DECP051

Preliminary Issues:

Ryanair contended that the Court lacked jurisdiction to investigate this dispute on three grounds, namely:

1. That there was no trade dispute within the meaning of Section 2 of the Act which the Court could investigate,

2. That it was the practice of the employer to engage in collective bargaining negotiations in respect of the grade, group or category of workers who are party to the trade dispute, if any.

3. That the internal dispute resolution procedures had not failed to resolve the dispute.

Existence of a Trade Dispute

Counsel for Ryanair submitted that no bona fide trade dispute existed between it and the applicant union. It was submitted that this referral was part of the strategy of the union to compel union recognition.

Section 3 of the Act provides for a preliminary hearing for the purpose of determining if the requirements specified at Section 2 have been met. Section 2 provides:

2.-(1) Notwithstanding anything contained in the Industrial Relations Acts, 1946 to 1990, at the request of a trade union or excepted body, the Court may investigate a trade dispute where the Court is satisfied that –

• (a) it is not the practice of the employer to engage in collective bargaining negotiations in respect of the grade, group or category of workers who are party to the trade dispute and the internal dispute resolution procedures (if any) normally used by the parties concerned have failed to resolve this dispute,
  
  (b) either –

• (I) a provision of the Code of Practice on Voluntary Dispute Resolution under Section 42 of the Industrial Relations Act 1990 specifying the period of time for the doing of any thing (or such a provision of any code of practice amending or replacing that code), or
  • (II) any agreement by the parties extending that period of time,

• • • • 
        (ii) the dispute having been referred to the Commission for resolution in accordance with the provisions of such code, no further efforts on the part of the Commission will, in the opinion of the Commission, advance the resolution of the dispute and the Court has received a report from the Commission to that effect,
    
    (c) the trade union or the excepted body or the employees, as the case may be, have not acted in a manner which, in the opinion of the Court, has frustrated the employer in observing a provision of such code of practice, and

• • (d) the trade union or the excepted body or the employees, as the case may be, have not had recourse to industrial action after the dispute in question was referred to the Commission in accordance with the provisions of such code of practice.

• • the expression "trade dispute" means any dispute or difference between employers and workers or between workers and workers connected with the employment or non-employment, or the terms of the employment, or with the conditions of employment, of any person;
    

Conditions Specified in Section 2(1)(a) of the Act

Section 2(1)(a) provides that the jurisdiction of the Court to investigate a trade dispute under the Act is contingent upon it not being the practice of the employer to engage in collective bargaining negotiations in respect of the grade, group or category of employees who are party to the trade dispute and that the internal dispute procedures (if any) normally used by the parties concerned have failed to resolve the dispute. The use of the wordpractice, in the first limb of this requirement, suggests that the employer must normally or routinely engage in collective bargaining in respect of the relevant grade, group or category of employees or their representatives.

Ryanair submitted that while it does not engage with trade unions it does engage in extensive collective bargaining with its employees and employee representatives. The Union contends that at best Ryanair consults with its staff but that it does not engage in collective bargaining as that term is understood. It is, therefore, necessary for the Court to determine if the form of engagement, if any, which Ryanair has in respect of the group of employees who are party to the trade dispute forming the subject matter of this application constitutes collective bargaining within the meaning of the Act.

High Level Group on the Right to Bargain.

As was pointed out by the Court in DeterminationDECP032 – Ashford Castle and SIPTU [2004] 15 ELR 214(the Ashford Castle case), it is generally recognised that the Act was enacted to give effect to the report of the High Level group on Trade Union Recognition and the Right to Bargain established under the Partnership 2000 Agreement. This group, comprising representatives of IBEC, ICTU, the development agencies and Government, was established to consider proposals made by ICTU in relation to trade union recognition and the determination of pay and conditions of employment in non-unionised employments.

In its report, published in 1999, the High Level Group endorsed the essentially voluntarist nature of the Irish industrial relations system. They nonetheless recognised the need for new measures to afford additional support to employees where there are no arrangements for independent negotiation on pay and conditions of employment. The measures recommended by the group, from which the Act is derived, were intended to apply only where arrangement for collective bargaining negotiations, through which the issues in dispute could be processed, are not in place. This appears to have been accepted by Ryanair. Having quoted from the speech of the Minister for State at the Department of Enterprise Trade and Employment in introducing the second stage of the Industrial Relations (Amendment) Bill 2001in the Seanad (30th May 2000), the Company’s submission to the Court (at paragraph 21), stated:

• • “Thus it was the intention of the Oireachtas that the Labour Courts jurisdiction would only be invoked where collective bargaining arrangements were not in place and the parties are not engaged in talks. This is not the case in relation to Ryanair”

Trade Union Recognition

Counsel for Ryanair made extensive submissions to the effect that the Act cannot be used to enforce trade union recognition against an employer, such as Ryanair, who does not wish to negotiate with trade unions. The Court readily accepts that these submissions are correct. It is abundantly clear from the legislative history of the Act and from its terms overall that it was not intended to provide for trade union recognition (in the sense that an employer will recognise the union as the collective representative of its workforce) and that it cannot be used to force employers to engage in collective bargaining with trade unions against their will.

