Ever since the issue of EROs and REAs came to the forefront in February 2011 when the then Government commissioned a report on their effectiveness, Peninsula Business Services has endeavoured to keep our clients informed on the developments in this area. Since that report we have had the landmark moment of the High Court rendering EROs unconstitutional and with the Government ever since seeking to reintroduce the EROs (and REAs) in a more constitutionally compliant manner it is now more important than ever to ensure that employers are kept up to date. Today we will examine the recent movements on the matter of the Contract Cleaning REA and proposed Security REA in addition to examining the most recent changes introduced to the Industrial Relations (Amendment) (No.3) Bill which is seeking to cure any constitutional difficulties with EROs and REAs.
The Security Industry has been in a little bit of a flux since the High Court rendered the Security ERO unconstitutional in July 2011. While it may seem as though this would be beneficial for employers given that new employees could be employed under lower terms and conditions, it seems the situation isn’t that straight-forward. The security industry was still bound to pay any employees employed before the High Court decision on the older ERO terms. This meant that new entrants to the market could come in, employ a host of new employees on lesser terms and conditions and then undercut existing security firms in the tender market. As a result, a temporary Security REA was proposed to safeguard the existing employers while the Government worked on the reintroduction of the ERO system. Indeed, Peninsula Business Services was heavily involved in an advisory capacity with the Security Institute of Ireland (SII) on the relevant pros and cons of entering into a temporary REA and delivered papers at SII conferences over the last 12 months on same.
As previously mentioned, a temporary Security REA was proposed but the application for the REA received 26 formal objections from security employers throughout the country with a threat of High Court action being mooted to prevent its introduction. To date the Labour Court has not conducted a hearing into this matter and the issue seems to remain as a bone of contention. Accordingly, it is interesting to note that interested parties to the REA debate have agreed to re-open negotiations on the introduction of an REA. It is not yet clear but it seems as though a permanent REA may be introduced, rather than a temporary one, with a view to avoiding any future ERO scenario. The most likely reason for this is that an REA bound industry generally retains more control over the terms and conditions of an REA and the underlying spirit of collective bargaining with unions tends to avoid costly litigation when an employee feels as though they have been short-changed. It remains to be seen, though, how this proposal will sit with the 26 objectors who stood firm against its introduction on a temporary basis in January 2012. It may be the case that they will hold firm or, indeed, it is possible that they will consent to its introduction on the basis that if they do not agree they will most likely be bound by an ERO in the near future anyway.
In our February edition of the Bottom Line Express we addressed the introduction of a temporary Contract Cleaning REA for a six month duration. This REA was introduced, following negotiations between SIPTU and the Irish Contract Cleaners Association (ICCA), for effectively the same reasons as that of the Security Industry outlined above. This matter is now very much a live issue as the REA is due to expire on 3 August 2012 and it seems as though SIPTU and ICCA cannot agree on any possible renewal. The current temporary REA effectively mirrored the terms of the outgoing ERO. However, the ICCA wish to introduce a new REA which would allow for lesser terms and conditions, and consequently lower employment costs, whereas SIPTU were seeking more favourable terms in some areas with some concessions elsewhere.
This industry could now be in for a turbulent time if no agreement is reached by 3 August. The reason for this is that existing employees will still be paid REA rates and SIPTU will no doubt take umbrage if newer employees are engaged post-REA on lesser terms and conditions. In addition, existing employers will no doubt be upset if tenders are lodged on contracts they service on the basis of these lower terms when they are bound to pay existing employees a higher rate. Peninsula Business Services would strongly advise all Contract Cleaning companies to keep firmly abreast of REA negotiations.
It is becoming increasingly likely that the new legislation will be introduced within the next month or two to reintroduce EROs in a constitutionally compliant manner and to cure any potential constitutional defects that the REA system is currently suffering from. This is because the most recent draft of the Industrial Relations (Amendment) (No.3) Bill has passed all stages of the Dáil and was discussed in the Seanad last week at both Second and Committee Stages. Peninsula have ensured to keep all clients posted on the proposed changes to the ERO and REA systems and this was most recently discussed in our January 2012 edition of the Bottom Line Express (see here).
Interestingly, discussions at the Final Stage of the Dáil saw some eleventh hour additions to the Bill for consideration by the Seanad and thankfully one of those is targeted towards reducing red tape and the documentary burden on employers. Under the old system of EROs and REAs, an employer was obliged to provide each employee with a full text copy of the relevant ERO or REA which governed their employment terms and conditions. This was a costly and cumbersome task for employers which was complicated by the fact that EROs and REAs can be extremely vague in their detail which often leaves a term of same open to interpretation. Indeed, the Labour Court has long since been burdened with a plethora of cases to clarify what certain provisions actually meant. Thus, the provision of the ERO/REA to an employee often resulted in employee confusion and employee/employer disputes over whether or not the employee was being remunerated in a compliant manner. Under the new system, an employer will only be obliged to make reference to the ERO or REA in the employee’s terms and conditions, so that the employee is aware of its existence, but will not be obliged to provide the employee with a copy of it.
The second interesting development is that the Dáil have clarified what ‘substantially representative’ means when it comes to introducing and retaining REAs. As it stands, the negotiating bodies who wish to introduce an REA (e.g. SIPTU and ICCA referenced above) must actually be substantially representative of the employees and employers within that industry at the time the agreement is registered. However, there is no requirement for those bodies to remain substantially representative after implementation. This left the possible scenario where the implementing bodies may be no longer substantially representative of the industry but yet that industry would still be bound by an unwanted REA. The most recent addition to the Bill means that the bodies must remain substantially representative with trade union relevant membership figures being used to assess their representativeness and employer body membership figures also being factored.
Employers should seek advice from Peninsula Business Services if they have any questions over existing REAs or proposed changes to the ERO/REA systems. Please phone the 24 Hour Advice Service on 01 855 50 50 and one of our experienced advisors will be happy to assist.
