This appeal arises from a judgment in the High Court which was appealed to the Supreme Court. The NECI (Respondent) represented small and medium sized electrical contractors. The Respondent successfully applied for a judicial review of a Sectoral Employment Order (“SEO”), the subject of a recommendation by the Labour Court, under procedures laid down the Industrial Relations (Amendment) Act, 2015, and subsequently embodied in a statutory instrument, S.I. 251/2019.

The effect of this Order was to set terms and conditions for workers across the entire electrical contracting area in the State. The recommendation was made in response to applications to the Labour Court from Connect trade union, and two employers’ groups, namely, the Electrical Contractors’ Association (“ECA”), and the Association of Electrical Contractors of Ireland (“AECI”), which were treated as a joint applicant by the Labour Court.

Two of the most significant questions that were raised in the High Court were firstly, a challenge to the constitutionality of Chapter 3 of the Industrial Relations (Amendment) Act, 2015, on foot of which the statutory instrument was promulgated; and secondly, the Respondent’s alternative case that, in making the recommendation on foot of which the statutory instrument in question was promulgated, the Labour Court had acted ultra vires, specifically by failing to give reasons for its recommendation.

NECI was successful on both claims. On the first issue, the High Court judge subsequently granted a suspended declaration that Chapter 3 of the Industrial Relations Act 2015 violated Article 15.2.1 of the Constitution, which vests sole legislative power for the State in the Oireachtas, as he held the impugned provision empowering the Labour Court to make decisions which were legislative in nature.

It was stated by the Supreme Court that it was perfectly within the remit of the Labour Court to state that it would deal with the issues raised in correspondence during the course of the hearing, and in its recommendation. However, where the Labour Court failed to comply with its statutory duty was that it simply did not address these issues in a manner compliant with the case law by giving reasons.

This was a breach of its duty as a statutory decision-making body. The issues raised were not unanswerable. It would have been open to the Labour Court to make observations and findings on the questions of “economic sector” and “substantially representative”, based on the facts of the application before it.

The Supreme Court set aside the part of the High Court judgment which held that Chapter 3 of the Act of 2015 was repugnant to Article 15.2.1 of the Constitution but upheld that the Labour Court had acted ultra vires, by failing to give reasons for its recommendation. The Supreme Court concluded that there was no impermissible delegation of legislation in this instance.

The legislation does not trespass on the function of the legislature. The power to make a recommendation which may have the force of law is nothing if not substantial. However, the court noted that the recommendation must take place in conformity with the statutory procedure, each step of which is laid down by the Oireachtas.

The Chapter sets out both rights and duties for the protection of the parties, and for objectors.  The Court stated that it is true that an SEO may acquire the force of law, but the Oireachtas laid down a high level of legislative safeguard in relation to any potential SEO.

The Supreme Court also recommended that a pension scheme with no less favourable terms, including both employer and employee contribution rates, than those set out in the Construction Workers Pension Scheme be included in the Sectoral Employment Order.

Any changes to the rates for the Construction Workers Pension Scheme should be applied to the categories of workers covered by this Sectoral Employment Order.
https://www.courts.ie/view/judgments/6cbf54cd-3bff-4a68-904e-867bbd1d2ea9/2be7c459-521d-4a45-8376-9e0bc6b832e7/2021_IESC_36_MacMenamin%20J..pdf/pdf