The independent review of Registered Employment Agreements (REAs) and Employment Regulation Orders (EROs) was published last week. The review was commissioned by the Government to consider the future of sectoral wage setting mechanisms. Opponents of the process had called for its abolition on the grounds that it was antiquated and not fit to meet current labour market requirements. The report recommends that the system be maintained but radically overhauled.

Amongst the recommendations for reform in the report are as follows:

  • The abolition of EROs based on geographical distinction.
  • The abolition of some EROs where they are only representative of small numbers of workers and as a result are no longer efficient.
  • The standardisation of overtime and Sunday payments - currently there are a range of different Sunday premiums and overtime rates across various EROs and the report recommends that these be standardised by introducing overtime guidelines which would address rates for overtime and definitions of same.
  • The introduction of a limited ability to derogate from sectoral minimum pay and conditions on economic grounds.
  • The introduction into EROs of the same enforcement mechanism for REAs - these proposed changes would make it easier to enforce EROs as currently they can only be enforced through a criminal prosecution in a District Court.
  • An ability to exempt employments with collective bargaining from EROs.

Following the publication of the report the Government indicated that it would bring forward proposals for reform by the end of June with reforms expected to be implemented by September. The Government also indicated that it would not be bound to implement the recommendations in the report and can make such proposals as it sees fit on the issue.

The nature of the reforms may however be influenced by the outcome of a number of constitutional challenges to the ERO/REA systems which are currently before the courts. In particular the judgment in the Quick Service Food Alliance case is expected by the end of May or early June.This case involved a challenge to the constitutionality of the laws setting up Catering EROs in Ireland on the basis that it involved an unconstitutional transfer of the right to decide policy. The outcome of this case may be a factor in determining the nature of future reforms.

We will keep you appraised of future developments in this area as they happen.