Compulsory Bargaining
Cases
Johnson Matthey v SIPTU
LCR18387
SUBJECT:
1. Referral from the Labour Relations Commission under the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
RECOMMENDATION:
The dispute was referred to the Court pursuant to Section 2(1) of the Industrial Relations (Amendment) Act, 2001 as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004 (the Acts), following the failure of the parties to reach agreement in relation to the matters at issue at the Labour Relations Commission under the enhanced Code of Practice on Voluntary Dispute Resolution (S.I. 76 of 2004).
The Court is satisfied that the conditions specified at Section 2(1)(a) to 2(1)(d) of the Acts were fulfilled in this case and that the dispute was properly before the Court for investigation and recommendation.
The Court has taken careful account of the submissions of the parties in their written and oral presentations. Section 5(2) of the Act provides that a recommendation made by the Court shall not provide for arrangements for collective bargaining. Subject only to that restriction the Court is required to give its opinion on the matter under investigation and, where appropriate, its view as to the action, which should be taken, having regard to the terms and conditions of employment, in the employment concerned.
In response to the Union’s claims, the Company contends that the Court, under Section 5(2), must have regard to the conditions of employment, which it provides, and when viewed in their totality, are not out of line with appropriate standards.
The Company, therefore, contends that the intervention of the Court under Section 2(1) of the Industrial Relations (Amendment) Act 2001, as amended, is not warranted. In support of its contention, the Company pointed out that its terms and conditions of employment are very competitive and are comparable to those pertaining in the medical devices and manufacturing industries. The Court notes the commitment given by the Company at the Labour Relations Commission on 13th April, 2005, where it outlined its acceptance of the involvement of a Trade Union representative at disciplinary and / or grievance meetings held to deal with individual employee concerns.
The Court considered it desirable to first consider this aspect of the Company’s response since, if it succeeds on this point, it may be unnecessary to consider in detail the other issues raised in the case.
The Industrial Relations (Amendment) Act 2001, as amended, provides a significant addition to the powers of the Court in industrial relations disputes. In considering the nature of the new powers given to it, and the circumstances in which it is appropriate to invoke them, the Court has stated in recommendation LCR17745 (Bank of Ireland and IBOA) as follows:-
“The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of out industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards”.
As the Court has previously pointed out, such protection is only required and the intervention of the Court justified, where it can be demonstrated that pay or conditions of employment are out of line with accepted standards -GE Healthcare and SIPTU, Recommendation No 18013.In that context regard should be had to terms and conditions applicable to similar categories of workers in analogous employments in which there is collective bargaining.
The Court has been provided with information on the terms and conditions of employment in this Company.
In the present case, the Court cannot see any basis upon which it could conclude that the terms and conditions of employment of those associated with the claim, when viewed in their totality, are out of line with acceptable standards. In consequence, the Court does not consider it appropriate to issue substantive recommendations, under Section 5(1) of the Act, on the claims under investigation.
In respect of the claim regarding disciplinary and grievance procedures, the Court wishes to point out that in the event of a complaint alleging an infringement of the Code of Practice on Grievance and Disciplinary Procedures (S.I. 146 of 2000), such complaint can be addressed pursuant to Section 43(2) of the Industrial Relations Act 1990.”
Bank of Ireland v IBOA
LCR17745
SUBJECT:
1. Union application under the Industrial Relations (Amendment) Act, 2001.
RECOMMENDATION:
This dispute came before the Court by way of an application by IBOA (The Union) pursuant to Section 2(1) of the Industrial Relations (Amendment)Act, 2001.
The Section under which the dispute was referred prescribes a number of conditions which must be fulfilled before the Court can embark upon an investigation of the dispute. Whilst the employer in this case did not raise any issue as to the fulfilment of those conditions, the Court is of the view that there are matters arising in that regard upon which it is appropriate to comment.
The first condition precedent to an investigation is set out in Section 2(1)(a) as follows:
“It is not the practice of the employer to engage in collective bargaining negotiations and the internal disputes resolution procedures (if any) normally used by the parties concerned have failed to resolve the dispute.”
It is the practice of Bank of Ireland Group to engage in collective bargaining negotiations. It does so with the applicant Union and with other Trade Unions in respect of various grades or categories of employees. It is not, however, the practice or the policy of the Bank to engage in collective bargaining negotiations in respect of the management grades whose pay and conditions of employment is the subject matter of this application.
