McGowan & Ors v The Labour Court, Ireland, the Attorney General & Ors
The Supreme Court has handed down its judgment in this challenge to the constitutionality of those provisions of the Industrial Relations Act 1946 (the 1946 Act) which regulate the registration and enforcement of Registered Employment Agreements (REAs), thus bringing finality to a long-running and protracted sequence of legal challenges in this area. The plaintiffs in the action comprised a number of electrical contractors who were not party to the original electrical contracting REA and who objected to being bound by its provisions and, in particular, took exception to those provisions of Part III of the 1946 Act which created a range of criminal offences for employers who were deemed non-compliant with an REA which purported to apply to them. District Court prosecutions were in train against a number of the plaintiff employers.
The High Court had declined the plaintiffs' request to determine whether or not Part III of the 1946 Act offended the Constitution given the context in which this issue had come before that Court. Nevertheless, the Supreme Court, following a comprehensive case-management process involving the plaintiffs and the State parties, determined that it was in the best interests of all parties affected by the REA in question and Part III generally, to determine the issue on appeal, as otherwise the already protracted litigation would continue and the issue would inevitably come before the Supreme Court again.
The Supreme Court's judgment is largely concerned with examining the question of whether or not Part III of the 1946 Act results in an impermissible delegation of law-making power to a body or bodies other than the Oireachtas. The law in this area has been examined by the Courts in several high profile cases and is well-settled. The Courts have made it clear in those cases that Article 15.2.1 of the Constitution states that the Oireachtas is the only body that has power to make law within the State. However, this is not inconsistent with the practice whereby the Oireachtas, having set down in primary legislation (an Act) the principles and policies by which a particular activity should be regulated, also in that Act then empowers a Government Minister, for example, or some other public body (e.g. a local authority) to make detailed regulations implementing those principles and policies by means of secondary legislation.
Part III of the 1946 Act provided that parties who claimed to be representative of workers and employers in a particular sector could agree very detailed arrangements governing rates of pay, pension entitlements etc that should apply in that sector. Thereafter, the parties could apply to the Labour Court to have the agreement between them registered as an REA with the effect that all workers and employers in the sector would be legally bound to comply with the terms of the agreement, even if they had not been party to the relevant negotiations. The Supreme Court determined that the arrangements envisaged in Part III effectively amounted to investing the parties to such an agreement – who typically are private entities such as trade unions and employer representative groups – with the power to make legislation regulating the industry or sector in question and that this was in fact an impermissible abrogation by the Oireachtas of its law-making functions under the Constitution.
As a consequence of this judgment, Part III of the 1946 Act ceases to have legal effect and the agreements registered under it are no longer enforceable. The Department of Jobs, Enterprise and Innovation did anticipate a number of the shortcomings in the 1946 Act identified in this judgment and the Industrial Relations (Amendment) 2012 was passed into law on 24 July 2012 in an attempt to remedy them. However, the 2012 Act does not apply retrospectively to save those REAs registered prior to its enactment. It remains to be seen whether or not trade unions and employer representative groups in those sectors traditionally covered by REAs (construction, electrical contracting, printing etc) will seek to register new agreements under the 2012 Act. The Supreme Court did not explicitly discuss the 2012 Act, however, the Court's wide-ranging criticism of the very concept of an agreement entered into by private parties being legally binding on an entire sector of industry, would suggest that even the amendments to Part III of the 1946 effected by the Oireachtas in 2012 will not be enough to prevent the REA mechanism from being consigned to industrial relations history.
Following the Supreme Court ruling, the Minister for Jobs, Enterprise and Innovation issued a statement on the judgment advising that the Government will study the judgment and take legal advice on it before commenting in detail.