Ryanair Ltd (applicant/ appellant) v Labour Court (respondent) and Irish Municipal Public and Civil Trade Union (IMPACT) (Notice party)
Judicial review - Appeal of refusal to grant an order of certiori in respect of a decision of the respondent in favour of the notice party - Whether "trade dispute" - Whether unfair procedures used in hearing before the respondent - Meaning of "collective bargaining" - Statutory interpretation - Industrial Relations (Amendment) Act 2001, s 2 - Industrial Relations (Miscellaneous Provisions) Act, 2004 s. 2 - Trade Union Act, 1941 s. 6
The Supreme Court (The Chief Justice, Mr Justice Murray, Mrs Justice Denham, Mr Justice Hardiman, Mr Justice Geoghegan and Mr Justice Fennelly); judgments delivered February 1st, 2007.
The Acts of 2001 and 2004 are intended to deal with problems arising in a non-unionised company. As a matter of law the applicant/appellant is entitled not to deal with trade unions nor can a law be passed compelling it to do so. There is an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment.
Given their purpose, the Acts of 2001 and 2004 must be given a proportionate and constitutional interpretation so as not unreasonably to encroach on the applicant/appellant's right to operate a non-unionised company.
The intention of the Oireachtas was that the respondent's jurisdiction would only be invoked where collective bargaining arrangements were not in place and the parties are not engaged in talks.
The Supreme Court so held in quashing the decision of the respondent and ordering a rehearing of the matter.
Martin Hayden SC; Richard Nesbit SC and Paul Anthony McDermott BL for the applicant; David Barniville SC for the respondent; Gerry Durcan SC and Cathy Maguire BL for the notice party
Mr Justice Geoghegan commenced his judgment by setting out the context of the appeal. The applicant/appellant was the well-known airline company which has a policy of not negotiating with trade unions. A legislative regime had been enacted which was contained in the Industrial Relations (Amendment) Act, 2001 and the Industrial Relations (Miscellaneous Provisions) Act, 2004 to ensure that there would not be oppression or exploitation or unfair dealings on the part of an employer with employees in a company that is not unionised.
That legislation ensures that if there are not reasonable arrangements for resolving on a collective basis, problems arising between employees or particular categories of employees and the employer there is an ultimate recourse to the respondent.
Mr Justice Geoghegan said that in this particular case, what happened was that the applicant/ appellant decided to change its fleet of aeroplanes from being composed of Boeing 737-200s to the newer and larger models of Boeing 737-800. Such a change required special training of the pilots who were going to fly the new aircraft. The applicant/ appellant decided to offer eight senior Dublin-based pilots such retraining on particular terms and conditions. The next intended batch to be retrained were to be a group of pilots who were based in Stansted airport in London. For the purpose of the internal procedures and mechanisms for collective employer and employee relationships, the Dublin-based pilots and the Stansted-based pilots would be separate categories of employees. The Dublin-based pilots who had received the offer for retraining were unhappy with some of the terms and conditions and entered into correspondence with management. More or less in tandem with the correspondence relating to the eight pilots with management, the notice party purported to invoke the 2001 and 2004 Acts already referred to and purported to bring before the respondent a "trade dispute" on behalf of unidentified pilots of the applicant/ appellant. The legislation provided for a procedure whereby the respondent can conduct a preliminary inquiry as to whether it has jurisdiction to deal with the matter, ie whether the statutory factors are present which give the right of the notice party to invoke the respondent in circumstances where the employer company does not itself negotiate with trade unions. That procedure was adopted in this case, and the respondent made a decision in favour of the notice party and against the applicant/appellant in as much as the applicant/appellant disputed the jurisdiction.
The applicant/appellant claimed that there was in fact no "trade dispute" giving rise to a right to go to the respondent and that at any rate the respondent adopted unfair procedures and made an irrational decision. With leave, the applicant/appellant brought a judicial review application seeking to quash the decision of the respondent on these grounds. That relief was refused by the High Court, and it was an appeal from that decision of the High Court which had now come before the Supreme Court.