It does, however, provide a measure of protection to employees in employments where pay and conditions are not freely determined by collective bargaining. As the Court has previously pointed out, such protection is only required and the intervention of the Court justified, where it can be demonstrated that pay or conditions of employment are out of line with accepted standards.(seeRecommendation LCR18013 - GE Healthcare and SIPTU ). The existence of circumstances justifying a Court intervention cannot be established in a preliminary investigation under Section 3 but only in a substantive investigation under Section 5.

Significantly, however, nowhere in the Act does it refers to trade union recognition. The effect of precluding the Court from affording trade union recognition, as that term is generally understood, is achieved by the provisions of Section 5 (2) and Section 6(2) which prohibit the Court from providing for arrangements for collective bargaining in either its recommendations or its determinations. Thus, it would appear, the framers of the statute understood the expression collective bargaining negotiations as referring to the mode of negotiation on pay and conditions of employment normally conducted between employers and trade unions, although it can, of course, be conducted with an excepted body within the meaning of Section 6 of the Trade Union Act 1941, as amended.

Collective Bargaining Negotiations

The expression “collective bargaining negotiations” is not defined by the Act or by the other Industrial Relations Acts with which it must be read in conjunction. Its meaning was, however, extensively considered by this Court in the Ashford Castle case. Here the Court stated as follows:

• • “A central question which arises for consideration is the meaning of the term "Collective Bargaining Negotiations" as it appears in the subsection. The expression is not defined in the legislation nor is it defined in any other Irish industrial relations statute of which the Court is aware. It is not a legal term of art but it is a commonly used term in the conduct of industrial relations. In the absence of any statutory definition of the term the Court must assign to the expression the meaning which it would normally bear in an industrial relations context.
    
    Collective bargaining comprehends more than mere negotiation or consultation on individual employment related issues including the processing of individual grievances in relation to pay or conditions of employment. In the industrial relations context in which the term is commonly used it connotes a process by which employers or their representatives negotiate with representatives of a group or body of workers for the purpose of concluding a collective agreement fixing the pay and other conditions of employment applicable to the group or collective of workers on whose behalf the negotiations are conducted.
    
    Normally the process is characterised by the involvement of a trade union representing workers but it may also be conducted by a staff association which is an excepted body within the meaning of the Trade Union Act 1941, as amended. However, an essential characteristic of collective bargaining, properly so called, is that it is conducted between parties of equal standing who are independent in the sense that one is not controlled by the other.

Collective Bargaining and Ryanair

It is Ryanair’s case that it does engage in collective bargaining with its own staff. It claims to do so through its Employee Representative Committees (ERCs) and through what are described as town hall meetings.

With regard to the town hall meetings, the Court is satisfied that, as they were described to the Court, they constitute a form of consultation or information meetings and have none of the essential characteristics of collective bargaining.

ERCs

These committees are employee/management fora at which employment related issues can be discussed. Ryanair claims that they are the vehicles through which it carries on collective bargaining with its staff. Other than in its submission to the Court, there is nothing in any Ryanair publication seen by the Court to indicate that the ERCs are a collective bargaining forum. In its annual report for 2004, the ERCs are described as“forum which ensure that all department representatives can consult on current issues”. In a recent undated circular from Ryanair to its staff in relation to a pay increase it is stated, “In recent months we have consulted with all employee groups through ERC and Town Hall meetings”.In a further memo from David O’Brien of Ryanair dated 1st April, 2004, it is stated in relation to lost licence insurance for pilots“I plan to meet all the ERCs shortly, once we have completed the series of town hall meetings in the next week. Kevin Osborne will attend the ERC meetings to address any questions in relation to the terms of this new policy …..”

In its submission to the Court, the Union drew attention to Ryanair’s 20F filing to the Securities and Exchange Commission in the US, which contains the following statement:

• • “Although Ryanair currently consults with groups of employees, including pilots, through “Employee Representative Committees” regarding work practices and conditions of employment, it does not conduct formal binding negotiations with collective bargaining units, as is the case with many other airlines.”

• • “Dublin Airport, Ryanair’s main base of operation, is highly unionised. Although Ryanair currently consults with groups of employees in particular categories regarding work practices and conditions of employment, it does not conduct formal binding negotiations with collective bargaining units, as is the case with many other airlines”
    

• • “Your starting salary is stated in your Contract of Employment. You will be notified, in writing, of any change in your salary. The first review of your salary will take place when you have successfully completed your probation. A review means a review, not necessarily more money, ……… Salaries are reviewed in Ryanair in April of each year……”

Engagement with Pilots

From the information provided to the Court it is clear that the formal position of Ryanair is that it has never negotiated with a trade union, including IALPA. The factual position appears to be somewhat more ambiguous.

