Supreme Court allows appeal quashing Labour Court decision for unfair procedure and legal error on jurisdiction.

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)

NOTICE PARTY/RESPONDENT

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 –

(a) 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 and the internal dispute resolution procedures (if

any) normally used by the parties concerned have failed to resolve the dispute,

(b) either –

(i) the employer has failed to observe

(I) a provision of the Code of Practice on Voluntary Dispute Resolution under section 42 of the

Industrial Relations Act, 1990 specifying the period of time for the doing of any thing (or such a

provision of any code of practice amending or replacing that code), or

(II) any agreement by the parties extending that period of time or

(ii) the dispute having been referred to the Commission for resolution in accordance with the provisions

of such code, no further efforts on the part of the Commission will, in the opinion of the Commission,

advance the resolution of the dispute and the Court has received a report from the Commission to that

effect,

(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.

(2) (Not relevant).”

From the wording of the amended section, it is clear that the first requirement for the Labour Court’s jurisdiction is that there be an

existing “trade dispute”. Ryanair disputed that there was a “trade dispute”.

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.”

Under the amended section the Labour Court, if it decides to hold such an inquiry, must in my view do so in relation to all the

requirements specified in section 2. It cannot limit the inquiry to some but not all of the requirements. This point is relevant to a view

which the Labour Court seems to have taken that although it went on to express views as to whether there was or was not a trade

dispute, it was not bound to do so.

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.”

This is somewhat curious because it seems clear that both at the hearing before Hanna J. in the High Court and in the submissions

before this court this issue played a significant part. I do not think that anything turns on this given that one of the grounds for relief

in the way of certiorari permitted by the learned judge was that the Labour Court had erred in law and/or in fact in concluding that

“the unilateral withdrawal of the pilots from the established practice of collective bargaining meant that it was not the practice of the

applicant to engage in collective bargaining” for the purposes of section 2 of the 2001 Act, as amended, and meant therefore that

that requirement in section 2 was met. I suspect that the apparent inconsistency can be explained by an understandable assumption

on the part of the learned judge giving leave that the finding that it was not the practice of Ryanair to engage in collective bargaining

was a pure finding of fact not involving any legal issues. For the purposes of this judgment, I am regarding it as a live issue.

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.”

Does this mean that if a group of employees unilaterally withdraws from the internal negotiating procedures, it cannot thereafter be

said that the employer has a practice of engaging in collective bargaining with them? That was the argument of IMPACT before the

Labour Court and it was accepted by the Labour Court in fact at least on the basis of a mistaken interpretation of the judgment of

Fennelly J. in this court in Iarnród Éireann v. Holbrooke [2001] 1 IR 237. I will be returning to this case later. Alternatively, does the

sentence mean that there is not in place any permanent machinery for collective bargaining negotiations? I think that this is the only

sensible interpretation that can be given to the words and I will expand on my viewpoint later in the judgment.

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.”

The affidavit goes on to explain that Mr. David O’Brien is Director of Flight and Ground Operations of Ryanair and that the evidence of

Mr. Wilson and Mr. O’Brien was that Ryanair did engage in collective bargaining with its pilots and that this was the practice of Ryanair

and also that the internal dispute resolution procedures had not failed. Mr. Wilson went on to point out that in contrast to this no

pilot or other employee appeared or was present to support the assertions of IMPACT and that no testimony was adduced to

controvert the evidence that Ryanair did engage in collective bargaining with pilots and had an internal dispute resolution procedure in

place which had not failed to resolve the dispute. I will, in due course, be explaining how the Labour Court dealt with this matter. For

all practical purposes, the Labour Court accepted a particular viewpoint put forward by the trade unions and as a consequence held

that Ryanair did not engage in collective bargaining negotiations.

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:

“We also note that Ryanair continues to talk as if what is at issue here is union recognition, rather than fair and equitable

treatment consistent with what we have heretofore experienced. You are well aware of industrial norms and indeed the

norms within Ryanair previously with regard to training, and we do not see why you should depart from those.

Nevertheless, we are willing to engage with you to try and find a solution.”

The fundamental unfairness of which Mr. Wilson complains in the affidavit is that on Ryanair’s behalf two significant officers of the

company gave evidence whereas not a single employee represented by the trade union gave evidence nor were they ever identified.

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.”

Both sets of supplemental submissions are exhibited. The IMPACT’s supplemental submissions for the most part consist of legal

arguments which are reiterated and accepted in the decision of the Labour Court and I will, therefore, comment on them when I come

to analyse that decision. The union does, however, suggest that certain documents attached to Ryanair’s submissions make “clear”

that “those who are elected as employee representatives do not engage in negotiation but at most a form of consultation.”

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.”

