British
and Irish Legal Information Institute
Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Supreme Court of Ireland Decisions
You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Ryanair -v- The Labour Court [2007] IESC 6 (01 February 2007)
URL: http://www.bailii.org/ie/cases/IESC/2007/S6.html
Cite as: [2007] IESC 6
[New search] [Help]
|
Judgment Title: Ryanair -v- The Labour Court Composition of Court: Murray C.J., Denham J., Hardiman J., Geoghegan J., Fennelly J. Judgment by: Geoghegan J. Status of Judgment: Approved
Outcome: Allow And Set Aside | |||||||||||||
- 2 - THE SUPREME COURT Appeal No. 377/2005 Murray C.J. Denham J. Hardiman J. Geoghegan J. Fennelly J.BETWEEN: RYANAIR LIMITED Applicant/Appellant and THE LABOUR COURT Respondent and IRISH MUNICIPAL PUBLIC AND CIVIL TRADE UNION (IMPACT) JUDGMENT of Mr. Justice Geoghegan delivered the 1st day of February 2007 In this judgment, I will be referring to the above-named parties as “Ryanair”, “The Labour Court” and “IMPACT”. In a case such as this, where there have already been double proceedings in the sense of a hearing before the Labour Court and a hearing before the High Court words such as “applicant”, “appellant” and “respondent” can inevitably cause some confusion. The factual background to this appeal is relatively simple though the necessary questions of statutory construction are anything but. The context of the appeal is that Ryanair, the well-known airline company, has a policy of not negotiating with trade unions, a fact of which all employees of Ryanair are obviously well aware. This does not mean that Ryanair will not permit its employees to be members of trade unions. Presumably, even if it wanted to achieve that, it knows it cannot do so as freedom of association is guaranteed by the Constitution. So that there will not be oppression or exploitation or unfair dealings on the part of an employer with employees in a company that is not unionised, a legislative regime has been enacted which is contained in the Industrial Relations (Amendment) Act, 2001 and the Industrial Relations (Miscellaneous Provisions) Act, 2004. That legislation ensures that if there are not reasonable arrangements for resolving on a collective basis, problems arising between employees or particular categories of employees and the employer there is an ultimate recourse to the Labour Court. In this particular case, what happened was that Ryanair decided to change its fleet of aeroplanes from being composed of Boeing 737–200s to the newer and larger models of Boeing 737-800. Such a change required special training of the pilots who are going to fly the new aircraft. Ryanair decided to offer eight senior Dublin based pilots such retraining on particular terms and conditions. The next intended batch to be retrained were to be a group of pilots who were based in Stansted Airport in London. For the purpose of the internal procedures and mechanisms for collective employer and employee relationships, the Dublin based pilots and the Stansted based pilots would be separate categories of employees. The Dublin based pilots who had received the offer for retraining were unhappy with some of the terms and conditions and entered into correspondence with management to which I will be referring in due course. In terms of Irish competition the rival airline, Aer Lingus, is unionised and has long dealt with IALPA. More or less in tandem with the correspondence relating to the eight pilots with management, IMPACT purported to invoke the 2001 and 2004 Acts already referred to and purported to bring before the Labour Court a “trade dispute” on behalf of unidentified pilots of Ryanair. As I will be explaining in more detail the legislation provides for a procedure whereby the Labour Court can conduct a preliminary inquiry as to whether it has jurisdiction to deal with the matter i.e. whether the statutory factors are present which give the right of the union to invoke the Labour Court in circumstances where the employer company does not itself negotiate with trade unions. That procedure was adopted in this case and the Labour Court made a Decision in favour of IMPACT and against Ryanair in as much as Ryanair disputed the jurisdiction. Ryanair claimed that there was in fact no “trade dispute” giving rise to a right to go to the Labour Court and that at any rate the Labour Court adopted unfair procedures and made an irrational decision. With leave, Ryanair brought a judicial review application seeking to quash the Decision of the Labour Court on these grounds. That relief was refused by the High Court (Hanna J.) and it is an appeal from that decision of the High Court which has now come before this court. I think it important at this stage to set out the relevant provisions in the 2001 and 2004 Acts. These are not the only enactments which are relevant to the appeal but the other provisions can be referred to at a later stage. I intend to set out now section 2 of the Industrial Relations (Amendment) Act, 2001 as amended by section 2 of the Industrial Relations (Miscellaneous Provisions) Act, 2004. I will underline the amendments. The amended section, therefore, reads as follows: “2. – (1) Notwithstanding anything contained in the Industrial Relations Acts, 1946 to 1990, at the request of a trade union or excepted body, the Court may investigate a trade dispute where the Court is satisfied that –
(b) either – (i) the employer has failed to observe
