Court rules for fast-food companies


The Government is consider introducing a temporary measure to protect pay and conditions for tens of thousands of workers who could have been affected by the High Court ruling today that legislation governing wage -setting mechanisms is unconstitutional.

Minister for Enterprise, Jobs and Innovation Richard Bruton said today his intention was to provide protection for an interim period pending the introduction of comprehensive reforms to the joint labour committee/registered employment agreement systems of determining pay and conditions.

He said the temporary measure would cover both existing personnel and new recruits for its duration.

Mr Bruton said he would be giving detailed consideration to the High Court judgment.

He said the immediate priority would be "to explore ways in which we can protect vulnerable workers who might feel that their position is now been completely undermined".

He said this would allow space for the development of a overall balanced reform package.

The Minster said careful study of the High Court judgment may require additional changes in the sort of legislation which he had proposed to colleagues in Government.

The High Court today upheld a challenge by fast-food operators to the constitutionality of laws setting mandatory minimum rates of pay and conditions for more than 190,000 workers.

The system was established 60 years ago to minimum pay and conditions for certain sectors of workers.

Mr Justice Kevin Feeney ruled unconstitutional the laws under which minimum pay and conditions are set under Employment Regulation Orders (ERO) proposed by JLC's for approval by the Labour Court.

The judge granted declarations that the relevant provisions of the 1946 and 1990 Industrial Relations Acts are unconstitutional because they allowed for an impermissible excessive delegation of law-making power concerning pay and conditions to the Labour Court in the absence of any guiding policies or principles.

He ruled the fast food operators had established pay rates and conditions of employment were set for workers in the catering sector under a May 2008 Employment Regulation Order in an arbitrary and unfair manner.

John Grace Fried Chicken Ltd, Cook Street, Cork and its operator John Grace had established that ERO unlawfully interfered with their property rights under the Constitution, he found.

Mr Justice Feeney has adjourned to July 26th next the issue of damages for the fast food operators related to the May 2008 ERO, which was rescinded in 2009.

During the hearing, the court heard workers in the catering sector have the lowest average earnings across any sector.

The action was taken by John Grace Fried Chicken Ltd, Cook Street, Cork; its operator John Grace and the Quick Service Food Alliance (QSFA) Ltd, also of Cook Street, Cork, which represents the interests of owners of fast food restaurants including Subway, Abrakebabra, Supermac's and Burger King.

The action was against the Catering JLC, the Labour Court and the State.

While the case related to catering workers, the outcome has implications for all workers whose minimum pay and conditions are set under this system.

The operators had claimed the system allowed for the setting of wage rates higher than the national minimum wage, Sunday pay rates higher than those set under the Organisation of Working Time Act and more favourable working conditions.

Today, the judge upheld their claims the measures were put in place in the absence of any policy guidelines from the Oireachtas in breach of their property rights and rights to fair procedures.

A number of prosecutions of fast food operators over alleged failure to implement the terms of a May 2008 ERO for catering workers have been stayed pending the outcome of the case.

Speaking after the ruling, Mr Grace said the pay of existing workers in fast food sector would not be affected by today’s ruling.

However, he said that new employees taken on in the future could have to work on inferior terms and conditions such as the national minimum wage.

The Restaurants Association of Ireland called on the Government to immediately abolish JLCs.

It claimed sunday premium payments were causing 40 per cent of restaurants to close on

Chief executive Adrian Cummins said: “The High Court has proven that what the Restaurants Association of Ireland has been saying for the last two years is 100 per cent correct, that these anti-business Joint Labour Committees were not constitutionally sound.”

The Small Firms Association called for the JLC system to be abolished immediately in light of the ruling.

Director Patricia Callan said: “The inflexibility of the current unconstitutional system has no place in a modern economy and has resulted in jobs being lost and a reduction in the working hours of others in those affected sectors, and continues to be an impediment to job creation.”

Chambers Ireland said the judgment would help to boost employment.

Deputy chief executive Sean Murphy said job retention and creation was a top priority for business.

"Today’s ruling should have a positive impact on the Government’s plans to reform these wage setting mechanisms, and in turn help to create more jobs in the future," he said.

The Irish Hotels Federation called on the Government to accept the ruling, which it said had shown JLCs to be deeply flawed, inequitable to employers and a severe impediment to job creation.

IHF chief executive Tim Fenn said: “By accepting the decision of the High Court, Minister Richard Bruton would remove a serious barrier to job creation and enable hoteliers to unlock the significant additional employment capacity within the sector.”

Sinn Féin and Fianna Fáil called for the High Court’s ruling to be appealed.

Additional reporting: PA