Supreme Court of Ireland Decisions

THE SUPREME COURT

Record No. 145 & 150 /2000

Den ham J.

Murphy J.

Murray J.

McGuinness .J.

Fennelly J.

BET WEEN/

IARNROD EIREANN-IRISH RAIL

Plaintiff/Respondent

-and-

CHRISTOPHER HOLBROOKE, JOHN COURTNEY BRENDAN OGLE,

GERARD HUGHES, BRIAN DUNPHY, ANTHONY COLLIER, KEVIN CONNOLLY,

KEVIN FOX, DAVID HEALY, HENRY MASTERSON, HUGH McCARTHY AND

IRISH LOCOMOTIVE DRIVERS' ASSOCIATION

Defendants/Appellants

JUDGMENT delivered on the 25th day of January, 2001 by FENNELLY J., [Nem Diss].

Although the setting for the present appeal is a contentious labour dispute in the national railway system, the court is confronted with two comparatively discrete points of statutory interpretation. Thus the briefest sketch of the litigation to date will suffice.
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The plaintiff, Iarnrod Eireann-Irish Rail, is a company, formed and registered under the Companies Acts pursuant to the provisions of the Transport (Reorganization of Coras Iompair Eireann) Act, 1986. It is a state body responsible for the railways and exercises the functions conferred previously on Coras Iompair Eireann, which holds all its shares.
The first eleven defendants are all employed by the plaintiff as locomotive drivers and, as the plaintiff emphasised at the hearing, are valued employees in that capacity.. They are members of as well as constituting the National Executive of the last named defendant, the Irish Locomotive Drivers' Association (ILDA). It is the precise legal or, to be more precise, industrial-relations, character of ILDA which is the principal bone of contention between the parties to the appeal.
The matter which principally preoccupied the High Court was the plaintiff's claim that the personal defendants had engaged in unlawful industrial action, in particular by organising and inciting illegal work stoppages, thereby causing damage to the plaintiff. All these claims were dismissed by the learned trial judge after a hearing which lasted six days. There is no appeal.
The plaintiff also included in its proceedings a claim for the following declarations:

1. A Declaration that the defendants are acting unlawfully in that they are portraying themselves as a duly authorised or excepted body for the purposes of the Trade Union Act of 1941 as amended in that they are-

Insisting on representing locomotive drivers in the plaintiff's service in the context of their terms and conditions of service in breach of statute (and in
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particular in breach of the Railways Act 1924) in the absence of lawful warrant and in particular a negotiation licence as stipulated by statute;

Directing, fomenting, instigating, promoting and maintaining the industrial action against the plaintiff contrary to law and in particular the Industrial Relations Act 1990.

Interfering with the plaintiffs statutory mandate to provide a transport and rail service within the State.

2. A Declaration that the plaintiff is required as a matter of law (and in particular statute law) to negotiate and conclude agreements pertaining to the terms and conditions of service of its employees with those authorised trade unions recognised for such purpose by the Plaintiff and possessing negotiation licences.

The defendants resist these claims essentially by saying:

• ILDA is a trade union registered under the Trade Union Act, 1871;

• ILDA is an excepted body within the meaning of the Trade Union Act, 1941 (the act of 1941);

• ILDA is a trade union representative of railway employees within the meaning of section 55 of the Railways act, 1924 (the act of 1924).

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The defendants claim, further, by way of counterclaim, declarations to the effect that the plaintiff, by virtue of the terms of the act of 1924, is bound to regulate rates of pay, hours of duty and other conditions of service with trade unions representative of railway employees, which includes ILDA, and:
4. A Declaration that the plaintiff is required to reach agreement with the Irish Locomotive Drivers' Association together with other Trade Unions representative of railway employees within the meaning of Section 55 of the Railways Act 1924 in order to amend the agreement relating to rates of pay, hours of duty and other conditions of service of locomotive drivers made about the month of May 1994 with the Trade Unions representative of such railway employees
The trial judge found in favour of the plaintiff on all these legal issues. The High Court order declares

