Home Knowledge Bill to Reform Joint Labour Committee/Registered Employment Agreement Systems

Bill to Reform Joint Labour Committee/Registered Employment Agreement Systems

On 22 December 2011, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, published a new Bill to introduce reforms to the Joint Labour Committee (JLC) and Registered Employment Agreement (REA) mechanisms for setting wages in certain industries. 

Once enacted, the legislation will implement the programme of reforms to the JLC/REA systems agreed by the Government following the High Court judgment in the successful challenge to the constitutionality of the systems in July 2011. To view a previous article on this, please click here.

The principal measures proposed by the new Bill include:

  • JLCs will have the power to set a basic adult rate and also two additional higher rates relating to length of service in the sector or business and the standards and skills recognised for the particular sector. This will be a significant reduction in the number of different rates previously in place
  • JLCs will no longer set Sunday premium rates. Instead, a statutory code of practice will be prepared by the Labour Relations Commission following submissions from employers and trade unions
  • Companies will be permitted to derogate from Employment Regulation Orders (EROs) and REAs in the event of financial difficulty. However, the Labour Court must satisfy itself that specified criteria have been met. The derogation will be granted for a limited period only and following consultation with employees
  • JLCs will have to take into account a series of economic and industrial relations factors in the setting of wage rates
  • A new definition of “remuneration” will be introduced which excludes, among other things, pay for Sunday work and pay in lieu of notice
  • There will be ministerial involvement in the supervision of JLCs and in the making of orders to vary or revoke EROs
  • Civil remedies will be introduced as opposed to sole reliance on criminal sanctions
  • The scope of each JLC will be reviewed to ensure the range of establishments to which it applies continues to be appropriate. Such reviews are to be undertaken every five years. 

In relation to REAs specifically, increased flexibility will be introduced to allow REAs to be cancelled or reviewed as appropriate. The circumstances in which an REA can be cancelled, where either the employers or the trade unions cease to be substantially representative of workers or employers in the particular sector, will be clarified.  Clarification will also be provided in relation to the cancellation of REAs by reason of substantial change in the relevant sector making the continued registration of the REA undesirable.   

Minister Bruton also announced his intention to introduce a series of additional reforms to the JLC/REA systems which will not require legislative amendment, including the reduction of the number of JLCs from thirteen to six. This will be done by way of amalgamation and abolition. 

Contributed by Maryrose Dillon.