The Labour Court recently rejected a claim by the employee forum of Nortel Networks (Ireland) Ltd that Nortel should cover the legal costs of the employee forum.  

The case was the first taken under the Irish Information and Consultation legislation introduced in 2006.  William Fry represent Nortel, which was placed into administration by the English High Court.  The administration takes effect in Ireland pursuant to applicable EU Regulations.  Nortel is engaged in an ongoing information and consultation process with the employee forum in relation to the administration process.  The employee forum requested that Nortel provide it with financial assistance to cover its costs for legal advice sought in connection with the administration process.  When Nortel refused, the forum referred the matter to the Labour Relations Commission.  A conciliation hearing failed to resolve the dispute and it was referred to the Labour Court.    

The Labour Court had to decide whether an employer’s obligation to provide financial resources to its employee forum under the Information and Consultation legislation extends to the payment of legal costs incurred by the employee forum.  

The purpose of an employee forum is (in general terms) to facilitate communication between employer and employees.  The Labour Court stated that pursuing claims on behalf of employees did not form part of the duties of the employee forum and in any event legal advice is not necessary for such claims.   The Court was satisfied that the matters on which the forum wanted legal advice could be clarified elsewhere (for example by the National Employment Rights Agency) without the need to incur legal costs.  Accordingly the employees’ claim was rejected by the Labour Court.

Employers are bound by the Information and Consultation legislation to provide an employee forum with such financial assistance as is reasonable to enable the employee forum to fulfil its functions.  As we can see from the recommendation in the Nortel case, this obligation on employers is not unlimited.  While each case will be decided on its facts, this recommendation will be of assistance to employers who are requested to fund independent legal advice for employee forums.