Labour Court to quash hotel pay order

The Labour Court has agreed to quash an order it made in November fixing the wages and working conditions of some 25,000 low-paid hotel workers outside Dublin and Cork.

It is to reconsider the matter as part of the settlement yesterday of a High Court challenge to the order by the Irish Hotels Federation and a Co Clare hotelier.

The settlement of the action also means the IHF is not now proceeding with its challenge to the constitutionality of industrial relations laws under which the Labour Court order - and other orders affecting the wages and conditions of an estimated 250,000 workers - was made.

The IHF, hotelier Michael Vaughan and Vaughan Lodge Ltd, which operates the Vaughan Lodge Hotel in Lahinch, had brought a judicial review challenge to the manner in which a statutory minimum wage and working conditions were fixed last November for some 25,000 hotel workers outside Dublin, Dún Laoghaire and Cork.

In proceedings brought against the Hotels Joint Labour Committee, the Labour Court, Ireland and the Attorney General, with Siptu as a notice party, the applicants also challenged the constitutionality of the laws under which the hotels JLC and Labour Court made their decisions.

Under the Industrial Relations Acts 1946 and 1990, the hotels JLC and the Labour Court have powers to make and approve proposals fixing wage rates and conditions of employment which are then binding.

It was claimed those laws were "coercive" of employers and impermissibly delegated the State's law-making powers to the Labour Court.

The State rejected such claims and also pleaded that if the laws did interfere with employers' property rights, such interference was in the interests of social justice and the common good.

On the third day of the hearing yesterday, Mr Justice Bryan McMahon was told the proceedings were resolved on consent on terms including the quashing of the Employer Regulation Order made by the Labour Court in November last on foot of proposals of the hotels JLC.

The order was quashed on the ground that the Hotels JLC had failed to forward to the Labour Court a September 2007 IHF submission on wages and conditions of hotel staff.

The settlement terms also include an order that the applicants would be paid their costs, including reserved costs.

In those circumstances, the sides also agreed it was not necessary to determine the other issues raised in the proceedings.

The central issue in the case was whether the Labour Court acted correctly in deciding that pay increases due to workers under the Towards 2016 national wage agreement should be applied after application of the national minimum wage legislation to pay rates.

The IHF had argued that the Towards 2016 increases should be applied prior to application of the minimum wage legislation.

The disputed order by the Labour Court would result in the workers receiving pay increases of a maximum 22 cent per hour.