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This is an appeal brought by Golden Dale Unlimited Company T/A Ballydoyle Racing (“the Appellant”), pursuant to section 28(7) of the Workplace Relations Act 2015 (“the 2015 Act”), against four compliance notices served on the Appellant by a Workplace Relations Commission inspector on 20 February 2017. The Appellant’s Notice of Appeal was received by the Court on 28 March 2017. The Court heard the appeal over three full days: 26 July 2017, 28 and 29 August 2017. The Court also convened a case management conference on 21 August 2017.

Section 28(1) of the 2015 Act provides: “(1) Where an inspector is satisfied that an employer has, in relation to any of his or her employees, contravened a provision to which this section applies, the inspector may serve a notice (in this section referred to as a “compliance notice”) on the employer.” Section 28(17) states that Section 28 applies to those provisions specified in column (3) of Schedule 4 (of the 2015 Act). The provisions in question include the following sections of the Organisation of Working Time Act 1997 (“the 1997 Act”): sections 6(2), 11, 12, 13, 14(1), 15(1), 16(2), 17, 18, 19(1), 19(1A), 21, 22 and 23(1) and (2). Each of the four compliance notices under appeal in the within proceedings notified the Appellant of breaches of either section 11 or section 13 of the 1997 Act that the inspector was satisfied had occurred in respect of a number of named employees on stated dates in May 2016. In total, seven of the Appellant’s employees are named in the compliance notices under appeal. Five of those employees are grooms and two are exercise riders.

The detail of the breaches of the 1997 Act that the inspector took the view had occurred in May 2016 in the case of the named employees of the Appellant can be summarised as follows:

• (a) A failure to grant a daily rest period of eleven hours to three named employees on stated dates in May 2016, as required by section 11 of the 1997 Act;

  (b) A failure to grant three named employees a weekly rest period of 24 consecutive hours in each of four consecutive weeks in May 2016, in breach of section 13(2) of the 1997 Act;

  (c) A failure to grant four named employees two rest periods of at least 24 consecutive hours each in a week following a week in which they hadn’t received a single weekly rest period of 24 consecutive hours, in contravention of section 13(3) of the 1997 Act; and

  (d) A failure to grant four named employees a weekly rest period that includes a Sunday in any of four specified weeks in May 2016, in contravention of section 13(5) of the 1997 Act.

Regulation 3 of the Regulations provides:

• “(1) Without prejudice to Regulations 4 and 5 of these Regulations and subject to the subsequent provisions of this Regulation, each of the activities specified in the Schedule to these Regulations is hereby exempted from the application of sections 11, 12, 13 and 16 of the Act.

  (2) The exemption shall not, as respects a particular employee, apply in relation to—

  • (a) section 11, 12, 13 or 16 of the Act if the employee—
    • (i) is not engaged wholly or mainly in carrying on or performing the duties of the activity concerned,

      (ii) is exempted from the application of that section by virtue of regulations under section 3(3) of the Act, or

      (iii) falls within a class of employee in relation to which a joint labour committee (within the meaning of the Industrial Relations Acts 1946 to 2015) may perform functions under those Acts,

    or

    (b) section 16 of the Act if the employee is a special category night worker within the meaning of subsection (3) of the said section 16.

  (3) The exemption shall not apply, as respects a particular employee, if and for so long as the employer does not comply with Regulation 5 of these Regulations in relation to him or her.”

“An activity falling within a sector of the economy or in the public service—

• (a) in which it is foreseeable that the rate at which production or the provision of services as the case may be, takes place will vary significantly from time to time,
  or
  (b) the nature of which is such that employees are directly involved in ensuring the continuity of production or the provision of services, as the case may be,
  and, in particular, any of the following activities—
  • (i) the provision of services relating to the reception, treatment or care of persons in a residential institution, hospital or similar establishment,
    (ii) the provision of services at a harbour or airport,
    (iii) production in the press, radio, television, cinematographic, postal or telecommunications industries,
    (iv) the provision of ambulance, fire and civil protection services,
    (v) the production, transmission or distribution of gas, water or electricity,
    (vi) the collection of household refuse or the operation of an incineration plant,
    (vii) any industrial activity in which work cannot, by reason of considerations of a technical nature, be interrupted,
    (viii) research and development,
    (ix) agriculture,
    (x) tourism,
    (xi) workers concerned with the carriage of passengers on regular urban transport services,
    (xii) in the case of persons working in railway transport—
    • (I) whose activities are intermittent;
      (II) who spend their working time on board trains; or
      (III) whose activities are linked to transport timetables and to ensuring the continuity and regularity of traffic.

(i) The business carried on by the Appellant comprises activities that are properly described as agriculture within the meaning of paragraph 3(ix)of the Schedule to the Regulations;

(ii) The nature of the activities that comprise the Appellant’s business is such that employees (grooms and exercise riders) named in the compliance notices under appeal are directly involved in ensuring the continuity of production and, therefore, come within the terms of Paragraph 3(b) of the Schedule to the Regulations; and

(iii) That the activities carried on by the Appellant are activities in which it is foreseeable that the rate of production takes place will vary significantly from time to time.

