Mandate says Labour Party Bill could save thousands of jobs

Tuesday 9 March 2010

Mandate Trade Union has today called on Government to accept the Labour Party Private Members Bill to allow for a downward review of commercial rents on existing leases in the interests of jobs and the overall economy. The Bill is to be debated in the Dáil this evening at 7:00pm (Tuesday, 9 March 2010).

The union insists that this Bill has the potential to save thousands of jobs in the retail sector and the priority for this Government should be to create and protect quality jobs in whatever way they can.
Mandate General Secretary, John Douglas, said, “At a time when we are haemorrhaging jobs in the retail sector due, in large part, to overpriced and inflexible commercial rents, the Government has an opportunity to show that it will put people and jobs first and make some real efforts towards reducing the live register.”
According to the CSO, 24,290 of those joining the live register in the first quarter of 2009 came from the retail sector and Mr Douglas insists that those figures are no doubt worse now.
“The wholesale and retail sector was the largest employment sector of the economy back in 2008 when it employed over 307,000 people. One year later nearly 30,000 jobs had been lost in this sector alone and the situation is getting worse by the day,” said Mr Douglas.
“We have recently seen significant job losses in Arnotts, Debenhams, Superquinn and Hughes and Hughes amongst many other major retail employers. We have also seen a trend of employers reducing the hours of their employees which is having a massive effect on their income, pushing more and more people into the poverty net. It is important to note that rental costs now constitute 20% of companies operating costs and this in turn represents a significant contributory factor in reduced hours for employees,” said Mr Douglas.
“People need to wake up to the fact that high rents and other utility costs are costing jobs, reducing worker incomes and contributing to the stagnation of this economy. This must be addressed urgently and accepting this Bill would go a long way towards doing that.”
The National Competitiveness Council (NCC) stated in a report in January 2010 that commercial property prices have fallen by 52 percent in nominal terms between their peak of early 2008 and Q2 2009. Mandate says this is a real reflection of the commercial property market and having an upwards only rent clause for existing businesses is unfair, uncompetitive and does nothing to help retail businesses, workers, or the overall economy. “It’s quite clear that this clause only serves to preserve the unrealistic and exorbitant profit margins that were made in the past for large property companies,” said Mr Douglas.
The NCC report said, “The ban on upward only rent review clauses in business leases, which comes into effect on the 28th February 2010, will also help improve Ireland’s cost competitiveness. However, many companies are tied into long leases with no opportunity to renegotiate the terms so recent developments will mainly benefit new and expanding or relocating firms.”
Mandate contends that this is in itself competitively unfair on those who had negotiated their rents during the economic boom and it is a major factor in why we are seeing so many retail businesses closing and jobs being lost.