Joan Collins (Dublin South Central, People Before Profit Alliance)
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I thank the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, for coming to the House for this Topical Issue. It appears that the relevant Ministers did not appear for the other issues that were raised, although I do not know whether that reflects something. I have raised this issue because a ruling of the Supreme Court last Thursday struck out the legality of registered employment agreements, or REAs. This happened previously with employment regulation orders, EROs, and joint labour committees, JLCs. All these abbreviations sound very confusing.

The 1946 Industrial Relations Act was specifically enacted to provide that a union or unions representing a majority of workers in a particular industry - and the employers representing a majority in that industry - could, if both agreed, register an agreement on pay and conditions with the Labour Court, which would then have legal status. I am seeking clarity from the Minister following what happened on Thursday. There was much coverage of this issue at the weekend. It must be clearly spelled out that the existing agreements remain in force unless renegotiated, so that workers already in contract are protected under the national contract of employment.

My second question concerns the problem with new agreements. Can employers now bring in immigrant workers on pay that is just above the minimum wage, or based on their own countries' minimum wage levels? An unemployed friend of mine has informed me about a recent advertisement in Poland seeking 900 electricians to do a big contract job in Intel. Workers here are obviously concerned about this.

Those affected are mainly construction workers, electrical contractors and plumbers. Will the Minister act to legalise the REAs through the Dáil, as we had to do before, without watering down the pay and conditions of these workers?

Barry Cowen (Laois-Offaly, Fianna Fail)
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We acknowledge that there are certain sectors affected by the judgment on REAs that benefit from greater flexibility and the freedom to ensure wages reflect the economic reality. This would help boost employment in those sectors and disincentivise black market labour. Many employers that comply with REAs are being undercut by unscrupulous employers paying lower wages off the books. Following the Supreme Court ruling, it is essential we do not allow a free-for-all to emerge. We want confirmation from the Government that there will not be a surge of employers suddenly moving to unilaterally reduce the wages of workers who have been covered by REAs until now or seeking to displace existing staff with new employees on inferior terms. Existing legislative protection which applies to all employees in the State must be rigorously enforced. Guidelines must be set down to ensure engagement between employers and employees on any renegotiated terms and conditions in these sectors.

Industrial peace, as the Minister knows, is very important in attracting foreign direct investment. Despite the upheaval in the construction industry in recent years, it has not been hit by widespread strike action. Swift action by the Government is necessary to prevent a vacuum from emerging. Has the Minister consulted with the Attorney General in response to this judgment? What legislation is he preparing on that and when can we expect it to be in place? It is most important that we do not allow a vacuum to emerge after this judgment, which would create unforeseen difficulties for the sectors affected by REAs.

Richard Bruton (Dublin North Central, Fine Gael)
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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.

Joan Collins (Dublin South Central, People Before Profit Alliance)
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I thank the Minister for clarifying that. The point I want to stress is that there should be no vacuum that might leave workers vulnerable. I made the point regarding the advertisement in Poland seeking 900 workers for a big contract in Intel and offering only €10 per hour. While we have electricians sitting at home in Ireland who cannot get jobs, that will cause a lot of concern among unemployed workers. The Attorney General is to advise the Minister, but does he think legislation will need to be introduced, and how quickly does he think it can be brought to the Dáil? It is very important that we do that.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister for his response. I reaffirm my fears. I expect the Minister in the short term might confirm what he said regarding contracts of employment being legally binding. Those contracts of employment were based on the conditions and terms of REAs and I hope they are not deemed to be illegal based on the unconstitutionality of REAs, as the Minister rightly said. If he can confirm that with a degree of finality, without having to refer to the Attorney General, that is fine and we will accept it.

Regarding any proposed legislation that will emanate from the findings of the Attorney General in her response to this judgment, will the Minister ask for a degree of flexibility that may not be contained in the existing REAs struck some time ago that will help the sectors concerned while being cognisant of the economic realities regarding wages in those sectors? I do not decry those agreements.

I expect that any future legislation would not be deemed to be unconstitutional by any such court. However, there must be sectoral support and guarantees for those areas in which we had REAs in the first place and have continued to have them in the intervening years.

Richard Bruton (Dublin North Central, Fine Gael)
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I can give an assurance to Deputies Cowen and Collins that existing contracts remain and can only be altered by agreement. The fact that the REAs have been struck down, therefore, does not alter the contract an individual has with his or her employer. The same applied when the EROs were struck down - the contracts remained and the record will show there was no wholesale cutting of wages as a result of the period during which they were not underpinned.

Deputy Collins asked what would happen to the REAs. Obviously they will have to be reconstituted under the 2012 Act. The Deputy asked if new legislation was needed. The 2012 Act was drafted after this case was initiated and in that legislation we sought to establish policies and principles that would guide the establishment of such orders and agreements as well as reviews by the Labour Court that would ensure the workers and employers were representative of the broad category for which they claimed to negotiate, and so on. A number of hurdles are involved. These issues come to me, as Minister, and are laid before the Oireachtas. This was all designed to deal with the legal frailties that had been established in the John Grace Fried Chicken case.

In answer to Deputy Cowen's point, the new 2012 Act provides for principles and policies, including looking at the competitiveness of the sector as defined in broad terms in the Act. It provides that in the formation of a new REA the whole environment must be considered and, in that sense, it allows a review of the competitiveness, flexibility and appropriateness to the economic conditions in which the agreement is negotiated. We will wait for wait for advices from the Attorney General in order to have full understanding of the judgment before we proceed but that is the position at present, as I understand it.