Employees now have basic statutory entitlements in relation to pay, working hours, holidays, maternity leave and other working conditions. However, depending on the industry or sector, an employer may have to recognise further employee rights contained within binding, collective, industry-specific agreements known as Registered Employment Agreements and Employment Regulations Orders. The constitutionality of such agreements has recently been challenged.

REAs and EROs

Registered Employment Agreements (“REAs”) are agreements, relating to remuneration or conditions of employment, which are registered with the Labour Court. The parties to the agreement must be substantially representative of workers and employers within the sector and those who may be affected by the agreement, if registered, must be given an opportunity to object to the registration. Such registration renders the agreement legally binding, not only on the parties to it, but also on those who are in the class, type or group to which the agreement relates. Breach of its provisions is a criminal offence.

Employment Regulation Orders (“EROs”) are similar in effect to REAs but they are created in a slightly different way. A Joint Labour Committee (“JLC”) is established by the Labour Court and is composed of members representative of employers and employees engaged in a particular activity or part of a specific industry. The JLC submits proposals to the Labour Court on minimum rates of pay and terms and conditions which, if approved, become an ERO. An example of a JLC is that governing retail grocery and allied trades, which applies to all grocery outlets, newsagents, multiples, supermarkets and convenience stores.

Challenges to EROs and REAs

In July of this year, the High Court dismissed a challenge by a group of electrical contractors to an REA. The group argued before the High Court that the agreement was invalid and unconstitutional and sought judicial review of a decision by the Labour Court to uphold the REA. They objected to the REA on the basis that it was made by parties who were not representative of the industry taken as a whole and that they themselves were not parties to the REA.

It was further argued that the ERA requires pay levels and conditions of work far above those that small contractors like themselves can afford to pay and it makes it impossible for them to successfully tender for work because their costs are too high, especially in the current economic difficulties.

The challenge to the ERA was refused by Mr. Justice Hedigan on number of grounds, including:

  • The delay in bringing judicial review proceedings since the registration of the ERA on 24 September 1990, was not justified.
  • The decision of the Labour Court to refuse to cancel the REA was neither at variance with reason and common sense, nor was it based on an identifiable error of law.
  • The constitutional issues in the case were not considered by the High Court for a number of reasons such as the delay in bringing proceedings and that the Court found it undesirable that the constitutional challenge should proceed alongside judicial review proceedings.

With regard to EROs, the Quick Food Service Alliance (QFSA) has issued proceedings to challenge the constitutionality of an ERO. The QFSA claims that the Oireachtas is the only body capable of making laws under Article 15.2.1 of the Constitution, and that therefore JLCs do not have the requisite authority to set minimum wage levels and employment conditions for specific industries.

The QFSA case has yet to be heard, however, the Industrial Relations (Amendment) Bill 2009 seeks to remedy the constitutional loophole raised by QFSA. The Bill requires new REAs, new EROs and variations and cancellations of either, approved by the Labour Court, to be then approved by the Minister for Enterprise, Trade and Employment by way of Ministerial Order. Following this, the proposed agreement or order, or amendment to such, must be laid before both Houses of the Oireachtas, giving both Houses the power to annul the agreement or order within a 21 day timeframe.

Conclusion

The decision of Mr. Justice Hedigan has left the door open for others to mount a constitutional challenge, therefore employers and employees affected by current REAs and EROs should monitor closely the result of the QFSA case and any similar new proceedings.