Witnesses

Mr Patrick Phelan, the WRC inspector who served the compliance notices on the Appellant, gave evidence on behalf of the Workplace Relations Commission. The Appellant called the following witnesses: Mr Tony O’Keeffe, Engineer; Mr Des Leadon, Veterinary Surgeon and Consultant Clinician; Mr Matt Dempsey, Chairman of the National Stud and Chairman of the Farmers Journal; Professor Evans, Professor of Agriculture in UCD; Mr Clem Murphy, Bloodstock Consultant at Coolmore Stud; Mr Robbie Manton, employed by the Appellant as Groom and Head of Yard (and one of the named employees in a number of the compliance notices under appeal); Mr Tom Curtis, a consultant to the Appellant; Mr Aidan O’Brien, Racehorse Trainer; Mr Craig Bryson, employed by the Appellant as an Exercise Rider. The Appellant furnished detailed written witness statements on behalf of the latter five witnesses (only), which witness statements were confirmed by each of the witnesses concerned as their evidence to the Court.

The Issues for Determination by the Court

Having regard to the extensive evidence and the comprehensive legal submissions received by it over three full hearing days, the Court considers that the issues that fall to be determined by it in this appeal can be usefully considered in the following order:

• 
  1. Are the compliance notices served on the Appellant ‘defective’ such that the Court is obliged to order them to be withdrawn?

  2. Is section 28 of the Workplace Relations Act 2015 a criminal provision that the Court is obliged to construe strictly as such?

  3. Can the Appellant rely (i) on the continuity of production exemption in the Regulations having regard to its being a component in the Coolmore-Ballydoyle wider operation, the objective of which is the breeding of thoroughbred stallions and brood-mares; and/or (ii) on the ‘agriculture’ exemption for the purposes of Paragraph 3 of the Schedule to the Regulations; and/or (iii) on the variation in production exemption?

  4. If the Appellant’s operation is deemed to be within scope of the one or more of the exemptions in the Regulations, can the Appellant avail itself of any exemption if it does not have compensatory rest periods in place?

1. The Form of the Compliance Notices Served on the Appellant

Section 28(2) of the 2015 Act provides:

• “(2) A compliance notice shall–
  (a) state the grounds for the inspector's being satisfied that there has been a contravention referred to in subsection (1),
  (b) for the purpose of ensuring compliance by the employer concerned with any employment enactment, require the employer to do or refrain from doing such act or acts as is or are specified in the notice by such date as is so specified, and
  (c) contain information regarding the bringing of an appeal under subsection (7) against the notice, including the manner in which an appeal shall be brought.”

Mr Travers SC submits that the WRC has complied fully with the requirements of section 28(2) and there was no breach of fair procedures as against the Appellant in circumstances where the inspector did not expressly address the issue of the non-application of the exemptions in the case of the Appellant. He further submits that section 28 affords the Appellant the right to appeal the compliance notices to this Court, in the course of which appeal it has ample opportunity to make the case, for example, that it qualifies for one or more of the exemptions provided for in the Regulations. Mr Travers SC added that, in his submission, to adopt the approach to the legislation Mr Gallagher SC was advocating would be to completely undermine its effectiveness and to undermine the specific and express decision taken by the Oireachtas to provide for the compliance notice mechanism as means of enforcement of employment legislation.

Having considered in some detail the wording of section 28(2) of the 2015 Act, the format and wording of the compliance notices served on the Appellant herein, and the parties’ submissions on this issue the Court is of the view that the said compliance notices substantively comply with the relevant statutory requirements. The following matters are clearly stated on the face of each individual notice served by Mr Phelan on the Appellant: (a) the grounds on which the inspector was satisfied that there has been a contravention of the 1997 Act; (b) what the inspector required the Appellant to do in order to achieve compliance with the 1997 Act; and (c) what steps the Appellant should take in order to initiate an appeal against the compliance notice.

In short, the Court – for the reasons stated above - does not accept that the Appellant’s submission to the effect that the compliance notices served on it on 20 February 2017 are ‘defective’ or ‘invalid’ and that the Court should, therefore, order their withdrawal is well-founded.

2.Is section 28 of the Workplace Relations Act 2015 a criminal provision that the Court is obliged to construe strictly as such?

In the course of making his legal submissions on the final afternoon of the hearing, Mr Gallagher told the Court that “Section 28 … was introduced in 2015 and it does create a criminal offence and, if criminal provisions are being invoked, there must be compliance with them and, if there is not compliance with them, then that makes their invocation invalid.” He cited a number of authorities in both his written and oral submissions to the Court in support of his contention that this Court is obliged to apply a strict construction to section 28 of the 2015 Act because section 28(14) creates a criminal offence. He refers, for example, to the judgment of O’Higgins J (as he then was) inMullins v Hartnett[1998] 2 ILRM 304, wherein the learned judge (at page 311) quotes with approval the following passage from Maxwell’sOn the Interpretation of Statutes(12^thed., 1969, 239-40):

• “… the strict construction of penal statutes seems to manifest itself in four ways: in the requirement of express language for the creation of an offence; in interpreting strictly the words setting out the elements of an offence; in requiring the fulfilment of the letter of the statutory conditions precedent to the infliction of punishment; and in insisting on a strict observance of technical provisions concerning criminal procedure and jurisdiction.”

Mr Travers SC submits that it is not necessary to adopt the strict interpretation of section 28 advocated by Mr Gallagher SC because the section is not a criminal provision. He submits that it is a provision which enables a compliance notice to be issued, a mechanism provided for by the Oireachtas in the 2015 Act as a means of achieving more effective implementation of certain employment legislation (including the 1997 Act) in circumstances where it is well-recognised that many employees are very reluctant to make complaints about their employers. The issuing of a compliance notice, he submits, does not in any way result in any automatic criminal liability for the employer concerned. Potential liability to a criminal prosecution only arises much later in the process in circumstances where the employer either chooses to ignore the compliance notice or unsuccessfully appeals it. Then – and only in such circumstances – the Workplace Relations Commission has discretion to initiate a criminal prosecution against the employer in question for that employer’s failure to implement a direction given to it in a compliance notice.

