Hotels ask Govt to stick to pay deal

The Irish Hotels Federation (IHF) has called on the Government to adhere to the pay terms set out by the national pay agreement Towards 2016in determining future rises in the national minimum wage.

In a statement, the IHF said the two most recent revisions were based on recommendations from the Labour Court which, it said, "does not have to explain or reconcile its recommendations with the objective of maintaining competitiveness in the Irish economy.

"The IHF reiterates its belief that the Labour Court is not the appropriate vehicle to determine the national minimum wage rates, and its recommendations should not be permitted to override those already agreed under Towards 2016," the IHF said.

The organisation said that if this practice continued, it would undermine the competitiveness of labour-intensive industries such as the hospitality sector.

John Power, IHF chief executive, said a key purpose of the national social partnership agreements is to deliver a "structured programme of national wage adjustments" and to take into account, amongst other things, the objective of maintaining national competitiveness and inflation in the economy.

"The hospitality sector is labour intensive . . . and labour costs can exceed 40 per cent of turnover.

"Continued increases in the statutory minimum wage, exceeding those agreed in the National Agreement, will continue to have a significant negative impact on competitiveness in the hospitality sector."

The IHF said the recent Labour Court recommendation to increase the national minimum wage to €8.65 an hour from July places Ireland within two cent an hour of Luxembourg which has the highest minimum wage rate in the EU.

"In a competitive international tourism environment, Ireland's wage costs is frequently compared with countries such as Spain and Portugal where the national minimum wage rates are €3.12 and €2.23 per hour respectively and the equivalent of €7.90 an hour in the UK," Mr Power said.

"The Irish hospitality sector is particularly vulnerable to wage increases as payroll costs represent a much larger percentage of turnover than in other industries. Implementation of the increase in July 2007 will push wage rates further towards an unsustainable level."