The purpose of this statement is to address any uncertainty with regards to the interpretation of certain conditions of the Public Works Contracts following the Supreme Court decision of 9th May 2013 on the Registered Employment Agreements. The Department of Public Expenditure and Reform welcomes the clarity brought by the statement from the Minister for Jobs, Enterprise and Innovation of the 27 June (which is reproduced in full below) and also notes the intention of the Minister for Jobs, Enterprise and Innovation to introduce legislation that will put in place a mechanism to permit parties to register employment agreements in a manner that is fully informed by the Supreme Court judgement.
In light of the Supreme Court decision and Minister Bruton’s statement of 27 June, the Department of Public Expenditure and Reform has been considering the references in the Pay and Conditions of Employment clause in the Public Works Contracts and is satisfied that no amendments are necessary to the clause. The existing wording is consistent with the current position regarding REAs and should permit the recognition of any new employment agreements that may be registered under any such new legislation.
Statement from Minister Bruton re Registered Employment Agreements (reproduced from http://www.djei.ie/press/2013/20130627c.htm)
27 June 2013
The Minister for Jobs, Enterprise and Innovation, Richard Bruton T.D. today [Thursday] stated that he intends to bring forward legislation to address the recent Supreme Court ruling that struck down Registered Employment Agreements.
The Minister said “Last month, the Supreme Court struck down as unconstitutional the framework for Registered Employment Agreements as provided for in the 1946 Industrial Relations Act. This is an important issue for many employers and their employees particularly in relation to rates of pay and tendering for contracts. I intend as soon as possible to put in place legislation that will be fully informed by the Supreme Court judgment, but will introduce a revised framework to deal with these matters”.
NOTES FOR EDITORS
In the judgment delivered on 9 May last in McGowan and others v The Labour Court, Ireland and the Attorney General, the Supreme Court held that Part III of the Industrial Relations Act 1946 was invalid having regard to Article 15.2.1 of the Constitution.
That Article provides, in effect, that the exclusive power to make laws is vested in the Oireachtas. The Supreme Court took the view that Registered Employment Agreements are instruments having the status of laws made by private individuals subject only to a limited power of veto by a subordinate body. While the Constitution allows for the limited delegation of law making functions, the provisions of the 1946 Act went beyond what is permissible under the Constitution.
The effect of this decision is to invalidate the registration of employment agreements previously registered under Part III of the 1946 Act. In consequence the Labour Court no longer has jurisdiction to enforce, interpret or otherwise apply these agreements.
As a result, all such agreements no longer have any application beyond the subscribing parties and are not enforceable in law.
However, existing contractual rights of workers in sectors covered by Registered Employment Agreements are unaffected by the ruling. Contractual rights can be altered only by agreement between the parties involved.
There were 6 existing sectoral REAs registered or varied by the Labour Court in recent years: two in the Construction Sector and one each covering Electrical Contracting, Printing, Overhead Powerline Contractors and Dublin Drapery, Footwear and Allied Trades. It is estimated that between 70,000 and 80,000 workers were covered by these sectoral agreements. In addition, there were over 50 employment agreements covering individual enterprises that had been registered by the Court under the 1946 Act.