The Ryanair ruling is likely to have significant implications for the conduct of Irish industrial relations, writes Michael Doherty
The Ryanair case centred on the interpretation of the Industrial Relations (Amendment) Act 2001, which arose from the social partnership agreement, Partnership 2000, when a high-level group comprising trade union and employer representatives was set up to examine trade union recognition.
Under the Act, an employer may be compelled to grant union representatives the right to represent unionised employees on workplace issues relating to pay, and terms and conditions of employment. The Labour Court can make a determination with regard to these matters, and to dispute resolution and disciplinary procedures, in the employment concerned but cannot provide for arrangements for collective bargaining.
The dispute in the Ryanair case began in summer 2004 when Ryanair began the conversion of its Dublin fleet. This involved retraining for some 90 pilots, who were told they could either pay €15,000 for the training or sign a bond abandoning their entitlement to raise matters with the Labour Court. A number of the pilots, members of the Irish Airline Pilots' Association (a branch of Impact), sought to have the union negotiate with Ryanair about these, and other issues, on their behalf. Ryanair refused to negotiate with the union. In January 2005, the Labour Court determined that a "trade dispute" existed between the company and the union and this was upheld by the High Court the following October. Ryanair appealed the decision to the Supreme Court.
The Supreme Court found for the company on two key issues. Ryanair had argued that the Labour Court failed to give sufficient consideration as to whether the dispute was "genuine". The company argued that it did engage in collective bargaining with its own staff through its employee representative committees and what it described as "town hall meetings". The Supreme Court held that the Labour Court, in deciding that the "town hall meetings" were actually just consultation or information meetings, had not adequately evaluated the "in house" procedures.
Secondly, the company had complained vehemently that, while oral evidence was given by witnesses on behalf of Ryanair, no employee gave evidence and, indeed, none of the pilots involved was at any stage identified. The Supreme Court found this to be a breach of fair procedures and ordered a full rehearing of the matter in the Labour Court with something akin to full court procedures to be followed.
Ryanair has reacted ebulliently to the ruling, saying it recognises that union recognition cannot be imposed on "high-pay multinationals" and that the legislation was never intended for pilots "on over €100,000 a year" but for low-paid workers. This, much like the airline's service to "Paris", gets some, but not all, of the way to the reality.
At the heart of the airline's case is the view that the legislation is an attempt to bring in trade union recognition by the back door. This reflects suggestions that the legislation is forcing multinational companies to consider trade union recognition as a key issue when deciding whether or not to make further investments in Ireland and that the prospect of having their pay structures and conditions of employment scrutinised by the Labour Court is alarming multinational employers.
In fact, the majority of cases that have been brought under the legislation have involved trade unions targeting relatively low-paying, unionised indigenous firms. The Labour Court's determinations to date have tended to focus on instances where the court is of the view that the terms and conditions of employment are significantly out of line with appropriate standards. This was seen in the high-profile case involving Ashford Castle, where the Labour Court instructed Ashford Castle Hotel to apply average pay increases of 15 per cent to 20 per cent. The High Court, in upholding the ruling, noted that other "comparable hotels" seemed to be able to maintain financial viability while paying rates of pay comparable to those which were recommended in respect of Ashford Castle.
By contrast, in a case involving GE Healthcare (a Cork-based subsidiary of a US-owned multinational) the company successfully defended a claim under the Act by demonstrating that its terms and conditions were in line with other companies in the sector. This decision seemed to imply that "high-pay multinationals" had little to fear from the legislation if they were acting in accordance with industry norms.
Impact has described the Ryanair ruling as "no more than a temporary setback" but privately the union movement will have grave concerns about its implications.
Firstly, this ruling will make it more difficult to successfully pursue claims under the Act. The requirement for more formal court procedures to be followed will mean more lawyers, which, inevitably, means more delays and more costs. The cash-strapped union movement may find it difficult to take on the legal firepower of the "high-pay" multinationals (or the "low-pay" indigenous firms!) on these terms. The fact that employees may now be compelled to give evidence in such cases also means that many are likely to be discouraged from pursuing such action, particularly if their employer displays a Ryanair-like aversion to trade unions.
Secondly, what of previous decisions under the Act? The likes of Ashford Castle Hotel may now be in a strong position to argue similar breaches of fair procedures in respect of their cases.
More broadly, what of the future of the Labour Court, which has traditionally been valued precisely because its procedures and operation are less formal and more flexible than the traditional courts? The latter have long been deferential to the Labour Court, acknowledging, as Mr Justice Frank Clarke did in the Ashford Castle case, that it has an expertise in industrial relations matters not shared by other judicial bodies.
Finally, what implications might the decision have for the future of social partnership? The 2001 Act was intended to address the concern of the trade union movement about declining union penetration, particularly in the private sector.
If the Ryanair decision has the effect of emasculating the Act, will the unions have to reconsider the advantage of being "partners" in a process that has failed to deliver even the basic right for members to be represented at the workplace?
• Michael Dohertyis a law lecturer in DCU specialising in employment law