The Supreme Court has found the Minister of State for Business, Enterprise and Innovation acted outside his powers in June 2019 in making a sectoral employment order (SEO) for electricians.
It ruled that SEO should be set aside on grounds including the Labour Court’s failure to set out adequate reasons for recommending that SEO.
The court has remitted the matter to a different panel of the Labour Court to prepare and furnish a recommendation giving reasons in accordance with the applicable law, the Industrial Relations (Amendment) Act 2015.
Mr Justice John MacMenamin said the Labour Court report in relation to the electricians SEO failed to properly set out a proper summary of the submissions made by those interested parties who opposed the making of a SEO and did not engage with those submissions.
What was absent from the recommendation in favour of the SEO, or the accompanying report, was any full description as to the reasons as to how or why the Labour Court had reached its conclusions, he held.
Labour Court report
The Minister could not have been satisfied, from the Labour Court report, that court had complied with the applicable statutory provisions concerning making a SEO and was thus required to refuse to make the SEO, he held.
He also ruled that the Labour Court recommendation that there should be a pension scheme which would contain terms “no less favourable” than those set out in the Construction Workers Pension Scheme does not comply with requirements of the 2015 Act.
Mr Justice MacMenamin was giving the court’s main judgment today on an appeal by the State over High Court findings in proceedings brought by members of the Náisiúnta Leictreach Contraitheor Eireann/National Electrical Contractors of Ireland (NECI).
The NECI had challenged the SEO for electricians in proceedings against the Labour Court, the Minister for Business, Enterprise and Innovation, Ireland and the Attorney General.
They argued that requiring all employers in their sector to apply the SEO to their employees interfered with competition and was unfair to smaller electrical contractors.
However, the Supreme Court has overturned a far-reaching High Court finding that a 2015 law under which sectoral employment orders setting minimum pay and conditions within the building sector is unconstitutional.
Today, Mr Justice MacMenamin disagreed with the High Court the parent legislation governing SEOs - Chapter 3 of the Industrial Relations (Amendment) Act 2015 - is invalid by reference to Article 15.2.1 of the Constitution, which vests “sole and exclusive” power of making laws for the State in the Oireachtas.
The High Court had found the legislation trespassed upon the exclusive law-making power of the Oireachtas because it delegated legislative authority on important matters of policy to the Minister, and indirectly to the Labour Court, without defined boundaries.
The 2015 Act permits trade unions and employer groups to request the Labour Court, in certain circumstances, to examine terms and conditions for employees in certain sectors.
The Labour Court then reports to the Minister who can accept or reject its recommendations.
In various findings, the High Court’s Mr Justice Garrett Simons said, because the Minister can only either accept or reject the Labour Court’s recommendation, it seemed the Minister cannot examine the relevant sector with the effect broad policy choices had been delegated to the Labour Court.
No impremissible delegation
Mr Justice MacMenamin found there was no impermissible delegation of legislation in this instance.
While the extent of the delegation here is significant, the recommendation must take place in conformity with statutory procedure, each step of which is laid down by the Oireachtas, he said
The statutory process involved is “a highly unusual one” as it seeks to establish a statutory procedure which creates entitlements for applicants but also for objecting parties, he observed.
At the same time, the process has a clear policy dimension in the sense that subject to compliance the result is intended to be that sector-wide agreements can be made.
He upheld the High Court decision not to make any findings, despite being urged by the NECI, in relation to the validity of the system reflected in the 2015 Act for dealing with alleged breaches of an SEO.
Mr Justice Peter Charleton gave a concurring judgment focussing on the breadth of guidance and limits of authority within the 2015 Act and on the failure of the Labour Court to give reasons.
Final orders will be made later.