The High Court delivered a judgment (June 23rd, 2020) that the provision in the Industrial Relations (Amendment) Act 2015 for the making of sectoral employment orders was unconstitutional.  It also set aside the 2019 Electrical Contracting Sector Sectoral Employment Order.

Sectoral Employment Orders

The National Electrical Contractors Ireland (NECI) challenged the validity of the Sectoral Employment Order (Electrical Contracting Sector) 2019 and Chapter 3 of the Industrial Relations (Amendment) Act 2015 (the “2015 Act”) on the basis that both were invalid with regard to the Constitution. The National Electrical Contractors Ireland sought a declaration that the SEO breached the personal rights of their members.

What Is A Sectoral Employment Order?

The sectoral employment orders that they sought to overturn are agreements that may set out minimum pay rates as well as pension and sick pay schemes for an economic sector. This is defined as a “sector of the economy concerned with a specific economic activity requiring specific qualifications, skills or knowledge” (in this case, electrical contractors).

What Happens Now?

The Department of Business, Enterprise, and Innovation has 21 days to consider an appeal of the decision. If the Department does appeal, then it is possible that a legal stay could ensure the terms of the existing SEOs continue to apply pending the outcome of the appeal.

In the event that the Department decides not to appeal the decision, legislation will need to be implemented to address issues identified by the High Court if sectoral employment orders are to continue to have a place in the Irish employment market.

As a result of the High Court’s decision all three existing SEOs for the electrical contracting, mechanical crafts and general construction industries are now invalid. On this basis, workers previously covered by these SEOs will be entitled to the terms and conditions in their contracts of employment or, where no contract is in place, the protection of legislation such as National Minimum Wage Acts 2000 and 2015.

If the decision is not overturned, employees working under sectoral employment orders will not have the protection of the minimum hourly SEO rates.  This change might be welcomed by many employers, it could lead to other issues for a sector that has struggled to identify and recruit suitably experienced staff in recent years.

Contact Us To Discuss The SEO Ruling

We are assisting electrical contractors in managing this situation from a financial and advisory perspective.  Contact us today on 052 61 37775 or email our Managaing Director, Áine Kiely O’Donnell on [email protected] for a discussion on the SEO issue.