FULL RECOMMENDATION
AN CHUIRT OIBREACHAIS THE LABOURCOURT INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 32, INDUSTRIAL RELATIONS ACT, 1946 PARTIES : AL READ ELECTRICAL LIMITED (REPRESENTED BY M. O'LEARY & COMPANY, SOLICITORS) - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Breach of the Electrical Contracting Industry Registered Employment Agreement on Pensions, Assurance and Sick Pay.
BACKGROUND:
2. The dispute concerns a complaint by the Union on behalf of one employee that the Company was in breach of Rules 23, 17, 2 and 6 of the Electrical Contracting Industry Registered Employment Agreement (R.E.A.). The Union claims that the Company failed to enrol the employee in the Construction Industry Federation (C.I.F.) Pension and Mortality Scheme, and that it failed to pay him the correct rate of pay, a meal allowance and travelling time.
The Union referred the issue to the Labour Court on the 22nd of August, 1997, under Section 32 of the Industrial Relations Act, 1946. The Court investigated the dispute on the 20th of February, 1998, the 1st of February, 1999, and the 17th of January, 2000. Both parties made written and oral submissions and furnished independent legal opinions to the Court.
UNION'S ARGUMENTS:
3. 1. Pension Scheme: The worker should have been enrolled in the C.I.F. Pension and Mortality Scheme from the date of his 20th birthday. The Company has not complied with this requirement.
2. Pay: The complaint refers to the period from April, 1995, to the end of July, 1996. The worker was a fourth year apprentice to the end of March, 1996, and was entitled to be paid 80% of the electricians' basic rate. He then became entitled to the full rate. The total amount of pay due to him is £800.22.
3. Travelling Time: The worker was never paid travelling time. In accordance with Rule 6 he should have received at least one hour per day for 0 - 4 miles, which would amount to £3299.36 from 1993 to 1996.
4. Meal Allowance: From January, 1993, to July, 1994, the meal allowance was £1.65 per day; from July, 1994, to December, 1994, it was £2.35 per day; from January, 1995, to June, 1996, it was £2.00 per day and from July, 1996, it was £1.00 per day. The worker is claiming a total of £1455.05 for meal allowance.
COMPANY'S ARGUMENTS:
4. 1. Pension Scheme: The Company was unaware that membership of the C.I.F. Pension Scheme was mandatory and operated a separate pension scheme. The Company's scheme did not cover sick pay, but paid a Death-in-Service benefit which was considerably higher than that of the C.I.F. Scheme. The Company, when made aware of its obligations, has now enrolled its existing employees in the C.I.F. Scheme and is prepared to make contributions on behalf of the claimant.
2. Pay: The Company was unaware of the existence of the Registered Employment Agreement. It is not a member of the E.C.A. or A.E.C. Ireland. FAS pressurised the Company to employ the worker concerned and at the end of his apprenticeship the Company reluctantly agreed to employ him on a temporary basis at an agreed rate.
3. Travelling Time: The Company is not aware of any breach of Clause 6 of the R.E.A.. All employees commence work at the Company's depot each day and are then transported in company vehicles, during company time, to various site locations and are returned to the depot before finishing time each evening.
4. Meal Allowance: The Company is not aware of any breach of Clause 17 of the Agreement. However, the Company is agreeable to pay whatever amount the Court determines is due.
ORDER:
This claim came before the Court by way of a complaint by the Technical Engineering and Electrical Union ("the Union") made pursuant to Section 32(1) of the Industrial Relations Act, 1946.
It is alleged that Al Read Electrical Limited ("the Employer") failed or neglected to comply with the Registered Employment Agreement (Electrical Contracting Industry) as varied by Order of this Court on the 11th of November, 1996. In substance, the Union's complaint is that a named employee of the Employer was paid at a rate less than that specified in the Agreement in terms of basic pay and allowances. It is also claimed that the named employee was not entered in an approved pension scheme, as is required by the Agreement.
The Agreement in question was made between the Electrical Contractors Association, the Association of Electrical Contractors (Ireland) and the Technical Engineering and Electrical Union. It was first registered in the Register of Employment Agreements on the 24th of September, 1990. The Agreement was negotiated between the parties to the Agreement through the National Joint Industrial Council for the Electrical Contracting Industry (NJIC). The Employer is not a member of either Association which is party to the Agreement.