(c) the trade union or the excepted body or the employees, as the case may be, have not acted in a manner which, in the opinion of the Court, has frustrated the employer in observing a provision of such code of practice, and (d) the trade union or the excepted body or the employees, as the case may be, have not had recourse to industrial action after the dispute in question was referred to the Commission in accordance with the provisions of such code of practice. Secondly, Ryanair argued that it was the practice of Ryanair to engage in “collective bargaining negotiations”. Thirdly, Ryanair argued that it had in place internal dispute resolution procedures and that there had not been a failure of those procedures to resolve the alleged dispute. The Labour Court held against Ryanair on all of these issues but as I have already mentioned, Ryanair claims that not only was the Labour Court wrong and irrational in its decision on these issues but that it gave an unfair hearing to Ryanair. The jurisdictional inquiry in the Labour Court arises under section 3 of the 2001 Act as amended by section 3 of the 2004 Act. The section in its amended form reads as follows: “Any question as to whether the requirements specified in section 2 have been met may, as the Court considers appropriate be determined by the Court either by way of a hearing preliminary to the Court’s investigation under that section or as part of that investigation.” I propose now to summarise the affidavits which were filed in the High Court for the purposes of the judicial review application. The impugned Decision of the Labour Court was made on the 26th January, 2005. By order of the High Court (Macken J.) made the 21st February, 2005 leave was granted for judicial review of that Decision. The leave was in respect of most of the orders sought in the statement grounding the application for judicial review and on all but one of the grounds of relief. The only order of certiorari sought which was excluded by the leave read as follows: “Order of certiorari by way of judicial review quashing the findings of the respondent in its decision entitled ‘Ryanair Limited v. Irish Municipal Public and Civil Trade Union/Irish Airlines Pilot Association’, Decision No. DECPO 51 made the 26th day of January 2005 that it was not the practice of the applicant to engage in collective bargaining.” The first affidavit grounding the application for judicial review was sworn by Eddie Wilson, Director of Personnel and Inflight of Ryanair. Mr. Wilson explains in that affidavit that by an application dated the 22nd November, 2004 IMPACT of which the Irish Airlines Pilots Association (IALPA) is a part applied to the Labour Court for an investigation of an alleged trade dispute between that union and Ryanair concerning the Dublin based pilots pursuant to section 2(1) of the Act of 2001 as amended. In the next paragraph Mr. Wilson makes clear that Ryanair’s position “was and remains” that it did not accept that there was a trade dispute between it and the trade union or that the trade union was entitled to intermeddle in the affairs of Ryanair. It then went on to explain the position of Ryanair in relation to employees joining or not joining trade unions etc. and that is something which I have already explained. One of the problems about this affidavit and about a good deal of the evidence before the High Court is that it is not entirely clear whether everything in the affidavits was said or produced before the Labour Court. All the affidavits should have been drawn up with this in mind but they were not. However, I am satisfied that the substance of Mr. Wilson’s affidavit was in fact before the Labour Court. In paragraph 5 of his affidavit, he explains the position in relation to what he calls “collective bargaining” in Ryanair. He said that it was a “continual process” whereby Ryanair negotiates with representatives of its employees “for the purpose of concluding collective agreements which fixes pay and other conditions of employment.” He then goes on to describe the system whereby employees including pilots elect employee representatives to Employee Representative Committees (ERCs) and that the various ERCs negotiate directly with the company on an ongoing basis in relation to all terms and conditions of employment. He said that minutes of these meetings were circulated to all employees and approved by the employee representatives. Each category of employees elected their own representatives to the ERCs and in the case of Dublin pilots according to Mr. Wilson it was up to the pilots to elect or appoint representatives on to the pilots ERCs. However, he went on to explain that the pilot representatives, that is to say, the Dublin pilot representatives had withdrawn in August, 2004 and no new representatives had been appointed. At this point, I would comment that the reason for the withdrawal of pilots is not really explained but it may be a reasonable inference to draw that it was part of a strategy to enable recourse to the Labour Court. The withdrawal gave rise to the obvious problem as to what is meant by the sentence “It is not the practice of the employer to engage in collective bargaining negotiations in respect of the grade, group or category of workers who are party to the trade dispute.” There is a kind of anger expressed by Mr. Wilson in paragraph 5 of the affidavit in that with reference to the withdrawal of the pilots from the ERCs, he makes clear that Ryanair “strenuously objected to the referral by IMPACT/IALPA which it saw merely as an attempt to compel it to negotiation with this union and to allow it to intermeddle in the affairs of the company.” As will emerge from correspondence to which I will be referring later, the resolution of the problems arising in this case has not been helped by these expressions of emotion on the part of Ryanair, however, understandable. There was an unfortunate reluctance on the part of Ryanair to engage in the real issues and in that sense the company was its own worst enemy before the Labour Court. Continual