Registered Employment Agreements

Dáil Éireann Debate, Wednesday - 22 May 2013

Wednesday, 22 May 2013

Questions (21, 53, 54)

Clare Daly

Question:

21. Deputy Clare Daly asked the Minister for Jobs, Enterprise and Innovation the current status of the REAs in view of the recent Supreme Court ruling. [24137/13]

Martin Ferris

Question:

53. Deputy Martin Ferris asked the Minister for Jobs, Enterprise and Innovation the steps he has taken to ensure that low-paid workers under the JLC and REA schemes continue to be fully protected and their income safeguarded. [24465/13]

Brian Stanley

Question:

54. Deputy Brian Stanley asked the Minister for Jobs, Enterprise and Innovation if he will give an assessment of the impact of the recent Supreme Court judgment with regard to REAs. [24463/13]

Written answers

Minister for Jobs, Enterprise and Innovation

I propose to take Questions Nos. 21, 53 and 54 together.

In recent years there has been a continuing series of legal challenges to the JLC and REA systems, including the 2011 Grace Fried Chicken case that resulted in the High Court striking down all Employment Regulation Orders (EROs) and the recent Supreme Court ruling in relation to Registered Employment Agreements (REAs). As the Deputies will be aware, on 1 August last (informed by the judgment in the Grace Fried Chicken case), a new legal framework for REAs and EROs was put in place by way of the Industrial Relations (Amendment) Act 2012.

The Act provided for a comprehensive suite of measures to strengthen their constitutional and legal framework (such as procedures to be followed by the Labour Court and enhanced Ministerial and Oireachtas oversight and discretion), to allow for enhanced flexibility of application, and to restore and underpin the protections afforded to workers.

In the judgement delivered on 9 May last in McGowan and others v The Labour Court, Ireland and the Attorney General, the Supreme Court held that Part III of the Industrial Relations Act 1946 was invalid having regard to Article 15.2.1 of the Constitution.

That Article provides, in effect, that the exclusive power to make laws is vested in the Oireachtas. The Supreme Court took the view that Registered Employment Agreements are instruments having the status of laws made by private individuals subject only to a limited power of veto by a subordinate body. While the Constitution allows for the limited delegation of law making functions, the provisions of the 1946 Act went beyond what is permissible under the Constitution. The effect of this decision is to invalidate the registration of employment agreements previously registered under Part III of the 1946 Act. In consequence the Labour Court no longer has jurisdiction to enforce, interpret or otherwise apply these agreements. As a result, all such agreements no longer have any application beyond the subscribing parties and are not enforceable in law.

However, as was the case in relation to EROs following the 2011 High Court judgment, existing contractual rights of workers in sectors covered by Registered Employment Agreements are unaffected by the ruling. Contractual rights can be altered only by agreement between the parties involved. There were 6 existing sectoral REAs registered or varied by the Labour Court in recent years: two in the Construction Sector and one each covering Electrical Contracting, Printing, Overhead Powerline Contractors and Dublin Drapery, Footwear and Allied Trades. It is estimated that between 70,000 and 80,000 workers were covered by these sectoral agreements. In addition, there were over 50 employment agreements covering individual enterprises that had been registered by the Court under the 1946 Act.

The striking down of the REAs means that new employees in these sectors can now be hired at a rate agreeable between workers and their employers. This is subject only to the provisions of the National Minimum Wage Act, 2000. From the parties’ perspective, the primary objective of REAs is to provide them with a sense of certainty around terms and conditions that will apply when the employer is tendering for and working through contracts and to have in place agreed grievance and industrial peace provisions. The agreements also have the effect of ensuring that the industry terms and conditions are recognised and maintained. In addition, the existence of these legally backed agreements is recognised under European Union law and ensures, in accordance with the Posted Workers Directive, that contractors from outside the jurisdiction, who may be using employees from lower wage economies, do not obtain an advantage over local contractors in terms of wage costs.

This is a significant judgment that requires careful consideration having regard not only to the provisions of the 1946 as it stood when the REAs were fashioned and registered but also to the amendments to the 1946 Act contained in the 2012 Industrial Relations Act. Insofar as REAs are concerned, the Attorney General has been asked to supply advice. That advice is awaited as is the Order of the Supreme Court.