Having considered the relevant legislation namely, section 2 of the 2001 Act as amended by section 2 of the 2004 Act, Mr Justice Geoghegan said that it was clear that the first requirement for the respondent's jurisdiction was that there be an existing "trade dispute". The applicant/appellant disputed that there was a "trade dispute".
Secondly, the applicant/appellant argued that it was its practice to engage in "collective bargaining negotiations". Thirdly, the applicant/appellant argued that it had in place internal dispute resolution procedures and that there had not been a failure of those procedures to resolve the alleged dispute.
The respondent held against the applicant/appellant on all of these submissions.
The applicant/appellant claimed that not only was the respondent wrong and irrational in its decision on these issues, but that it gave an unfair hearing to the applicant/appellant.
Mr Justice Geoghegan said that the jurisdictional inquiry in the respondent arises under section 3 of the 2001 Act as amended by section 3 of the 2004 Act. Mr Justice Geoghegan said that under the amended section the respondent, if it decides to hold such an inquiry, must do so in relation to all the requirements specified in section 2. It cannot limit the inquiry to some but not all of the requirements. Amongst the grounds for relief in the way of certiorari was that the respondent had erred in law and/or in fact in concluding that "the unilateral withdrawal of the pilots from the established practice of collective bargaining meant that it was not the practice of the applicant to engage in collective bargaining" for the purposes of section 2 of the 2001 Act as amended and meant therefore that the requirement in section 2 was met.
Mr Justice Geoghegan summarised the contents of the diverse affidavits sworn in the application and said that it was perfectly clear that the alleged dispute was a dispute about the terms and conditions in which the eight Dublin pilots would embark on training for the Boeing 737-800s and the employment consequences of their not agreeing to the company's terms. However, it could only be a "trade dispute" within the statutory meaning if the internal machinery for discussing issues was attempted to be invoked by the relevant employees and such an attempt was either rejected by the employer or if not rejected did not resolve the problems.
Mr Justice Geoghegan said that certain correspondence from the pilots threw some doubt on whether there was a trade dispute at the relevant time. Mr Justice Geoghegan said that the question must arise whether there could be said to be a "trade dispute" within the meaning of the 2001 Act at the time of the application, given the withdrawal of the Dublin pilots from the internal procedures. Even if the answer to that question was in the affirmative, further serious questions remained to be considered as to whether there can be any jurisdiction on the part of the respondent given that, but for the withdrawal of the pilots from the internal procedures, there may have been appropriate internal procedures in place and, of course, whether in the light of that it can be said that the internal procedures failed to resolve the dispute.
Mr Justice Geoghegan said that it was not in dispute that as a matter of law the applicant/ appellant was perfectly entitled not to deal with trade unions nor could a law be passed compelling it to do so. There was an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment. With a view to curing this possible mischief, the Acts of 2001 and 2004 were enacted. Given their purpose they must be given a proportionate and constitutional interpretation so as not unreasonably to encroach on the applicant/ appellant's right to operate a non-unionised company. The three issues which the applicant/ appellant regarded as preliminary issues as to jurisdiction were; firstly that there was no trade dispute within the meaning of section 2 of the 2001 Act; secondly, that it was the practice of the applicant/appellant to engage in collective bargaining negotiations in respect of the pilots who are party to the trade dispute, if any; and thirdly, that the internal dispute resolution procedures had not failed to resolve the dispute, if any. Mr Justice Geoghegan said that with regard to the first issue, the respondent in its decision had taken the view that what it calls the "validity" of the "dispute" referred for investigation should more properly be dealt with in the course of the substantive investigation under section 5. But as the matter had been fully argued, the court went on to give its decision on the point. In the opinion of Mr Justice Geoghegan the existence of a trade dispute was a vital condition precedent to jurisdiction, and he did not agree that that question should be left to a later substantive investigation. The respondent went on to consider the definition of the term "trade dispute" in the 2001 Act. In a careful analysis of various relevant enactments it came to the conclusion that the definition of the term was to be found in section 3 of the Industrial Relations Act, 1946 which defines "trade dispute" as meaning: "any dispute or difference between employers and workers or between workers and workers connected with the employment or non-employment, or with the conditions of employment, of any person."