The Court accepts the correctness of the argument advanced by Mr Gallagher SC: section 28 clearly in subsection (14) thereof, does create a new criminal offence i.e. that of failure to comply with a compliance notice by the date specified therein. However, this Court does not exercise a criminal jurisdiction: its statutory function under the 2015 Act, in the context of the within appeal, is clearly circumscribed by section 28(10):

“The Labour Court shall, upon an appeal under this section, do one of the following:

• 
  (a) affirm the compliance notice concerned;

  (b) withdraw the compliance notice concerned;

  (c) withdraw the compliance notice and require the employer to whom the notice applies to comply with such directions a may be given by the Labour Court.”

3. Can the Appellant rely (i) on the continuity of production exemption in the Regulations having regard to its being a component in the Coolmore-Ballydoyle wider operation, the objective of which is the breeding of thoroughbred stallions and brood-mares; and/or (ii) on the ‘agriculture’ exemption for the purposes of Paragraph 3 of the Schedule to the Regulations; and/or (iii) on the variation in production exemption?

A central plank of the case made by Mr Gallagher SC on the appeal before the Court is that the nature of the Appellant’s business activity exempts it from the obligation to apply both section 11 and section 13 of the 1997 Act to those of its employees who are the subject of the compliance notices at issue, having regard to Regulation 3 of the Organisation of Working Time (General Exemptions) Regulations 1998 -S.I. 21 of 1998 (“the Regulations”). Unfortunately, neither the Regulations nor the 1997 Act (or for that matter, the Working Time Directive itself – Directive 2003/88/EC (“the Directive”)) contains a definition of ‘agriculture’. In this context, extensive submissions were made by both sides as to the meaning which should be given to it by the Court for the purposes of the exemption provided for in paragraph 3(ix)of the Schedule to the Regulations (quoted above). In addition, a substantive part of the evidence adduced from a number of the witnesses called by the Appellant focused on the agricultural nature of the Appellant’s business operations.

On the opening day of the hearing, Ms Healy-Rae BL set out the Workplace Relations Commission’s position as follows. In the absence of a statutory definition, the Court is obliged to apply the ordinary principles of statutory interpretation. A literal reading of the word ‘agriculture’ does not include training and racing of horses, which Ms Healy-Rae submits is the essence of the Appellant’s business. Those activities, she submits, are sporting rather than agricultural activities. Next, counsel referred the Court to the well-known decision of the Supreme Court inInspector of Taxes v Kiernan[1981] IR 117 wherein that Court held that in applying section 78 of the Income Tax Act 1967 (which provided for the tax assessment of an occupier of land who was a dealer in cattle), there was no reason to justify a departure from the ordinary prevalent meaning of the word ‘cattle’ which did not include pigs. She also opened the following definition of agriculture from the Oxford English Dictionary: “the science or practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool and other products.” She submits the Appellant’s business (as distinct from that of the nearby Coolmore Stud) is confined to the training and racing of horses and does not include thoroughbred horse breeding and cannot, therefore, be regarded as the production of an agricultural product.

Ms Healy-Rae BL next urged to the Court to consider its obligation to apply national law in conformity with the law of the European Union. In this regard, she referred to the decision of the Court of Justice inImpact v Minister for Agriculture and Food & OrsCase C-268/06 [2008] IRLR 552 on the basis of which decision she submitted that this Court could have regard to “particular definitions of agriculture in Irish domestic law … in circumstances where there is no definition in the [Directive] itself.” Counsel submitted that a particularly appropriate definition could be found in section 1 of the Industrial Relations Act 1976 (as amended by section 43 of the Industrial Relations (Amendment) Act 2015. That definition reads as follows:

“‘agriculture’ means —

• (a) (i) the production of animals, including the production of meat and other

  animal produce intended for human consumption,

  (ii) the sorting and packing of meat and other animal produce, and

  (iii) the production, sorting, and packing of crops, including fruit and

  vegetables, intended for human or animal consumption, on farm land (within

  the meaning of section 664 of the Taxes Consolidation Act 1997), and

  (b) horticulture, including market gardening, garden nurseries and nursery

  grounds”.

Ms Healy-Rae BL expressly addressed and rejected Mr Gallagher SC’s submission that it was open to this Court to have regard to Article 38 of the TFEU and the definition therein of agricultural products on the basis that that definition arises in the specific context of the Common Agricultural Policy and the trade in agricultural products which has no application to the Appellant’s business. Continuing in this vein, Ms Healy-Rae BL opened the judgment of the Court of Justice in Case C 41/09Commission v Netherlands[2011] IECR 1-831in support of her submission that horses and other equine species are not agricultural products (and, therefore, don’t attract the reduced rate of VAT that applies to such products).

Finally, Ms Healy-Rae BL submitted that, should there be any ambiguity as to the intention of the drafter of the Regulations with regard to the meaning of ‘agriculture’, it was open to this Court to apply a purposive interpretation to the Regulations having regard to the objectives of the Directive as set out in the preamble thereto.

