Despite its mildly right-leaning political stance, the current government has implemented an unexpectedly large number of policies potentially benefiting the working class at the cost of the employer sector. These measures encompass an extra fortnight of parental leave implemented in July 2022 and a three-day paid sick leave entitlement, complemented by a rise of 80 cents in the minimum wage, bringing it to €11.30 as of January 2023.
Notably, a new annual public holiday was designated in February 2023, St Bridget’s Day, followed by the introduction of the Work-Life Balance Act in April. This essentially implemented EU work-life balance regulation into Irish law, granting additional rights to Irish workers, such as extended breaks for breastfeeding or milk expression and maternity leave for transgender men, among others. Furthermore, provisions are in place for domestic violence leave and the option to request flexible working hours.
However, the policy changes didn’t cease here. In the subsequent January, paid sick leave was broadened to five days, coupled with a considerable €1.40 rise in the minimum wage.
The latter half of the current year is set to witness the automatic enrolment of employees into contributory pension schemes, as well as an extension in parental leave from seven to nine weeks. Following this, paid sick leave will extend to seven days in the coming January.
On the whole, these alterations appear to be progressive. The reality, however, is that they are barely bringing Irish working standards up to par with the majority of EU and Organisation for Economic Co-operation and Development countries. The Department of Employment’s recent report on the cumulative impact of these measures further states that these countries generally enjoy more public holidays and enforce statutory sick pay, with auto-enrolment pension schemes being a common feature in many nations.
The financial burden of these new measures on businesses, not to mention the potential PRSI increases, may not have been well-received by Fine Gael and Fianna Fáil; however, the economic rationale remains solid. Those nations which prioritise policies fostering quality job creation and an inclusive labour force traditionally outperform those favoring labour market flexibility and the ease of hiring and firing in response to market fluctuations.
Regrettably, the strategy seems to have misfired partially. The same study concluded unexpectedly that many workers and businesses will experience minimal to no effects from these measures.
The conclusion appears less paradoxical or pessimistic than initially thought. The key finding in the report shows a significant lack of impact from these initiatives largely due to many workers across different economic sectors already receiving above the Living Wage, along with benefits like paid sick leave and flexible working.
This isn’t strictly within large multinational companies. The bracket also encompasses workers in large local corporations and sectors including, but not limited to, financial services; property; professional services like law, accounting and consulting; healthcare, specifically medical and dental, as well as commercial semi-state sector workers.
The pressing issue for the Government is the primarily negative impact in areas where these measures have affected.
According to the report’s authors, two particularly vulnerable sectors are retail and hospitality. These labour-dependent and low-wage sectors are expected to witness a significant surge in their costs over the next decade due to these actions.
There’s a high probability that the workers from these industries will likely suffer the most. The study cautions that employers might adjust employees’ working hours and schedules to counteract the implications of the measures, notably the PRSI increase. In real terms, this might result in more employees working shorter hours, potentially necessitating dual employment. This hardly fits the vision of improved working conditions that the measures aim to achieve; it rather seems quite the reverse.
Writing off the entire initiative as pointless might be an overstatement, but its chances of providing any meaningful benefit as the upcoming general election nears seem slim.
Despite the forward-thinking nature of these measures, drawing attention to its successes might not resonate with the majority of voters for the Government. Furthermore, the few who do notice may have a negative impression.
It appears as though no matter what is done, mistakes are inevitable. Simon Coveney, the Employment Minister, is acutely aware of the potential pitfalls and has disclosed a variety of strategies alongside the report’s release. These initiatives incorporate a promise frequently made by the Fine Gael Minister, which is the reduction of bureaucracy and simplification of administrative processes for businesses. This should indeed be a suitable solution.