NECI High Court Case Quashes Unworkable Sectoral Employment Order for Electrical Contractors

Last Tuesday, October 25, Mr Justice Charles Meenan of the High Court was informed that the State was not objecting to an order sought by Náisiúnta Leictreach Contraitheor Eireann (NECI) to quash the SEO, which had come into effect at the start of February 2022. The Sectoral Employment Order is no longer the law of the land.

Since the legislation providing for the previous Registered Employment Agreement (REA) was deemed unconstitutional in May 2013, NECI members have experienced harmonious relations between employees and employers due to the flexibility of local bargaining.
We know the industry is not a one size fits all with many different aspects such as electrical installation and repairs, Emergency Lighting, Fire Alarms, Data Cabling, Intruder Alarm, CCTV, EV Chargers, Refrigeration and Air Conditioning units, food processing automation and water treatment services to name but a few. Business models vary depending on location, nature of the business and the cost of living.

In just over a year the NECI since the highly significant Supreme Court judgment which upheld the High Court’s decision to strike down the previous electrical sector SEO, the NECI has again succeeded in having a sectoral employment order for the Electrical Contracting Industry (Statutory Instrument 2021/703) quashed.

In February of this year, the NECI began judicial review proceedings in respect of the Minister’s decision to sign the SEO into law for our industry. The State were to provide opposition papers in which it would outline its defence to the NECI High Court Judicial Review proceedings. Ultimately the State provided no such opposition papers and made no comment on the nine grounds of concern that the NECI had raised. The State simply accepted that the NECI was correct on one of the grounds claimed and confirmed in open correspondence that it would consent to an order quashing the SEO currently in place for the Electrical Contracting Industry.

The NECI have constantly engaged with the Labour Court seeking fairness and transparency in its processes which have led to the introduction of two redundant SEOs for our industry. Despite the NECI‘s efforts it has always been our opinion that the Labour Court has substantively ignored our concerns.

It is hugely disappointing that the NECI has had to seek recourse in the High Court on three separate occasions seeking openness and transparency in the processes.

The NECI is a small organisation with limited resources and its members had to take on the full resources of the State just so the NECI could voice its concerns.

The first application to the High Court by the NECI was against the Labour Court in 2017 in respect of an SEO application which was subsequently withdrawn by the Unions.

The second set of proceeding issued by the NECI (which was fully contested by the State) led to Supreme Court hearing, and ultimately, the striking down of the 2019 Electrical Contracting Sectoral Employment Order (S.I. No. 251/2019) which purported to give law making power to the CWPS (i.e., it allowed CWPS to set the pension contribution rate for both employers and employee working within the electrical contracting industry). In fact, and quite concerningly, the current SEO for the Mechanical Engineering Building Services Contracting Sector contains a similar provision.

The 2019 SEO which was quashed by the High Court in the NECI’s case in 2020, which decision was then confirmed by the Supreme Court Case in 2021, had been introduced into law on foot of a recommendation by a division of the Labour Court chaired by Ms Louise O’Donnell.

The third set of High Court proceedings have now led to the State consenting to an order quashing the existing Sectoral Employment Order in the Electrical Contracting Sector (S.I. 2021/703). Despite this, the Electrical Contracting SEO remained the law of the land and electrical contractors remained subject to it, until Tuesday 25th October when Mr. Justice Charles Meenan of the High Court agreed to set aside the Sectoral Employment Order (SEO).

In the NECI’s proceedings before the Supreme Court, the court confirmed the importance and necessity of the Labour Court providing adequately clear reasons for its decisions to recommend the introduction of an SEO. Despite the clear instruction from the Supreme Court in this regard, the State has now accepted that the Labour Court’s most recent report, which accompanied its recommendation, did not align with the recommendation. The report said one thing, and the recommendation said another. Despite this, the recommendation by the Labour Court to the Minister for Enterprise Trade and Employment was accepted and signed into law. The Minister’s statutory role under the Industrial Relations (Amendment) Act 2015 is a limited one and, in essence, he or she is to simply ensure that the Labour Court has carried out its statutory function in line with requirements of the 2015 Act. It should not be the responsibility of the NECI to constantly have to issue High Court proceedings to point out to the Minister that he or she has failed in their duty to simply ensure the Labour Court had carried out its statutory function correctly before accepting the Labour Court’s recommendation that an SEO be introduced.

We do not know the exact date upon which the State realised that the current SEO was in breach of the 2015 Act. The 2015 Act states that the Minister appointed to sign the Sectoral Employment Order into law cannot seek to have an SEO quashed. The Minister is merely allowed to request the Labour Court review the terms and conditions of the SEO after three years from when it commenced.

The State has confirmed that the enactment of the SEO breached legislation. There is no legal mechanism contained in the 2015 Act which would allow for the Minister to amend and/or cancel the SEO. As such, and despite the acknowledgment of the State that the SEO was introduced into law in breach of the 2015 Act, electrical contractors were still obligated to comply with the terms of the SEO until the High Court had granted an order quashing the SEO.

Despite four applications made for SEOs for the Electrical Contracting Industry and two SEOs having been made, neither the Labour Court, nor the Minister appointed to sign Sectoral Employment Order into law, would seem to properly understand or appreciate the role given to them under the Industrial Relations (Amendment) Act 2015.

It is the NECI’s sincere hope that the Labour Court will listen, consider, and take cognisance of the representations made by the NECI on behalf of its members in the future, when carrying out their statutory function. In the NECI’S opinion the Labour Court’s actions to date appear to have the effect of simply supporting the interests of big business to the detriment of small electrical contractors.

Everyone in the Electrical Contracting Industry has been failed by the Labour Court and the Minister for Enterprise Trade and Employment in relation to this flawed SEO.

The NECI will continue to be a voice for its members.

In conclusion, we would like to thank Helen Callanan SC, David O’Brien BL and Harry Carpendale, Solicitor for all their work in representing the NECI’s interests over the years.