Ireland: Pay-setting powers of joint labour committees curtailed

The revision of Ireland’s joint labour committee (JLC) low pay review and wage-setting system has attracted mixed reactions from unions and employers. The committees’ function is to set minimum pay in sectors where wages are typically low. In 2011, the High Court ruled that the wage-setting mechanism used by the committees was unconstitutional. After a lengthy review, The JLC system has been refined, its powers limited and two JLCs have been abolished altogether.

Legal history

Joint labour committees (JLCs) were reinstated in January 2014 by the Minister for Jobs, Enterprise and Innovation, Richard Bruton, following an extensive review of the committee system.

The review was conducted by the Labour Court between 2012 and 2013 in the wake of the High Court ruling of July 7, 2011 in the John Grace Fried Chicken case. It declared that employment regulation orders, which impose the minimum pay rates set by JLCs, were unconstitutional. The court said it had based its ruling largely on the principle that the committees’ ‘delegated power [to set terms] is excessive’, and that the system of wage setting lacked ‘policies and principles’.

Up to January 2014, ten areas of employment were covered by joint labour committees:

  • agricultural workers;
  • catering staff outside Dublin City and Dun Laoghaire;
  • catering staff in Dublin City and Dun Laoghaire;
  • contract cleaners;
  • hairdressers;
  • hotel workers, excluding those in Cork and Dublin;
  • Dublin hotel workers;
  • retail, grocery and allied trades workers;
  • security industry personnel;
  • law clerks.

The majority of these joint labour committees set minimum pay rates; where no rate was explicitly set, the national minimum wage applied.

The practice of joint labour committees was to set sectoral pay conditions in jobs that are typically low paid. However, after the 2011 High Court ruling, the terms set by the joint labour committees could no longer be legally enforced, which meant that 17 employment regulation orders then in existence could no longer be enforced.

Review by the Labour Court

The Labour Court appointed Janet Hughes, who has worked as a Rights Commissioner with Ireland’s Labour Rights Commission, to conduct a review of all ten joint labour committees accepting submissions from a wide range of interested parties.

The Minister for Jobs, Enterprise and Innovation, Richard Bruton, said that since the 2011 High Cour ruling, he had been seeking a radical overhaul of the joint labour committee system: ‘From the start of this process I have said that reform in this area is necessary in order to make the system fairer and more responsive to changing economic circumstances and support job-creation.’

On the back of the Hughes review, the following reforms were agreed.

  • Two joint labour committees, for Dublin hotel workers and law clerks, would be disbanded.
  • Changes were to be made to five more committees, those for contract cleaners, hairdressers, hotel workers outside Dublin and Cork, and security staff.

Further changes suggested by the Hughes Review to the agricultural workers’ JLC require separate primary legislation, and the Department of Agriculture is presently in talks with the Department of Jobs, Enterprise and Innovation on this issue.

As a result of legal advice, Richard Bruton has not acted on the review’s suggestions for alterations to the scope of the retail, grocery and allied trades JLCs.

Revised JLC powers

The power of the remaining eight JLCs to set minimum pay and conditions of employment has been curtailed. For their rulings on pay to have legal effect, employment regulation orders must now be agreed by all the parties concerned. New employment regulation orders will now also require the approval of the Minister for Jobs, Enterprise and Innovation and will have to be laid before both houses of the Irish parliament before becoming law.

In some sectors, such as security and contract cleaning, there is support from employers for sectoral wage bargaining, largely as a way to prevent undercutting by competitors. However, in sectors such as hotels, there is strong resistance to the setting of minimum rates. Under the new rules, if employers refuse to agree with JRCs’ minimum wage rulings, it won’t be possible to make new employment regulation orders to enforce them.

Social partners’ reactions

The Services Industrial Professional and Technical Union (SIPTU) and Mandate are the two largest unions which represent workers in employment sectors of employment where joint labour committees are most likely to rule on levels of pay. Both unions welcomed the re-establishment of joint labour committees.

SIPTU Vice-President Patricia King said the union ‘would expect’ employers in the relevant sectors ‘to take a full and productive part in the process’ of the reformed JLC system. Mandate’s General Secretary John Douglas similarly called ‘on all of the relevant employers to engage positively with the process as a matter of urgency’.

However, the group that represents Irish business, Ibec, opposed the government’s decision to retain an ‘outdated’ wage-setting system, describing the move as ‘misguided and at odds with the economic needs of the country’. Ibec’s Head of Industrial Relations Maeve McElwee said:

The joint labour committee system should have been consigned to history. It was established at a time when employment protection laws did not exist. We now have more than 40 pieces of legislation to protect workers and a national minimum wage. There is no justification for extra wage-setting rules in specific sectors.

Andy Prendergast, IRN Publishing

 

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