On 9 May 2013, the Supreme Court held that the Registered Employment Agreement (REA) system for determining pay rates and working conditions is unconstitutional. This decision is likely to have significant consequences for employers and employees in the electrical industry (it was the Electrical REA being challenged), but also other sectors governed by REAs, including construction, retail and printing.
The basis for the Supreme Court decision is similar to that which led the High Court in July 2011 to strike down the Joint Labour Committee (JLC) system, (a similar, but distinct system for regulating terms and conditions of employment in certain industries).
The Supreme Court held that whilst the legislature may delegate the power to make administrative rules and regulations, and to exercise certain functions under statute to subordinate bodies, such delegated authority should not, and could not, extend to law-making. In delivering his judgment, Mr Justice O'Donnell stated that "What appears to be law is being made by persons other than the Oireachtas". The Supreme Court concluded that the Industrial Relations Act, 1946 ("the 1946 Act") permitted an excessive delegation of law-making power in the absence of guidance or instruction. Furthermore, the Supreme Court found "striking":
"...the fact that both EROs and REAs are made part of the criminal law and bind everyone who participates in the relevant sector. Furthermore, the relevant provision of criminal law is made not by the Oireachtas, but rather by private individuals, themselves participants in the industry to be regulated."
In response to the Supreme Court's decision, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, has already issued a statement acknowledging the Supreme Court decision has the effect of striking down REAs which have been put in place under the legislation. The Minister confirmed that the Government intends to study the Supreme Court decision and take legal advice...