knowledge 6 August 2015 |

Important Industrial Relations Update - The Industrial Relations (Amendment) Act 2015

Registered Employment Agreements and Sectoral Employment Orders

The previous Registered Employment Agreement (“REA”) system was found to be unconstitutional in the landmark Supreme Court decision of McGowan & Ors v Labour Court Ireland & Anor [2013] IESC 21. The Act aims to replace the previous REA system by providing for:

• the reintroduction of a legislative framework for the registration of employment agreements between an employer or employers and trade unions governing terms and conditions in individual companies. These REAs will not be legally binding beyond the individual companies and, therefore, will not have sector wide application; and
• a new statutory framework for the establishment of orders setting minimum rates of remuneration and other terms and conditions of employment for a specified type, class or group of workers (“Sectoral Employment Orders”). These Sectoral Employment Orders will act as the new framework to replace the previous sectoral REAs which covered, amongst others, the construction, electrical contracting and contract cleaning sectors.

The Act contains detailed procedures for the registration, variation and cancellation of REAs. It also establishes certain guidelines to assist the Labour Court when assessing an application to register an employment agreement. For example, the Court must have regard to whether the registration of the agreement is likely to promote harmonious relations between the workers and the employer.

In respect of Sectoral Employment Orders, the Act permits a trade union and/or employer body which is substantially representative of workers or employers of such workers in a sector to make an application to the Labour Court to request a review of the terms and conditions relating to the remuneration and any sick pay scheme or pension scheme of workers in a particular sector. The Labour Court will then determine whether to make a recommendation to the Minister for Jobs, Enterprise and Innovation for the making of an Sectoral Employment Order for the sector in question.

Employers should note that where an worker of a class, type or group who is subject to an REA or Sectoral Employment Order receives less favourable remuneration and/or conditions of employment than those contained in the REA or Sectoral Employment Order, the REA or Sectoral Employment Order rate of remuneration and/or conditions of employment, as the case may be, will have effect as if the terms of the REA or Sectoral Employment Order were substituted for the terms contained in the worker’s contract of employment.

Collective bargaining

The Act also provides for an improved framework for workers who seek to improve their terms and conditions in circumstances where collective bargaining is not recognised by their employer.

Under the Industrial Relations (Amendment) Act 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act 2004, (the “IR Acts”) the Labour Court was empowered to investigate a trade dispute by a trade union where it was the practice of the employer not to engage in collective bargaining. However, the decision of the Supreme Court of Ireland in Ryanair Limited v Labour Court and Ors [2007] IESC 6 limited the scope of the IR Acts. In summary, following the Ryanair case where an employer had put in place an adequate mechanism enabling negotiations with employee representatives or staff groups, its employees could not seek to refer a trade dispute to the Labour Court without having firstly utilised and exhausted those internal procedures.

The Act has now amended the IR Acts to insert the following definition of “collective bargaining”:

“…

voluntary engagements or negotiations between any employer or employers’ organisation on the one hand and a trade union of workers or excepted body to which this Act applies on the other, with the object of reaching agreement regarding working conditions or terms of employment, or nonemployment, of workers.”

It should be noted that where an employer asserts to the Labour Court that there is a practice in place of negotiating with an “excepted body”, it is a matter for the Labour Court to determine that such negotiations take place. Furthermore, for the purposes of determining the status of any negotiations with an “excepted body”, the Act provides that such a body must be “independent and not under the domination and control of an employer or trade union of employers.”

The Act respects the voluntary nature of the Irish industrial relations system and does not require employers to engage in collective bargaining or require formal recognition of trade unions. However, the Act does provide for a mechanism for a trade union, on behalf of its members, to have disputes regarding remuneration, terms and conditions assessed against relevant comparators and determined by the Labour Court.

We will be publishing a detailed briefing shortly on the principal provisions of the Act. In the interim, the Employment Group at McCann FitzGerald can assist employers on any queries arising in respect of the Act.