High Court strikes down minimum pay law for electricians

The High Court has struck down a law providing for certain minimum pay and entitlements for electricians.

Smaller electrical contractors had brought a challenge to the issuing last year by the Government of a sectoral employment order (SEO) setting out pay rates, pension and sick pay entitlements in the electrical industry.

The contractors, members of the National Electrical Contractors of Ireland (NECI), claimed the SEO breached their rights and was unconstitutional.

Among their arguments were that the SEO made it a criminal offence for them to employ workers on any less favourable terms than others did and represented a significant encroachment on the employers’ freedom to contract.

The case was against the Labour Court, the Minister for Business, Enterprise and Innovation and the Attorney General. The claims were denied.

On Tuesday, Mr Justice Garrett Simons found the Minister had acted outside her powers in purporting to make the SEO.

It was a condition precedent to the Minister’s jurisdiction to make an SEO that she was satisfied the Labour Court had complied with the requirements of Chapter 3 of the Industrial Relations (Amendment) Act 2015, he said.

The Minister erred in law in concluding, on the basis of a report and recommendation submitted to her, that the Labour Court had complied with those provisions, he said.

The report accompanied a recommendation in April 2019 to the Minister by the Labour Court that the SEO be issued.

The judge said the report formed the cornerstone of the Minister’s subsequent assessment of whether the Labour Court had complied with the provisions of the 2015 Act (Chapter 3).

The report was deficient because it failed to record “even the conclusions of the Labour Court on crucial matters, still less does the report state a rationale for those conclusions”.

The report also failed to set out a fair and accurate summary of the submissions made by interested parties who opposed the making of a SEO and did not engage with the issues raised in those submissions, he said.

The report and recommendation also did not adequately address the definition of the “economic sector” concerned and did not specify the class, type or group of workers to which the recommendation would apply, he said.

Given that the SEO fell outside the Minister’s powers, the judge said it was not, strictly speaking, necessary to consider the challenge made to the constitutional validity of the parent legislation (the 2015 Act) by reference to constitutional rights.

However, ruling on that issue as well, the judge said the parent legislation did not contain sufficient principles and policies to guide the very broad discretion conferred upon the Minister and, indirectly, upon the Labour Court.

A decision to impose mandatory minimum terms and conditions of employment across an entire economic sector requires making difficult policy choices and has far-reaching consequences for employers, workers and consumers, he said.

The parent legislation abdicated the making of these significant policy choices to the Minister/Labour Court which meant there had to be regard to the potential impact on competitiveness in the sector but which was “at large as to the choice as to which objective is to prevail”, he said.

The concept of “fair and sustainable” remuneration was “hopelessly vague and too subjective”, he said.

The delegation of that role to the Minister involved “a standard-less delegation of law-making to the Minister” and one which would be almost impossible to challenge by way of judicial review, he said.

Therefore, the parent legislation was invalid by reference to Article 15.2.1 of the Constitution (power of Oireachtas to make laws), he said.