High wages ‘closing Irish restaurants’

30th July 2010, 10:53am

Three hundred restaurants have closed in the Irish Republic in the last 12 months and “unsustainable” pay rates have been a major factor in their collapse, according to the Irish Restaurants’ Association (RAI).

Now it has launched a campaign for a reduction in the national minimum wage of €8.65 an hour, which it says is the third highest in the EU – after France and Luxembourg – and 20% above the comparable rate in Northern Ireland and Britain. As part of the campaign, it is also seeking the abolition of what it sees as an oudated system of regulating wages in certain industries, including catering.

According to RAI chief executive Adrian Cummins, the rates are determined by joint labour committees and, in catering, work out at 8% above the minimum wage. "Payment for Sunday working is calculated at the rate of a day and a third, which is €12.42 an hour.

"These rates are simply unsustainable in the present economic climate," he says, "and are a major factor in the spate of closures we have recently experienced. As a result of the premium payments, many restaurants no longer find it viable to open on Sundays. That involves the loss of significant income and makes the survival of businesses all the more difficult."

The RAI has presented its case to a parliamentary committee on enterprise, trade and employment, warning that more restaurants face collapse unless urgent action is taken by government. It called for an immediate reduction in the minimum wage to €7.65, pointing out that the rate has been increased by 55% since its introduction in 2000, while inflation has risen by 34% over the same period.

The restaurant sector, it said, was "a vital component" of the tourist industry, employing 64,000 staff, a quarter of all tourism jobs, and contributing €2bn a year to the Irish economy. It addition to crippling labour costs, it had to cope with sky-high rents and rates and "the heaviest excise duties on wines of any country in Europe".

Mr Cummins claims restaurateurs have adapted to the recession by cutting costs and menu prices, but warns this is not enough to ensure survival. The RAI plans to ramp up its campaign in September, when parliament resumes after the summer recess.

Related Articles:

• 07 Jun 2011 - Awards ceremony recognising chef who catered for the Queen marred by protests
• 15 Nov 2010 - Budget Plea As 'One Restaurant A Day Closes'

Click here to submit a comment!

Have your say!

To comment on this article, simply enter your name and email and send us your views. Please note that your comment will appear publicly below this article once it has been processed. For enquiries please email info@eatoutmagazine.co.uk.