Government proposal on JLCs “an exercise in economic folly” – IHF
IHF President Paul Gallagher commented, “At a time when many tourism businesses are struggling to survive it’s unacceptable that the Government’s focus is on restoring an outdated wage-setting mechanism that severely undermines the viability of Ireland’s tourism industry”.
He continued, “We’re calling on the Government to show political gumption and face down short-sighted demands by those seeking to retain the status quo.
“Job creation should not be all about the smart economy. We have a Government that is attempting to pull out all the stops to create jobs in the IT and innovation sector but their words and actions are not aligned when it comes to tourism – one of the country’s largest indigenous industries.
“On the one hand we have supportive tourism initiatives such as a reduced VAT rate while on the other hand we have additional costs being imposed on tourism businesses in the form of JLCs. What we’d like is for Fine Gael, in particular, to show the courage of its convictions and follow a pro-business agenda that allows tourism to live up to its potential to act as a major engine for growth and job creation.”
Payroll is the largest element of hotel and guesthouses’ costs, representing 42 per cent relative to turnover following significant increases over the last decade and he urged the Government to create an environment that safeguards the 56,000 employees in hotels and guesthouses allowing for growth in employment.
If enacted, the proposed legislation would undermine industry and State efforts to promote the tourism sector as a driver for economic growth.
Hotels and guesthouses, many of which are operating at a loss, are being forced to pay a premium over and above the national minimum wage, he stated, adding, “Businesses can no longer be shackled with an obsolete system which imposes excessive wage demands and complex compliance requirements. The proposed legislation makes no sense for our country and is neither appropriate nor fit-for-purpose in a modern competitive economy. It has lost its relevance with the introduction of the National Minimum Wage Act and other extensive employment legislation.
“It is astonishing that, while 440,000 people are on the live register, the Government is seeking to create another barrier to creating employment. By re-instating the JLC system the Government will, in fact, be facilitating an increase in the number of people on the live register.”
The IHF represents almost 900 hotels and guesthouses throughout the country which employ 56,000 people. The fundamental problem with the JLC system is that the main legislatively-determined wage rates reflect the economic peak of 2007 rather than the dramatically worsened position of 2012 in which hotels across the board are experiencing dramatically reduced revenue and capacity utilisation.
“It is astonishing that, while 440,000 people are on the live register, the Government is seeking to create another barrier to creating employment.” – IHF President Paul Gallagher.
