Sunday 4 December 2016

Low Pay Commission 'hamstrung' firms told

Paul O'Donoghue

Published 11/06/2015 | 02:30

The Low Pay Commission has to report to the Government by July 15
The Low Pay Commission has to report to the Government by July 15

A body established to advise the Government on the appropriate rate for the national minimum wage has been "hamstrung" by comments made by a Minister, it has been claimed.

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The Low Pay Commission was set up earlier this year to examine the current national minimum wage of €8.65 and whether it should be increased.

It is made up of of a Government appointed chairperson, three people with experience of working with low-paid workers, three people with experience of employers' interests and two members with experience of labour market economics and employment law.

The commission will advise the Government annually on the rate of the national minimum wage and it due to make its first report to the Government by July 15th. However, the chairman of the Small Firms Association (SFA) AJ Noonan claims that the Commission will be unable to take a completely objective view of the issue due to comments made by Minister for Business and Employment Ged Nash.

Mr Nash has called 2015 the "year of the pay rise" and has said that he wants to see the minimum wage increased "progressively" in the coming years and that there is an "inevitability" about pay increase demands as the economy improves. However, he has said that he would only be in favour of an increase when "economic circumstances allow that to happen".

Speaking to the Irish Independent Small Firms Association Chairman AJ Noonan said that public comments made by the Minister have made it difficult for the Low Pay Commission to function effectively.

"The Minister has already said that there will be wage increases. If he has already said that there will be wage increases, what is the Low Pay Commission meant to do?" he said.

"I believe that the Low Pay Commission was pretty hamstrung from the very start, when it is at the end of an electoral cycle it is very difficult for it to function properly."

He added: "I believe that Minister Nash is a good man and like him personally, but his priorities have nothing to do with those of the small business community."

A spokeswoman for the Department of Jobs hit back at Mr Noonan's comments, describing them as "nonsense".

"The legislation setting the Low Pay Commission up on a statutory basis stipulates that account must be taken of the impact of any increase to the national minimum wage on levels of employment and unemployment, the cost of living and national competitiveness," she said.

"Before the establishment of the Low Pay Commission by Minister Nash, any Government could unilaterally impose a new rate of the national minimum wage without consultation.

Allegations

She added that the Low Pay Commission "is an independent body with representatives from employers, workers and academics. Any allegations that the work of the Low Pay Commission has been 'hamstrung from the very start' are nonsense."

Mr Noonan was speaking after the SFA Annual National Conference which took place yesterday.

The conference also coincided with the SFA's Summer Business Sentiment Survey, which saw 639 firms respond from a sample of 2,500 SFA member companies.

71pc of respondents to the study stated that their business is improving, whilst just 8pc felt it was disimproving. Nearly two thirds of respondents plan to take on new staff this year.

However, just 41pc of small businesses expect to increase pay this year, with more than half saying that they will maintain pay rates while 3pc said that they are reducing rates.

Mr Noonan said that many small businesses are still struggling and any increase in the minimum wage increase could lead to companies moving abroad. While he acknowledged that the number of people being paid at or below the minimum wage is relatively low, he claimed it could lead to wage inflation.

"It is interfering with the market place. It puts pressure on other wages and there will be job losses in vulnerable sectors," he said.

"It is a question of what companies can afford. If they are profitable then of course they should share their success but if a company is on its knees and wages are increased it could put a company out of business. The 3pc who are reducing wages don't want to do it.

"It [a minimum wage increase] will drive business and investors to the UK."

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