By Deirdre Lynch, Associate, Byrnewallace, Dublin, Ireland
So far, 2015 has been a busy year for employment lawyers in Ireland. Legislation was passed in May which will overhaul the current employment dispute resolution system. Draft legislation has also been published recently which, when enacted, will introduce a number of important changes to Irish industrial relations laws. Finally, legislation has been drafted which will establish a Low Pay Commission which will make recommendations to the Minister in relation to the level of the statutory national minimum wage. Each of these significant developments is discussed below.
In Ireland employees are free to join a trade union of their choosing; however, there is no concomitant obligation on their employer to recognise or negotiate with any particular trade union unless, of course, the employer decides to do so. The Irish system of collective bargaining is therefore voluntary in nature, which, not unsurprisingly has been a source of much dissatisfaction for Irish trade unions for many years, which asserted that the system was at odds with international legal requirements.
In its Programme for Government published in 2011, the Irish government undertook to “reform the current law on employees’ rights to engage in collective bargaining… so as to ensure compliance by the State with recent judgments of the European Court of Human Rights.” This statement provoked much debate in Ireland regarding the precise nature of the reforms to the industrial relations system which would be proposed and eventually implemented. Employers were concerned that compulsory collective bargaining would be introduced. However, draft legislation published in May, namely, the Industrial Relations (Amendment) Bill 2015 (the “Bill”), falls short of introducing compulsory trade union recognition and has been generally welcomed by employers and trade unions.
As matters currently stand in Ireland, where it is not an employer’s practice to engage in collective bargaining with its employees, they have a statutory right to seek a binding determination from the Labour Court in relation to their terms and conditions of employment (subject to certain pre-conditions being met). There are few limits on the extent of the Labour Court’s discretion to determine wage rates and other terms and conditions of employment. However, it is not open to the Labour Court to make a binding determination in respect of trade union recognition. In other words, the Labour Court is not empowered to order an employer to engage in collective bargaining with a trade union.
Over the years, trade unions brought many cases before the Labour Court seeking binding determinations on pay and conditions in organisations which did not have a practice of engaging in collective bargaining. In 2007, the Supreme Court delivered a very significant judgment in a case involving the airline Ryanair, which was widely viewed as limiting the instances where trade unions could go to the Labour Court seeking a binding determination. In essence, the Supreme Court held that a company which did not engage in collective bargaining, but which did engage in negotiations with staff groups or representatives, should be exempt from the provisions of the legislation. This judgment meant that the legislative framework was much less useful to trade unions given that many employers in Ireland engage in negotiations with staff groups. As a consequence of the Supreme Court decision, the number of applications to the Labour Court for determinations on pay and conditions reduced dramatically.
The Bill was published on 14 May 2015 and it aims to provide an improved framework for workers who are working in an organisation which does not engage in collective bargaining to seek to enhance their terms and conditions of employment. The Bill does not oblige employers to engage in collective bargaining. Instead, it provides a mechanism through which employers which do not engage in collective bargaining may be brought before the Labour Court by trade unions for a binding determination to be made on terms and conditions. The primary changes proposed by the Bill are, as follows:
• The term “collective bargaining” had not previously been defined in the relevant legislation. Given that whether or not an employer engages in collective bargaining determines whether or not a binding determination may be sought from the Labour Court on terms and conditions, the absence of a definition of this term led to much uncertainty. “Collective bargaining” is now defined in the Bill as “voluntary engagements or negotiations between any employer or employers' organisation on the one hand and a trade union of workers or excepted body to which this Act applies on the other, with the object to reaching agreement regarding working conditions or terms of employment, or non-employment, of workers”. The inclusion of a definition of "collective bargaining" should go some way towards providing greater clarity as to which companies are covered and which are not.
• The Bill enhances the protections against victimisation available to workers who invoke their rights. It contemplates that workers may apply for interim relief where a dismissal is being challenged as unfair in circumstances where the worker believes that he/she is being victimised as a result of being directly involved in the investigation of a trade dispute by the Labour Court.
