Restaurants 'will cut jobs if wages rise'

A report delivered to Business and Employment Minister Ged Nash by the Low Pay Commission (LPC) recommended an increase of 50 cent an hour, which would see the pay rate moving from €8.65 per hour to €9.15.

The hospitality sector claims that it could drastically effect small businesses and cause them to cut staff or close their business completely.

Chief executive of the RAI Adrian Cummins is worried it could badly damage the industry just as it's getting back on its feet and said his association was against the idea from the beginning.

"We were always against it, and our submission to the LPC detailed that," said Mr Cummins.

"You're going to add on about €1,000 per staff member, per year in every business.

"If it does rise by 50 cent, then if you have 10 staff, then it means you have to find €10,000 every year and the knock-on effect is that every other employee will also be looking for a similar percentage increase."

The RAI chief said that an increase in pay-rates would make an increase in food prices inevitable.

"That'll be up to every business individually if they want to raise prices, but if you begin to lose competitiveness then obviously prices will increase.

recovers

"So to say that prices will increase because of a rise in the minimum wage, yes, that would be correct. There's a lot more to be done before the industry recovers from the recession," said Mr Cummins.

"There's a recovery in Dublin 2 and Dublin 4, but much less so around the rest of the county and the rest of the country."

The raise could come be introduced in October's Budget, and will represent a 5.7pc increase on current rates.