Industrial Relations (Amendment) Act

01 December 2015

Updated December 2015

Gives introductory guidance on the Industrial Relations (Amendment) Act 2015. Covers the old regime, the need for change and the key provisions of the Act including a new definition of collective bargaining, excepted bodies, new principles and policies to assist the Labour Court, protection for employers, protection against victimisation and Registered Employment Agreements (REAs).

The Industrial Relations (Amendment) Act came into effect on 1 August 2015.

The new Act aims to provide an improved framework for workers who seek to enhance their terms and conditions of employment, where collective bargaining is not recognised by their employer, as well as to provide a replacement system for Registered Employment Agreements (REAs), and a new type of order known as Sectoral Employment Orders (SEO).

The Act, which falls short of providing statutory union recognition, has been broadly welcomed by trade unions and worker groups. For employers who engage in some form of negotiation with a staff association (which is not a trade union) they need to assess whether this body is genuinely independent from the employer business and if so this may be sufficient to bring it outside the scope of the legislation.

The 2001-2004 Industrial Relations Acts provided a statutory right for employees to be represented by trade unions in trade disputes regarding terms and conditions of employment.

While they were able to seek a binding determination from the Labour Court in relation to their terms and conditions of employment, no binding determination, however, could be made in respect of trade union recognition. The position under this legislation was seen as a compromise solution for trade unions who failed to secure a right to trade union recognition.

The constitutional position under Irish law

Under Article 40.6.1 of the Constitution, Irish citizens have a constitutional right to form associations and unions. The corollary of this is that there is a right for Irish citizens not to be compelled to form an association or be compelled into membership of a trade union. This position encapsulates the voluntarist nature of the Irish industrial relations landscape.

The position under the ECHR

The current Irish position appears to be at variance with the provisions of Article 11 of the European Convention on Human Rights (ECHR). In its submission in Demir and Baykara v Turkey (Application No 34503/97 12 November 2008), the ECHR ruled that the right to collectively bargain with an employer is an essential element of the right to form and join trade unions guaranteed under Article 11 of the ECHR. It is this inconsistency under the ECHR which prompted the government, as part of its mandate, to include a commitment to legislating under Irish law for an improved framework for collective bargaining in Ireland.

The decision in Ryanair

The Ryanair decision in 2007 was the beginning of the end for the 2001-2004 Acts. In brief, the Supreme Court held that a company which did not engage in collective bargaining but did engage in negotiations with staff groups or representatives (that is, even though they were not unionised) should be exempt from the provisions of the legislation. As a result of this decision the number of applications under this legislation reduced dramatically as the scope of the Acts were perceived as being further limited. Companies which had a history of collective bargaining with staff groups (excepted bodies) were now deemed as being outside the scope of the legislation.

The new Act respects the voluntarist tradition of industrial relations in Ireland. It does not require employers to engage in collective bargaining; rather, it provides a framework through which employers who do not engage in collective bargaining may be brought before the Labour Court by trade unions. Some of the key provisions of the Act are set out below:

A new definition of collective bargaining

The Supreme Court decision in Ryanair noted that there was no definition of collective bargaining in the 2001 to 2004 Acts. It went on to state that the Labour Court was in error in utilising the industrial relations concept of collective bargaining and that instead an ordinary dictionary definition should apply

To address this deficiency a definition of collective bargaining is set out in the Act. It states for the purposes of this Act, 'collective bargaining' comprises voluntary engagements or negotiations between any employer or employers' organisations on the one hand and a trade union of workers or excepted body to which this Act applies from the other, with the object to reaching agreement regarding working conditions or terms of employment, or non-employment, of workers.

Excepted body

The Act does not amend the definition of excepted body. However the Act addresses the status of an excepted body in so far as ensuring that it is genuinely free of employer influence in terms of negotiating and agreeing on wages or other conditions of employment. An excepted body is a body which may lawfully negotiate wages or other conditions of employment without holding a negotiation licence.

In determining if the body is an excepted body, the Labour Court will now have regard to the extent to which the body is independent and not under the domination and control of the employer or trade union of employers with which it engages or negotiates in terms of its establishment functioning and administration. Given that excepted bodies by their very nature and constitution are involved in collective bargaining as defined above, they will no longer have a right of access under the Act. This means that it will be a matter for a trade union alone to initiate the procedures under the new regime.

Proof that collective bargaining with an excepted body is taking place

It will be up to employers to satisfy the Labour Court where it asserts that it is the practice of the employer to engage in collective bargaining with an excepted body in respect of the grade group or category of workers concerned. This represents a shift in the burden of proof.

New principles and policies to assist the Labour Court

The Act provides for more detailed policies and principles to be followed in the context of establishing remuneration and conditions. When examining the terms and conditions of any employer, the Labour Court will take into account the totality of the remuneration and conditions of employment and, in doing so, look at comparators, where available, which can comprise both unionised and non-unionised employers. Further, in making any recommendation or determination under the Act, the Labour Court will still have regard to the sustainability of the employer’s business in the long term.

Protection for employers

Some protections are proposed in the Act for employers who face claims from small sections of their workforce. Claims will be excluded if the workers in question comprise an insignificant proportion of their workforce.

Protection against victimisation

Protection will be provided by way of allowing interim relief to be applied for in the Circuit Court in circumstances where a dismissal is being challenged on the grounds of unfairness arising from an individual believing that they are being victimised as a result of invoking through the trade union, or acting as a witness or comparator for the provision of the Acts. This may result in employees being more assertive in bringing claims under the new provisions, secure in the comfort of this protection.

Registered Employment Agreements (REAs)

Part 3 of the Act provides significant amendments to the Registered Employment Agreements (REAs) process in Ireland. It provides for the reintroduction of a mechanism for the registration of employment agreements between an employer or employers and trade unions governing terms and conditions of employment in individual enterprises. It also provides a revised framework to replace the sectoral REAs.

The need for reform in this area arose as a result of the Supreme Court striking down as unconstitutional the electrical REA system. The Court held that Part III of the Industrial Relations Act 1946 was unconstitutional, thereby invalidating the registration of all REAs made under this section.

Since May 2013, new employees in most sectors could be hired at a rate of remuneration agreed between workers and their employers. This is subject only to the provisions of the National Minimum Wage Act 2000.

The likely impact of the new legislation is an increase in worker bodies/trade unions utilising the provisions of the Act to seek to better their terms and conditions of employment, with a likely corresponding increasing in claims as well. In order to avoid the potential for costly claims employers should consider establishing some form of employee consultation forum which might meet the definition of collective bargaining under the new legislation.

This factsheet was written by A&L Goodbody, Solicitors, IFSC, North Wall Quay, Dublin 1.

© A&L Goodbody Solicitors. The material is not intended to provide, and does not constitute, legal or any other advice on any particular matter, and is provided for general information purposes only.