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ISSUE 57 page 6

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Irish wage regulation saved but reform is in the offing

In Ireland a national minimum wage is supplemented by wage regulation set by a system of Joint Labour Committees (JLCs). As part of a review following the National Recovery Plan the system, which can set Employment Regulation Orders (EROs) and Registered Employment Agreements (REAs), has been thorougly appraised and reforms set out. Wholesale abolition is unlikely however.

The review was triggered by the conditions imposed on Ireland following the financial aid package received from the International Monetary Fund (IMF) and the EU to stave off the country’s bankruptcy.  The two international institutions plus the European Central Bank (ECB), wanted the country’s labour market deregulated as it believed that this would create jobs ‘while safeguarding basic workers’ rights’.  The review was widely expected to recommend abolition of the JLCs and this was reinforced in July when a High Court judgement found that the Industrial Relations Act of 1946, which established EROs, was unconstitutional. All rates of pay set by these orders immediately ceased to be legally binding.
In the event the ‘Duffy-Walsh’ review, written by the chair of the Labour Court and an academic economist, found that workers covered by the JLC system did not earn more than those outside it and that ‘lowering the basic JLC rates to the level of the minimum wage rate is unlikely to have a substantial effect on employment’. They contented themselves with recommending the amalgamation of certain Committees, that collective bargaining agreements take precedence, that changes in the national minimum wage be reflected in ERO rates and that employers should have a limited right to be exempted if they could prove an economic case to be so. Trade unions seemed to be happier with this outcome than employers. The Irish Hotels Federation, whose sector employs over 28,000 people covered by a JLC, said that ‘the authors were solely focused on tinkering with the JLC system without any serious intention to consider abolition’. Jack O’Connor, President of Irish union SIPTU, however, thought that the review was’ a rational objective analysis of the issues’ . Perhaps these reactions influenced the subsequent government proposals as these were seen as going further in the employers’ direction, including considering competitiveness with trading partners when setting pay rates.


Recent rulings from the European Court of Justice
German pilots can stay on after 60
UK pilots win partial victory in holiday pay row
The working conditions of airline pilots were on the menu at the ECJ recently. As well as the UK case detailed below, Lufthansa employees Messrs. Prigge, Fromm and Lambach found their case against compulsory retirement  at 60 decided by the court. When they reached the magic number their contracts of work were automatically terminated under the company’s collective agreement. The pilots claimed that this constituted age discrimination as both international and German legislation specifies a retirement age of 65 as long as those over 60 work in a multi-pilot crew with younger co-workers. The court ruled that, while measures such as monitoring physical capabilities that may diminish with age were justified on the grounds of protecting the public, a blanket ban based on an age limit lower than that enforced outside the company was disproportionate. It therefore breached the Employment Equality directive passed in 2000.
The ECJ has ruled on the dispute between British Airways and the BALPA union over holiday pay. The trade union had complained that allowances for flying time and periods spent away from home were not taken into account when calculating holiday pay which was paid at the basic rate. Basing their decision on the Civil Aviation and Working Time directives, the court confirmed that annual leave remuneration must correspond with normal remuneration. Any aspect of pay that is ‘linked intrinsically to the performance of the tasks which the worker is required to carry out’ must be included. Therefore an element of psy during leave must correspond to flying time. However ‘occasional or ancillary costs’ such as those incurred when away from home need not be included.

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