In its submission to the Court, Ryanair quoted from a report into a dispute in which it was involved in 1998. In this report, by Philip Flynn and D.J. McAuley (the Flynn – McAuley report), commissioned by the Minister for Enterprise Trade and Employment pursuant to section 38(2) of the Industrial Relations Act 1990, the following passage appears:

• • “In relation to the determination of pay and conditions of employment of Ryanair pilots, Ryanair communicates with the elected committee of Ryanair pilots. A pilot can only vote in elections to the committee if the pilot is an IALPA member, therefore only IALPA members are on the pilots committee and the election is conducted in accordance with IALPA Rules”.

• • “they have negotiated a number of agreements with the Ryanair Local Group. Well established arrangements for collective bargaining with IALPA Ryanair Local Group have been found to operate in a satisfactory manner by our members in that company. These include procedures for the resolution of grievances and conditions and standards of hotel accommodation. Indeed it is worth noting that the company included a reference to the fact that it had a five year comprehensive agreement with their pilots in their floatation prospectus. The company’s initial proposals had been rejected in a ballot of IALPA members on the 27th March 1997. The company made some further changes to the proposal, when re-balloted the pilots voted in favour of the proposal.”

Having considered all of the information placed before it, the Court is satisfied, on the balance of probabilities, that whilst Ryanair communicates and consults with employees, including Pilots in relation to their pay and conditions of employment, it is not its practice to engage in collective bargaining negotiations as the Court understands that expression. The Court has also found that there are no operative internal dispute resolution procedures. The Court is also satisfied that the other conditions specified at section 2(1) have been met.

That finding is sufficient to dispose of the preliminary point under investigation in the applicant’s favour. Nonetheless, for the sake of completeness and for the purpose of clarity, the Court considers it appropriate to deal with other matters which were addressed by the parties in the course of the hearing.

In the Court’s view, the clear purpose of the first limb of section 2(1)(a) of the Act is to provide that if a trade dispute which is the subject of a referral under the Act can be resolved by collective bargaining negotiations between the parties to the dispute, that course should be adopted in preference to an investigation pursuant to section 5 of the Act. Hence the section requires the Court to satisfy itself that itisnot the practice of the employer to engage in collective bargaining negotiations. In the instant case, even if it was the practice of Ryanair to engage in collective bargaining in the past (and the Court is not satisfied that it was) that is 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.

The collective bargaining negotiations to which section 2(1)(a) refers must be in respect of the grade, group or category of employees who are party to the trade dispute. The words grade, group and category must each mean something different otherwise the provision would be a tautology. In its submissions IALPA told the Court that the pilots whom it represents wish to negotiate with the professional assistance of that Union and not otherwise (and there is nothing before the Court which could indicate that IALPA is not faithfully representing the views of its members in that regard). Pilots as a body are clearly a category of employees. But those who wish to be represented by IALPA and are associated with the claims forming the subject matter of the dispute referred to the Court are undoubtedly a group within that category. The only body which this group has authorised to represent them in collective bargaining negotiations is IALPA.

Ryanair, as is its right, will not negotiate with IALPA. It seems axiomatic that if Ryanair does not recognise the only body which the group of employees who are party to the trade dispute wish to represent them, it could not be its practice to engage in collective bargaining negotiations in respect of that group.

This point is of particular significance arising from the provisions of Section 6 of the Trade Union Act 1941, in respect of which both parties made comprehensive submissions.

The relevant provision is as follows:

• • 6.—(1) 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 negotiation licence.

• • “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)”

• • “At this point it is important to note that the definition of an excepted body is one which ‘carries on negotiations for fixing wages …’ (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. No argument based on this point was advanced by the respondents, though it was raised by the court during the hearing. The court must, nonetheless, interpret the statute in what it conceives to be the manner required by law and cannot adopt an erroneous interpretation because none of the parties relies upon the correct one.

• • As I see it, the issue is whether a body can claim that it ‘carries on negotiations’ (noting the use of the present tense), where patently it does not and cannot do so because the employer refuses to negotiate.”

Hence, even if the Court is wrong in its main conclusion and it is the practice of Ryanair to engage in collective bargaining negotiations with an excepted body of pilots, it would hold that any such body could not lawfully do so in respect of the group of pilots who are party to the instant dispute. The Court would also hold with the applicants on this aspect of the preliminary issue.

Decision

For all of the reasons set out herein, the Court is satisfied that the requirements specified in Section 2(1)(a) of the Act have been met. Accordingly, the Court will proceed to investigate the substantive dispute.





Signed on behalf of the Labour Court



Kevin Duffy
25th January, 2005______________________
CONChairman



NOTE

Enquiries concerning this Decision should be addressed to Ciaran O'Neill, Court Secretary.