FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 32, INDUSTRIAL RELATIONS ACT, 1946 PARTIES : NORESIDE CEILINGS & PARTITIONS LTD (REPRESENTED BY COGHLAN KELLY, SOLICITORS) - AND - OPERATIVES PLASTERERS' AND ALLIED TRADES SOCIETY DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr Nash |
1. Alleged breach of the Construction Industry Registered Employment Agreement - Pensions Assurance and Sick Pay.
BACKGROUND:
2. The case before the Court concerns an application by the Operatives Plasterers' and Allied Trades Union on behalf of two employees of the Company in respect of the alleged failure of the Company to comply with the provisions of the Registered Employment Agreement (REA), (Construction Industry Pensions Assurance and Sick Pay). The Union contends that the two employees in question are covered by the said Registered Employment Agreement.
The Company is seeking a direction from the Court as to whether or not the REA applies in the case of these particular workers.
The Company stated that it is in the business of erecting partition walls and suspended ceilings. This involves construction of metal frames for partition walls and inserting plasterboard into those frames.The second part of their business involves installing suspended ceilings on metal grids.
The Employer maintains that the work done by the employees in this particular case is not covered by any of the gradings in the Construction Operatives- Skills and Responsibility ranking and that therefore the employees are not Construction Workers within the meaning of the Registered Employment Agreement.
The Union referred the matter to the Labour Court on the 26th June 2006 in accordance with Section 32 of the Industrial Relations Acr,1946. A Court hearing took place on the 31st October, 2007.
DECISION:
The issue for consideration in this case concerns the scope of the Registered Employment Agreement (Construction Industry Pensions Assurance and Sick Pay), (the REA), as varied. It arises in the context of a complaint by the OPATSI (the Complainant) made pursuant to S32 of the Industrial Relations Act 1946 against Noreside Ceilings & Partitions Limited (the Respondent).
The Court heard submissions from both sides. The Respondent's legal representative submitted to the Court that the Registered Employment Agreement does not apply to its employees, as they are not workers covered under the heading "Class of Workers To Whom This Agreement Applies". The classification given by the Respondent to the two named employees concerned with the claim was described as "Metal Stud Fixers". She accepted that the Respondent comes within the scope of the agreement as covered by the First Schedule to the Agreement, which defines a "building firm".
The complainant Union submitted to the Court that the Respondent's employees come within the definition of the classes of workers covered by the Agreement. It stated that the work undertaken by the employees concerned is regarded by the Union as work normally carried out by plasterers and consequently comes within the definition of "craftsmen" under the Agreement.
The REA is expressed to apply to workers in prescribed categories who are employed by a building or civil engineering firm. Since the Respondent's workers are not specifically mentioned in the Agreement, it contended that the REA has no application to them.
It is clear from S28 of the Act that the REA is an employment agreement or a collective agreement as it would be more properly described in modern terms. It was made between the CIF (which is a Trade Union of employers in the Construction Industry) and a number of named Trade Unions of workers. By operation of S30 of the Act the terms of the REA are incorporated into the individual contracts of employment of workers to whom they relate.
The primary arbitral role in the interpretation of Registered Employment Agreements has been assigned to this Court by S33 of the Act. This Section provides:-
- (1) The Court may at any time, on application of any person, give its decision on any question as to the interpretation of a Registered Employment Agreement or its application to a particular person.
(2) A Court of Law, in determining any question arising in proceedings before it as to the interpretation of a Registered Employment Agreement or its application to a particular person, shall have regard to any decision of the Court on the said agreement referred to it in the course of the proceedings.
(3) If any question arises in proceedings before a Court of Law as to the interpretation of a Registered Employment Agreement or its application to a particular person, the Court of Law may, if it thinks proper, refer the question to the Court for its decision, and the decision of the Court thereon shall be final.
The Legal Principles Applicable
The issue of the scope of the Agreement was considered by the Court in Decision 06120,Horan Homes(Castlemaine) Ltd and BATU.In that case the issue for consideration was not the class of workers covered by the Agreement but the definition of a "firm". In that case the Court held:-
- "The REA should be construed in accordance with the ordinary rules of contractual construction (seeAdams & Others v British Airways plc[1995] IRLR 577). The object of the process is to ascertain the intention of the parties to the REA and, where there is ambiguity, to ascribe to it the meaning intended by its authors. In that process the Court must apply a presumption that the parties intended their agreement to make sense from the perspective of business efficiency. It is also to be assumed that the parties did not intend their bargain to produce an unreasonable result. InDodd v Churton[1897] 1 QB 562, Lord Esher MR formulated the rule as follows:-
"One rule of construction with regard to contracts is that, where the terms of a contract are ambiguous, and one construction would lead to an unreasonable result, the Court will be unwilling to adopt that construction".
