Start of challenge to laws on wage rates

A High Court challenge to the constitutionality of laws under which a statutory minimum wage and working conditions were fixed for some 25,000 hotel workers outside Dublin and Cork began yesterday.

The outcome will have significant implications for some 250,000 workers whose wages and conditions are fixed under the same laws.

Mr Justice Bryan McMahon yesterday began hearing the challenge by a hotel operator in Co Clare and the Irish Hotels Federation (IHF) to the constitutionality of industrial relations laws under which a statutory minimum wage was fixed last November by the Labour Court, on foot of proposals from the Hotels Joint Labour Committee (HJLC), for workers in hotels outside Dublin, Dún Laoghaire and Cork.

It is claimed the laws are "coercive" of employers and unconstitutional because they impermissibly delegate the State's law-making powers to the Labour Court.

The State has denied the claims of unconstitutionality and has also pleaded that, if the disputed laws do interfere with employers' property rights, that interference is proportionate in the interests of social justice and the common good.

The action is by Vaughan Lodge Ltd, which operates the Vaughan Lodge, a small hotel in Lahinch, Co Clare, employing 17 staff; Michael Vaughan and the IHF.

The challenge is to the decision of the Labour Court of November 5th, 2007, approving proposals of the HJLC for a minimum wage for some 25,000 staff in a large number of hotel businesses, and fixing those minimum rates. The rate fixed is higher than that applied to staff working in hotels in Dublin, Dún Laoghaire and Cork city.

Mr Vaughan claims his hotel's wage costs have increased by 25 per cent in the past three years and now amount to 42 per cent of its income.

Opening the case, Donal O'Donnell SC said the laws under which the HJLC and the Labour Court decided on the minimum wage rate were "anachronistic" and "bureaucratic" and drew their inspiration from legislation going back to the 1913 Dublin lockout.

The provisions effectively allowed the HJLC and the Labour Court to set wage rates, any breach of which would amount to a criminal offence, he said.

The laws being challenged by the IHF sat "very uneasily" with existing much more general laws providing for a minimum wage and governing conditions of work, health and safety, dismissal and other matters, he said.