The first element of this part of Mr Gallagher SC’s case is that the Appellant’s is an agricultural enterprise and the workers in respect of whom the compliance notices were issued are engaged wholly in agriculture and, therefore, they are exempt from the provisions of sections 11 and 13 of the 1997 Act by virtue of regulation 3 of the Regulations. In advancing this argument, Mr Gallagher SC places considerable weight on the interconnectivity of the Appellant’s enterprise with that of Coolmore Stud (although he acknowledges that they are two distinct legal entities). He says that the submissions made on behalf of the Workplace Relations Commission fail to take into account the critical role played by the Appellant in the development of the thoroughbred horses that are produced from, and ultimately go back to, Coolmore, where they are used for breeding purposes. He submits that the production of thoroughbred horses, when seen in the context of the Coolmore-Ballydoyle relationship, can only be considered to be a wholly agricultural activity: it is conducted on farms; the end product is the outcome of an agricultural activity. In this continuum between Coolmore Stud and the Appellant, he submits, the latter’s role is not limited to the production of stallions and brood mares but is key to the ongoing production of stallions and brood mares as the performance of the horses on the race track will inform the Appellant’s input into the selection process of choosing suitable stallions and brood mares for reproduction purposes in Coolmore. Racing – Mr Gallagher SC submits – is a limited part of the horses’ life but it is “the objective benchmark by which judgements can be made as to which horses are the best athletes, the supreme athletes, and therefore the horses that are best used for breeding purposes”.

Mr Gallagher SC urged the Court to accept a broader definition of agriculture than that advanced on behalf of the Workplace Relations Commission. He accepts that agriculture is usually associated with food production but cannot be confined just to food production. He suggested that an enormous amount of animal husbandry is required to ensure the well-being and health of the thoroughbred horses while they are in the Appellant’s charge. This husbandry includes the procurement of the animal feeds (much of which are grown on the Appellants’ farms); the feeding, care, management and rearing of the animals on the farm; the return of manures to the farmland; and managing the reproduction, fertility and breeding of the animals to produce subsequent generations of animals. Mr Gallagher askes the Court to note that all of the foregoing is subject to regulation by the Department of Agriculture, Food and Marine. He also suggests that the breeding of pedigree cattle, by analogy, gives a good sense of what is involved in Ballydoyle. The end product in both cases – he suggests – is an animal that will have acquired enhanced value because of qualities developed by animal husbandry combined with breeding potential.

Mr Gallagher SC does not accept Ms Healy-Rae BL’s submission with regard to the applicability of the definition of ‘agriculture’ in section 1 of the Industrial Relations Act 1976 for the purposes of interpreting and applying the Directive. He suggests that the approach advocated by the Workplace Relations Commission in suggesting that a provision of Irish domestic law defines what is agriculture for the purposes of the Directive is “a new concept that has no legal basis and flies in the face of all of the legal authority, including the cases relied on by the WRC, which says that the concepts in the Directive are European concepts”. He then referred this Court to Article 38 of the TFEU and to Annex 1 of the Treaty which makes reference to live animals in the context of the promotion of trade in agricultural products. He submits that the definition in the Treaty is “decisive of this matter and certainly of very considerable importance”.

A number of witnesses were called by the Appellant to give evidence, in particular, in support of the submissions made by Mr Gallagher SC as to the agricultural nature of the Appellant’s activities, the continuity of production between Coolmore Stud and the Appellant’s enterprise, and the seasonal variation in the rate of production. The names of those witnesses were listed earlier in this determination. It is not necessary to recite, in any detail, the evidence that was adduced from them as, in the Court’s view, Mr Gallagher’s comprehensive submissions anticipated all of the relevant evidence of his witnesses in a most cogent and clear manner. Mr Tony O’Keeffe – an engineer with a particular interest in agriculture and equine matters – was first up. He had made a site visit to Ballydoyle (and to Coolmore) on 6 April 2017 during which visit he took a series of detailed photographs of the activities there. He subsequently compiled ninety or so of these into a booklet which he presented on to the Court for the purposes of illustrating what, in his opinion, is the agricultural nature of the activities pursued there, particularly by the grooms and exercise riders.

Mr Des Leaden – a highly qualified equine veterinary surgeon and a consultant clinician, and himself the owner of a small stud farm – was the second witness up for the Appellant. His evidence focused largely on the continuity between the operations of Coolmore and Ballydoyle and on the importance of the husbandry of thoroughbred racehorses having regard to their temperament, strength and size. He told the Court that thoroughbred racehorses are inherently dangerous animals and that working with them always carries an element of risk. However, in his opinion, this risk can be mitigated when an animal and its handlers become familiar with one another. He further stated that “individual observation is paramount to the management of these animals from conception through to maturity”. The animals, he said, instantly focus on any change in their regime. Hence, in the witness’s view, continuity in terms of which individuals handle or interact with a particular horse is vital to the management of the horse and to the safety and well-being of both horse and handler. He referred to the scientific literature in support of his evidence that a horse’s heart rate will change in response to approaches from different human beings. He gave a detailed account of the work of grooms and exercise riders generally on the basis of his long experience as a veterinary practitioner. He stated that this experience has taught him that a conversation with the groom and exercise rider handling a horse at any particular time is ‘pivotal to’ a veterinarian’s examination of that horse and to the diagnosis of injury or illness. The presence of the horse’s familiar groom at a racing event makes an enormous contribution to reassuring the horse when in unfamiliar surroundings. He also spoke in detail about how a horse’s ability on the racetrack feeds back into the overall assessment of the horse’s genetic merit. Dr Leaden emphasised in his evidence that the interaction between a thoroughbred horse and its groom are dynamic. In explaining what he meant by this, he said that “not everyone gets on with every horse” with the consequence that there are an infinite range of “individual variations between riders, between grooms and between horses. And these are dynamic interactions. And to say, well, one is the same as the other, or there is no difference between them, is not so”. He stressed that, in his opinion, “It’s the familiarity with the individual that is so crucial to what’s going on”. For that reason, the witness continued, “[A]ll elite trainers here, hand pick the individual who is going to be with that horse, both within the stable environment and perhaps separately to ride it. They hand pick them and they will assess the validity of their choice objectively and if they think they have made a mistake, they will change it.”