"... that the Defendants not having a negotiation licence and not being an "expected (sic) body's within the meaning of Section 2 of the Trade Union Act, 1942 are not a "representative union" within the meaning of Section 55 of the Railways Act 1924 and cannot lawfully conduct negotiations for the fixing of pay hours of duty and other conditions of service of locomotive drivers in the employment of the Plaintiffs"

The defendants' appeal takes issue essentially with the trial judge's interpretation of the sections of the Act of 1941 and the Act of 1924 that were at issue and also claims that he erred in
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holding section 55 of the Act of 1924 to be merely directory and not mandatory. In effect, as explained during the hearing of the appeal, the defendants claim that the plaintiffs are bound to negotiate with and to reach agreement with trade unions including ILDA.
The existence of ILDA resulted from dissatisfaction with the negotiation by the existing two unions representing employees of the plaintiff of a new collective agreement in 1994. It is a break-away union comprising former members of the Services, Industrial and Professional Trade Union, known as S I P T U, and the National Bus and Railway Union, known as the N B R U. Originally formed merely as the National Locomotive Drivers' Committee, ILDA was registered with the Registrar of Friendly Societies on 29th July, 1999 as a trade union pursuant to the provisions of the Trade Union Act, 1871.
The plaintiff, however, to use the language of the trial judge, "looked upon the emergence of I L D A with undisguised dismay." They did not favour what they regarded as fragmentation of the workforce into yet more unions over and above the eleven with which they already dealt. All locomotive drivers are obliged by the terms of their contracts of employment to belong either to S I P T U or N B R U. They would deal with unions in possession of a negotiation licence granted by virtue of the act of 1941. I L D A has not applied for such a licence. The plaintiff also considered I L D A to be a disruptive influence not only on negotiations but on the actual operation of the railways. In short, the plaintiff does not recognise ILDA and will not negotiate with it.
Resolution of the dispute turns then on the meaning and effect of two legal provisions. I will deal, firstly, with the act of 1941, as amended and, secondly with section 55 of the act of 1924.
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Part II of the act of 1941 introduced a system of what its title calls: "Licensing of Bodies Carrying on Negotiations for Fixing Wages or Other Conditions of Employment." Section 5(1) defines a "negotiation licence" accordingly. Negotiation licences can be granted by the Minister for Industry and Commerce, now the Minister for Labour, according to section 7(a) of the Act only to a body "that is either registered under the Trade Union Acts, 1871 to 1935, or, if not so registered, is a trade union under the law of another country and its headquarters control is situate in that country..." Following section 2(2) of the Industrial Relations Act, 1990, (the act of 1990) this must be read as referring to the Trade Union Acts, 1871 to 1990. The same section requires the applicant for a licence to have deposited and, thereafter, to keep deposited in the High Court an "appropriate sum."
A Trade Union applying for a negotiation licence after the passing of the act of 1990 has to deposit a minimum of £20,000 (see section 20(3) and 21(3) with the Third Schedule to the act of 1990). Furthermore, section 2 1(2) of the act of 1990 imposes a minimum membership requirement of 1,000 in respect of applications made for a negotiation licence after the passing of that act. These statutory provisions were not, however, discussed at the hearing.
The present appeal centres on section 6 and particularly its amendment in 1942. Section 6, so far as relevant reads as follows:

"6.- (1) It shall not be lawful for any body of persons, not being an excepted body, to carry on negotiations for the fixing of wages or other conditions of employment unless such body is the holder of a negotiation licence.

(2) Where any body of persons acts in contravention of this section, the members of the committee of management or other controlling authority of such body and

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such of the officers of such body as consent to or facilitate such act shall be liable on summary conviction thereof to a fine not exceeding ten pounds, together with, in the case of a continuing offence, a further fine not exceeding one pound for every day during which the offence is continued.

