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Collective bargaining in Non-union companies

The Industrial Relations (Amendment) Act 2015 (the “2015 Act”), which came into force on 1 August 2015, was implemented to address the aftermath of the Supreme Court decision of Ryanair v. The Labour Court [2007]. While the 2015 Act does not mandate companies to engage in collective bargaining with trade unions, it imposes serious consequences when they don’t and makes it difficult to engage in collective bargaining with an employee body other than a trade union.

The 2015 Act amends the Industrial Relations (Amendment) Act 2001-2004 (the “2001 Act”) with the following effect:

Employers who wish to avoid both negotiating with a trade union, and being subject to the 2001 Act (as amended), must satisfy the Labour Court that it engages in “collective bargaining” with an “excepted body”. The 2001 Act (as amended) puts the burden on the employer to prove this and the 2015 Act has introduced a definition of “collective bargaining” which refers to negotiations with “the object of reaching agreement”. It also introduced a new definition of “excepted body” to restrict the circumstances in which an employee forum or works council can be considered to be an excepted body. When determining whether or not a body is an excepted body, the Labour Court must have regard to the “establishment, functioning and administration” of that body and must take into account certain factors, including:

In essence, an ‘excepted body’ is a body of employees that is not a trade union but whose existence – if an employer engages with it – will exclude the application of the 2001 Act (as amended) and the powers thereunder of the Labour Court to impose terms of employment on employers. It also reduces any potential power that the trade union may gain within a company.

There has been only one decision in the Labour Court to date in respect of an “excepted body” under this new legislation – Freshways Food Company and SIPTU (LRC 21242). In this case, the Labour Court interpreted the new definition of an “excepted body” very narrowly and held that the staff representative group in Freshways did not amount to an “excepted body” under the Act and therefore the Labour Court had jurisdiction to make a determination in relation to the terms and conditions of SIPTU members in Freshways.

The Labour Court specifically held that:

  1. Collective bargaining with an ‘excepted body’ must be “the customary or expected mode of determining pay and conditions within the employment concerned”.
  1. The onus of proving that collective bargaining occurs with an excepted body rests with the employer. The Labour Court held that an ‘excepted body’ “cannotes an independent association or body of workers having many of the characteristics of a trade union without being such an organisation within the meaning of the Trade Union Acts.” It went further to state that an ‘excepted body’ should be negotiating in respect of its members and not for the employees generally. It therefore appears that a representative must argue on behalf of the group of employees which he/she represents and only them.
  1. Written evidence was required from the employer to prove that the excepted body engaged in negotiations rather than simply consultation. This is contrary to the typical nature of negotiations involving trade unions during which very little is put in writing until a final agreement is reached.

It will be interesting to see if the Labour Court follows this approach in respect to each proposed ‘excepted body’ as such approach would make it difficult for an excepted body to exist and therefore amounts to indirectly mandating collective bargaining with trade unions. However this surely would lead to a Judicial Review.


Anne O’Connell

Employment Law Solicitors

Article dated 8th May 2017


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