propaganda in correspondence as to how excellent the company is rather than taking up the issues point by point was not helpful to anybody not least to the Labour Court or the High Court or this court. Be that as it may, I believe that the Labour Court was not correct in its interpretation of the sentence to which I have referred above. Mr. Wilson went on to exhibit the written submissions which Ryanair made to the Labour Court. He also exhibited the written submissions of IMPACT. These submissions would all have been treated as evidence by the Labour Court in that the hearing was entirely informal and there was no sworn evidence of any kind. In this connection paragraph 10 of the affidavit reads as follows: “I say that at no stage during the hearing on this preliminary issue did any Ryanair pilot or other member of the applicant staff attend at the hearing, other than your deponent and Mr. David O’Brien. I say that IMPACT was represented by a number of trade union officials from IMPACT/IALPA none of whom were employed by the applicant or had involvement with the applicant.” In paragraph 17 of Mr. Wilson’s affidavit he makes reference to having drawn the attention of the Labour Court to what he calls the existing Pilot Group Agreement of 30th November, 2000 which was a collective bargaining agreement as he described it for the years 2000 to 2005. There had been a ballot of all the pilots in Ryanair approving of the agreement. Mr. Wilson then goes on to refer to certain of the correspondence which was opened to the Labour Court. This included a number of letters from Ryanair pilots who are members of IALPA. Ryanair argued that in that correspondence the pilots acknowledged that there was an internal dispute resolution mechanism and they sought to engage with Ryanair to find a solution to any difficulties which they had. In particular the following passage in a letter from the pilots is referred to:
Towards the end of the affidavit, Mr. Wilson takes issue with the finding of the Labour Court that the Pilots Employee Representative Committee was not an “excepted body” within the meaning of section 61(1) of the Trade Union Act, 1941 and was, therefore, a body with which it would not be lawful to engage in collective bargaining. This is heavily disputed by Ryanair and I will return to it later. I do not propose to refer to the next two affidavits as they refer merely to questions of procedure. A statement of opposition, however, was filed dated the 29th April, 2005. The verifying affidavit in relation to that statement was sworn on the same date by Michael Landers, Assistant General Secretary of IMPACT. The description at the hearing is contained in paragraph 8 of the affidavit, the operative parts of which read as follows: “On the 14 December, 2004 and the 20 December, 2004 the respondent conducted a preliminary hearing to determine whether or not the requirements specified in the Industrial Relations (Amendment) Act, 2001, section 2(1)(a) had been met. The hearing on the 14th December 2004 transpired as follows: Shay Cody, Deputy General Secretary of the Notice Party, Evan Cullen, President of IALPA, Jimmy McFarlane, Vice-President of IALPA, Neil Johnston, IALPA official and your deponent attended on behalf of the notice party. Mr. Wilson, Director of In-Flight and Personnel, and Mr. David O’Brien, Director of Flight and Ground Operations, and Sean Barrett, Economist, together with the applicant’s legal team attended on behalf of the applicant. The notice party and the applicant read out their written submissions … and referred to the appendices to those written submissions containing extensive documentation relating to the issues in contention for the respondent. The notice party and the applicant were invited to comment on each other’s submissions and did so. The respondent directed questions to the parties. The parties answered these questions. The respondent did not require any of the persons questioned to take the Oath before answering the questions posed. Neither the applicant nor the notice party requested that any person would be required to give evidence on Oath. At the conclusion of the hearing, the respondent requested further written submissions and adjourned the matter to 20 December 2004. At the hearing on that day, the parties read out their supplemental submissions.” While I am not entirely clear as to the precise identity of those documents among the documents which are before the court, I believe that this court has all the documentation which was in fact before the Labour Court. I am not at all satisfied that that documentation of itself negatives the case being made by Ryanair. The key question would seem to me, was there in place a machinery which would have obliged the management of Ryanair to sit around the table with representatives of the Dublin pilots and discuss matters of pay and conditions. If there could not be such a discussion simply because the pilot representatives had withdrawn from the internal arrangements then the statutory requirements for jurisdiction would not be fulfilled. There is a fact finding exercise to be carried out here and I will be returning to the question of whether that was adequately done by the Labour Court or not. The submission of IMPACT which was lodged with the Labour Court goes on to emphasise that in some further documents the word “consultation” is used. This is mainly a reference to what Ryanair told the USA authorities and I will return to it. On my reading of the union’s submission, the key paragraph is the third last paragraph and it reads as follows: “Even if, which is denied, the ‘Employee Representative Committees’ engage in negotiations they do not do so with regard to pilots. It is common case between the