That would appear to be the kernel of the case being made by the union. It was clearly accepted by the Labour Court. But as I have

already indicated and as I will be elaborating upon, I am satisfied that the union cannot bring itself within the 2001 Act, as amended,

on foot of a factual withdrawal from the committee system by the pilots. I am of opinion that the Holbrooke case does not support

any such proposition.

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.”

Again, the controversial view is clearly being put forward and indeed it was ultimately accepted by the Labour Court that a unilateral

withdrawal by the pilots from internal machinery necessarily leads to a conclusion that thereafter there were no collective bargaining

arrangements. I have already briefly disagreed with this proposition and indicated that I will be elaborating on it later.

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.”

Before even considering any reply that may have come to that letter the letter itself has all the hallmarks of a carefully framed letter

paying lip service to “any internal Ryanair dispute resolution procedures that may be in place” (though thereby in a sense admitting

that such procedures were in place) but with the real intention of invoking the procedures under the 2001 and 2004 Acts. The short

seven day time limit for a reply is significant. The letter was in fact replied to by Mr. O’Leary in a letter of the 11th November, 2004.

The general thrust of the letter in reply was that Ryanair recognised the right of its employees to join unions but that it was Ryanair’s

policy to deal only directly with its own employees and not through outside agencies including unions. Mr. O’Leary goes on to state

the following:

“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.”

Mr. O’Leary goes on to assert that the union is not entitled to invoke the 2001 Act and that if that course is pursued,

constitutionality of the Act including the 2004 amendment will be challenged by Ryanair. The final two sentences read as follows:

“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.”

I will skip over an exchange of letters that then ensued between the Advisory Services Division of the Labour Relations Commission

and Mr. O’Leary. The net result of the exchanges was that Mr. O’Leary would have nothing to do with the Labour Relations

Commission and again, warned that the union had no right to invoke the 2001 and the 2004 Acts. That replying letter by Mr. O’Leary

was dated the 18th November, 2004.

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.”

That letter gave rise to what seems like an undated reply but which is stamped as having been received by “IALPA” on the 23rd

November, 2004 refuting that the pilots were being asked to sign something that was outside of their control and stating that they

were merely being given an offer. The letter agreed to a meeting in relation to additional information sought but went on to insist on

certain deadlines in relation to the conversion. The letter made clear then that in the event that the pilots did not accept the offer

they would continue to fly the 200 fleet until they were phased out. A meeting apparently then took place between the pilots and Mr.

O’Brien and Mr. O’Leary. The pilots complained that their concerns had not been properly dealt with. In the letter which had been

received by IALPA on the 23rd November, 2004 Ryanair had stated (inter alia) the following:

“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.”

In their letter of the 29th November, 2004 the eight pilots complain about this language by saying:

“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.”

The reference to an absence of bargaining process with pilots in Ryanair for some time would seem to be a reference to a situation

which arose as a consequence of the two pilot representatives resigning from the Dublin pilots ERC.

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:

“Various issues regarding contracts of employment, conversion to new aircraft type/variants and principles regarding

redundancy as outlined in the attached letter from IMPACT to Ryanair.”

It is not in fact entirely clear from the exhibited documentation before this court what letter exactly was the so-called “attached

letter” but it seems obvious that it was either the letter from Captain Cullen, dated the 3rd November, 2004 quoted above or a letter

in similar terms as for instance a letter of the 12th November, 2004 sent by IMPACT to the Director of the Advisory Service of the

Labour Relations Commission. That last letter in turn referred to the letter from Captain Cullen of the 3rd November, 2004 and the

reply from Ryanair of the 11th November, 2004. The question must arise whether there could be said to be a “trade dispute” within

the meaning of the 2001 Act at the time of the application given the withdrawal of the Dublin pilots from the internal procedures.

Even if the answer to that question is in the affirmative, further serious questions remain to be considered as to whether there can be

any jurisdiction on the part of the Labour Court given that, but for the withdrawal of the pilots from the internal procedures, there

may have been appropriate internal procedures in place and, of course, whether in the light of that it can be said that the internal

procedures failed to resolve the dispute.

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”.

The court points out that this is a “broader definition” than that contained in the 1990 Act or that previously contained in the

repealed Trade Disputes Act, 1906. It bases that conclusion on the addition of the word “difference” to the word “dispute”. It takes

the view that “difference” must mean something distinct from a “dispute”. I do not think that this follows. It is common in statutes to

include overlapping nouns or adjectives. For instance, if Ryanair and a particular group of its employees with which it was dealing

were in disagreement over the dismissal of some employee, that would incontrovertibly be a “dispute”. On the other hand if the

disagreement related to interpretation of say a collective agreement, it might at least be argued that that was not a “dispute”. The

inclusion of the word “difference” is intended only to indicate the wider meaning of “trade dispute”. In the definition itself both words

come within the expression “trade dispute”. The Labour Court in considering whether there was a “trade dispute” should have

investigated whether there was internal machinery for resolving the perceived problem and whether that machinery had been

exhausted. I am not satisfied that this issue was investigated in that way. Indeed, it is difficult to see how it could have been

without some evidence from at least one of the employee pilots in dispute.

