Irish Supreme Court rules on REAs

The basis for the Supreme Court’s decision is similar to that which led the High Court to strike down the Joint Labour Committee system, which is a similar but distinct system for regulating terms and conditions of employment in certain industries in Ireland.

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 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 Irish Parliament].

In response to the Supreme Court’s decision, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, has already issued a statement acknowledging that the Supreme Court’s decision has the effect of voiding REAs that have been put in place under the legislation. The Minister confirmed that the Government intends to study the decision and take legal advice on it.

The immediate impact for employers in any sector previously covered by an REA is that such employers may hire new employees on terms and conditions which are less favourable than those set by the REAs. These terms would still have to comply with employment legislation, such as the Minimum Wage Act 2000, the Organisation of Working Time Act 1997, etc.

Existing employees whose terms and conditions of employment were drawn up to comply with the requirements of a particular REA are unaffected by the ruling and their existing contractual rights can only be altered by agreement.