Employers who do not engage in collective bargaining may be brought before the Labour Court for the investigation of a trade dispute. The Industrial Relations (Amendment) Act 2001 put in place a mechanism whereby the Labour Court can consider trade disputes (concerning the terms and conditions of workers), and make initial Recommendations, followed by legally binding Determinations, resulting from this consideration. Where a trade dispute has been referred to the Labour Court, an employer may seek to put forward an argument that the Labour Court has no jurisdiction to investigate the dispute. This typically arises in circumstances where an employer can show that, whilst it does not engage in collective bargaining with a trade union, it does so with a non-unionised excepted body of workers.

The 2001 Act was expected to have significant implications for non-unionised employers. However, in the 2007 case of Ryanair Limited v the Labour Court [2007] IESC6, the Supreme Court was satisfied that negotiations between Ryanair and staff groups, which were not trade unions, did amount to collective bargaining for the purposes of the 2001 Act. It followed that the Labour Court did not have jurisdiction to deal with the dispute. This judgment altered the interpretation of the ambit of 2001 Act to such an extent that the referral of trade disputes was effectively set at naught for a prolonged period of time.

A broader interpretation

Just over one year ago, on 1 August 2015, the Industrial Relations (Amendment) Act 2015 amended the 2001 Act mechanism by seeking to enhance the rights of workers.

The introduction of new definitions of collective bargaining and excepted body arguably created greater scope for disputes to be referred to the Labour Court for the first time since Ryanair. The broadening of the interpretation of the 2001 Act mechanism was welcomed by trade unions and employee bodies alike, effecting a new stage in the Irish industrial relations landscape.

One year on, the Labour Court has, in fact, made only one Recommendation to date under the amended regime, in the recent case of Freshways Food Company and SIPTU, LCR 21242.

The Freshways trade dispute

The dispute related to rates of pay and conditions of employment for SIPTU members employed as general operatives in Freshways, a sandwich preparation and distribution business, which SIPTU contended were less favourable than comparable workers in similar employment.

Freshways does not recognise SIPTU or any other trade union for the purposes of collective bargaining. However, the company submitted that it already engages in collective bargaining with its staff representative group (the "SRG") as an excepted body. Freshways put forward a 2.5% pay rise agreed with the SRG in 2015 in an attempt to demonstrate that collective bargaining is taking place.

The Labour Court examined the SRG and this argument in light of the new definitions of collective bargaining and excepted body. In determining that it did have requisite jurisdiction to investigate the dispute, the Labour Court decided that, even if it could be shown that the SRG negotiates with Freshways, the fact that it does so not only in respect of its own members but also other employees meant that it did not fall within the definition of an excepted body under the 2015 Act. The Labour Court was not satisfied that the one ad hoc example of a pay rise in 2015 demonstrated that "negotiation" was taking place nor did it amount to a "practice" of collective bargaining in line with the statutory definition.

Recommendations made by the Labour Court

In summary, the Labour Court recommended improvements to the workers' terms and conditions to include three incremental pay increases by January 2018, enhanced paid sick leave and an additional day of annual leave for workers with more than 5 years' service. In addition, a disciplinary and grievance procedure which allows for trade union representation was recommended along with a mechanism for the referral of disputes to the appropriate service of the Workplace Relations Commission and/or the Labour Court.

Implications for Employers

The Recommendation has significant implications for employers who do not engage in collective bargaining. Even where an employer already has a staff body with whom it engages in respect of terms and conditions of employment, it appears this may not be sufficient to meet the statutory definitions. The case is certainly indicative of the manner in which the Labour Court is likely to consider the common preliminary argument as to whether it has jurisdiction to investigate a dispute.

One year on, whilst Freshways is the only Recommendation made under the amended 2001 Act regime, it seems the landscape is surely now set for more to follow.

This article was published in The Sunday Business Post on 7th August