This article appears in the current issue of 'Hotel and Restaurant Times'
‘A black day for the industry’, said the Restaurants Association of Ireland.
‘Unfathomable’ said the Irish Hotels Federation.
‘Irrational’ said IBEC.
But then anything to do with a Joint Labour Committee has always aroused strong emotions among hospitality industry employers.
On this occasion the employer bodies were reacting to a decision by Richard Bruton, the Minister for Jobs, Enterprise and Innovation to retain rather than scrap most JLCs with two exceptions, one of which is to be the Dublin Hotels JLC.
In his statement Minister Bruton said that he intends to abolish the joint labour committees that dealt with terms and conditions for staff in the hotel sector in Dublin. The Minister said he planned to amend the scope of others including the committee governing hotels (outside Dublin). Mr Bruton said he would also be amending the administration of two separate joint labour committees in the catering sector pending their amalgamation. He added that ultimately under his reforms, JLC would operate only in seven sectors.
His decision follows a Review of JLCs conducted by the Labour Court following the enactment of the Industrial Relations (Amendment) Act 2012. This legislation became necessary when the High Court ruled in 2011 that legislation delegating powers concerning pay and conditions to JLCs was unconstitutional and therefore rendered existing JLCs redundant.
That case, taken by John Grace Fried Chicken and the Quick Service Food Alliance (a group of fast food restaurants), challenged the constitutionality of the Industrial Relations Act 1946 which gave the Labour Court the power to fix statutory minimum rates of pay and working conditions. The Act allowed the Labour Court to establish a Joint Labour Committee (JLC) for a given class of workers. A JLC prepares draft regulations setting minimum pay and conditions. Once the Labour Court adopts the JLC’s proposal, it becomes law without any supervision by the Oireachtas. The 1946 Act bars judicial review “on any matters within [the Labour Court's] jurisdiction”.
The Constitutionality of this law has always been in doubt and an earlier case, taken by the Irish Hotels Federation ended without a definitive judicial decision. The State did not challenge the 2011ruling, but instead the Government said it would introduce legislation to ensure that the JLCs would act within the terms of the Constitution.
Following the striking down of JLCs in 2011, intense lobbying was begun by employer groups who argued that the JLCs should be abandoned and worker groups who wanted them restored. Minister Bruton was on record as wanting to reform the system which he is now proposing to do, albeit retaining most of the JLCs which employers wanted to be axed.
JLCs have their origin in the Ireland of the 1950s when unemployment and emigration were very high and general living standards in the country were poor. Workers who could find employment and who were members of trade unions could however enjoy reasonable pay and conditions, but many non-union workers in certain sectors, including hotel and catering, were poorly paid for working long hours. Employers of trade union members also complained about what they saw as unfair competition from non-union businesses.
The JLCs were established to address this situation. They comprised equal numbers of representatives of trade unions and employers under an independent chairman appointed by Minister. The Committees set draft minimum rates of pay and conditions for their sector and once these are approved by the Labour Court they become legally binding without any supervision from the Oireachtas. This latter provision was the issue which resulted in the 2011 High Court decision declaring the JLCs to be unconstitutional..
Over the years the trade unions were enthusiastic supporters of the JLCs which invariably recommended wage increases and better working conditions. Employers regularly complained that provisions for overtime, enhanced week-end working rates and other ‘perks’ were unaffordable and damaged their business. It is nevertheless unlikely that many hotels or restaurants went out of business because of JLCs provisions alone. More recently employers have argued that the Minimum Wage has rendered the JLCs obsolete.
Richard Bruton’s decision to reform the JLCs has been strongly opposed by the RAI and IHF, but some of the proposals may nevertheless be welcomed.
Among the provisions of the 2012 Act are:
• JLCs will have the power to set a basic adult rate and two additional higher rates
• Companies may seek exemption from paying ERO and REA rates due to financial difficulty
• JLCs will no longer set Sunday premium rates. A new statutory Code of Practice on Sunday working is to be prepared by the Labour Relations Commission
• When setting rates JLCs will have to take into accounts factors such as competitiveness and rates of employment and unemployment
Other reforms, which do not need legislative change, include reducing the number of JLCs and standardising benefits such as overtime through a nationally agreed protocol or Code of Practice.
These reforms and the Minister’s proposals will establish a new era for the JLCs, provided of course that the 2012 Act is itself Constitutional.
Reacting to the Minister’s announcement, Adrian Cummins, chief executive of the Restaurants Association of Ireland said, ‘we will be getting our constitutional lawyers to look at the new proposal and if we find that the proposals are unconstitutional, our members will be asked if the Association should proceed with a Legal Challenge’.
This battle is not over and we may again see the Constitutional position of the JLCs debated in the Courts.