The respondent pointed out that this was a "broader definition" than that contained in the 1990 Act or that previously contained in the repealed Trade Disputes Act, 1906. It based that conclusion on the addition of the word "difference" to the word "dispute". It took the view that "difference" must mean something distinct from a "dispute".
Mr Justice Geoghegan said that it was common in statutes to include overlapping nouns or adjectives. The inclusion of the word "difference" was intended only to indicate the wider meaning of "trade dispute". In the definition itself both words come within the expression "trade dispute". Mr Justice Geoghegan said that the respondent in considering whether there was a "trade dispute" should have investigated whether there was internal machinery for resolving the perceived problem and whether that machinery had been exhausted.
In respect of the second issue, Mr Justice Geoghegan said that the respondent had given the words "in respect of the grade, group or category of workers who are party to the trade dispute, if any" a literal interpretation, the effect of which would be that if a category of employee. such as for instance the Dublin pilots, decided not to engage in "collective bargaining negotiations" with the applicant/ appellant, then ipso facto it could not be said to be "the practice of" the applicant/appellant "to engage in collective bargaining negotiations . . ." Mr Justice Geoghegan said that given the purpose of the legislation these words could not be given that meaning. Otherwise a category of employees could invoke the respondent simply by deciding to boycott whatever collective bargaining machinery the company had put in place. That would be a serious infringement of the right to which the Oireachtas also attached importance in the Act of 2005, as amended, of an employer to maintain its own internal negotiating machinery.
Mr Justice Geoghegan was of the view that what "practice" means therefore in this context was that the machinery was in place and not ad hoc. It did not mean that the "practice" ceased to exist if the employee unilaterally abandoned it.
Of course, it was a different question altogether as to whether the machinery established by the applicant/appellant did involve "collective bargaining negotiations" within the meaning of the Acts. The respondent's approach to this question was also incorrect. If there was machinery in the applicant/appellant company whereby the pilots may have their own independent representatives who sit around the table with applicant/appellant's representatives with a view to reaching agreement if possible, that would seem to be "collective bargaining" within an ordinary dictionary meaning.
It would seem strange if definitions peculiar to trade union negotiations were to be imposed on non-unionised companies.
The respondent had noted in its decision that it was the applicant/appellant's case that it does engage in collective bargaining with its own staff and that it claimed to do so through its Employee Representative Committees (ERCs) and through what it described as town hall meetings. However, the respondent was of the view that the town hall meetings constituted a form of consultation or information meetings and had none of the essential characteristics of collective bargaining. Mr Justice Geoghegan said that the respondent was entitled to take the view that the town hall meetings could not be considered as contributing to collective bargaining. What was important to consider, however, was how the respondent viewed the ERCs. The court was clearly told by the applicant/appellant that they were the vehicles by which it carried on collective bargaining with its staff. There was a system of election to these committees, but the Dublin pilots had withdrawn from their committees. Mr Justice Geoghegan said that as to whether the ERCs operated as a potential basis for collective bargaining negotiations or not was really the key issue to which the respondent had to determine. The procedure whereby the respondent made that determination was by reference to a number of disparate features. This was not satisfactory and was fundamentally an unfair procedure. The officers of the applicant/appellant who attended the hearing made clear their case that ERCs perform this function. If that was going to be disputed, it should have been done by sworn, or at the very least unsworn, oral evidence before the respondent from pilots working in the company.