On a literal reading of section 2(1) the Court may only conduct an investigation where it is satisfied that it in not the practice of the employer to engage in collective bargaining negotiations, simplicitor. This may not be in accord with the legislative intent. However it appears to the Court that to read the section as permitting an investigation where it is not the practice of an employer to engage in collective bargaining negotiations with or on behalf of the applicant group, would involve interpreting the section by importing words which it does not contain. On the normal cannons of construction, as they are understood by the Court, such an approach to interpretation is not permissible.
Since this matter was not raised by the employer and was not fully argued at the hearing the Court does not make any finding on this point and wishes to reserve its position to another case in which the point may be relied upon and be fully argued.
With regard to the second limb of paragraph (a) it is noted that Bank of Ireland do have in place a grievance procedure which appears to conform to the provisions of the Code of Practice on Disciplinary and Grievance Procedures (S.I. No. 146 of 2000). There is no evidence that any of the matters now before the Court were processed through that grievance procedure. However, again, this matter was not raised by way of an objection to the Court proceeding with the investigation and the Court merely notes the point at this stage.
Conclusions and Recommendations:
The Court has taken account of the written and oral submissions made by the parties and the additional information received from them following the Court hearing.
In addition to the matters referred to above, this case differs from the generality of cases investigated by the Court under the Act of 2001 in a number of respects. Historically managers employed by the bank were covered by collective bargaining arrangements. This changed on or about 1988 when the Bank introduced new arrangements which involved a form of individual assessment. These arrangements appear to have been accepted by the managers generally. The Union continued to be recognised by the Bank as the representative of its members in management grades in all matters other than in relation to collective bargaining. When a new system of Performance Management and Remuneration System for Managers was introduced the Union were briefed on the new system but were not offered a role in its negotiation.
Thus, this is not a case where an employer is refusing to recognise a trade union per se. Rather, it is the Bank’s position that in keeping with its own policy since 1988 (and the position within the financial services sector generally), the remuneration of its managers is not determined by collective bargaining.
Section 5 of the Act provides that where the Court has investigated a trade dispute under Section 2 it may make a recommendation giving its opinion in the matter and, where appropriate its view as to the action that should be taken having regard to the terms and conditions of employment and to dispute resolution and disciplinary procedures, in the employment concerned. This provision may be contrasted with Section 68 of the Industrial Relations Act 1946, which is the statutory provision under which the Court normally issues recommendations. That section simply provides that the Court may make a recommendation setting forth its opinion on the merits of the dispute and the terms on which it should be settled. It seems clear from the wording of Section 5 that the Court should only deal with the substantive issues raised in the referral under the Act of 2001 where it is satisfied that the circumstances of the case make it appropriate to do so. What those circumstances are must depend on the facts of each case.
Legislative History:
As is well known the Act was enacted to give effect to the report of the High Level Group established under paragraph 9.22 of Partnership 2000 to consider the detailed proposal submitted by ICTU on the recognition of Unions and the right to bargain and the IBEC position on the impact of these proposals. This report reaffirmed the commitment of the Social Partners to the preferred voluntary approach to disputes resolution. Nonetheless the report went on to recommend what it described as an exceptional procedure which could apply where voluntary arrangements are not followed. These procedures are now given statutory effect by the Act of 2001.
The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of our industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards.
Comparison With other Employments.
It is agreed between the parties that the method by which Bank of Ireland Group determines the remuneration of managers is similar to that used by all other financial institutions in the case of comparable grades. In that respect this case can be distinguished from other cases dealt with under the provisions of the 2001 Act in which collective bargaining was either the norm or commonplace in similar employments. In such cases it was considered appropriate for the Court to have regard to rates of pay and other conditions of employment which were determined through collective bargaining within the sector. Such an approach is neither practical nor appropriate in this case. It is, however, noteworthy that the pay movement of the applicant grades over the past number of years has been broadly in line with that of employees of the Bank who are covered by collective bargaining arrangements.
In support of its contention that rates of pay are out of line, the Union have relied upon the salaries paid to managers in one other bank which, they claim, is Bank of Ireland’s closest competitor. For its part the Bank does not accept that the comparisons drawn with that bank are valid. Regardless of the position in that respect the Court is not satisfied that it could reasonably conclude that the remuneration package of the applicant group is out of line with those applicable to comparable grades within the sector generally on the basis of comparison with just one employment. In these circumstances the Court is not satisfied that it is appropriate to make recommendations in relation to the rates of pay of the mangers concerned.
