Industrial Relations Update – What you need to know

Industrial Relations (Amendment) Act 2015
The commencement of the Industrial Relations (Amendment) Act 2015 (the "Act") on 1 August 2015 is noteworthy not only for the changes it introduces, which we have detailed below, but also for the following key industrial relations principles that remain untouched:

  1. There is still no legal obligation for Irish employers to recognise trade unions; and
  2. There is still no legal requirement for Irish employers to collectively bargain (except in specific collective consultation scenarios).

So, notwithstanding the interest associated with the passing into law of the Act, it is vital to note that it continues to respect the voluntarist tradition of industrial relations in Ireland.

Main Changes
The main changes to the IR landscape can be summarised as follows:

  1. Greater clarity around the mechanism for Labour Court investigations of trade disputes;
  2. The recasting of the registration of employment agreement ("REA") legislative framework; and
  3. The introduction of universally applicable sectoral employment orders ("SEOs").

The Act is likely to reinvigorate an avenue of redress for trade unions that has been dormant since the 2007 Ryanair decision. One of the practical outcomes form that decision was that it appeared to preclude the Labour Court from investigating a trade dispute in circumstances where the employer had a suitable mechanism in place for negotiating with employee representatives and that process had not yet been exhausted by those workers. The new Act refines the conditions precedent which must be in place before workers in non-unionised workplaces can seek a Labour Court mandated improvement to their terms and conditions of employment.

Employers who continue to offer remuneration terms which, in their totality, are not out of line with their peers in their sector are unlikely to be substantially affected about the changes being introduced by the Act.

New Definitions to be aware of: "collective bargaining" and "excepted body"
The Supreme Court, in Ryanair, noted that there was no definition of "collective bargaining" in the Industrial Relations Acts 2001 to 2004. To address this deficiency, the Act sets out a new definition:

“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”.

If negotiations between an employer and a trade union (or excepted body) do not meet the threshold of the above definition, an employer cannot avoid a Labour Court investigation of a trade dispute by suggesting it is engaging in collective bargaining.

The Act also sets out a new definition of "excepted body" requiring it to be "independent and not under the domination and control of an employer". Excepted bodies will no longer have a right of access to the Labour Court under the Act.

What's new for trade disputes before the Labour Court?
The new law places the onus on the employer to satisfy the Labour Court that it is the practice of that employer to engage in collective bargaining. It is not the trade union that bears this burden of proof.

The Act also provides useful guidance on what the Labour Court now needs to take into account when deciding whether to impose changes to terms and conditions of employment including:

  • Assessing the totality of the remuneration and conditions of employment 
  • Reviewing available comparators which can comprise both unionised and non-unionised employers
  • Having regard to the terms of any collective agreements in force
  • Having regard to the sustainability of the employer’s business in the long term

The broadening of the comparator net is a new development for employers and may, in some instances, weaken a challenge.

Balanced protections for employers and employees
The Act provides an additional layer of protection for employers by amending the Industrial Relations (Amendment) Act 2001 to expressly exclude the investigation of trade disputes where it is satisfied that the dispute is not being brought by a significant section of the employer's workforce. In addition, trade disputes in respect of which the Labour Court has made a recommendation cannot be referred to the Labour Court again for a period of 18 months, subject to certain conditions.

From an employee perspective, the Act provides enhanced protections against penalisation by employers of workers who invoke their rights under the Act. Such workers can now seek a Circuit Court order to restrain any dismissal related to a trade dispute.

What's happening on REAs and what are SEOs?
Following a Supreme Court decision which resulted in existing REAs being invalidated, the Act aims to fix the issues surrounding REAs (including Sectoral Employment Orders ("SEOs") once and for all.

The Act provides for the reintroduction of the registration of REAs governing terms and conditions of employment in individual enterprises.  While REAs are legally binding between the employer and its workers, REAs will not have sector wide application e.g. construction. To address this gap the Act introduced the concept of agreements that apply to all members of a particular economic sector (as defined in the Act), to be regarded as SEOs.

The Act provides for existing employment contracts to have effect as if the REA (or SEO) remuneration rate or conditions of employment were substituted for that contract rate and/or conditions. In line with other provisions in the Act to afford employers additional protection, the Labour Court will require confirmation that the relevant trade union of workers is "substantially representative" of the workers in the class, type or group.

Ok – so now what? - Tips for employers

Any non-unionised employer seeking to show that a staff association falls within the definition of "excepted body", should ensure appropriate paperwork is in place (including evidence of independent election and so forth)

  • Be aware of the meaning of "collective bargaining" so that your business is clear as to whether it does or does not engage in "collective bargaining"
  • Be aware that in a non-unionised environment, not having a sufficient process in place may result in a trade union applying for a legally binding Labour Court determination in respect of terms and conditions of employment; and
  • To manage this risk, consider benchmarking your terms and conditions of employment (in their totality) as against your peers in your sector to check whether your terms and conditions may be vulnerable to an investigation by the Labour Court.

Karen Killalea, Partner & Ailbhe Dennehy, Senior Associate

Date published: 13 August 2015