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Government approves drafting of legislation to replace Registered Employment Agreements        printable version
01 Aug 2014: posted by the editor - Ireland

The Government has approved the preparation of legislation to provide for a revised legislative framework to replace the Registered Employment Agreement system, Minister for Jobs, Enterprise and Innovation Richard Bruton TD and Minister of State for Business and Employment Gerald Nash TD announced today (Friday).

The move follows the judgment by the Supreme Court in McGowan and others v the Labour Court, Ireland and the Attorney General , which held that Part III of the Industrial Relations Act 1946 was invalid having regard to Article 15.2.1 of the Constitution. The effect of this was to invalidate the registration of employment agreements previously registered under that piece of legislation.

The new mechanism will allow unions and employers to apply to the Labour Court to initiate a review of pay/pensions/sick pay terms of workers in a particular sector and make recommendations to the Minister for the making of an order in these areas. The new mechanism will also provide for flexibility in response to changing economic circumstances or changes in the make-up of a sector.

The new legislation will help provide certainty for employees as well as for businesses tendering for contracts. It will also help pomote industrial peace in the crucial construction sector, and establish universal standards which will help prevent Irish firms being undercut in tendering for contracts. It will form part of a package of measures aimed at supporting the development of a sustainable, competitive Irish construction sector and create jobs in this crucial area.

Speaking today, Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, said: "A central part of the Government’s Action Plan for Jobs is supporting the development of a sustainable, competitive construction sector and creating jobs in this crucial area. Part of this is providing for a mechanism to replace the Registered Employment Agreements between staff and employers in the area. This is an important step in ensuring that businesses have certainty around wage costs when they tender for contracts. It is a crucial means of helping to provide for industrial peace, and in ensuring that irish companies are not put at a disadvantage when tendering for contracts.

 "However it is also crucial to ensure that these systems do not become rigid and inflexible, and do not become an impediment to job-creation in a fast-changing economic environment. For these reasons we have put in place a series of new safeguards, to ensure that employer and employee bodies are substantially representative, to provide for reviews of obligations in response to changing economic circumstances, and to ensure that they do not become a factor that causes the collapse of firms in financial difficulty.

 "I intend to have the legislation published during the next Dáil session, with a view to its enactment as soon as possible thereafter. This will be an important step in developing a sustainable, competitive and jobs-rich construction sector in the years ahead, which we so badly need."

 Minister of State for Business and Employment, Gerald Nash TD, said: "REAs provided a practical and successful mechanism for workers and employers to agree proper sectoral terms and conditions that brought about wage and industrial relations stability as well as ensuring the maintenance of industry standards. The striking down of REAs meant that this important facility was absent. This framework, albeit amended to reflect the Supreme Court, will mean that local level agreements can be reached and registered and broader sectoral terms and conditions set that will deliver good terms and conditions for workers and wage stability and industrial peace for employers. This is especially important as the economic recovery, so hard fought for, gathers momentum."

The new legislation will include provisions for:     

  • A mechanism whereby the Labour Court can initiate a review of the pay/pensions/sick pay terms of workers in a particular sector and make recommendations to the Minister. An employer body or trade union will be able to apply to the Labour Court looking for such a process or for a particular recommendation to the Minister      
  • Specific principles and policies that the Labour Court will be obliged to take into account when considering whether/what recommendation to make to the Minister in relation to  pay/pensions/sick pay terms
  • Interested parties will be able to make submissions to the Labour Court in the context of a review
  • Oireachtas oversight of these issues      
  • Provision to allow firms in financial difficulties to apply for a temporary derogation from the obligations set out in an order  
  • Requirement for an employer or trade union body to be ‘substantially representative’ in the relevant sector, as defined, before it can make an application for a review or a recommendation      
  • Anti-penalisation measures     
  • Facility for the Minister, if satisfied, to make an order giving effect to a Labour Court recommendation     
  • The facility for the registration of employment agreements to which there are only the subscribing parties, as was in place previously (and therefore not legally binding beyond the subscribing parties)     
  • Enforcement and compliance measures, consistent with the new Workplace Relations Bill. Such legally supported frameworks are recognised under European Union law and they ensure, in accordance with the Posted Workers Directive, that contractors from outside the jurisdiction, who may be using employees from lower wage economies, do not obtain an advantage over local contractors in terms of wage costs.

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