A variety of other issues have been raised by the Union in this referral. Again, unlike other cases investigated by the Court under the 2001 Act, in this case a mechanism exists within the employment itself by which those issues may be addressed by the individuals concerned and they may be represented by their Union in so doing. As earlier observed, the Bank has in place a grievance procedure which conforms to the provisions of the Code of Practice on Disciplinary and Grievance Procedures made pursuant to Section 42 of the Industrial Relations Act, 1990. The Bank have pointed out to the Court that this procedure provides that where a grievance is not resolved during the internal stages an external appeals lies to an independent person. It goes on to point out that in the normal course of events the appeal to an independent person is conducted by a Rights Commissioner acting in a private capacity. It appears that this procedure is in line with the existing agreement between the Union and the employer. It also seems to the Court that all of the issues raised in this referral are capable of being processed through this grievance procedure.
Having regard to all of the circumstances of this case the Court does not consider that a basis exists upon which it could be concluded that the conditions of employment of managers employed by Bank of Ireland Group, taken as a whole, are significantly out of line with appropriate standards. Consequently the Court is does not consider it appropriate to recommend any action in respect of the matters raised by the Union in this referral. It does, however, recommend that where individual grievances exist they should be processed through the appropriate procedures.”
Ryanair -v- The Labour Court
[2007] IESC 6
Supreme Court Geoghegan J.
“The Decision of the Labour Court was dated the 25th January, 2005, the hearing having taken place on the 14th December, 2004. Although I will be indicating points of disagreement with some of its findings the Decision is an impressive document both in terms of its structure and the manner in which the questions are identified. The document does, however, betray an understandable mindset in favour of the way particular expressions are used and particular activities are carried out by trade unions. This is not a correct approach in my view given that the relevant legislation is intended to deal with problems arising in a non-unionised company. It is not in dispute that as a matter of law Ryanair is perfectly entitled not to deal with trade unions nor can a law be passed compelling it to do so. There is an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment. With a view to curing this possible mischief the Industrial Relations Acts, 2001 and 2004 were enacted. Given their purpose they must be given a proportionate and constitutional interpretation so as not unreasonably to encroach on Ryanair’s right to operate a non-unionised company. With those preliminary comments, I will now address the three issues which Ryanair regarded as preliminary issues as to jurisdiction. These are:
1. That there was no trade dispute within the meaning of section 2 of the 2001 Act.
2. That it was the practice of Ryanair to engage in collective bargaining negotiations in respect of the pilots who are party to the trade dispute, if any.
3. That the internal dispute resolution procedures had not failed to resolve the dispute, if any.
…………….
It would appear that a core sentence in the Decision of the Labour Court is the following:
“Ryanair, as its right, will not negotiate with IALPA. It seems axiomatic that if Ryanair do not recognise the only body which the group of employees who were party to the trade dispute wish to represent them, it could not be the practice to engage in collective bargaining negotiations in respect of that group.”
I do not think that this is a correct interpretation of section 2(1)(a). The relevant grade, group or category of employees would seem to be the Dublin pilots. Some or all of them may or may not be members of the union. The company, as is its right, does not negotiate with the union. It claims that it does negotiate with the Dublin pilots viathe ERCs and that in so far as that cannot be done at present, it is only because the pilot representatives have themselves withdrawn. This may or may not be correct but as I see it, it has never been properly investigated by the Labour Court because of the adoption of a different, and in my opinion incorrect approach to what it had to decide. It should have been addressing its mind to whether there were in place adequate collective negotiation procedures (giving an ordinary meaning to that expression) within Ryanair. If the view that I take prevails, the Labour Court will still have to determine these questions.
In taking the view which it did take it would appear from the Decision that the Labour Court was influenced by the provisions of section 6 of the Trade Union Act, 1941, as amended. Section 6(1) of the 1941 Act reads as follows:
“It shall not be lawful for any body of persons, not being an excepted body, to carry on negotiations for the fixing of wages or other conditions of employment unless such body is the holder of a negotiations licence.”
Having cited this subsection, the Labour Court goes on to observe that it must be assumed that the reference to collective bargaining negotiations in the 2001 Act is not intended to comprehend collective bargaining unlawfully conducted. The court points out however, that Ryanair contended that pilots as a category constitute an “excepted body”. The union on the other hand argued that there was no excepted body representing pilots which could lawfully negotiate with Ryanair.
