Ireland: New sectoral wage mechanisms under Industrial Relations Amendment Act 2015

New sectoral wage-setting mechanisms are established under the Industrial Relations (Amendment) Act 2015.

New Sectoral Employment Orders (SEOs) will replace the old sectoral Registered Employment Agreements (REAs) that were struck out by the Supreme Court for being unconstitutional in the McGowan judgment in 2013. The provisions are contained in section 3 of the Industrial Relations (Amendment) Act 2015 which commenced on 1 August 2015.

Under the new act, sectoral orders stipulating binding pay and conditions can be made, where unions and/or employer organisations request the Labour Court to examine the remuneration, sick pay or pensions of workers in their economic sector. For the Labour Court to proceed, it must satisfy itself that the unions and employers involved are 'substantially representative' of the sector.

Then the Labour Court would have to invite public representations, following which it may hold a hearing of 'all parties appearing to the Court to be interested and desiring to be heard'. The Court would then make a recommendation to the Minister for Jobs, who may confirm or reject the terms as an SEO. Every SEO must also be laid before both Houses of the Oireachtas. The minister may also request the Labour Court to review the terms of an SEO, once three years have passed since it was first made.

In making its recommendation, the Labour Court has to take account of the following economic factors:

  • the potential impact on levels of employment and unemployment in the identified economic sector;
  • the terms of any relevant national wage agreement;
  • the potential impact on competitiveness in the sector;
  • remuneration in other economic sectors in which workers of the same class, type or group are employed;
  • that the SEO will be binding on all workers and employers in the sector.
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