Dr Leaden had the following to say in relation to what he perceives to be the connection between the respective operations at Coolmore Stud and Ballydoyle: “I believe this is a continuum … from conception to maturity. This is a continuum and, so, to attempt to divide them and categorise them … overlooks the continuum and the fact that we race horses so we breed better ones. So, it is an integral part of the process, it is not a distinct part of it …[I]t is a continuum, there is not some vast cavity, some Grand Canyon between the two entities, it doesn’t exist.” Later – in response to a question from the Court – Dr Leaden stated: “… the purpose of breeding them is to establish which one is going to be a better athlete than the next. So you must test them athletically … The reason we breed them is to race them so that we breed better ones”.

The third witness called on behalf of the Appellant was Mr Matt Dempsey, Chairman of the National Stud and Chairman of the Farmers’ Journal. He spoke in detail about the Irish thoroughbred industry and the reasons for its success including the availability of limestone-based soil on which to rear the horses. He stated that, in his view, horse racing is effectively a shop window for the horse breeding industry and no more than that.In response to a question from Ms Healy-Rae BL, he said that he wouldn’t regard horse racing as a sport at all: “… I wouldn’t see it as a sport at all, it is very clearly a shop window and from that shop window is taken out the best of the exhibits to be fed back into the breeding part of the operation.” In short, Mr Dempsey reiterated much of what Dr Leaden had said in relation to the importance, in his view, of the continuum between the respective operations of Coolmore Stud and Ballydoyle for the retention of the very best bloodlines in Ireland. He cited the example of Galileo.

The final witness for the Appellant on the first day of hearing was Professor Evans – Professor of Agriculture in University College Dublin. Professor Evans stated that his area of academic expertise is animal physiology. He informed the Court that he had visited Ballydoyle and Coolmore for a part of a day in advance of the appeal hearing. In the course of giving his expert opinion evidence to the Court, Professor Evans discussed his understanding of agriculture, the importance of animal husbandry and whether or not the work of the grooms and exercise riders at Ballydoyle can be properly characterised as agricultural activity. He proffered rather broad, all-encompassing descriptions of both agriculture and of animal husbandry, neither of which was supported by any reference to any published authorities. In relation to the former he stated:

• “… I think it’s clear that agriculture is a very broad topic, but I would define it as the breeding, the cultivation and the rearing of plants or animals, such that they have some value. You have to have some value associated with this. I guess this is done on premises that we call farms, so it’s usually very closely associated with the land, although not always, in a very modern context. And it’s something that mankind has been doing for thousands of years and is really the success of the domestication of the plants and animals that we have been interested in over that period of time.”

Professor Evans opined as follows in relation to animal husbandry:

• “Animal husbandry is everything associated with the care of the animal. One of my colleagues made a comment very recently which I think is quite interesting: the genetics of an animal or a plant determines its potential. But you won’t realise its potential without the best husbandry and that if there is any disease, you will sort of chip away at its potential. So, the day it’s born it has fantastic potential. Everybody is looking at what its parents can do, what its brothers or sisters can do. But it simply won’t do that if the husbandry is not ideal, is not maximised so to speak”.

In her cross-examination of Professor Evans, Ms Healy-Rae BL put it to him that the Irish Racehorse Training Authority had made a submission in the context of a review (carried out on behalf of the then Department of Jobs, Enterprise and Innovation) into the Agricultural Joint Labour Committee in which the Authority argued that the horseracing industry is very different from the wider agricultural industry and should be excluded from the scope of the Joint Labour Committee’s work. Professor Evans expressed disagreement with this approach and re-iterated his view that “having horses on the land, breeding them, caring for them, husbandry, rearing them, that to me is agriculture”.

On the second day of hearing (28 August 2017), the Court heard from the following witnesses for the Appellant: Mr Clem Murphy, Bloodstock Consultant at Coolmore Stud; Mr Robbie Manton, employed by the Appellant as Groom and Head of Yard (and one of the named employees in a number of the compliance notices under appeal); Mr Tom Curtis, a consultant to the Appellant; Mr Aidan O’Brien, Racehorse Trainer. Mr Murphy gave detailed evidence on the inter-relationship between Coolmore and Ballydoyle. He confirmed both operations – although separate legal entities- have the same ultimate owners and that both operations “are a link in the chain of production of broodmares and stallions”. He added: “…[T]he whole purpose of Ballydoyle in the first place is to produce stallions for the Coolmore empire, if you like, whether it’s in Coolmore in Fethard in Tipperary or in Cork or whether they go to Kentucky or Australia.” However, Ballydoyle, he said, would not be financially viable without Coolmore’s support. Mr Murphy provided the Court (by way of both his written witness statement (accepted by the Court as his evidence) and in direct oral evidence) with detailed statistics of the number of breeding mares and stallions with proven race-track ability that are returned from Ballydoyle to Coolmore for breeding purposes on an annual basis. He explained to the Court how success in racing impacts on the financial value of a racehorse for breeding purposes and illustrated his explanation with specific examples. Under cross-examination from Mr Travers SC, he told the Court that in fact many brood mares who do not succeed on the race track return to Coolmore because of their intrinsic worth.

