The new minimum wage for workers aged under 18 is €6.41 per hour; those who are 18 or over and/or in their first year of work receive €7.32 per hour; and those who are over 18 and/or in their second year of work receive €8.24 per hour.
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