Supreme Court Rules on Registered Employment Agreements

Supreme Court Rules on Registered Employment Agreements

In a judgement delivered last week, the Supreme Court declared that Registered Employment Agreements (“REAs”) made under the Industrial Relations Act, 1946 are unconstitutional.

REAs are agreements between trades unions and an employer or group of employers and regulate the pay and conditions of employment in certain industries. Part III of the Industrial Relations Act, 1946 governs these agreements and states that once registered, an REA will be automatically incorporated into individual contracts of employment and will be enforceable through the civil courts and by criminal prosecution. Significantly, however, REAs apply not only to the parties to the agreements, but to all workers and employers in the sectors which are governed by the REAs.

Court proceedings were brought by a group of electrical contractors in the construction industry who complained that they were bound by an agreement - an REA - to which they were not party and in which the employers’ interests were represented by parties which they did not consider to be representative of their interests. The Court was asked to determine whether Part III of the Industrial Relations Act, 1946 contravened Article 15.2.1 of the Constitution as the creation of REAs involved a delegation by the Oireachtas of the power to create laws to another body, breach of which laws would attract both civil and criminal sanctions.

The Supreme Court noted that the power being delegated to the parties involved in negotiating REAs was an 'unlimited grant of power in relation to employment terms, made to bodies unidentifiable at the time of the passage of the legislation and without intermediate review’. Part III of the Act, the Court stated, was a ‘wholesale grant, indeed abdication, of the lawmaking power to private persons...’ The Court found that as REAs purport to bind non-parties, they ‘pass unmistakably into the field of legislation which by Article 15 is the sole and exclusive preserve of the Oireachtas’. On this basis, the Court declared that the provisions of Part III of the Industrial Relations Act, 1946 are invalid, having regard to the provisions of Article 15.2.1 of the Constitution.

This decision will have major implications for employers operating in sectors where terms and conditions of employment have been regulated by REAs.

If you have any queries please feel free to contact Michael Kennedy or your usual contact at Byrne Wallace Shields LLP.