Mr Murphy also spoke about the wider integration between Ballydoyle and Coolmore through the use of shared facilities (veterinary teams, exchange of staff occasionally, land, equipment and husbandry). (Under cross-examination by Mr Travers SC, Mr Murphy admitted he didn’t know exactly what staff from either entity actually were exchanged or who co-operated in saving hay and oats etc.) Finally, Mr Murphy, in his evidence-in-chief addressed in general terms the period covered by the compliance notices which are the subject of the within appeal (May 2015). He stated May is a particularly busy month in both Ballydoyle and Coolmore as the classic horse races in Europe commence in the first week of May each year. He described it in the following terms: “It’s all hands-on-deck and it’s really a very important time where the staff are really looking forward to the season. It’s the beginning of the whole season for us and it’s the most important time of year”. Under cross-examination, Mr Murphy accepted that the busy season extended up until November each year. When it was put to him by Mr Travers that the records given to the Workplace Relations inspector showed that many of the employees who didn’t get rest breaks in May 2015 likewise didn’t get breaks in November 2015 and several worked for 28 or 29 days also in that month without getting a weekly rest break, Mr Murphy said he wasn’t familiar with those records. In fact, in response to questions from the Court, Mr Murphy confirmed that he spends a lot of time out of the country and is, therefore, absent a lot from Coolmore itself and is not often physically present at Ballydoyle. (On re-examination he clarified this as being, “During the racing season, probably once every couple of weeks.”). As a consequence, however, – by his own admission – he has no first-hand knowledge of how the grooms’/exercise riders’ rotas actually work in Ballydoyle. However, he did also confirm that his understanding is that when grooms are in attendance at the races that they are at their employer’s disposal at all times and can be required to attend to their horses at any stage of the day.

Mr Robbie Manton, who is a groom and Head of Yard, was the second witness up for the Appellant on the second day of hearing. He gave evidence in relation to the daily regime in his yard at Ballydoyle. He confirmed that the morning regime is much more intensive and busy than the afternoon regime. He gave details of the different activities that take place in the stables and on the gallops at various times of the day. He stated that – much like many of his colleagues -he has a break from midday until 3.00 p.m. during which time he goes home. In response to questions from Mr Gallagher SC, Mr Manton elaborated on the importance of the relationship between groom and horse. He indicated that his familiarity with each individual horse in his yard is essential to the early detection of problems such as lameness or injury. He gave some specific examples of where early intervention based on such intimate familiarity was of particular assistance to resolving difficulties with a horse’s health.

Mr Manton went on to describe a typical day’s racing for a groom in, for example, Dundalk and England. He described the facilities that are incorporated into the horse transporters used by Ballydoyle (bunks, seating areas, night heaters etc.). He confirmed that a groom usually has an opportunity to get a meal and to view some of the racing but that he/she will spend most of the time with the horses. Usually, only one of the group of grooms travelling to a particular race meeting will be away from the horses at any one time.

Under cross-examination, Mr Manton re-iterated that, in his view, the ideal situation is where there is continuity with regards to the particular groom and exercise rider dealing with each horse.

The final witness called by the Appellant on the second day of hearing was Mr Aidan O’Brien. Mr O’Brien had furnished the Court with a detailed witness statement in advance of the resumed hearing. He confirmed to the Court that the contents of that statement could be taken as his evidence to the Court. There was considerable overlap between the issues covered in Mr O’Brien’s evidence-in-chief and matters that had been opened to the Court by earlier witnesses save that Mr O’Brien spoke in some detail about the daily level of interaction between the staff at Coolmore and the staff at Ballydoyle, including himself. In fact, that level of interaction is so high that in his view “everything about us [i.e. Ballydoyle] is totally connected to Coolmore”. He described Ballydoyle as “a complete open book” because of the level of detail about a horse’s progress in training that is constantly fed back to Coolmore “on nearly a minute to minute basis. The horse’s videos, their work, the jockeys’ comments, the weights, the bloods, every single thing about it, every minute of the day". The purpose of communicating this information is so that the people in Coolmore can make well-informed decisions about what stallion should cover what mare so as to breed the best next generation of thoroughbred horses. He described Ballydoyle’s role in the breeding continuum as being to “fire up the genes” of the well-bred horses that are sent to them from Coolmore. He stated that, in his opinion, the individuals dealing with a particular horse on a daily basis played a key role in this process by instilling confidence in the horse and facilitating the development of that horse’s individual personality. The witness told the Court that he personally assigns individual riders and grooms to horses having regard to the particular horse’s temperament and the rider’s/groom’s personality. From time to time, he makes changes if a horse is not thriving. He also said that he relies on daily feedback from riders and grooms to inform his assignment of staff going forward. Mr O’Brien also gave evidence in relation to his day to day role in the activities at Ballydoyle and he offered his opinion on the importance of continuity to the training of horses there whereby strong relationships are developed between an individual horse and its exercise rider and groom. This, he told the Court, is very important for health and safety reasons and contributes to a safe and happy environment for the horses and the staff.

