Following the recent landmark decision in the Quick Service Food Alliance (‘QSFA’) case, there has been much confusion among employers in sectors covered by the Joint Labour Committee (‘JLC’) system. Can employers change existing employees’ pay and terms and conditions of employment and can they put in place different terms for new employees?
As readers of earlier issues of this ezine will be aware, the QSFA case held certain provisions of the Industrial Relations Acts 1946 and 1990, which provide for the making of employment regulation orders (‘ERO’s) under the JLC system, to be unconstitutional. As a result of the decision, EROs made on foot of those provisions are invalid.
What does this mean in practice and what has been done to rectify the situation by the Government? Despite soundings from the Minister for Jobs, Enterprise and Innovation immediately after the decision, that some form of emergency order would be put in place to ensure workers, typically in low paid sectors, would be protected, no such order has been made to date. However, on 28 July 2011, the Government announced an action plan to reform the JLC system. The principal changes proposed include a reduction in the number of JLCs from 13 to 6 and a reduction in the number of pay rates which can be set, to a basic adult rate and two higher increments to reflect longer periods of service. Previously, JLCs set over 300 different wage rates. Significantly (and sensibly), conditions of employment which are already protected by the vast array of employment rights legislation will not be covered by the revised JLC system. Employers will be able to derogate from EROs in cases of financial difficulty.
Options open to Employers whose Employees were previously covered by an ERO under the JLC system and in relation to New Hires
New employees in sectors covered by the JLC system can be hired on the basis of entirely different terms and conditions of employment to existing employees, so long as this does not discriminate against such employees’ on any of the grounds set out under the Employment Equality Acts 1998-2008.
The position in respect of existing employees is a little trickier. Arguably, depending on existing employees’ contracts of employment, they may have an express or implied contractual right to a certain level of pay and/or to certain terms of employment as set out in previous ERO’s. For this reason, employers are advised to review employees’ contracts of employment and take legal advice before making any changes to existing employees’ terms and conditions of employment.
Interestingly, even though approximately 490 jobs have reportedly been created in the catering sector since the ERO’s have been deemed unconstitutional, the Minister has indicated that it is his intention to continue to press ahead with his planned reforms.
What now for the National Employment Rights Authority (‘NERA’)
Over the last number of years, NERA has dedicated a large number of inspectors and resources to investigating employers who are covered by the JLC system and prosecuting employers who fail to comply with EROs made under it. As these inspectors will no longer be focusing on compliance with EROs (for the time being at least), it frees them up to focus on investigating other employment law breaches such as employers’ breaches of the Organisation of Working Time Act 1997, the Terms of Employment Information Acts 1994-2001, and the Payment of Wages Act 1991. Therefore, while the threat of an investigation and/or prosecution for breaches of EROs is removed for the time being, employers should bear in mind that an inspection from NERA may still be on the cards.