The Agreement was first registered in accordance with Section 27 of the 1946 Act on the 24th of September, 1990. The Agreement was subsequently varied on a number of occasions in accordance with Section 28 of that Act. The third such variation prescribed the rates of pay and other conditions of employment, which form the subject matter of the Union's complaint.
The effective date of the order of the Court varying the Agreement for the third time is shown on its face as being the 11th of November, 1996. In the body of the Agreement as so varied, adjustments in the rates of pay and allowances now in contention are expressed to apply with effect from various dates between the 1st of July, 1994 and the 1st of July, 1996. The complaint herein relates to the period between April, 1995 and July, 1996.
In the course of the hearing into the complaint it emerged that there were two net issues for determination by the Court:
1. Can the Agreement be applied retrospectively, for the purposes of Section 32(1) of the 1946 Act, so as to encompass the period covered by the Union's complaint?
2. Can the wording of Rule 6 of the Agreement be interpreted as providing an entitlement to Travelling Time in the case of an employee who starts and finishes work at the employer's shop rather than a site?
Industrial Relations Considerations
The Union is seeking the application to its member of rates of pay, allowances and conditions of employment, which were negotiated and agreed through the NJIC.
The established system of pay determination for the electrical contracting industry is that agreements concluded by the NJIC are accepted as providing the appropriate standard rates of pay and other conditions of employment applicable to electricians and their apprentices in the industry. This is a fair and orderly system of pay determination, which brings considerable advantages to workers and employers alike.
The system is particularly appropriate in this industry. It is comprised of a large number of individual employers who generally compete between each other for contracts. The industry is labour intensive and any variation in labour costs as between companies would distort their competitive position.
The requirements of orderly industrial relations dictate that all employers should accept and implement the outcome of negotiations conducted through the NJIC. However, the dispute is not before the Court as an industrial relations dispute. It is a referral by way of a complaint pursuant to Section 32(1) of the 1946 Act. In exercising its jurisdiction under that Section the Court may not determine the complaint solely on the basis of what constitutes good industrial relations practice. It is required to apply the relevant provisions of the Industrial Relations Act 1946 - 1990 as it finds them.
It is on that basis that the Court has reached the conclusions and the determination which follows.
Determination of the Court
Retrospection
In relation to the variation of a Registered Employment Agreement, Section 28(2)(c) of the 1946 Act provides as follows:
"If the Court makes an order varying the agreement, the agreement shall, as from such date not being earlier than the date of the order as the Court specifies in the order, have effect as so varied"
On its plain and ordinary meaning, the wording of this provision appears to preclude the giving of retrospective effect to a variation order beyond the effective date shown on the face of the order. The Union does not accept that the provision should be so construed. They contend that the overall scheme of the Act is to give retrospective legal effect to the Agreement as varied.
They point out that Section 32(1) of the 1946 Act requires the Court to determine whether in the terms of the Section"any employer of any class to which the agreement relates has failed or neglected to comply with the agreement".This, they say, involves an interpretation of the Agreement, which in this case clearly provides for retrospection.
The Employer takes the opposite view. They say that by Section 28(2)(c) of the 1946 Act, variations of Registered Employment Agreements are expressly prohibited from having retrospective effect. They also argue that the 1946 Act provides a statutory modification to the common law position whereby agreements are binding only on those who are party to the agreement. In these circumstances, they say that there is a presumption against retrospective effect, which is not rebutted.
The Effect of Registration
In considering this question it is necessary to examine the legal effect of registering an employment agreement pursuant to Section 27 of the 1946 Act. Normally, an industrial relations agreement would not have legal effect unless the parties thereto intended to create legal relations. Even then it could only apply as between the parties themselves.
Section 30(1) of the 1946 Act provides, in effect, that on being registered the terms of such agreements bind all workers and employers of the class to which they are expressed to apply whether or not they are party to the Agreement. Moreover, Section 32 of the Act provides a statutory mechanism by which the terms of the Agreement can be enforced. This can ultimately include a criminal sanction in the case of failure to comply with an Order of the Court directing compliance with the Agreement (Section 32(4) of the 1946 Act).
