Judgment was given today in the long awaited constitutional challenge brought by the fast-food industry. In a comprehensive judgment, Judge Feeney resoundingly declared that the relevant provisions under the 1946 and 1990 Industrial Relations Acts relating to JLCs, EROs, and REAs, were unconstitutional.

Judge Feeney’s judgment found for the Plaintiffs in every aspect of their claim, not only that the Acts were in breach of article 15(2)(1) (the Oireachtas has sole and exclusive powers to make law) but also the property rights in Article 43 (2).

Commenting on the ruling, Boyce Shubotham, Head of the Employment & Benefits Department at William Fry, said:

“It has long been the view of employment law specialists that the legislation was unconstitutional and it was only a matter of time before a successful challenge was made. In fact several sets of proceedings were issued but surprisingly most were settled (for example the electrical contractors) before any judgement could be given.

While it was the intention of the 1946 legislation to protect vulnerable workers there were many abuses and anomalies. For example, it was a criminal offence to employ an electrician at less than over €1,000 a week or a construction worker at less than €800 a week. The question has to be asked in what way these workers were vulnerable or open to exploitation?

There was also the bizarre situation where if you employed a hairdresser in Bray, you had to pay him/her over €530 a week yet, if you employed the same hairdresser in Liffey Valley or Balbriggan you only had to pay €377 a week.

This outcome can hardly come as a surprise to the government. The real issue is whether in the face of such a resounding indictment of the whole JLC system, the Government will accept reality and not appeal the decision.

Assuming that the Government does not appeal the decision, the issue now is whether employers will be entitled to reduce the wages of their current employee on the basis that they were paying the wages based on a legal obligation, i.e. if an employer is currently paying employees based on unconstitutional legislation, what is the consequence for employees?

The answer is that if the employer has a written contract with the employee, which refers to payment based solely on the employment orders, that the employer could terminate the employee’s contract and offer the employee new terms (not just wages but overtime and rest periods – if they were covered by the employment orders). Whether employers would be likely to do this remains to be seen, but in my view it would be unlikely.

What is more likely is that restrictive practices brought in by the employment orders may be changed to give employers better flexibility.”