The Supreme Court has set aside the High Court’s declaration that the legislation governing sectoral employment orders was unconstitutional, but upheld its findings that an electrical contracting sector order was legally defective because the Labour Court had not given adequate reasons and had not specified pension contribution rates as required by law.
In a judgment dated 18 June 2021, Mr Justice John MacMenamin said Chapter 3 of the Industrial Relations (Amendment) Act 2015 did not breach Article 15.2.1 of the Constitution, which reserves law-making power to the Oireachtas. The Court concluded that the Act set sufficient limits and safeguards for the Labour Court’s role in recommending sector-wide employment terms. It therefore set aside the High Court’s suspended declaration of unconstitutionality.
However, the Court upheld the High Court’s separate finding that the Labour Court acted beyond its statutory powers when it recommended the order without adequately explaining its conclusions. The recommendation and accompanying report listed issues and stated that the Labour Court was satisfied statutory criteria had been met, but did not explain the basis for those conclusions or substantively address significant objections raised by the National Electrical Contractors of Ireland (NECI), including questions about representation, the sector’s scope and competitiveness.
The Court said adequate reasons were needed so affected parties, the Minister, the Oireachtas and the public could understand the decision and assess whether it could be challenged. It held that the Labour Court had breached its statutory duty to give reasons. The Minister, who approved the recommendation, had also acted beyond his powers because he could not properly be satisfied that the statutory process had been followed on the material before him. The judgment said the Minister’s scope for action was constrained and did not find that he had acted blameworthily.
A separate defect concerned pension contributions. The order tied contribution rates to those set by trustees of the Construction Workers’ Pension Scheme, so future changes to that scheme would automatically change the rates under the order. The Court held that the 2015 Act required the order to specify minimum daily contributions by workers and employers. The recommendation’s reference to terms “no less favourable” than the scheme did not meet that requirement.
The Court also upheld the High Court’s decision not to determine NECI’s challenge under Article 6 of the European Convention on Human Rights. It found there were no relevant pleadings or factual findings to support consideration of that issue in this case.
The matter was remitted to a different Labour Court panel to prepare and furnish a recommendation with reasons, in accordance with the statute. The Supreme Court said any procedures needed to give effect to its orders were for the Labour Court, subject to the legislation.