“Excepted body” is defined by section 6(3)(h) of the Trade Union Act, 1941 (as inserted by section 2 of the Trade Union Act, 1942) as follows:
“A body all the members of which are employed by the same employer and which carries on negotiations for the fixing of wages or other conditions of employment of its own members (but no other employees).”
If it can be demonstrated that the ERC is an instrument in place whereby pilots may enter into collective bargaining negotiations with Ryanair then it must surely be an excepted body. The argument against this and which was accepted by the Labour Court is based on the decision of this court in Iarnród Éireann v. Holbrooke cited above. The Labour Court has, in particular, relied on a passage from the judgment of Fennelly J. speaking for this court.
“At this point it is important to note that the definition of an excepted body is one which ‘carries on negotiations for fixing wages …’ (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. No argument based on this point was advanced by the respondents, though it was raised by the court during the hearing. The court must, nonetheless, interpret the statute in what it conceives to be the manner required by law and cannot adopt an erroneous interpretation because none of the parties relies upon the correct one.
As I see it, the issue is whether a body can claim that it ‘carries on negotiations’ (noting the use of the present tense) where patently it does not and cannot do so because the employer refuses to negotiate.”
The Labour Court concluded from the judgment of Fennelly J. and in particular that passage that a body of persons can only be an exempted body if the employer consents to negotiate with the body. That, of course, is perfectly correct. But the court then went on to hold that “by parity of reasoning” if an employer wishes to negotiate with a group of its own staff rather than through a trade union but the employees are unwilling to negotiate on that basis they cannot be regarded as an excepted body. Not only do I believe that this interpretation does not follow but I believe it to be incorrect. That decision is relevant only to the situation where an employer refuses to negotiate. It is not relevant to a situation where a particular category of employees is unwilling to avail of internal machinery for negotiation within a non-unionised company where the machinery is fair and reasonable and there is no unreasonableness on the part of the company. It is important to consider the purpose of section 6 of the 1941 Act, as amended. Fennelly J. had this to say at p. 245 of the report:
“The learned trial judge was undoubtedly correct, however, in stating that the object of the section was to relieve the hardship that would arise if employees of small firms were deprived of the benefit of trade union representation in carrying on negotiations. I would go further. Trade union membership is not compulsory and, although the court was not addressed on the constitutional implications of the interpretation of the section, it can hardly be doubted that it cannot be made so by law. Even at a practical level, if an employer and its workers agreed to exclude union representation, it would be extraordinary if it were illegal for a staff committee to enter into consensual negotiations with the employer.”
Fennelly J., however, then went on to point out that the employees could not be said to be carrying on negotiations for the fixing of the wages where the employer refused to negotiate. As I read his judgment what Fennelly J. had in mind was that the statutory permission given to excepted bodies to negotiate by virtue of the amendment in the 1942 Act was designed to assist employees in small companies. For one reason or another and possibly the financial implications, the employees in a small firm might want to be able legally to negotiate with their employer rather than join a registered trade union. In many instances they might be persuaded by their employer not to join a trade union. The 1941 Act had omitted to provide for the employee counterpart of the employer conducting negotiations in-house. It was considered desirable that employee bodies “be not left exposed while employers were covered by an exception”. But under the scheme of the Acts as Fennelly J. pointed out “the activity is implicitly consensual”. The purpose of the 1942 amendment was to deal with a situation where both employer and employees in a small firm wanted to negotiate terms and conditions in a situation where the employees would not be acting illegally for not having a negotiation licence under the 1941 Act. This element of consensus is not in any way of the essence of the legislation with which this appeal is primarily concerned. What is required under these statutory provisions is that the employer has in place an appropriate system.
The interpretation which I have placed on the legislation to the effect that the employer must have in place an appropriate internal system of collective negotiations is not admittedly a literal interpretation. In fairness to the Labour Court, it is the normal rule that legislation must be interpreted according to the words used but if a literal interpretation would potentially destroy the whole purpose of the legislation as would be the case here then it is appropriate that a purposive interpretation be applied. Ryanair may be right or wrong in perceiving the steps which have been taken by the pilots as effectively an attempt to force Ryanair to deal with the trade union. It would be especially important where that potentiality at least might exist and might indeed involve an element of unconstitutionality that a purposive interpretation be applied”.
Fennelly J.