• The Bill also includes protections for employers which are facing disputes with an insignificant proportion of the workforce. In certain circumstances, the Labour Court can refuse to investigate a dispute involving an insignificant proportion of the workforce.
• The Bill introduces new matters which the Labour Court must consider in making a recommendation on terms and conditions of employment. For example, the Labour Court is not entitled to make a recommendation which improves remuneration and conditions of employment unless it is satisfied that the totality of the remuneration and conditions of employment of the workers in question provides a lesser benefit to them having regard to the remuneration and conditions of employment of comparable workers employed in similar employments. In addition, the Labour Court must have regard to the effect of any recommendation on maintaining employment and the long term sustainability of the employer’s business. The introduction of these additional factors to be considered by the Labour Court will provide significant comfort to employers in that they impose a level of control on the Labour Court’s discretion in making a recommendation on pay and conditions.
REFORM OF WORKPLACE RELATIONS STRUCTURES
The Workplace Relations Act 2014 will come into operation on 1 October 2015 and will effect the most significant reform of Ireland’s employment dispute resolution system since the system was first established. It will transform the manner in which employment and equality disputes are processed in Ireland. The current system for resolving workplace disputes is unwieldy and requires different employment law rights to be enforced in different fora. This frequently results in multiple claims involving the same parties being dealt with by different fora, which is inefficient and not cost effective. The Act will create a new single framework for the processing of employment and equality disputes in Ireland, and, therefore, the new system will be more streamlined and straightforward.
The principal reforms include the following:
• A new body called the Workplace Relations Commission (“WRC”) will assume responsibility for hearing claims under Irish employment legislation which are currently heard by a number of different bodies.
• The WRC will have increased powers of inspection and will have novel compliance measures available to it, namely, a compliance notice and a fixed payments notice, both of which should promote higher levels of compliance with employment legislation by employers.
• A new two-tier structure will be created with claims being dealt with at first instance by the WRC, with a right of appeal to the Labour Court.
• Certain complaints may be dealt with by written submission only. Where the Director General forms the opinion that a dispute or complaint can be processed in this manner, he may inform the parties of his intention not to hold a hearing. Either party may object within 42 days.
• Mediation may occur in certain cases, provided that neither party objects.
• The Act enables the Minister to prescribe fees for the provision of services by the WRC or the Labour Court. However, the Minister has publicly committed not to introduce fees, except possibly in the case of appeals by complainants who failed to attend the hearing before an adjudication officer and who then subsequently appeal the decision of the WRC to the Labour Court.
The Act will also make some changes to substantive employment law. In particular, employees who are absent from work for long periods because of illness will be entitled to accrue annual leave during their sick leave and, subject to certain limitations, to take that accrued annual leave after their sick leave ends.
LOW PAY COMMISSION
In Ireland the statutory minimum wage is currently €8.65 per hour. Draft legislation, namely, the National Minimum Wage (Low Pay Commission) Bill 2015 has been published which, when enacted, will put the recently formed, Low Pay Commission, on a statutory footing.
The function of the Commission is to make annual recommendations to the Minister regarding the national minimum wage. In making its recommendation, the Commission will be required to have regard to a number of factors, including, changes in earnings, currency exchange rates and income distribution since its last recommendation, whether employment and productivity have been increasing/decreasing, international comparisons (particularly with Great Britain and Northern Ireland), the necessity for job creation and the likely effect that any change in the minimum wage would have on the cost of living, national competitiveness and levels of employment/unemployment.
The Commission has nine members, including, a chairperson, three members who understand the interests of low paid workers, three who understand the interests of employers and two with specialist knowledge of matters such as, statistics, employment law and proven competence in analysing and evaluating economic research and statistical analysis.
In light of recent legislative development in Ireland, it is certain that the employment laws they are a changin’ and that interesting times lie ahead for employment lawyers!