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

In recent years, there has been a continuing series of legal challenges to the JLC and registered employment agreement, 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 respect of REAs.

As the Deputies will be aware, on 1 August last, 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, to allow for enhanced flexibility of application and to restore and underpin the protections afforded to workers.

The recent Supreme Court judgment 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, 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, existing contractual rights of workers in sectors covered by REAs are unaffected.

There were six existing sectoral REAs registered or varied by the Labour Court in recent years. It is estimated that between 70,000 and 80,000 workers were covered by these sectoral agreements. In addition, there were more than 50 employment agreements covering individual enterprises that had been registered. The striking down of the REAs means that new employees in these sectors can now be hired at a rate agreed between workers and their employers. This is subject only to the provisions of the National Minimum Wage Act 2000.

From the parties' perspective, REAs established industry terms and conditions and provided a sense of certainty when tendering. They were recognised under European Union law and, through the posted workers Directive, ensured that contractors from outside the jurisdiction, who may be using employees from lower wage economies, did not obtain an advantage over local contractors in terms of wage costs.

This is a significant judgment that requires careful consideration and I have asked the Attorney General to advise on all issues. That advice is awaited as is the order of the Supreme Court and, until these are received, I am not in a position to indicate what, if any, legislative response may be required.

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