(3) In this section the expression "excepted body" means any of the following bodies, that is to say:-

(a) a body which carries on negotiations for the fixing of the wages or other conditions of employment of its own (but no other) employees,

(b) a body which is registered under the next following sub-section of this section,

(c) a civil service staff association recognised by the Minister for Finance,

(d) an organisation of teachers recognised by the Minister for Education,

(e) the Agricultural Wages Board,

(f) a trade board established under the Trade Board Acts, 1909 and 1918, and

(g) a body in respect of which an order under sub-section (6) of this section is for the time being in force,

(4) [not relevant]

(5) [not relevant]

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(6) The Minister may by order declare that this section shall not apply in respect of any particular body of persons

(7) [not relevant]

(8) Nothing in this section shall render it unlawful for any person or group of persons to mediate in a trade dispute or to bring together the parties in a trade dispute with a view to reaching an amicable settlement.

Section 2 of the Trade Union Act, 1942 provides:

"2. In Section 6 of the Act of 1941, the expression "excepted body" shall include a body all the members of which are employed by the same employer and which carries on negotiations for the fixing of the wages or other conditions of employment of its own members (but of no other employees)."

It is agreed that ILDA does not hold a negotiation licence and that it does not qualify for any of the exceptions contained in section 6 of the Act of 1941. Thus it cannot lawfully carry on wage or other negotiations unless it comes within the definition of "excepted body." It is also common case that all the members of ILDA are and were at all material dates "employed by the same employer" to wit, the plaintiff. However, the Constitution of ILDA at Article 5 provides:

"Membership shall be open to all Locomotive Drivers, male or female, resident or employed on the Island of Ireland."

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Membership, on the other hand, is not automatic. Applications must be submitted to the Executive Council, who have complete discretion to accept or reject.
The effect of Article 5 is to open the possibility of membership to employees of railway undertakings other than the plaintiff, which, in reality, means only Translink, the Northern Ireland Railway Company. No employees of Translink have ever, in fact, been members of ILDA. The decision of the trial judge to reject the claim of ILDA to be an excepted body turned on Article 5 of its Constitution. He said:

"I do not, however, accept the submission of the Defendants to the effect that their claim to be an "excepted body" is to be determined solely by reference to the employment of their current members. I am of the view that the clear intention of the legislature in creating the body designated as "excepted body" was to relieve an obvious hardship which might have arisen in the context of the enactment of Section 6(1) of the Trade Union Act, 1941 in that many employees in small firms might have been deprived of the benefit of trade union representation in the carrying on of negotiations for the fixing of wages and other conditions of employment, where members of the staff of a particular employer did not wish to join a large outside union but whose numbers were too small to raise and maintain what in 1941 was a very substantial deposit of £1,000 which was required for the purposes of getting a negotiation licence. In my view, therefore, it is essential in order to be considered to be an "excepted body" that all the members of such a body must at all times be employed by the same employer and Article 5 of the constitution of IL.D.A. insofar as it extends membership of I.L.D.A. to persons other than employees of the Plaintiffs, is inconsistent with that essential requirement."

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At the hearing of the appeal, the plaintiff advanced three grounds upon which ILDA does not qualify as an "excepted body":

• membership of ILDA, is not confined to employees of one employer;

• under the provisions of section 55 of the Act of 1924, an agreement reached with "trade unions representative of such employees" is binding on all employees: hence ILDA could not satisfy the statutory condition that they negotiate on behalf of "no other employees";

• the members of ILDA are in breach of the terms of their employment contracts in belonging to another union.

