Judgment: 2019-08-15 · Court archive

High Court stays electrical sector pension contributions pending judicial review

The court refused an injunction against the 2019 Sectoral Employment Order but paused its pension contribution requirements until the judicial review is determined.

The High Court · [2019] IEHC 873

Who, what, where, when and why

Who
  • The Labour Court
What

The court refused an injunction against the 2019 Sectoral Employment Order but paused its pension contribution requirements until the judicial review is determined.

Where

No place detail is included in this summary.

When

Judgment:

Other dates in the report
  • 1 September 2019

    The court therefore refused the reliefs sought in the motion but granted a limited stay: only the order’s requirement to contribute to a pension scheme is paused, pending determination of the proceedings. The judgment states that if the applicant loses, the stay would be lifted and payments backdated to 1 September 2019. The applicant gave an undertaking as to damages. The judge said an early trial was desirable; the judgment did not determine the underlying judicial review.

Why

Reasons reported in the judgment

The judge found that the balance of convenience weighed against the requested injunction on the order’s general provisions, given the limited financial evidence and the statutory provisions addressing inability to pay. On the pension issue, he considered the constitutional challenge went beyond being merely arguable. He said employers could be required to pay into a scheme over which they had no control, and repayment could be problematic if the applicant ultimately succeeded.

The High Court has paused the pension contribution requirements of the Sectoral Employment Order for the electrical contracting sector while a judicial review continues. It refused the applicant’s broader request to block the order’s operation.

The ruling, delivered by Mr Justice Meenan on 15 August 2019, concerns an order due to take effect on 1 September. The applicant, an employer representative body for small and medium-sized electrical contractors, challenges the Labour Court’s recommendation and the resulting order. Its judicial review argues, among other things, that the process was unlawful and that the pension provisions breach constitutional limits on law-making.

The order sets pay rates and categories, working hours, sick pay, pension provisions and a dispute resolution process. Its pension clause requires employers to enrol covered workers in a scheme with terms no less favourable than those of the Construction Workers Pension Scheme (CWPS), with contributions adjusted when CWPS rates change.

For the interim injunction application, the applicant relied on affidavits from two businesses describing potential financial effects. One said the mandatory wage increase could require at least one redundancy and changes to its pricing and tendering. The other estimated an additional annual cost of about €265,210.73, including pension contributions, and expressed concern about the business’s future after making no profit the previous year.

The respondents argued that the evidence from two businesses did not outweigh the potential benefits of the order to about 13,800 workers. They also pointed to a statutory process for seeking an exemption where an employer faces severe financial difficulties. On criminal liability, they submitted that failing to comply with the order was not itself a criminal offence and described the relevant offences and available financial-circumstances defence.

The judge found that the balance of convenience weighed against the requested injunction on the order’s general provisions, given the limited financial evidence and the statutory provisions addressing inability to pay. On the pension issue, he considered the constitutional challenge went beyond being merely arguable. He said employers could be required to pay into a scheme over which they had no control, and repayment could be problematic if the applicant ultimately succeeded.

The court therefore refused the reliefs sought in the motion but granted a limited stay: only the order’s requirement to contribute to a pension scheme is paused, pending determination of the proceedings. The judgment states that if the applicant loses, the stay would be lifted and payments backdated to 1 September 2019. The applicant gave an undertaking as to damages. The judge said an early trial was desirable; the judgment did not determine the underlying judicial review.

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