“I fully agree with the judgment that has been delivered by Geoghegan J. I write only to explain that I also am of opinion that the Labour Court has misunderstood part of the reasoning in my judgment in Iarnród Éireann v. Holbrooke [2001] 1 IR 237.
The Labour Court relied on this judgment as an alternative to its principal conclusion that it is not the practice of Ryanair to engage in collective bargaining negotiations in respect of the relevant grade, group or category of workers. What it said was that, even if it was the practice of Ryanair to engage in such collective bargaining negotiations, it, the Labour Court, “would hold that any such body could not lawfully do so in respect of the group of pilots who are party to the instant dispute.”
It must first be recalled that what the Labour Court had to be satisfied of was that:
“it [was] not the practice of the employer to engage in collective bargaining negotiations in respect of the relevant grade, group or category of workers who are parties to the trade dispute…”
The Labour Court cited the following passage from my judgment in Iarnród Éireann v. Holbrooke:
“At this point it is important to note that the definition of an excepted body is one which ‘carries on negotiations for fixing wages …’ (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. ………
As I see it, the issue is whether a body can claim that it ‘carries on negotiations’ (noting the use of the present tense) where patently it does not and cannot do so because the employer refuses to negotiate.”
Patently, the employer in the present case has not stated that it refuses to negotiate and the Labour Court does not claim that it has. However, its decision says:
“It is clear from this judgment that a body of persons can only be an excepted body if the employer consents to negotiate with the body. By parity of reasoning, if an employer wishes to negotiate with a group of its own staff rather than through a trade union, but the employees are unwilling to negotiate on that basis, they cannot be an excepted body.”
Those statements are not justified by the cited passages in my judgment in Iarnród Éireann v. Holbrooke. As I explained at page 245 of the judgment, “the legislative intent was to relieve against the obvious hardship which would have resulted from depriving employees in small firms of the right to negotiate directly their pay and conditions of work with their employer.” Without the provision for “excepted bodies,” it would have been unlawful for a group of employees to negotiate with their own employer. The first sentence in the quoted passage from the Labour Court decision is puzzling. A body cannot be excepted unless it negotiates. It cannot negotiate with the employer without the latter’s consent. The second sentence seems to be to the same effect. But I do not see how either sentence justifies the conclusion reached by the Labour Court that “any such body [apparently an excepted body of pilots] could not lawfully do so in respect of the group of pilots who are party to the instant dispute.” This, with respect, is circular reasoning. If any group of pilots is willing to negotiate with Ryanair, it being accepted that Ryanair is willing to negotiate, it follows that that group is an excepted body. Thus, there would be no illegality.
To be fair to the labour Court, I should cite the intervening passage, from which it appears to deduce this conclusion. It is as follows:
“If…… there is an excepted body comprising pilots employed by Ryanair, membership of the body could only be voluntary and could not extend to those who do not wish to be members. It seems equally clear from the plain wording of Section 6(3)(h) of the Trade Union Act, 1941 that such an excepted body could only lawfully negotiate on behalf of its own members and no other employees. On the uncontradicted submission of IALPA those pilots which it represents do not wish to be represented in negotiations with their employer other than by their trade union. On that account they could not be realistically described as members of an excepted body constituted for the purpose of negotiating directly with Ryanair and any such body could not lawfully engage in collective bargaining on their behalf.”
Again, this passage seems open to the charge of circularity. I leave aside the question of the sufficiency of evidence, which has been dealt with in the judgment of Geoghegan J. The Labour Court uses the unwillingness of those pilots who are members of IALPA to negotiate directly, in order to reach the conclusion that it would be unlawful for Ryanair “to engage in collective bargaining negotiations…” It does so in reliance on the pilots’ wish to be represented by a trade union, when Ryanair’s acknowledged policy is not to negotiate with a trade union. The essential step in the reasoning is the statement that the pilots “could not be realistically described as members of an excepted body…” But the question before the Labour Court was whether it was the practice of Ryanair to engage in collective bargaining. The conclusion of the Labour Court would implicitly oblige the company to negotiate with a trade union. Even though it says it is willing to engage in collective bargaining, it is said that it could not lawfully do so, because the employees do not consent.
Iarnród Éireann v. Holbrooke involved an attempt by a group of employees to compel their employer to negotiate with them and/or a Trade Union which did not have a negotiating licence. The employer refused. In the present case the employer has refused to negotiate with a trade union but maintains that it is willing to negotiate with the employees.”
LCR21242