In my view, the first of these arguments is ill-founded. All ILDA's members are, in fact, and were at all material times employed by the same employer. In any event, I do not think ILDA's Constitution is relevant. If it did not contain Article 5, it would be equally open for it to accept as members employees of another employer. The section does not require anything more. To read into the section words which would exclude bodies whose members could potentially include persons employed by another employer is not justified by any canon of construction of which I am aware. None was advanced in the argument.
The learned trial judge was undoubtedly correct, however, in stating that the object of the section was to relieve the hardship that would arise if employees of small firms were deprived of the benefit of trade union representation in carrying on negotiations. I would go further. Trade
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union membership is not compulsory and, although the court was not addressed on the constitutional implications of the interpretation of the section, it can hardly be doubted that it cannot be made so by law. Even at a practical level, if an employer and its workers agreed to exclude union representation, it would be extraordinary if it were illegal for a staff committee to enter consensual negotiations with the employer.
At this point it is important to note that the definition of an excepted body is one which "carries on negotiations for fixing wages ...." (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. No argument based on this point was advanced by the respondents, though it was raised by the Court during the hearing. The Court must, nonetheless, interpret the statute in what it conceives to be the manner required by law and cannot adopt an erroneous interpretation because none of the parties relies upon the correct one.
As I see it, the issue is whether a body can claim that it "carries on negotiations" (noting the use of the present tense), where patently it does not and cannot do so because the employer refuses to negotiate.
Both the legislative history and the common sense of the matter support the view of the learned trial judge, which I would paraphrase and adapt as being that the legislative intent was to relieve against the obvious hardship which would have resulted from depriving employees in small firms of the right to negotiate directly their pay and conditions of work with their employer. As he pointed out the deposit required for a negotiation licence was the then not inconsiderable sum of £1,000. As noted above, the minimum figure is now £20,000. Employees within such firms may wish to or may be persuaded by their employer to exercise their constitutional right not to join a registered trade union.
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I think that the amendment made by section 2 of the 1942 Act was designed to cover a casus omissus arising from section 6 of the 1941 Act. The 1942 amendment mirrors, for employees, what was already contained for employers in the act of 1941. The 1941 exceptions include at section 6(3)(a):

"A body which carries on negotiations for the fixing of wages or other conditions of employment of its own (but no other) employees,"

The act of 1942 adds:

"A body all the members of which are employed by the same employer and which carries on negotiations for the fixing of wages or other conditions of employment of its own members but of no other employees,"

The underlined words are common to the two definitions.
The 1941 version had omitted to provide for the employee counterpart of the employer conducting negotiations in-house. It was obviously desirable that employee bodies be not left exposed while employers were covered by an exception.
In each case the activity is implicitly consensual, which explains the use of the present tense. This does not, of course, mean that the exception was intended to cover only bodies existing at the passing of the act. It can apply to any bodies which "carry on negotiations" whenever in the future by the consent of both sides negotiations actually take place.
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On this basis, I consider ILDA cannot be an "excepted body". I would uphold the view of the learned trial judge even if for rather different reasons.
It is not necessary, therefore, to consider in any detail the other points made by the plaintiff. I do not think that ILDA was seeking to negotiate on behalf of other employees. Nor do I think that any term of employment that its members belong to a trade union could affect the question of whether they were, in fact, members of a body defined by section 2 of the act of 1942.
The conclusion I have reached disposes of the argument regarding section 55(1) of the Railways Act, 1924, which provides:

"55(1) From and after the passing of this Act the rates of pay, hours of duly, and other conditions of service of railway employees shall be regulated in accordance with agreements made or to be from time to time made between the trade unions representative of such employees of the one part and the railway companies and other persons by whom they are respectively employed of the other part."

From the passing of the act of 1941, a trade union could seek to negotiate agreements envisaged by section 55(1), like any other agreement, only if it was the holder of a negotiation licence. ILDA was not.
In the result, it is not necessary to express an opinion on a number of difficult questions of interpretation of section 5 5(1). This Court, in Transport Salaried Staffs' Association and others v Coras Iompair Eireann [1965] I.R. 180, appears to have decided that rates of pay and other conditions of work negotiated with trade unions representative of railway employees were
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binding, at least on the employer, in respect of all employees covered by the relevant agreement. The implications of this decision for cases where there is a genuine dispute as to the representativeness of trade unions which the employer agrees to negotiate with are potentially extremely complex and delicate. In the present case the employer expressly refused to negotiate with ILDA. Since the latter was not an excepted body, it was, in my view, within its rights. If it claimed a similar right of choice as to negotiating partners where all were trade unions holding negotiating licences, would the Court have to express a view as to the representativeness of the chosen unions? Would an agreement reached even with representative trade unions bind other employees? As it stands, the section does not furnish very clear answers to these and other difficult questions. It may be that the legislature in 1924 had not contemplated that negotiated labour agreements would create such difficulties.
In the result, I would dismiss the present appeal. I would vary the declaration granted in the High Court to state merely that the "defendants are not an excepted body for the purposes of section 6 of the Trade Union Act, 1941 as amended by section 2 of the Trade Union Act, 1942."