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The Joint Labour Committee System as a Wage-Setting Mechanism: An Analysis of the Decision of the High Court in John Grace Fried Chicken Limited v Catering JLC

The Joint Labour Committee System as a Wage-Setting Mechanism: An Analysis of the Decision of the High Court in John Grace Fried Chicken Limited v Catering JLC

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An essay for the 2012 Undergraduate Awards Competition by Ciaran Lyng. Originally submitted for Law and German at None, with lecturer Professor Neville Cox in the category of Law
An essay for the 2012 Undergraduate Awards Competition by Ciaran Lyng. Originally submitted for Law and German at None, with lecturer Professor Neville Cox in the category of Law

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Published by: Undergraduate Awards on Aug 30, 2012
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10/27/2013

 
The Joint Labour Committee System as a Wage-Setting Mechanism: AnAnalysis of the Decision of the High Court in
John Grace Fried Chicken Limited v Catering JLC 
 
Abstract
The purpose of this article is to examine the recent High Court ruling on the Joint LabourCommittee (JLC) system, which sets minimum pay and conditions of employment forcertain workers in particularly sectors in Ireland. Through an analysis of the High Court
decision, its implications and the Government‟s response to the High Court find
ing thesystem unconstitutional, the article aims to assess whether the High Court were correct intheir finding and whether the new Bill cures the constitutional deficiency in the impugnedlegislation.Through research from a variety of sources, the aspects explored in this article includethe background to the JLC system including its origins in the Trades Boards, which wereestablished when Ireland was still part of the United Kingdom; the abolition of its UKequivalent, the Wages Councils; and the need for reform of the system as evidenced byboth the 2011 Programme for Government and the Duffy/Walsh Report of theIndependent Review of EROs and REAs Wage Setting Mechanisms. The High Courtdecision in
 John Grace Fried Chicken Limited v Catering JLC 
is examined and analysed.Within the course of his judgment in this case, Mr Justice Feeney focused on twoarguments, both of which were discussed in the article: whether sections 42, 43 and 45 of the Industrial Relations Act 1946 and section 48 of the Industrial Relations Act 1990were an unconstitutional delegation of power by the Oireachtas under Article 15.2.1° of the Constitution; and whether the imposition of higher rates of pay and conditions on thegroup of employers in the Dublin and Dun Laoghaire area was an unlawful anddisproportionate interference with constitutional guaranteed property rights.The article concludes that Mr Justice Feeney was correct in his finding that the JLCsystem, as it was then constituted, was an unconstitutional delegation of power by theOireachtas as there was not a sufficient degree of principles and policies outlined by theOireachtas to guide the Labour Court in establishing a JLC. The article then presents ananalysis of the planned legislative reform with the Governme
nt‟s publication of a new
Bill, the Industrial Relations (Amendment No.3) Bill 2011. The article concludes that the
 
new provisions in the Bill contain sufficient principles and policies for the JLC system tobe constitutional. The article also presents a political dimension to the planned legislativereform and posits that the continuation of the JLC system in Ireland is due to thesignificant presence of the Labour Party in the current coalition Government.
Introduction
On the 7
th
of July, 2011, in a landmark decision, the High Court ruled the Joint LabourCommittee (JLC) system, which sets minimum pay and conditions of employment of certain workers in particular sectors, is unconstitutional.
1
This is a decision that has far-reaching consequences for the future of the JLC system. Over the course of this essay, theJLC and ERO wage-setting mechanism will be explained and put in context, the decisionof the High Court in
 John Grace Fried Chicken Limited v Catering JLC 
2
will be criticallyanalysed including the impact this decision has on the process by which JLCs and EROswork under the terms of the Industrial Relations Act 1946 and the impact of the decisionon the general powers of the Labour Court. Finally, this essay will discuss the plannedlegislation reform of the JLC system with a discussion of the recently publishedGovernment Bill, which intends to implement the reforms necessary in response to thedeclaration of unconstitutionality by the High Court.
3
 