Instead of that, the respondent based its decision that the ERCs did not provide a platform for collective bargaining on the basis of arguments made by the union and the applicant/appellant's documentation with a particular emphasis on omissions from that documentation. Mr Justice Geoghegan said that it was difficult to see how the respondent could arrive at any conclusion on this point one way or the other without hearing evidence from at least one relevant employee of the applicant/ appellant.
In respect of the third issue namely, whether internal procedures had failed to resolve the dispute, the respondent first dealt with a point of interpretation as to whether "parties" in section 2(1)(a) referred to the parties before the it, or to the parties to the trade dispute. Mr Justice Geoghegan said that the respondent was correctly satisfied that it had to relate to the parties to the trade dispute. Further, the respondent was also correct in rejecting the relevance of an internal grievance procedure as set out in a document called "the Rough Guide". However, Mr Justice Geoghegan stated that if there was no ERC for pilots but there was evidence at least that this was only because the pilots unilaterally withdrew, how could it be said if that was in fact so that the internal dispute resolution procedures failed to resolve the dispute. If they were not availed of they cannot have been a failure. On all the documentation before the court it was impossible not to draw the natural inference that the dispute (using that expression in a non-technical sense) related in the main to the terms of the pilot retraining scheme. But, it was unfair and virtually impossible for the respondent to make a determination on this issue without ascertaining what pilots were in dispute.
The respondent did not have the evidence before it on which it could conclude that the internal procedures failed to resolve the dispute. It was clear that the respondent's decision was acknowledging a special, trade union meaning to the expression "collective bargaining negotiations". Mr Justice Geoghegan said that that phrase should be given simply an ordinary meaning and not any special meaning as understood in trade union negotiations.
Mr Justice Geoghegan said that the respondent had gone on to express the view that even if it had been the practice of the applicant/appellant to engage in collective bargaining negotiations, it was no longer the case and "cannot be the case where the parties do not agree on the basis upon which they will engage with each other". Mr Justice Geoghegan disagreed with this view, and indicated that all that is required is that there be a system in place. Once that requirement is fulfilled, the fact that the category of employees may not avail of it is irrelevant.
The respondent adopted a different and incorrect approach to what it had to decide. It should have addressed its mind to whether there were in place adequate collective negotiation procedures with the applicant/ appellant. In taking the view which it did take, it would appear from the decision that the respondent was influenced by the provisions of section 6 of the Trade Union Act, 1941, as amended. This section provides that "it shall not be lawful for any body of persons, not being an excepted body, to carry on negotiations for the fixing of wages or other conditions of employment unless such body is the holder of a negotiations licence." The respondent, having cited the section, went on to observe that it must be assumed that the reference to collective bargaining negotiations in the 2001 Act was not intended to comprehend collective bargaining unlawfully conducted.
The applicant/appellant contended that the pilots as a category constituted an "excepted body". The notice party on the other hand argued that there was no excepted body representing pilots which could lawfully negotiate with the applicant/appellant. "Excepted body" is defined by section 6(3)(h) of the Trade Union Act, 1941 (as inserted by section 2 of the Trade Union Act, 1942) as a "body all the members of which are employed by the same employer and which carries on negotiations for the fixing of wages or other conditions of employment of its own members (but no other employees)". The respondent concluded that a body of persons can only be an exempted body if the employer consents to negotiate with the body. That, of course, was perfectly correct. But the court then went on to hold that "by parity of reasoning" if an employer wishes to negotiate with a group of its own staff rather than through a trade union, but the employees are unwilling to negotiate on that basis, they cannot be regarded as an excepted body. This interpretation did not follow and was incorrect. It was important to consider the purpose of section 6 of the 1941 Act, as amended. The statutory permission given to excepted bodies to negotiate by virtue of the amendment in the 1942 Act was designed to assist employees in small companies.