The position was taken further by Section 10(3) of the Industrial Relations Act, 1969, as amended by Section 4 of the Industrial Relations Act, 1990. This renders a person affected by a Registered Employment Agreement criminally liable for any failure to comply with its terms.
What emerges from these statutory provisions is that on being registered by the Court, an employment agreement operates, not just as an agreement between contracting parties, but as a regulation, binding all those to whom it is expressed to relate and carrying criminal sanctions for any breach.
It is a long standing principle of statutory interpretation that statutes will not be given retrospective effect unless this is precisely shown to have been the intention of the legislature. By extension, any regulation or order made pursuant to a statute should likewise be presumed to apply prospectively.
In the Court's view the wording of Section 28(2)(c) of the 1946 Act does not give retrospective effect to the Registered Employment Agreement as varied. The Section clearly provides that the Agreement shall have effect as varied from a date being not earlier than the date of the variation order made by the Court. In the present case that date is the 11th of November, 1996.
In relation to the present case the following principles emerge:
1. The Agreement negotiated between the parties at the National Joint Industrial Council for the Electrical Contracting Industry is a valid industrial relations agreement, which as a matter of good industrial relations practice should be observed and applied.
2. The legally binding obligation imposed on the Employer by the Industrial Relations Acts 1946 - 1990, to meet the terms of the Agreement which form the subject matter of this complaint, can only apply from the date of the variation order by which they were incorporated into the Registered Agreement.
Travelling Time
The second issue for determination by the Court relates to an interpretation of Rule 6 of the Registered Employment Agreement.
This Rule provides as follows:
"Within a distance of 11 miles by road from the shop, men may be required to start and finish on site instead of from shop, hours to be in accordance with Rule 1. In such cases the following shall be paid:-..."(The rates applicable are then provided).
It is accepted that the employee to whom this complaint relates started and finished at the Employer's shop. On this basis the Employer contends that the payments provided by the Agreement do not apply to him. The Union argues that the parties to the Agreement intended that a minimum payment of one hour's pay per day would apply in such circumstances.
In support of its contention, the Union submitted to the Court after the hearing, a copy of a letter dated the 7th of September, 1983, from the then Chairman of the NJIC to Dublin Corporation, which confirmed that while the Rule in question is unspecific, the practice is that all electricians/apprentices receive the payments set out in the Rule.
The Court accepts that this may well be the custom and practice. The letter in question was written before the Agreement was registered under the Act. It is surprising that the Agreement as registered did not incorporate what was then understood to be the practice.
In any event, it is only the Agreement as registered which can be enforced by the Court. As a legally binding instrument, the Agreement must be applied in accordance with the wording contained therein, unless the Agreement itself indicates otherwise.
The language of the Rule is clear. The payments prescribed apply only to employees who start and finish on a site, rather than at the employer's shop. In this case the employee started and finished work at the Employer's shop. To give the Rule in question the meaning contended for by the Union would amount to an amendment of the Agreement by the Court. For this reason the Court must hold that the Employer is not bound by Section 30 of the 1946 Act to make the travelling time payments claimed.
The Court has also noted a Decision reached by a previous division in giving its interpretation of this Clause in Interpretation No. INT391, dated the 1st of December, 1992, under Section 33(1) of the Industrial Relations Act, 1946. In that case the Court interpreted the Agreement as meaning that travelling time applies only to those workers who are required to start work on site as opposed to the contractor's shop.
In light of the foregoing, the Court makes the following Determination:
1. The complaint that the Employer failed or neglected to comply with the Agreement as varied for the third time, during the period April 1995 and July 1996, is not well founded.
2. The complaint that the Employer failed or neglected to comply with Rule 6 of the Agreement is not well founded.
It is noted that the Employer has accepted that they are liable to include the employee in the industry Pension Assurance and Sick Pay Scheme. It is also noted that various other payments are due to the employee under the Agreement, which are not in contention. The Court expects the parties to agree the amounts due. In the absence of agreement between the parties the Court will make an order in respect of these matters on the application of either party and having received further submissions.
Signed on behalf of the Labour Court
Kevin Duffy
17th February, 2000______________________
D.G./D.T.Deputy Chairman
NOTE
Enquiries concerning this Order should be addressed to Dympna Greene, Court Secretary.