parties that there are no employee representatives representing pilots since August 2003. Accordingly, as a matter of fact, the ‘Employee Representative Committee’ do not currently engage in negotiations with regard to pilots. Accordingly and applying Holbrooke the ‘Employee Representative Committee’ cannot be said to be an excepted body in respect of pilots.” Mr. Landers in paragraph 11 of his verifying affidavit refers to the issue of whether there was in fact a “trade dispute” at the time of the application to the Labour Court. I must confess that I had the general impression that in the various affidavits and submissions of IMPACT this issue is somewhat skirted around rather than clearly confronted. Paragraph 11 is illustrative of what I mean. Mr. Landers refers to paragraph 5 of Mr. Wilson’s affidavit in which he asserts that Ryanair’s position is that there was no trade dispute but in response to this, Mr. Landers merely refers to the union’s written submissions to the Labour Court and to paragraph 18 of the same affidavit. But if one moves to paragraph 18 all it says is that there was evidence before the Labour Court upon which it was entitled to determine that there was a trade dispute in being and the deponent refers in general to certain paragraphs of Mr. Wilson’s affidavit and to the written submissions and documentation that were before the court. But the issue does not seem to me to have been dealt with in any precise way. To my mind, it is perfectly clear that the alleged dispute was a dispute about the terms and conditions in which the eight Dublin pilots would embark on training for the Boeing 737-800s and the employment consequences of their not agreeing to the company’s terms. However, it can only be a “trade dispute” within the statutory meaning if the internal machinery for discussing issues was attempted to be invoked by the relevant employees and such an attempt was either rejected by the employer or if not rejected did not resolve the problems. Certain correspondence from the pilots to which I will be referring must throw some doubt on whether there was a trade dispute at the relevant time. In relation to the issue as to whether there was evidence before the Labour Court upon which it was entitled to conclude that it was not Ryanair’s practice to engage in collective bargaining negotiations “in respect of the grade, group or category of employees who are party to the trade dispute” Mr. Landers in his verifying affidavit says that the documents submitted by Ryanair to the Labour Court “demonstrated that neither the ‘town hall meetings’ nor the ‘Employee Representative Committees’ operated as collective bargaining processes.” The deponent refers also to a letter relating to the so-called “town hall meetings”, the annual report for Ryanair for 2004 an undated circular from Ryanair to its staff announcing a pay increase, a memorandum from Mr. O’Brien dated 1st April, 2004 and Ryanair’s 20 Filing to the Securities and Exchange Commission. The fact remains however that neither a single pilot nor any other employee of Ryanair was called by the union to give evidence to the Labour Court. Given the particular issues that were at stake in this case, whatever of any general rule relating to hearings, it was not open to the Labour Court in the circumstances of this case to reach the conclusion which it did reach in the absence of such oral evidence and on the basis of the documentation before it. Mr. Landers goes on to dispute the relevance from Ryanair’s point of view of an agreement to which he admits had the characteristics of a collective bargaining agreement in respect of the period 2000 to 2005. Paragraph 26 of Mr. Landers’ affidavit is also clearly indicative of the core argument being made by the union. It reads as follows: “I beg to refer to paragraphs 22 to 25 of Mr. Wilson’s affidavit. I say that the notice party told the respondent on the 14th December 2004 that its members did not wish to engage in negotiations with the applicant other than with the professional assistance of the notice party. I say and believe and I am advised that as a matter of law, on that basis, the applicant cannot therefore be said to engage in collective bargaining with regard to the applicant’s members, i.e. the group of pilots who are party to the current dispute. In any event I say that it was common case between the parties that there were no pilots ERC since September 2004. Therefore it cannot be said that there were collective bargaining arrangements for pilots since that date.” I intend now to refer to some relevant correspondence with particular reference to its sequence. The first of such letters is that of 3rd November, 2004 written by a Captain Evan Cullen describing himself as President of IALPA – branch of IMPACT. Apparently, Captain Cullen was himself an employee of Aer Lingus. In that letter he writes personally to Mr. Michael O’Leary, Chief Executive of Ryanair and sets out three issues i.e. “Terms and Conditions of Employment”, “Aircraft/type variant conversion” and “Redundancy” which IMPACT would be anxious to enter into discussions with Mr. O’Leary. The last paragraph of this letter reads as follows: “We are available to meet with you or your representatives to discuss these matters. We are also available to utilise any internal Ryanair dispute resolution procedures that may be in place. However we wish to give you notice that should you not reply to this letter within seven days from the date hereof, it is our intention to refer the matter to the Labour Relations Commission in accordance with the Industrial Relations (Amendment) Act, 2001, as amended, by the Industrial Relations (Miscellaneous Provisions) Act, 2004.” “Any issues in relation to terms and conditions