New 'right to bargain' rulings push back boundaries of collective representation

The first rulings from Ireland’s Labour Court under recently updated 'right to bargain' procedures appear to push back the boundaries of collective employee representation and, for this reason, have been criticised by employers. This article examines some of the main implications of these early rulings, as at September 2004.

In 2000-1 (IE0108242N), new 'right to bargain' procedures were introduced in Ireland, giving employees the right to have disputes over workplace representation rights pursued all the way up to a binding Labour Court decision. Given trade union dissatisfaction with these provisions for processing union representation/recognition disputes (IE0209203F), the law was changed in 2004. Notably, the number of procedural steps has been reduced, thereby bringing down the timeframe for reaching the ultimate end stage, a binding Labour Court decision, to a maximum of 26 weeks (IE0309205F).

Since the new Industrial Relations (Miscellaneous Provisions) Act 2004 came into force in May 2004 (replacing the Industrial Relations (Amendment) Act 2001) the Labour Court has issued eight recommendations on the issues concerned, some of which clearly push back the boundaries of the 'right to bargain' procedures in the sphere of employee representation. According to commentators, there can be little doubt that the Court has adopted a more expansive interpretation of the legislation covering disputes over employee representation/union recognition than previously. Drawing on a study conducted by the Dublin-based Industrial Relations News magazine, this article examines some of the main outcomes of the new procedures, illustrated by examples from some of the main cases.

Process much faster

Cases relating to disputes over union representation/recognition are undoubtedly being processed much more quickly under the new procedures. One of the main trade union criticisms directed at the old procedures were that they were too slow and cumbersome, were susceptible to employer stalling tactics, and often resulted in union members becoming disillusioned. The key provision of the revised procedures - that the entire process take no longer than six months - formed part of the current national partnership pact, Sustaining Progress (IE0301209F and IE0304201N), concluded in early 2003. In June 2004, the Labour Court fleshed out this provision with a strict new timetable for the processing of such cases, which places tight deadlines on both employers and trade unions involved.

This new timetable allows unions to refer cases to the Court after six weeks at the voluntary stage of the process involving the Labour Relations Commission- thus cutting short any stalling by employers. The first Court hearing is held four to six weeks after this referral, with a voluntary recommendation issued within three weeks. The union has four weeks from this date to apply to the Court for a binding determination, if it feels that the employer concerned is likely to reject the recommendation. This determination hearing will be two to four weeks after this referral, with a determination decision within three weeks of this second hearing. The determination can be enforced in the Circuit Court.

From a trade union perspective, the new procedures are a significant improvement on the old procedures, and the unions appear quite satisfied with the changes. In contrast, employers are already voicing displeasure at the direction that the procedures are taking. In view of this, there is a distinct possibility that an employer could decide to mount a legal challenge.

Collective representation

Although the Labour Court is careful to emphasise that it does not and cannot recommend that the parties to a dispute in non-union employments should engage in collective bargaining per se, commentators believe that it is clearly pushing back the boundaries of the 'right to bargain' procedures in relation to collective representation rights for union members.

In a lengthy ruling on access to representation rights for members of the Union of Retail, Bar and Administrative Workers (MANDATE) at Radio Kerry, the Court marked out a clear distinction between individual grievance procedures and collective dispute-resolution procedures (IE0406203F), suggesting that the internal individual dispute procedures cited by the employer were inappropriate for addressing claims by a collective group of workers, and that the group of workers involved should have access to collective representation/dispute-resolution channels through their trade union.

Referring to the original intention of the right to bargain legislation, as set out in the report of the High-Level Group on Trade Union Recognition (IE9903135F) drawn up in 1999, the Court stated: 'Taken in its overall context that report set out to address situations in which groups of workers wish to be collectively represented by a trade union (or excepted body) in addressing issues concerning their terms and conditions in employments in which collective bargaining arrangements are not in place … Only a trade union or an excepted body can refer a case to the Court ... Individuals or groups of individuals do not have a right of referral. These provisions are entirely consistent with the view that the Act is primarily concerned with resolving group or category disputes.'

Two clear factors that ruled out the Radio Kerry procedures were that: (a) it was not a procedure that was normally used by the employees, with many indeed being unaware of its existence; and (b) the procedure expressly provided that issues be processed by individuals rather than groups of workers, which made it an individual grievance procedure rather than a dispute-resolution procedure.

The Court said that the Radio Kerry procedure was different from that in another case where the validity of internal dispute procedures arose at the Banta Global Turnkey company. Here the Court had taken the view that the procedures cited by the company were normally in use by the employees, with the company able to cite examples of issues, such as pay and Sunday working, that had been dealt with under this procedure.

Applying national deals

Another significant development arising from the early cases under the new procedures is that, in a number of cases, the Court has not only recommended that the company pay wage increases laid down by the terms of existing national agreements (Sustaining Progress at present), but has gone as far as instructing the employer to pay the terms of national agreements in the future as well. Where this course of action has been recommended, it constitutes a significant change in the industrial relations landscape of non-union employment in Ireland, and employers are already concerned about the implications. Effectively, following a claim by a union to represent members, the Labour Court, a third party, has the power to impose pay terms through binding determinations, and effectively make national agreements compulsory in non-union firms not covered by collective bargaining arrangements.

