Government approves amendments to draft collective bargaining legislation, arising from the Ryanair Decision

Last week, the Government approved the drafting of legislation to amend the Industrial Relations (Amendment) Acts 2001-2004. These are the Acts which provide access to the Labour Court for employees who are members of trade unions but whose employers do not have a practice of engaging in collective bargaining negotiations.

By way of background, Ireland asserts that it has a “voluntarist” industrial relations tradition. By this it means that employers are not forced by the law to engage in collective bargaining negotiations. Collective bargaining negotiations can only happen if the relevant employer voluntarily engages in such negotiations.

This “voluntarist” tradition has been a source of dissatisfaction for the unions for many years. They have asserted (albeit without much success) that Ireland’s voluntarist traditions are at odds with international legal requirements.

The unions have also pursued amendments to the Irish model through domestic legislation, with considerably more success. The Industrial Relations (Amendment) Acts 2001-2004 provide an extraordinary instrument for unions where employers decline to engage in collective bargaining negotiations.  The Acts allow disputes to be brought into a process which can ultimately lead to the Labour Court making legally enforceable determinations against employers. Few limits are set on the extent of the Labour Court’s powers to determine wage rates and other terms and conditions of employment. One item which is excluded is union recognition: the Court may not make a recommendation or determination which provides for “arrangements for collective bargaining”.

In the first six years of their existence, many cases were brought under the Industrial Relations (Amendment) Acts 2001-2004 by trade unions with considerable success from their point of view.

In 2007, the Supreme Court delivered a judgment in the Ryanair case which was perceived as considerably limiting the scope of the legislation. Prior to the case, it was generally perceived that the legislation applied to all companies which did not have a practice of collective bargaining negotiations with trade unions. In the Ryanair case, the Supreme Court said (in essence) that there is another category of companies which is excluded: that is the category of companies which have a practice of collective bargaining negotiation with staff groups which are not trade unions. 

The Supreme Court also found that there had been deficiencies in the manner in which the Labour Court had taken evidence in such cases.

The Supreme Court did not strike down the legislation.  The Acts continued to apply to many companies that had no practice of collective bargaining negotiations of any kind – whether with unions or otherwise. These employers have remained exposed to action under the Acts. The wide powers of the Court to determine pay and conditions within those companies remained in existence. Nevertheless, the perceived effect of the decision was that the Acts had been greatly reduced in scope. Only a handful of cases have been taken since 2007.

In themselves, the proposed amendments announced last week are relatively modest.  The main points are as follows:

• Clear definitions will be provided of expressions such as “collective bargaining negotiations” and related terms.  This will provide clarity about which companies are covered by the Acts and which are not.  Companies who assert that they are not covered by the Acts because they have an internal (non-union) collective bargaining mechanism will have to demonstrate that the worker representatives within that internal process are genuinely independent of the company.
• Increased protections against victimisation by employers of workers who invoke their rights under the Acts will be provided. 
• New principles and policies will be introduced to guide the Labour Court in its assessment of claims under the Acts. These are likely to provide significant comfort to employers, because in aggregate they are likely to reduce the wide discretion the Court previously possessed to determine wage rates and other terms and conditions of employment.  The detail of these principles and policies will be very important; that detail will only become clear when the legislation is published next year.
• Some protections are proposed for employers who face claims from tiny subsets of their workforce. It appears that claims may be excluded if the workers in question comprise an insignificant proportion of the relevant category or workers.

Despite that the extent of the proposed amending legislation appears relatively limited, the practical impact of the amendments could be very significant.  If the amendments create the impression that the Industrial Relations (Amendment) Acts 2001-2004 have become relevant again, 2015 could see a significant increase in the volume of litigation under those Acts.

If you have any queries, please contact Michael Kennedy, Elaine Kelly or Loughlin Deegan.