of employment, conversion training and possible redundancy are regularly (and will continue to be) addressed directly with our pilots using the successful and effective internal communications mechanisms that already exist to facilitate these discussions. You may rest assured that IALPA, an Aer Lingus union, will be no more involved in our internal discussions with our pilots than you are in similar discussions within Aer Arann or Cityjet.” “We will not allow IALPA or any other Aer Lingus union to misuse the 2001 Act by attempting to impose trade union recognition through the back door of the Labour Court upon a very high pay multinational company like Ryanair. Your attempt to do so will clearly have devastating implications for all non-union multinationals and their many thousands of employees in this country.” On the 19th November, 2004, a letter was written to Mr. David O’Brien, director of operations in Ryanair and signed by the eight Dublin pilots to which I have already referred. They were in fact the eight most senior Ryanair pilots and are described as such in the heading to the letter. I think it worthwhile citing this letter in full. It reads as follows: “Dear Sir We refer to your letter of the 12th November 2004 containing the offer of a place on the Boeing 737-800 training course. All of us who have signed below have noted that the letter when compared to the tax documentation given to us by you, has overstated our earnings. It is vitally important both from a tax point of view and an earnings point of view that this be clarified immediately. It seems that either we have been underpaid, in which case we would obviously like the matter clarified as soon as possible, and the appropriate salaries paid to us or alternatively that we will be overtaxed. We would be obliged if you could have the accounts department deal with this issue as soon as possible. Each of us confirms to you now that we are committed to dealing with this issue as soon as possible and that we will give you any information you require in order to try and clarify the position with Accounts and if necessary with Revenue. We also wish to express concern that we are being asked to sign up to something which is entirely outside our control. The wording of your letter seems to mean that if Ryanair is compelled to engage in collective bargaining with any trade union within five years of our conversion training then we will be asked to meet the costs of the training. This seems to us to be unfair. We have no control over any Union, and it seems particularly unfair that if a small number of unionised members in SIPTU (for example) succeeded enforcing collective representation, that we should suffer. Without in any way doubting your good faith, it is also the case that the company could arrange to enter such collective bargaining as a means of avoiding the costs of the training. We would hope therefore that you could provide us with some further information in these matters. In the interest of speed, you might give us copies of all documentation which we are expected to sign prior to, or after the commencement of the training. We hope that you take this letter in the spirit in which it is intended, namely one of cooperation with the company, but also protecting our own interests from actions over which we have no control. Lastly, before we accept the training and conversion are there any other terms involved in relation to operating the 737-800 fleet. Is there any disadvantage to continuing to fly the 200 fleet until such time as they are phased out? Yours sincerely Captain Roger Bourke, Captain John Goss, Captain Diarmuid Ryan, Captain Peter Serradas, Captain Jerome Lordan, Captain George O’Hara, Captain Pat Lordan and Captain Peter Gallagher.” “As a significant group of Dublin based pilots, you have an important role to play in continuing to promote our policy of directing between our pilots and the airline. This policy has underpinned our philosophy that for so long as this particular collective bargaining process continues then your pay will be better, pay increases higher, job security enhanced and training costs will be met by the company.” “We are not sure to which particular bargaining process you refer here as to the best of our knowledge there has been no bargaining process with pilots in Ryanair for some time. We certainly do not consider the arbitrary imposition of terms on groups of pilots to be any form of collective bargaining. In any event, we are well aware of your position that Ryanair will not countenance any form of collective bargaining, but we are seeking to ensure that each of our individual positions are adequately protected. As we have each been presented with the same fait accompli it is only natural that each of us would have the same concern.” All these dates have some significance because the application to the Labour Court was made on the 22nd November, 2004 by IMPACT not expressly on behalf of the eight pilots but on behalf of all pilots of Ryanair who were members of the union. These remain from beginning to end unidentified and that is another major complaint of Ryanair. The formal application to the Labour Court for investigation of dispute described the dispute as follows:
