The Irish Hotels Federation has called attempts by the Government to resurrect the Joint Labour Committee (JLC) system 'an exercise in economic folly that is out of touch with the realities confronting tourism businesses across the country.

Paul Gallagher, President, IHF said : “At a time when many tourism businesses are struggling to survive, it is unacceptable that the Government’s focus is on restoring an outdated wage setting mechanism that severely undermines the viability of Ireland’s tourism industry. We are 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,” states Mr Gallagher.  “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.”

Mr Gallagher said that payroll is the largest element of hotel and guesthouses’ costs, representing 42% relative to turnover following significant increases over the last decade. He urged the Government to create an environment that safeguards the 56,000 employees in hotels and guesthouses allows for growth in employment.  He states that, if enacted, the proposed legislation would undermine industry and State efforts to promote the tourism sector as a driver for economic growth – a policy objective to which the Government states it is committed and which has the potential to create over 20,000 new tourism jobs by 2015.

“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,” states Mr Gallagher states. “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 Irish Hotels Federation represents almost 900 hotels and guesthouses throughout the country, which in turn employ 56,000 people. The Federation’s fundamental problem with the JLC system is that the main wage 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.