It seems clear to the Court that the REA was concluded for the purpose of ensuring that all workers in the Construction Industry had access to pensions assurance and sick pay benefits. It also sought to ensure that all employers had an equal liability to provide these benefits thus maintaining a level playing field amongst employers in the industry. The general scheme of the REA is that workers who move from one employer to another, which is a well-known feature of the industry, could transfer their accrued pension benefits with them. This could only operate effectively if all employers in the industry were required to operate the scheme envisaged by the REA."
Similarly, the Court is of the view that the REA was intended to ensure that all building/construction workers were covered by such schemes. In this case if the terms "craftsmen" and "construction operatives" were to exclude workers involved in the erection of internal walls and the installation of internal ceilings on site, classified by the Respondent as "Metal Stud Fixers", the Agreement could not produce that result. The Union pointed out that by custom and practice the skilled type of work carried out by the two employees concerned is considered to be a craft job, generally regarded as plasterers. It stated that the Respondent would have a competitive advantage over its competitors if it were to be excluded from the scope of the Agreement for that reason. It quoted a substantial number of companies involved in similar work who are covered by the REA. The Court accepts the Union's contention in this regard and is of the view that the agreement would be rendered nugatory if the Respondent's classification of the workers concerned meant that they were to be excluded from the scope of the Agreement.
The Court considered the meaning of the words at issue inHoran Homes (Castlemaine) Ltd:
- "The move away from a literal interpretation of contracts to a more purposive approach was examined in the decision of the House of Lords inAntaios Compania Naviera S.A. v. Salen Rederierna A.B[1985] A.C.191, 201, where Lord Diplock, in a speech concurred in by his fellow Law Lords, observed:-
"if detailed semantic and syntactical analysis of a word in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense".
InMannai Investment Co Ltd v Eagle Star Life Assurance Co[1997] AC, 749, Lord Steyn had this to say:-
"In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law, therefore, generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are, therefore, interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language."
In his speech Lord Hoffman gave an everyday example of how language must be understood in the context in which it is used.
He said -
" I propose to begin by examining the way we interpret utterances in everyday life. It is a matter of constant experience that people can convey their meaning unambiguously although they have used the wrong words. We start with an assumption that people will use words and grammar in a conventional way but quite often it becomes obvious that, for one reason or another, they are not doing so and we adjust our interpretation of what they are saying accordingly. We do so in order to make sense of their utterance: so that the different parts of the sentence fit together in a coherent way and also to enable the sentence to fit the background of facts which plays an indispensable part in the way we interpret what anyone is saying."
In Investors Compensation Scheme v West Bromwich Building Society[ 1998] I All ER 98 Lord Hoffman, in giving the leading speech, set out five essential principles to be applied in the construction of contracts, as follows:-
"My Lords, I will say at once that I prefer the approach of the learned judge. But I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construed. I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v Simmonds [1971] 3 All ER 237 at 240-242, [1971] 1 WLR 1381 at 1384-1386 and Reardon Smith Line Ltd v Hansen-Tangen, Hansen-Tangen v Sanko Steamship Co [1976] 3 All ER 570, [1976] 1 WLR 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of 'legal' interpretation has been discarded. The principle may be summarised as follows.
(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the 'matrix of fact', but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4) The meaning which a document ( or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352, [1997] 2 WLR 945.
(5) The 'rule' that words should be given their 'natural and ordinary meaning' reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229 at 233, [1985] AC 191 at 2001:
'....if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.' "
The REA was written not by lawyers but by industrial relations practitioners. It is addressed to building employers, workers and their trade unions. Its purpose is clear and there can be no doubt that the parties to the agreement intended it to have general application in the industry. To ascribe to the parties to the REA an intention to limit its application to only certain construction workers on sites and to exclude other construction workers on sites would produce a manifestly absurd result. Accordingly, the Court is satisfied that the workers employed by the Respondent engaged in Metal Stud Fixing on site must be understood in its colloquial meaning as referring to construction workers covered by the REA.
For all of these reasons the Court is satisfied that the workers described by the Respondent as "Metal Stud Fixers" are workers within the classes of workers to which the Agreement applies.
The Court is satisfied on the information before it that there is a prima facie case that the complaint is well-founded. Accordingly, in the absence of voluntary disclosure, it will request the Department of Enterprise, Trade and Employment to undertake an inspection of the Respondent's records for the purpose of obtaining details of employees within the scope of the REA and to consider the complaint in detail when this information is obtained.
Signed on behalf of the Labour Court
Caroline Jenkinson
21st November, 2007______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Madelon Geoghegan, Court Secretary.