These matters will all be further considered by me in the next section of this judgment which will be an analysis of the Decision of the Labour Court. The Decision of the Labour Court was dated the 25th January, 2005, the hearing having taken place on the 14th December, 2004. Although I will be indicating points of disagreement with some of its findings the Decision is an impressive document both in terms of its structure and the manner in which the questions are identified. The document does, however, betray an understandable mindset in favour of the way particular expressions are used and particular activities are carried out by trade unions. This is not a correct approach in my view given that the relevant legislation is intended to deal with problems arising in a non-unionised company. It is not in dispute that as a matter of law Ryanair is perfectly entitled not to deal with trade unions nor can a law be passed compelling it to do so. There is an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment. With a view to curing this possible mischief the Industrial Relations Acts, 2001 and 2004 were enacted. Given their purpose they must be given a proportionate and constitutional interpretation so as not unreasonably to encroach on Ryanair’s right to operate a non-unionised company. With those preliminary comments, I will now address the three issues which Ryanair regarded as preliminary issues as to jurisdiction. These are: 1. That there was no trade dispute within the meaning of section 2 of the 2001 Act. 2. That it was the practice of Ryanair to engage in collective bargaining negotiations in respect of the pilots who are party to the trade dispute, if any. 3. That the internal dispute resolution procedures had not failed to resolve the dispute, if any. With regard to the first issue, the Labour Court in its Decision has taken the view that what it calls the “validity” of the “dispute” referred for investigation should more properly be dealt with in the course of the substantive investigation under section 5. But as the matter had been fully argued, the court went on to give its decision on the point. In my view the existence of a trade dispute is a vital condition precedent to jurisdiction and I do not agree that that question should be left to a later substantive investigation. The Labour Court went on to consider the definition of the term “trade dispute” in the 2001 Act. In a careful analysis of various relevant enactments it came to the conclusion that the definition of the term was to be found in section 3 of the Industrial Relations Act, 1946. I agree with that analysis but I part company with the Labour Court in its interpretation of the definition contained in section 3. Section 3 of the 1946 Act defines “trade dispute” as meaning: “any dispute or difference between employers and workers or between workers and workers connected with the employment or non-employment, or the terms of the employment, or with the conditions of employment, of any person”. I now move to the second issue which was whether it was the practice of Ryanair to engage in collective bargaining negotiations “in respect of the grade, group or category of workers who are party to the trade dispute, if any.” The Labour Court has given these words a literal interpretation the effect of which would be that if a category of employee such as for instance the Dublin pilots decide not to engage in “collective bargaining negotiations” with Ryanair then ipso facto it cannot be said to be “the practice of” Ryanair “to engage in collective bargaining negotiations …” Given the purpose of the legislation which I have already outlined, I am of opinion that the words cannot be given that meaning. Otherwise a category of employees could invoke the Labour Court simply by deciding to boycott whatever collective bargaining machinery the company had put in place. That would be a serious infringement of the right to which the Oireachtas also attached importance in the Act of 2005, as amended, of an employer to maintain its own internal negotiating machinery. The Labour Court, in its decision, has stated (and I am quite sure correctly) that “it is generally recognised that the Act was enacted to give effect to the report of the High Level Group on Trade Union Recognition and the Right to Bargain established under the Partnership 2000 Agreement.” It is stated in the Decision that while the High Level Group endorsed “the essentially voluntarist nature” of the Irish Industrial Relations System they nevertheless recognised the need for new measures “to afford additional support to employees where there are no arrangements for independent negotiation on pay and conditions of employment.” The court then makes clear that the measures recommended by the group from which the Act is derived were intended to apply only “where arrangements for collective bargaining negotiations, through which the issues in dispute could be processed, are not in place.” Ryanair agreed with this in making the submission. Thus it was the intention of the Oireachtas that the Labour Court’s jurisdiction would only be invoked where collective bargaining arrangements were not in place and the parties are not engaged in talks. This is not the case in relation to Ryanair. In my view, what “practice” means therefore in this context is that the machinery was in place and not ad hoc. It did not mean that the “practice” ceased to exist if the employees unilaterally abandoned it. Of course, it is a different question altogether as to whether the machinery established by Ryanair did involve “collective bargaining negotiations” within the meaning of the Acts. The Labour Court’s approach to this question was also, in my view, incorrect. While the court pointed out that the expression is not defined by the Act or by any other Industrial Relations Acts which have to be read in conjunction with it the court referred to its own decision in a case relating to employees at the Ashford Castle Hotel. There is cited in the Decision what the court stated in that case and it reads as follows: “A central question which arises for consideration is the meaning of the term ‘collective bargaining negotiations’ as it appears in the subsection. The expression is not defined in the