Earlier today Judge O`Donnell of the Supreme Court issued a judgment on behalf of the
Courts Service
Court declaring the Registered Employment Agreements (REAs), which apply to the Construction industry, the Electrical Contractors and other limited industries (see Labour Court website for further information of those industries) to be unconstitutional.
I have already over the years covered this subject, expressing my concerns as to the fairness of these Agreements, stating my belief that they were in breach of EU Competition provision.
See, for example our Morgan McManus website page on REAs and also the following BLOGS written by me :
Supreme Court Decision awaited on Challenge to the Registered Employment Agreement 01/02/2013
Is it not time to review the Registered Employment Agreements? 28/04/2013.
Decision of Supreme Court
Judge O`Donnell ruled that provisions under Part 111 of the Industrial Relations Act 1946, by which the REAs were regulated, contravened Article 15.2.1 of the Constitution which states that :
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”
This was not the position where “private persons unidentified and unidentifiable” were entitled to make laws on pay regulation which were ultimately enforceable by Criminal sanctions.
Reaction to Judgment
The Irish Times reported that the office of the Minister for Jobs, Enterprise and Innovation Richard Bruton said that “The judgment has the effect of striking down Registered Employment Agreements put in place under the 1946 Industrial Relations Act. Agreements which set pay and conditions for workers in five sectors including electrical contracting and construction are affected by today’s judgment” and “Existing contractual rights of workers in sectors covered by Registered Employment Agreement are unaffected by today’s ruling. Contractual rights can be altered only by agreement between the parties involved”
The Technical, Electrical and Engineering Union said the ruling erodes existing protection. The union’s general secretary Eamon Devoy said the electrical contractors have brought about a situation whereby foreign contractors will enter the country to undercut domestic operators.
Both of these statements are correct but what they do not clarify is the fact that those employers who had not signed Agreements with their employees in accordance with the rates determined by the REAs will now be free to negotiate rates, once those rates do not offend the provisions of the National Minimum Wage Act 2000.
Effect on Competition and on Economy
I have made no secret of my opinion on this. The Labour Court stated in the Camlin Electric case that Northern Ireland employers taking up Contracts in the Republic of Ireland were bound by the REAs. This could have had the effect of destroying any real competition within the relevant industries where Northern Ireland employers were expected to pay the same rates as their southern counterparts.
While Unions will predict industrial unrest the reality is that this country must become more competitive. Employers who have not signed up to the regulated rates under the REAs will now be able to submit more competitive rates in Tenders. The cost of construction will ultimately come down as competition feeds into the economy. This can only be good for the country.
I make no apology for my views on the matter. There will be plenty who will argue to the contrary and I welcome debate.