DUBLIN (Reuters) — Irish workers in low-paying jobs face possible wage cuts following a ruling by Ireland's High Court that a wage-setting system covering up to 200,000 people was unconstitutional.
The decision paves the way for employers to reduce the pay of cleaners, waiters, hairdressers, hotel employees and security guards.
Justice Kevin Feeney said current legislation gave the Labour Court and so-called Joint Labour Committees too much power.
"The Labour Court is effectively at large in relation to what matters to take into account in considering and fixing wage rates and conditions of employment," Feeney said. "The legislation upon which the Joint Labour Committee operates is silent as to how that committee is to carry out its functions in making orders."
Trade unions said the ruling was a disaster for workers and called on the government to urgently introduce legislation to protect the wage-setting mechanism.
"(The) High Court judgment removes the only protection low-paid workers had on their wages and conditions and is absolutely devastating news for them," said Patricia King, vice-president of the Services, Industrial, Professional and Technical Union (SIPTU). "It's the case of all their birthdays coming at once for the most unscrupulous employers in the state who are now free to plunder the wage packets of poorly paid workers."
The case was taken by John Grace Fried Chicken and the Quick Service Food Alliance, which represents a group of fast food outlets, including Burger King and Subway. They said they would not cut the pay of existing workers.
"This High Court decision is one that will pave the way for increased employment in a number of sectors, not just catering," said John Grace of John Grace Fried Chicken.
Ireland's government, under pressure to make the economy more competitive as part of a European Union/International Monetary Fund bailout, is considering proposals to reform wage-setting agreements.