The 1941 Act had omitted to provide for the employee counterpart of the employer conducting negotiations in-house. It was considered desirable that employee bodies be not left exposed while employers were covered by an exception. But under the scheme of the Acts as Fennelly J. pointed out in the case of Iarnród Éireann v Holbrooke 1 IR 237 "the activity is implicitly consensual".
The purpose of the 1942 amendment was to deal with a situation where both employer and employees in a small firm wanted to negotiate terms and conditions in a situation where the employees would not be acting illegally for not having a negotiation licence under the 1941 Act.
Mr Justice Geoghegan said that this element of consensus was not in any way of the essence of the legislation with which the instant appeal was primarily concerned. What was required under these statutory provisions was that the employer has in place an appropriate system.
Mr Justice Geoghegan said that the interpretation which the court would place on the legislation to the effect that the employer must have in place an appropriate internal system of collective negotiations was not admittedly a literal interpretation. In fairness to the respondent it was the normal rule that legislation must be interpreted according to the words used, but if a literal interpretation would potentially destroy the whole purpose of the legislation as would be the case here then it was appropriate that a purposive interpretation be applied. The respondent did not adopt fair procedures by permitting complete non-disclosure of the identity of the persons on whose behalf the union was purporting to be acting. There was a second and equally important element of unfair procedure.
Two senior management figures in the applicant/appellant company appeared at the hearing and made submissions which were, in effect, unsworn evidence and accepted as such by the respondent. It would appear that they maintained at all stages that appropriate procedures were in place. That may or may not be true, but the respondent was not entitled to disbelieve that evidence in the absence of hearing evidence from at least one relevant pilot who was an employee of the applicant/appellant.
Otherwise it was impossible to challenge the views put forward by the union which could only be characterised as opinion. The respondent decided the issue against the applicant/appellant to a large extent on foot of omissions in its documentation, and on foot of a view put forward by the union that the ERCs were consultative bodies only. This was not a fair procedure.
Mr Justice Geoghegan said that the respondent was incorrect for the reasons given in its interpretation of the words "the practice of the employer to engage in collective bargaining negotiations" and also in its conclusion that "the internal dispute resolution of procedures" had necessarily "failed to resolve the dispute". The appeal would be allowed and the decision of the respondent would be quashed and a rehearing would be ordered by the respondent in which it would apply the procedures and the law as indicated in this judgment.
Mr Justice Fennelly fully agreed with the judgment delivered by Mr Justice Geoghegan and was of the opinion that the respondent had misunderstood part of the reasoning in his judgment in Iarnród Éireann v Holbrooke 1 IR 237. Mr Justice Fennelly said that the respondent used the unwillingness of those pilots who are members of IALPA to negotiate directly, in order to reach the conclusion that it would be unlawful for the applicant/appellant "to engage in collective bargaining negotiations . . ." It does so in reliance on the pilots' wish to be represented by a trade union, when the applicant/appellant's acknowledged policy is not to negotiate with a trade union. The essential step in the reasoning is the statement that the pilots "could not be realistically described as members of an excepted body."
But the question before the respondent was whether it was the practice of the applicant/ appellant to engage in collective bargaining. Mr Justice Fennelly said that the conclusion of the respondent would implicitly oblige the company to negotiate with a trade union. Even though it says it is willing to engage in collective bargaining, it is said that it could not lawfully do so, because the employees do not consent.
Mr Justice Fennelly said that the case of Iarnród Éireann v Holbrooke involved an attempt by a group of employees to compel their employer to negotiate with them and/or a trade union which did not have a negotiating licence. The employer refused.
In the present case, the employer had refused to negotiate with a trade union but maintains that it is willing to negotiate with the employees.
The Chief Justice, Mr Justice Murray, Mrs Justice Denham and Mr Justice Hardiman concurred with the judgments of Mr Justice Geoghegan and Mr Justice Fennelly.
Solicitors: BCM Hanby Wallace (Dublin ) for applicant/ appellant; Chief State Solicitor for Labour Court; Darach Coneely for notice party.
Elaine Fahey, barrister