Under cross-examination by Mr Travers SC, Mr O’Brien was asked if it were possible to increase the numbers of grooms and exercise riders at Ballydoyle so that all staff could be afforded their statutory daily and weekly rest breaks. Mr O’Brien admitted that it could be done but, in his opinion, it would increase the health and safety risk for the horse and the worker because the same “telepathic” relationship will not be present between the horse and those attending him.

Discussion and Decision on Issue No 3

Section 19 of the Interpretation Act 2005 provides that “a word or expression used in a statutory instrument has the same meaning in the statutory instrument as it has in the enactment under which the instrument is made”. The Regulations were made pursuant to section 4(3) of the 1997 Act. Section 2(2) of the 1997 Act provides ‘A word or expression that is used in this Act and is also used in the Council Directive has, unless the contrary intention appears, the meaning in this Act that it has in the Council Directive’. Unfortunately, as previously noted, there is no definition of ‘agriculture’ in either the 1997 Act or the Directive. Therefore - and in the apparent absence of any relevant authorities at either national or CJEU level, as confirmed to it by Counsel for both parties, it falls on this Court to use its best endeavours to interpret the meaning of ‘agriculture’ by applying the applicable rules of statutory interpretation. It should be stated at this point that that Court is not convinced by the submissions made by Ms Healy-Rae BL to the effect that it should have regard to the definition of ‘agriculture’ in section 1 of the Industrial Relations Act 1976 (as amended by section 43 of the Industrial Relations (Amendment) Act 2015. In like manner, the Court sees no basis for accepting the submission advanced by Mr Gallagher SC to the effect that it should be guided by the wording of Article 38 TFEU.

Article 17 of Directive goes on to provide, at paragraph 3 thereof, that:

• “In accordance with paragraph 2 of this Article derogations may be made from Articles 3, 4, 5, 8 and 16:
  (a) …..
  (c) in the case ofactivities involving the need for continuity of service or production, particularly:
  • (i) services relating to the reception, treatment and/or care provided by hospitals or similar establishments, including the activities of doctors in training, residential institutions and prisons;
    (ii) dock or airport workers;
    (iii) press, radio, television, cinematographic production, postal and telecommunications services, ambulance, fire and civil protection services;
    (iv) gas, water and electricity production, transmission and distribution, household refuse collection and incineration plants;
    (v) industries in which work cannot be interrupted on technical grounds;
    (vi) research and development activities;
    (vii)agriculture;
    (viii) workers concerned with the carriage of passengers on regular urban transport services;
  (d) where there is a foreseeable surge of activity, particularly in:
  • (i)agriculture;
    (ii) tourism;
    (iii) postal services” (emphasis added)

Section 4 of the 1997 Act – and the Regulations made thereunder – provide for ‘exemptions’ to the application of stated provisions of the Act (and by implication the Directive) in stated circumstances. It is well established as a matter of European law that provisions which are in the nature of a derogation or exemption from general laws must be interpreted strictly. See, for example, Case 216/97Gregg v Commissioners of Customs and Excisewhere, at paragraph 12 of is judgment, the Court of Justice stated:

• “It should be observed at the outset that, according to settled case-law of the Court, the terms used to describe the exemptions envisaged by Article 13 of the Sixth Directive are to be interpreted strictly since these constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see Case C-2/95SDC v Skatteministeriet[1997] ECR I-3017, paragraph 20)”.

The ordinary meaning of the word ‘agriculture’ is that which is found in any standard, reputable dictionary of the English language. The Court has had the benefit of considering the following dictionary entries: (i) “the art or practice of cultivating the land” (Chambers Dictionary (2003)); (ii) “the science or practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool and other products” (Oxford Dictionary of English, Third Edition (2010)); (iii) “the science or occupation of cultivating land and rearing crops and livestock; farming; husbandry” (Collins English Dictionary (2011)). The Appellant – relying in particular on Professor Evans’s evidence – submits that the word ‘agriculture’ as used in both the Directive and the Regulations should be given a broader meaning than is encompassed by any of the foregoing dictionary meanings. That is, the Appellant urges the Court to apply a broad construction to the agricultural exemption by understanding ‘agriculture’ to encompass not only the cultivation of the soil for the production of crops for food but also to include the production of animals or plants ‘for value’.

The case advanced before the Court by Counsel for the Appellant emphasised, in particular, two aspects of the nature of activities carried on by the Appellant i.e. (i) that those are “activities [involve] the need for continuity of service or production”; and (ii) that the activities carried on by the Appellant are an integral element in a continuous cycle of production – along with Coolmore - of thoroughbred horses (“the product”). On the basis of the foregoing, and in light to the evidence given by the witnesses for the Appellant, the Court was urged to accept that the Appellant’s business falls within the meaning of “agriculture” for the purposes of the exemptions provided for in the Directive and the Regulations. The Court was, furthermore, urged to accept that the workers who are the subject of the relevant Compliance Notices are “wholly or mainly” engaged in work which is agricultural in nature.

Having carefully considered the legal arguments very ably advanced by Mr Gallagher SC on behalf of the Appellant, as well as the extensive evidence adduced from his many witnesses, the Court makes the following observations. Firstly, in the Court’s view, the Appellant is seeking to advance an interpretation of ‘agriculture’ which is far broader than the ordinary dictionary meaning of that word. In all the circumstances, however, and having regard to the established law in relation to the construction of derogations and exemptions from EU law, the Court declines to adopt the approach contended for by the Appellant.