Background
Under the Industrial Relations Act 1946
4
, JLCs are bodies established by the LabourCourt to regulate the minimum terms and conditions of employment for workers engagedin certain industries and geographic locations. JLCs are composed of equal numbers of employer and employee representatives and an independent chairperson, appointed by theMinister for Enterprise, Trade and Employment. Once one of the criteria identified insection 37 of the 1946 Act is fulfilled, a JLC can submit a proposal to the Labour Courtfor an ERO.
5
These proposals on minimum pay and conditions for the entire industry, towhich the JLC is related, can then be made into a legally binding ERO by the Labour
1
 
 John Grace Fried Chicken Limited v Catering JLC 
[2011] IEHC 277.
2
 
 Ibid.
3
Industrial Relations (Amendment No.3) Bill 2011.
4
Part IV.
5
This process is planned to be amended by the Industrial Relations (Amendment No.3) Bill 2011.
 
Court.
6
JLCs were originally established under the Industrial Relations Act 1946.However, both the JLC and the former UK Wages Council systems owe their origin tothe Trades Boards, which were introduced under the Trade Boards Act 1909.
7
However,the UK equivalent to the JLCs, the Wages Councils, were abolished in 1993.
8
Theabolition of the UK equivalent does beg the question about the continued persistence of the JLC system in Ireland, especially after the introduction of a national minimum wagein 2000.
9
It is in this context that employers have been calling for the abolition of the JLCsystem with IBEC making the point in 2010 that the economic and regulatoryenvironment in Ireland is unrecognisable from when the current JLC system wasconceived.
10
Therefore, the JLC system had been coming under sustained pressure in thelead up to the
 John Grace Fried Chicken Limited v Catering JLC 
case. The newProgramme for Government devised by the Fine Gael-Labour coalition in March 2011made a commitment to reform the JLC structure.
11
The Duffy/Walsh Report of theIndependent Review of EROs and REAs Wage Setting Mechanisms also concluded that
the current JLC regulatory system should be retained but “requires radical overhaul so as
to make it fairer and more responsive to changing economic circumstances and labour
market conditions”.
12
However, the decision in
 John Grace Fried Chicken Limited vCatering JLC 
, which is discussed below, has accelerated the need for reform of the JLCsystem, as evidenced by the aforementioned recently published Government Bill, theIndustrial Relations (Amendment No. 3) Bill 2011.
 John Grace Fried Chicken Limited v Catering JLC 
Decision
In the context of the continuing persistence of the JLC system in Ireland despite theabolition of its UK equivalent in 1993 and the introduction in Ireland of a MinimumWage in 2000, a constitutional challenge was taken by the members of the Quick Service
Food Alliance (“QSFA”) against the fact that that the Catering Joint Labour Committee
6
Section 39.
7
 
Michelle O‟Sullivan and Joseph Wallace, “
Minimum labour standards in a social partnershipsystem: the persistence of the Irish variant of Wages Councils
” (2011)
42
 
Industrial RelationsJournal 18 at 19; Bill Callaghan and R. Jones
, “
Wages councils and abolition: The TUC perspective
(1993)
 
14(5) International Journal of Manpower 17.
8
Trade Union Reform and Employment Rights Act, 1993, section 35; Brian Bercussion and Bernard Ryan,
“The
British Case: before and after the decline of collective wage formulation
in Blanpain ed,
Collective Bargaining and Wages in Comparative Perspective
(Kluwer Law International, 2005) at 55.
9
National Minimum Wage 2000, section 11(1).
10
IBEC Agenda,
IBEC lobbies on proposed employment law changes
”,
Issue 5, 2010.
11
Towards Recovery
 – 
Programme for a National Government: 2011-2016 at 11.
12
Kevin Duffy and Frank Walsh,
Report of Independent Review of Employment Regulation Orders andRegistered Employment Agreement Wage Setting Mechanisms
, April 2011, at para. 13.3.

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