The High Court has ruled that SEOs setting out pay rates, pension and sick pay entitlements  is invalid and unconstitutional. 

Employer’s Questions

 This isn’t new news to a lot of our clients. Our clients have instead been asking about their suffering as a result of having to pay these rates of pay and conditions that they could not afford and can they get compensation?  

To achieve this you will have to take a civil case against the WRC and the Labour Court and hope you win. 

This is not the first time ESA raised concerns about SEOs. Long before the 2011 High Court Decision, we went to the Labour Court on this matter, but the Client we acted for did not follow through to the civil courts to push the matter. However, the Fast Food sector put its money where its concerns were and succeeded. 

If you believe your Company has suffered as a result of having to pay these rates, then move on it and seek compensation for having had to pay out these rates. 

The next issue is : are you stuck with the contracts that reflect the old set rates?  This again is a matter of contract law and your right to resile from an illegal contract. We would be of the opinion that you can, but you will need to be prepared to defend this is court and legal advice should be sought.  

Why was the SEO overturned?

So, what went wrong for the SEO? If you look at Article 15.2.1 of the Irish Constitution it provides that the sole and exclusive power to make laws for the State is vested in the Oireachtas.  

In 2011 and then in 2013, the Supreme Court held that the Registered Employment Agreements (REA) and Joint Secretary Orders (JLC) that determined pay and working conditions, were unconstitutional.  

Our concern that the bodies making these Agreements and Orders is both of these bodies do not represent the majority of employers or businesses but are allowed to make universal decisions affecting a lot of companies.  

We now find that government bodies and large multinational firms employ agents to act on their behalf and impose such demands as ‘Union recognition or you cannot enter the worksite’. This is again unconstitutional. A person has the absolute right to join a Union or not, and any action that prohibits their employment should not be permitted.  

 Why was the SEO deemed illegal? 

However, the High Court found that the requirements of the Industrial Relations (Amendment) Act 2015 had not been complied with in the creation of the SEO. The High Court’s findings included that the statutory report submitted by the Labour Court to the Minister was deficient and failed to address the objectives set out above in addition to submissions made by the parties. The implication of this pronouncement is that the Minister should have therefore refused to make the order. 

The High Court went on to say that the electrical contracting SEO should be struck down, it went on to examine whether the provisions of the 2015 Act which provide for the delegation by the Oireachtas of the power to make SEOs is consistent with Article 15.2.1 of the Constitution. It is well established that Article 15 does not preclude the Oireachtas from delegating the making of secondary legislation, which is merely giving effect to principles and policies which are contained in the primary legislation itself. The High Court looked at the 2015 Act and concluded that it contained sufficient principles and policies to guide the Minister, as delegate, in the making of the SEO.  The Court found that Article 15.2.1° of the Constitution requirement was not met by the 2015 Act. 

If ESA can help you with your questions please don’t hesitate to contact us on 01 8774608 or [email protected]


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