Latest LEEF engagements

The latest update to Ibec members from CEO Danny McCoy

Dear member,

Yesterday evening the Labour Employer Economic Forum (LEEF) plenary group met, chaired by the Taoiseach, Micheál Martin along with Tánaiste Leo Varadkar, Minister Paschal Donohoe, Minister Eamon Ryan and Minister Michael McGrath and the leaders of the Congress of Trade Unions.

The agenda ranged across a number of issues including COVID-19 and updates on the progress of the many pieces of legislation impacting directly on employment rights, with the focus of the meeting centred on the economic challenges. Updates were provided from both Ministers of Finance and Public Expenditure & Reform on the keys issues and included discussion on the rate of inflation, the rising cost of energy for businesses and individuals, as well as supply chain challenges impacting the broader manufacturing sector.

As we gradually emerge from the pandemic, it is evident that the unwinding of the crisis response mechanisms deployed by central banks over the past two years will be fraught with global macroeconomic implications. For example, we can see already that excess money and Covid related distortions are driving worryingly high inflation rates.

Internationally, the solution will primarily lie in a resetting of monetary, exchange rate and fiscal policy. For Ireland, as a Eurozone member, we have no control over monetary and exchange rate policy which are likely to be out of sync with our robust growth. Government therefore will need to drive a much tighter focus on fiscal policy and seek to achieve coordination on issues such as the ‘social wage’ through income policy.  Social wage factors involve the social insurance costs for factors such as statutory leave and payments, as well as training levies.

We will work closely with Government through the LEEF process to help achieve coordination of tax and social welfare policies which can bring benefits to employees through improved public services or benefits. This will have cost implications for the economy but if done effectively and in a coordinated manner, the approach can help offset wage demands and avoid the growing wage-price spiral risks.  This does not involve centralised wage bargaining but can be best described as centralised social wage bargaining as opposed to the current situation of government-imposed costs directly onto business.

On COVID-19, the Taoiseach acknowledged the publication of the Transitional Protocol as all businesses begin to return to working without public health restrictions. It was also agreed that the EWSS, while winding down in the context of COVID-19, remains an important instrument for managing future potential economic shocks and should be evaluated for longer term labour market support.

The Tánaiste updated the LEEF on his legislative agenda, noting that he expects to have Statutory Sick Pay legislation enacted and given effect by July this year.  The Low Pay Commission is progressing work on the Living Wage agenda and the legislation on Redundancy Payments (Amendment) Bill due for enactment before summer.  The Right to Request Remote Working Bill was the subject of considerable discussion with an acknowledgement that it is an extremely challenging issue on which to legislate and recognising that all parties have considerable concerns which will have to be dealt with as the Bill is refined. Ibec will continue to keep you updated on all of these matters.

Finally this week, as we look to other important issues for the business community for the year ahead, I would like to invite you to join the virtual launch of Stronger Europe, Stronger Ireland: Competitive, Innovative, Sustainable, and Open, our new campaign outlining the priorities of Irish business to the Conference on the Future of Europe. Taking place on Thursday 10 February at 11am, we will be joined by with European Commissioner Mairead McGuinness, Ibec President and President of Aramark Northern Europe, Frank Gleeson, and Chair of Ibec’s EU Affairs and Trade Policy Committee Edel Creely. You can register to attend here.

As always, please get in touch if you have any queries.

Regards,

Danny McCoy

CEO

Ibec