legislation nor is it defined in any other Irish industrial relations statute of which the court is aware of. It is not a legal term of art but it is a commonly used term in the conduct of industrial relations. In the absence of any statutory definition of the term the court must assign to the expressions the meaning which it would normally bear in an industrial relations context. Collective bargaining comprehends more than mere negotiation or consultation on individual employment related issues including the processes of individual grievances in relation to pay or conditions of employment. In the industrial relations context in which the term is commonly used it connotes a process by which employers or their representatives negotiate with representatives of a group or body of workers for the purpose of concluding a collective agreement fixing the pay and other conditions of employment applicable to the group of workers on whose behalf the negotiations are conducted. Normally the process is characterised by the involvement of a trade union representing workers but it may also be conducted by a staff association which is an excepted body within the meaning of the Trade Union Act, 1941, as amended. However an essential characteristic of collective bargaining, properly so called, is that it is conducted between parties of equal standing who are independent in the sense that one is not controlled by the other.” The Labour Court Decision contains the following paragraph: “It is Ryanair’s case that it does engage in collective bargaining with its own staff. It claims to do so through its Employee Representative Committees (ERCs) and through what it described as town hall meetings. With regard to the town hall meetings, the court is satisfied that, as they were described to the court, they constitute a form of consultation or information meetings and have none of the essential characteristics of collective bargaining.” As to whether the ERCs operated as a potential basis for collective bargaining negotiations or not was really the key issue to which the Labour Court had to determine. The procedure whereby the Labour Court made that determination by reference to a number of disparate features was not satisfactory and was fundamentally an unfair procedure. The officers of Ryanair who attended the hearing made clear Ryanair’s case that ERCs perform this function. If that was going to be disputed, it should have been done by sworn or at the very least unsworn oral evidence before the Labour Court from pilots working in the company. Instead of that, the Labour Court based its decision that the ERCs did not provide a platform for collective bargaining on the basis of arguments made by the union and Ryanair documentation with a particular emphasis on omissions from that documentation. Points which seemed to have influenced the Labour Court include the following: 1. A contention by the union that “at best Ryanair consults with its staff but that it does not engage in collective bargaining as that term is understood.” 2. An annual report for 2004 in which the ERCs are described as “Forum which ensure that all department representatives can consult on current issues.” 3. An undated circular from Ryanair to its staff in relation to a pay increase in which it was stated “in recent months we have consulted with all the employee groups through ERC and town hall meetings.” 4. A further memo from David O’Brien of Ryanair dated 1st April, 2004 in which it was stated in relation to loss licence insurance for pilots
“Although Ryanair currently consults with groups of employees, including pilots, through ‘Employee Representative Committees’ regarding work practices and conditions of employment, it does not conduct formal binding negotiations with collective bargaining units, as is the case with many other airlines.” The third issue to be considered was whether internal procedures had failed to resolve the dispute. On this question, the Labour Court first dealt with a point of interpretation as to whether “parties” in section 2(1)(a) referred to the parties before the Labour Court or to the parties to the trade dispute. The Labour Court was correctly satisfied, in my view that it must relate to the parties to the trade dispute. The Labour Court was also correct in rejecting the relevance of an internal grievance procedure as set out in a document called “the Rough Guide”. In relation to the ERCs the court says the following: “The ERCs may have been a forum at which group or category issues were discussed but as previously found, there is no ERC for pilots currently in operation.” “Ryanair has also referred to correspondence between it and the eight pilots who were offered conversion training in which the pilots requested and Ryanair agreed to a meeting at which the terms of the offer could be discussed. These eight pilots cannot and have not purported to represent anyone other than themselves. The dispute which was referred to the court relates to the terms on which all pilots will be offered this training now or in the future. That is clearly a broader issue than that affecting the first eight pilots offered training and would have to be resolved in that broader context.” The court made the following conclusion: “Having considered all of the information placed before it, the court is satisfied, on the balance of probabilities, that whilst Ryanair communicates and consults with employees, including pilots in relation to their pay and conditions of employment, it is not its practice to engage in collective bargaining negotiations as the court understands that expression. The court has also found that there are no operative internal dispute resolution procedures. The court is also satisfied that the other