Secondly, notwithstanding the Court’s first conclusion, it is also the case that ‘agriculture’ is but one particular example of both the ‘continuity of production’ exemption and the ‘variation in the rate of production’ exemptions provided for in the Directive and in the Regulations. It follows as a matter of logic that an undertaking might be engaged in an activity which can be described as agricultural in nature but it doesn’t necessarily follow that some or all of its employees are necessarily engaged in ensuring the continuity of production. An entity seeking to rely on the exemption at paragraph 3(b) of Schedule 1 of the Regulations, in relation to particular workers, it seems to the Court, must be able to demonstrate that those workers are ‘directly involved in ensuring the continuity of production’.

Thirdly, the ‘continuity of production’ argument, as presented to it, inevitably requires the Court to regard the Appellant’s not as a stand-alone operation but as one that is but a stage in a cycle of production with another operation, that of Coolmore Stud. However, the reality is that Workplace Relations Commission has served a number of compliance notices on a single legal entity i.e. the Appellant. The Appellant’s challenge to the lawfulness of those compliance notices, must as a matter of common sense, stand or fall on the basis of that entity alone being able to demonstrate that it is entitled to avail itself of the exemptions from the relevant provisions of the 1997 Act it relies on.

Finally, Mr O’Brien very clearly told the Court, while under cross-examination, that every time of the year is busy at Ballydoyle: “Like we are busy all through the year.” He further accepted – when it was put to him by Mr Travers SC – that the Workplace Relations Commission had discovered similar breaches of the 1997 Act in the month of November as they had found in May 2016. This evidence on the face of it appears to undermine the case being made out on behalf of the Appellant in relation to variation in the rate of production throughout the year.

In conclusion, the Court, having regard to the foregoing observations, finds that the Appellant has failed to demonstrate to its satisfaction that the workers who are the subject of the Compliance Notices under appeal are ‘directly involved in ensuring the continuity of production or the provision of services’. The Court, for the reasons already stated, does not accept that the extremely broad definition of agriculture contended for by the Appellant has any application in the context of construing a derogation from European law. In addition, the Court does not accept that Appellant is entitled to avail of an exemption from its obligation to provide statutory rest breaks to those workers by virtue of the need to accommodate variations in production throughout the year.

4. If the Appellant’s operation is deemed to be within scope of the one or more of the exemptions in the Regulations, can the Appellant avail itself of any exemption if it does not have compensatory rest periods in place?

Recital (16) of Directive 2003/88/EC provides: “It is necessary to provide that certain provisions may be subject to derogations implemented, according to the case, by the Member States or the two sides of industry. As a general rule, in the event of a derogation, the workers concerned must be given equivalent compensatory rest periods”.

Article 17.2 of the Directive goes on to provide: “Derogations provided for in paragraphs 3, 4 and 5 may be adopted by means of laws, regulations or administrative provisions or by means of collective agreements or agreements between the two sides of industry provided that the workers concerned are afforded equivalent periods of compensatory rest or that, in exceptional cases in which it is not possible, for objective reasons, to grant such equivalent periods of compensatory rest, the workers concerned are afforded appropriate protection.”

Regulation 4 of the Regulations provides:

• “If an employee is not entitled, by reason of the exemption, to the rest period and break referred to in sections 11, 12 and 13 of the Act, the employer shall ensure that the employee has available to himself or herself a rest period and break that, in all the circumstances, can reasonably be regarded as equivalent to the first-mentioned rest period and break.”

In the course of the within appeal, counsel for both parties made reference to, and opened, several previous decisions of this Court which considered the extent of an employer’s obligation to provide compensatory rest periods to employees in circumstances where the employer in question sought to rely on one or more of the exemptions provided for in the Regulations. Those authorities include:Tifco Ltd T/A Crowne Plaza BlanchardstownDWT11124;Monkland Oyster Hotels Limited T/A Athlone Springs HotelDWT1074; andMichael O’Neill Mushrooms Limited v TiatovaDWT12103. In summary, Ms Healy-Rae BL submitted that the consistent position articulated by this Court in the aforementioned determinations is that an exemption provided for in the Regulations can only be availed of in circumstances where the employer in question has firstly put in place arrangements whereby the affected employees can avail themselves of compensatory rest breaks. She also submitted that the mere provision of canteen services and other enhancements in the workplace are not a substitute for this ‘pre-requisite’ to an employer’s entitlement to rely on the exemptions. Mr Gallagher SC argued strongly and at some length against this submission. In brief, his submission to the Court is that compliance with Regulation 5 is a precondition to qualifying for the exemptions but that Regulation 4 does not require that an employer provide compensatory rest periods as a pre-condition for qualifying for the exemptions.

The exemptions do not apply if the employees are not engaged “wholly or mainly” in carrying on or performing the duties of the activity concerned. Therefore, having regard to the Court’s findings that the exemptions do not apply in the case of the workers who are the subject of the compliance notices under appeal, it is not necessary for the Court to make any determination on the parties’ respective submissions in relation to Regulation 4.

The Court finds that the appeal fails in all respects. Each of the compliance notices served on the Appellant by the Workplace Relations Commission on 20 February 2017 is affirmed.

The Court so determines.

Signed on behalf of the Labour Court



Alan Haugh
LS______________________
05 January 2018Deputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Louise Shally, Court Secretary.