Ireland: Employment Law Update: Industrial Relations Reform

The Government recently published two significant new Bills which will reform the industrial relations landscape in Ireland.  The new legislation will provide for an enhanced collective bargaining framework in Irish workplaces. It will also provide a statutory basis for the Low Pay Commission, a body established to review, on an annual basis, the national minimum wage.

Below, we look at some of the key aspects of the new Bills.

Industrial Relations (Amendment) Bill 2015

(i) Collective Bargaining

The 2015 Bill provides for highly anticipated changes to the law on collective bargaining.  In particular, the Bill amends the Industrial Relations (Amendment) Acts 2001-2004 (the "Acts"). The Acts provided a system whereby employers who did not engage in collective bargaining negotiations could be brought before the Labour Court by trade unions. The Labour Court had significant powers to set wage rates and other terms and conditions of employment, and its determinations were binding and enforceable. However the Supreme Court judgment in Ryanair v The Labour Court1 was perceived as significantly limiting the scope of the Acts. Prior to Ryanair, it was understood that the Acts applied to all employers who did not engage in collective bargaining with trade unions. The Ryanair case, however, suggested that employers who negotiated with staff groups which were not trade unions, were excluded.  Although the Acts continued to apply to employers who did not engage in collective bargaining of any kind, the number of claims brought under the Acts consequently fell dramatically. The 2015 Bill clarifies matters by providing a new definition of "collective bargaining", and clarifying which employers are covered by the Acts and which are not. While the extent of the changes under the 2015 Bill actually appears quite limited, there is a perception that it will revive the Acts.

While the 2015 Bill does not go so far as to expressly require employers to engage in collective bargaining or to recognise trade unions, it has been warmly welcomed by trade unions as a significant step towards fulfilment of the Government's commitment to bring the Irish law on collective bargaining in line with international norms. Once enacted, one must anticipate a significant increase in claims.

(ii) Registered Employment Agreements

The 2015 Bill also provides for the reintroduction of the Registered Employment Agreement ("REA") system, which was struck down by the Supreme Court in McGowan v Labour Court2 in 2013. 

Under the new system, employers and trade unions will once again be able to submit employment agreements governing terms and conditions in individual organisations to the Labour Court for registration. The Bill also provides for the creation of a new framework for establishing minimum terms and conditions of employment for a specified group of employees or sector, to replace the old system of sectoral REAs.  Under the new system, bodies which are substantially representative of employees or employers within a relevant sector may request the Labour Court to carry out a review of the pay, pension and sick pay entitlements of employees within that sector. The Labour Court can make recommendations to the Minister, and if the Minister believes it is appropriate to do so, the Minister may make a binding Order in relation to the terms and conditions of employment for all employees within the sector.

Importantly, the Bill contains various principles and policies to guide the Labour Court and the Minister in the exercise of their functions under the legislation, with a view to addressing the Supreme Court's concerns in McGowan. In particular, no REA or sectoral Order may be made unless it is likely to promote harmonious industrial relations.

National Minimum Wage (Low Pay Commission) Bill 2015

This Bill provides for the Low Pay Commission ("LPC"), launched in February this year, to be placed on statutory footing. The LPC will be an independent body, whose main task will be to carry out an annual review of the national minimum wage and make recommendations to the Minister in this respect. The intention is that regular reviews of the national minimum wage will ensure that it can be adjusted as appropriate having regard to changes in earnings, productivity, competitiveness, and employment levels, and that any adjustments will take place on a gradual incremental basis, to reduce the impact of such changes for employers.

The LPC has already commenced its work. Submissions have been sought as part of a public consultation on the national minimum wage, and the LPC is expected to submit its first report in July.


1. For details in this regard, please see our January 2013 ezine on this topic

2. McGowan & Ors v Labour Court & Ors [2013] IESC 21.  See our 2013 ezine which looks at this decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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