The High Court held on 7 July 2011 that the Joint Labour Committee (JLC) system of determining pay rates and working conditions is unconstitutional. Arising from this the Court specifically held that the Employment Regulation Order (ERO) made in 2008 in the Catering Industry was an unlawful interference with the property rights of the Plaintiffs who consisted of a group of fast food retailers. This decision is likely to have cost saving consequences for employers in catering and other sectors governed by EROs such as hairdressing, retail, hotels and agriculture.
Mr Justice Kevin Feeney stated that the " .. pay rates and conditions of employment have in effect been determined in an arbitary and unfair manner". The Judge granted declarations that the relevant provisions of the 1946 and 1990 Industrial Relations Acts were unconstitutional as they allowed for an impermissible excessive delegation of law-making power concerning pay and conditions to the Labour Court in the absence of any guiding policies or principles.
Commenting on the judgement, Grahame Walsh, Head of Employment at RDJ said:
"This decision confirms the widely held view that the JLC/ERO system was unlawful. Absent any emergency legislation the immediate impact is that employers may hire new employees on terms and conditions which are less favourable than those set by the EROs. Not surprisingly the decision has been welcomed by IBEC and criticised by employee representatives. It is understood that the State is to discontinue prosecutions against employers for breaches of JLC rules. The most immediate issue is to what extent the terms of hundreds of thousands of existing employees may be impacted by the decision."
The Government has confirmed that it does not intend to appeal the decision.Minister for Jobs, enterprise and Innovation Richard Bruton issued a statement on 12th July last in which he said that he and his department had 'engaged in urgent consultations with the Attorney General and her office to explore all legal options available which would provide protection to workers previously covered by EROs.'
'In particular, two possibilities were examined: enacting emergency legislation to provide temporary protection for workers pending enactment of comprehensive reforms, and appealing the judgment that would likely have the result of providing a stay on its effects.
'Unfortunately, as a result of these consultations, it has become clear that neither option is viable.
'My intention is that legislation be introduced to the Dáil very early in the next term with prioritised enactment thereafter.'
Developments are eagerly anticipated by all interested parties.
