Employers: implementing pay rises for shop staff will cost jobs
SHOP WORKERS are in line for two pay rises this year under Labour Court wage agreements despite the carnage in the retail sector and a cut in the national minimum wage.
The pay rise of 2.5 per cent will cost an estimated 4,000 grocers an additional €25m a year, according to employers group Ibec. The first 1.25 per cent increase came into effect from January 1, with the second due in June.
The pay rise comes as retailers struggle to stay solvent despite falling consumer demand, high rents and poor credit lines from banks. More than 1,500 companies went bust last year, including many retailers. The wage increase is also contrary to the government decision to reduce the minimum wage by €1 to €7.65 per hour.
Ibec has called on the Labour Court to reverse or defer the increases, saying failure to do so will cause further job losses.
"Unless something is done to address this situation we will be faced with a scenario whereby in three-and-a-half years, the base rate for retail will have moved from being at the national minimum wage to being 25.5 per cent more than the national minimum wage," said Brendan McGinty, director of industrial relations with Ibec. He pointed out that most employers were freezing or reducing pay while grocery retailers had to increase wages.
More than 250 job losses were announced last week with many due to falling consumer demand. Britvic said it planned to cut 200 jobs from next month, while Toni and Guy, the hairdressing salon, said it was closing four salons with the loss of 35 jobs. Superquinn signalled that 100 jobs would go after a lease expired on its Kildare outlet. HMV also signalled a raft of cost-cutting measures including store closures and redundancies. Ivan Yates cited a slump in consumer spending as one of the factors behind the demise of Celtic Bookmakers, the betting company put into receivership last week.
The pay rises in the grocery trade were agreed by unions and employers under the auspices of the Labour Court almost three years ago. The intention was to raise grocery shop worker's wages from €8.65 -- which was then the minimum wage -- to €9.60. But the economic collapse and widespread job losses in the sector caused the last element of the pay rise to be deferred until October, when unions demanded that the outstanding 2.5 per cent increase go through this year.
The wage agreements -- which are legally binding -- have been a longstanding bone of contention for employers. The wages are set through employment regulation orders and registered agreements, under the auspices of the Labour Court.
They are intended to put wages in some traditionally low-paid sectors, such as hospitality and retail, above the minimum wage. Failure to pay the agreed rates can result in fines and legal action against the employer.
The EU/IMF bailout has demanded an independent review of the wage agreements by the end of March, as one of the conditions of the €85bn bailout. The review is likely to include a reduction in hourly rates, overtime and weekend rates, across a range of industries, but particularly in construction.
Ibec claims the recession has taken a massive toll in the retail sector with more than 47,000 job losses to date.