Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank Deputies Joan Collins and Barry Cowen for raising this important matter and giving me the opportunity to respond. An employment agreement is an agreement governing conditions of employment, made between a trade union and an employer or employer organisation. Such agreements may be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it registers the agreement. Under the provisions of Part III of the Industrial Relations Act 1946, prior to its amendment by the Industrial Relations (Amendment) Act of 2012, the effect of this registration was to make the provisions of the agreement legally enforceable even in respect of workers or employers that are not party to the agreement.

From the parties' perspectives, the primary objectives of REAs are to provide them with a sense of certainty around terms and conditions that will apply when the employers are 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 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.

Six sectoral REAs were registered by the Labour Court, two in the construction sector and one each covering electrical contracting, printing, overhead power line 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 almost 70 employment agreements covering individual enterprises.

As Deputies will be aware, in recent years there has been a continuing series of legal challenges to the JLC and REA systems, including the 2001 John Grace Fried Chicken case, which resulted in the High Court's striking down all employment regulation orders, EROs. A High Court challenge to the validity of the electrical contracting REA as well as the constitutionality of the 1946 Act was successfully defended in 2010 by the State. The decision was appealed to the Supreme Court. On 1 August last, informed by the judgment of the John Grace Fried Chicken case, a new legal framework for REAs and EROs was put in place by way of the Industrial Relations (Amendment) Act of 2012. The Act provided for more comprehensive measures designed to strengthen the constitutional and legal framework for both the JLC and REA sectoral wage-setting mechanisms, such as the specification of the procedures to be followed by the Labour Court and the provision of enhanced oversight and discretion by the Minister and the Oireachtas. The Act also reinstated a robust system of protection of workers in these sectors.

In a judgment delivered on 9 May 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 REAs are instruments having the status of laws made by private individuals. 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 REA 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 subscribing parties and are not enforceable in law. This is a significant judgment that requires careful consideration. The Attorney General had been asked to supply advice on the issues arising from this judgment.

Contracts of employment will remain. They are separate from the enforceability of the REAs. While there is no such agreement in place, employers can seek to renegotiate or a new employer can employ on new terms. We have requested advice from the Attorney General and we are awaiting that advice, which will be with us shortly. We will not delay in responding.

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