Joint Labour Committees (JLCs) are committees established under the Industrial Relations Act 1946 for the purpose of proposing wage agreements which would bind entire sectors of the Irish workforce. If these wage agreements are subsequently approved and ratified by the Labour Court then the agreement becomes an Employment Regulation Order (ERO) and this ERO would bind every employer that falls within that particular sector. For example, the Catering ERO was established in 1977 with the aim of setting minimum rates of pay and conditions for people in this industry. However, a legal challenge was mounted against the Catering ERO in a landmark decision of the High Court declared that the JLC system of setting minimum rates of pay and working conditions is unconstitutional as of the 07th July 2011. This decision had massive repercussions given the financial impact and the knock-on effect on employee terms and conditions. Accordingly, and in the midst of severe union pressure, the Government have sought to reintroduce the JLC system through new legislation which would ensure that they would now be compliant with the Irish Constitution. This new legislation has now been drafted as the “Industrial Relations (Amendment) Bill 2003” and given that its aim Is to ensure the continued existence of EROs, there have been a number of proposed sweeping changes to the previous unconstitutional system. The proposed reforms include the following changes that all employers should be aware if they have previously been bound by EROs. Employers in REA governed sectors should also be aware that the legislation applies equally to Registered Employment Agreements.
Reduction in the Number of JLC Rates:
The number of JLCs will be reduced from 13 to 6, through a process of abolition or amalgamation
Payment Rates:
JLCs will have the power to set only a basic adult rate and two higher increments in EROs to reflect longer periods of service. This will essentially reduce the number of rates while at the same time acknowledging the freedom of JLCs to establish two higher rates which will be based on length of service in the sector in addition to the standards and skills recognised for the sector concerned. In addition, employers will have the flexibility to pay lower rates or “sub-minimum rates” to employees who are aged under 18 years, first time job entrants, and employees undergoing training.
Sunday Premium:
JLCs can no longer set Sunday premium rates and national rules will apply to this from now on. However, the special status attached to Sunday work will be recognised through a new Statutory Code of Practice which will be prepared by the Labour Relations Commission. The Code will give direction to both employers and employees in ERO governed sectors in relation to additional amounts which are considered to be reasonable for Sunday work and the procedures to be followed in relation to pay disputes for Sunday work.
ERO Review Process:
There will also be a thorough and regular review process for each ERO after their introduction in respect of the appropriateness of their terms and conditions.
Criteria to be Considered by JLCs when Setting ERO Rates:
When setting new ERO rates, or making changes to existing rates, JLCs will have to take into account robust principles and policies outlined by the Oireachtas and this will take into account factors such as unemployment rates, competitiveness and wage trends in Ireland and also those of our major trading partners.
JLC Decision-Making Process:
The decision making process of JLCs will be reformed by the appointment of independent chairpersons who must have regard to recommendations put forward by the Labour Court in the event of a casting vote being exercised.
Inability to Pay:
Companies which are faced with financial difficulties will have greater flexibility in terms of their entitlement to depart from EROs and REAs. This is essentially a process whereby ERO governed employees claim that they have an inability to comply with ERO rates and a decision will then be made as to whether or not those reasons justify absolving that employer temporarily from having to meet ERO standards. However, in order for this departure to occur, the Labour Court must be satisfied that certain criteria have been met.
Record Keeping:
The high standard of record keeping and compliance for companies and employers in these types of sectors will be greatly reduced.
Oireachtas Involvement:
There will be strong Ministerial involvement in future that will have the power to observe JLCs and authority to amend or depart from EROs. This is an important aspect of the new JLC legislation as the central reason that the High court deemed the old system to be unconstitutional was as result of the complete absence of Oireachtas involvement in these EROs. This issue here is that the Oireachtas is the legislative power of the State, as per the Constitution, and the old ERO system meant that the JLCs and Labour Court were effectively legislating without having the authority or jurisdiction to do so.
Registered Employment Agreements
A time-bound process will be introduced whereby the terms of REAs may be amended by the Labour Court in certain circumstances and it will not be necessary to obtain the consent of all parties to the REA. Additionally, circumstances will be clarified when a Registered Employment Agreement may be cancelled because the trade union(s) or employer parties have failed substantially to represent workers or employers in the sector concerned and/or for other reasons related to substantial change in the sector concerned such that the continued registration of an Agreement would be undesirable. REAs will have a more legal and Constitutional role attached to them and there will be provision for Oireachtas oversight of REAs.
So while there are lots of changes afoot, many employers will agree that these are indeed mostly positive steps to improve the pre-existing situation. Peninsula Business Services (Ireland) will of course keep clients up to date in terms of any further developments.