conditions specified at section 2(1) have been met.” The court went on to express the view that even if it had been the practice of Ryanair to engage in collective bargaining negotiations it was no longer the case “and cannot be the case where the parties do not agree on the basis upon which they will engage with each other.” I have likewise expressed disagreement with this view and indicated that all that is required is that there be a system in place. Once that requirement is fulfilled the fact that the category of employees may not avail of it is irrelevant. It would appear that a core sentence in the Decision of the Labour Court is the following: “Ryanair, as its right, will not negotiate with IALPA. It seems axiomatic that if Ryanair do not recognise the only body which the group of employees who were party to the trade dispute wish to represent them, it could not be the practice to engage in collective bargaining negotiations in respect of that group.” In taking the view which it did take it would appear from the Decision that the Labour Court was influenced by the provisions of section 6 of the Trade Union Act, 1941, as amended. Section 6(1) of the 1941 Act reads as follows: “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 negotiations licence.” “Excepted body” is defined by section 6(3)(h) of the Trade Union Act, 1941 (as inserted by section 2 of the Trade Union Act, 1942) as follows:
“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.” “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 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 into consensual negotiations with the employer.” The interpretation which I have placed on the legislation to the effect that the employer must have in place an appropriate internal system of collective negotiations is not admittedly a literal interpretation. In fairness to the Labour Court, it is the normal rule that legislation must be interpreted according to the words used but if a literal interpretation would potentially destroy the whole purpose of the legislation as would be the case here then it is appropriate that a purposive interpretation be applied. Ryanair may be right or wrong in perceiving the steps which have been taken by the pilots as effectively an attempt to force Ryanair to deal with the trade union. It would be especially important where that potentiality at least might exist and might indeed involve an element of unconstitutionality that a purposive interpretation be applied. In this connection, I would particularly rely on the Supreme Court judgment of Denham J. in DPP (Ivers) v. Murphy [1999] 1 IR 98, a case expressly relied upon by Ryanair. The following passage from that judgment at p. 111 of the report is worth quoting: “The rules of construction are part of the tools of the court. The literal rule should not be applied if it obtains an absurd result which is pointless and which negates the intention of the legislature. If the purpose of the legislature is clear and may be read in the section without rewriting the section then that is the appropriate interpretation for the court to take.” Ryanair has challenged the decision of the Labour Court both on the grounds of unfair procedure and on the grounds of irrationality. However in the actual arguments made in relation to irrationality, Ryanair have essentially challenged the Labour Court’s interpretation of the relevant legislation. It could be argued therefore that Ryanair’s case is not so much irrationality as that the Labour Court was wrong in law. I do not think this makes any difference because what was involved was an inquiry as to the Labour Court’s own jurisdiction and the Labour Court was not entitled to make legal errors in considering its own jurisdiction. I believe that the Labour Court was incorrect for the reasons which I have given in its interpretation of the words “the practice of the employer to engage in collective bargaining negotiations” and also in its conclusion that “the internal dispute resolution of procedures” had necessarily “failed to resolve the dispute”. I would allow the appeal. I would quash the decision of the Labour Court and order that there be a rehearing by the Labour Court in which the Labour Court would apply the procedures and the law as indicated in this judgment. JUDGMENT of MR. JUSTICE FENNELLY delivered the 1st day of February, 2007. I fully agree with the judgment that has been delivered by Geoghegan J. I write only to explain that I also am of opinion that the Labour Court has misunderstood part of the reasoning in my judgment in Iarnród Éireann v. Holbrooke [2001] 1 IR 237. The Labour Court relied on this judgment as an alternative to its principal conclusion that it is not the practice of Ryanair to engage in collective bargaining negotiations in respect of the relevant grade, group or category of workers. What it said was that, even if it was the practice of Ryanair to engage in such collective bargaining negotiations, it, the Labour Court, “would hold that any such body could not lawfully do so in respect of the group of pilots who are party to the instant dispute.” It must first be recalled that what the Labour Court had to be satisfied of was that:
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.”
To be fair to the labour Court, I should cite the intervening passage, from which it appears to deduce this conclusion. It is as follows:
Iarnród Éireann v. Holbrooke involved an attempt by a group of employees to compel their employer to negotiate with them and/or a Trade Union which did not have a negotiating licence. The employer refused. In the present case the employer has refused to negotiate with a trade union but maintains that it is willing to negotiate with the employees. | |||||||||||||