In the first recommendation from the Court under the new procedures, in a case involving Meteor Mobile Communications, the company argued that it had a valid pay review system, in that it annually 'benchmarked' its rates against other information technology and telecommunications firms. It imposed a pay freeze for 14 months up to March 2004, but paid a 4% increase at that point. Still, the Court said that the rates paid were not the issue, but rather the existence of a formal pay review system. As well as recommending a 2% rise under the Sustaining Progress (SP) national pay deal from April 2004, the Court said the new national deal reached in June for the second half of SP (IE0409203F) should be implemented from July 2004, saying that 'this wage adjustment should be considered as a basic entitlement'.

An even more wide-ranging recommendation on future pay increases was made in a case involving Cooley Distilery, where the Court told the company to increase rates and that subsequently they 'should be increased in future by the application of national agreements when they become due. For this purpose the first phase of the next national agreement should be payable from 1 October 2004.' This appears to imply that not only should Cooley Distilery pay the increases due under the remainder of SP, but it should also pay increases set by all national agreements in future, for as long as such agreements exist. Another recommendation involving Clearstream Technologies, after setting out a new pay scale, also said that 'annual increases thereafter should incorporate basic national wage adjustments'.

Annual visits to Court?

The above cases raise an issue that has been in the background ever since the approach of setting pay and conditions through the 'right to bargain' procedures - rather than enforcing trade union recognition - was taken. A binding Labour Court recommendation can achieve significant one-off improvements for workers without union recognition, but does the union then have to go through the full process again every time it wants to update pay rates in the light of inflation or productivity changes?

Such an approach would clearly be time-consuming for all the parties involved - not least the Labour Court and Labour Relations Commission - which, even with the new streamlined procedures, would be faced with referrals and multiple hearings on an annual basis, just to apply cost-of-living pay increases. Perhaps it is this type of scenario that the Court is trying to head off by recommending the payment of nationally agreed wage increases into the future.

However, it is this aspect of the Court’s rulings under the new legislation which is most likely to be the subject of any legal challenge by employers. It is believed to be most likely that any such challenge would be made once a union attempts to enforce a binding determination through the Circuit Court.

One argument that could be made in favour of the payment of increases set by national deals into the future would be that employers would always have recourse to claim 'inability to pay'. Under SP, such claims can be processed through the appropriate procedures, involving independent assessors and binding Labour Court hearings (IE0312204F), with little or no necessity for actual bargaining at enterprise level. This route was noted by the Court in a case involving Creagh Transport, where it said that the payment of national wage terms was 'subject to the right of the company to plead inability to pay through the mechanisms provided by the agreement should it chose to invoke those mechanisms'.

'Shadow' collective bargaining

Another notable aspect of the Cooley Distilery, Clearstream Technologies and other rulings was that although the Labour Court is precluded under the 'right to bargain' procedures from directly instructing non-union employers to engage in collective bargaining, it appears to have indirectly imposed a similar outcome to that which would have occurred had collective bargaining arrangements been formally in place. Indeed, this was the benchmark that was used at Cooley Distilery , because the Court took into consideration pay rates collectively negotiated between the union and other employers for similar work, both locally and nationally: 'Whilst the circumstances of some of these employments are different to those of the employer in this case, they nonetheless provide an indication as to the range of pay rates established by collective bargaining for work of a similar nature.'

Reference point

A challenge to the Labour Court’s right effectively to impose national pay deals on non-union employers was made by Creagh Transport, which argued that since national wage agreements 'provide mechanisms for collective bargaining', the Court was precluded from recommending their adoption by the parties, as this would infringe the legislation’s ban on imposing collective bargaining on the parties.

The Court agreed that national pay increases were not an automatic entitlement, but did say that 'in the absence of any other established or agreed method of pay determination, they do represent an appropriate reference point'. It added that the ban on recommending collective bargaining did not preclude it from recommending national pay increases, arguing that 'any recommendation made by the Court to that effect can be implemented without the necessity for collective bargaining at the level of the enterprise'. It had noted that in the Creagh case the pay arrangements were 'lacking in transparency' and that pay had been static for several years. In this case, it would seem difficult to argue against national wage increases as a reference point.

However, it should be remembered that management at Meteor Mobile Communications had set out what they felt to be a valid pay benchmarking system for setting rates on an annual basis. In this case also, the Court said that national pay increases should be applied, so it would appear that a simple benchmarking exercise is not sufficient.

Commentary

The first rulings issued by Ireland’s Labour Court under the new, faster 'right to bargain' procedures undoubtedly push back the boundaries of collective employee representation and have thus already been criticised by employers. It remains to be seen if any employer will mount a legal challenge in this area.

While these cases do represent a threat to the status quo in traditional low-paid non-union companies, it must be borne in mind that a large number of other non-union firms tend to 'shadow' national pay increases. These firms would feel more comfortable with these rulings from the Court, although it would affect their freedom to impose pay freezes in tough times - a widespread practice in recent years. Employers would have access to inability to pay procedures, but this would, like the proceedings in the right to bargain legislation, be binding. (Tony Dobbins, IRN)