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 second paragraph in that quotation essentially contains the definition adopted by the Labour Court and which according to the

Decision was accepted by the parties. If, however, the Labour Court takes the view which arguably is hinted at both in the Ashford

Castle case and in this case that collective bargaining in a non-unionised company must take the same form and adopt the same

procedures as would apply in collective bargaining with a trade union, I cannot see that that is necessarily the case. If there is a

machinery in Ryanair whereby the pilots may have their own independent representatives who sit around the table with

representatives of Ryanair with a view to reaching agreement if possible, that would seem to be “collective bargaining” within an

ordinary dictionary meaning. It would seem strange if definitions peculiar to trade union negotiations were to be imposed on non-

unionised companies.

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.”

The Labour Court was entitled to take the view that the town hall meetings could not be considered as contributing to collective

bargaining. What is important to consider however is how the Labour Court viewed the ERCs. The court was clearly told by Ryanair

that they were the vehicles by which it carried on collective bargaining with its staff. There was a system of election to these

committees but as already mentioned, the Dublin pilots had withdrawn from their committees. Just because Ryanair may have from an

administrative perspective organised the elections and may have had a rule against renewal of a term for a representative which was

the case did not in any way mean that the pilots acting through the committee were doing so anything other than independently.

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

“I plan to meet all the ERCs shortly, once we have completed the series of town hall meetings in the next week.

Kevin Osborne will attend the ERC meetings to address any questions in relation to the terms of this new policy….”

5. A Ryanair 20 F filing to the Securities and Exchange Commission in the US which contained the following statement:

“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.”

On this last point, Ryanair contended that what was meant in that context was that no collective bargaining with outside third parties

took place. There were some other documents also which were parsed in that manner. Over all, it would seem to me that there was

insufficient evidence on which the Labour Court would have been entitled to find that the ERCs did not perform the function

contended for by Ryanair. It is difficult to see how the Labour Court can arrive at any conclusion on this point one way or the other

without hearing evidence from at least one relevant employee of Ryanair.

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.”

I have already dealt with this matter in other contexts. Put simply if there is no ERC for pilots but there is evidence at least that this

is only because the pilots unilaterally withdrew, how can it be said if that is in fact so that the internal dispute resolution procedures

failed to resolve the dispute. If they were not availed of they cannot have been a failure. On this issue the Labour Court in its

decision has also said the following:

“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.”

All I can say about this is that on all the documentation before this court it would be impossible not to draw the natural inference

that the dispute (using that expression in a non-technical sense) related in the main to the terms of the pilot retraining scheme. I am

sure that the Labour Court is correct, strictly speaking, in characterising the so-called dispute as involving more than those eight

pilots because naturally, others would be concerned for their own futures in relation to the scheme offered to the eight. But, in my

view, it was unfair and virtually impossible for the Labour Court to make a determination on this issue without ascertaining what pilots

were in dispute. For instance, although the union suggested it was acting on behalf of all the pilots this may not have included the

Standsted pilots as distinct from the Dublin pilots who were treated within Ryanair as a completely separate category. The natural

inference to draw (though it may prove to be incorrect) is that the real dispute was related to these pilots and it must be pointed out

that those eight pilots were still trying amicably to deal with the company at the stage of the reference to the Labour Court. Again, in

my view, the Labour Court did not have the evidence before it on which it could conclude that the internal procedures failed to

resolve the dispute.

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.”

I have already expressed the opinion that the court did not have the evidence on which it was entitled to makes these findings but in

relation to that particular quotation, I would draw attention to the phrase “as the court understands that expression”. Both in that

instance and in other instances in the Decision, it is clear that the court is acknowledging a special, what I might call, trade union

meaning to the expression “collective bargaining negotiations”. As I have indicated, my view is that it should be given simply an

ordinary meaning and not any special meaning as understood in trade union negotiations.

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.”

I do not think that this is a correct interpretation of section 2(1)(a). The relevant grade, group or category of employees would seem

to be the Dublin pilots. Some or all of them may or may not be members of the union. The company, as is its right, does not negotiate

with the union. It claims that it does negotiate with the Dublin pilots via the ERCs and that in so far as that cannot be done at

present, it is only because the pilot representatives have themselves withdrawn. This may or may not be correct but as I see it, it

has never been properly investigated by the Labour Court because of the adoption of a different, and in my opinion incorrect

approach to what it had to decide. It should have been addressing its mind to whether there were in place adequate collective

negotiation procedures (giving an ordinary meaning to that expression) within Ryanair. If the view that I take prevails, the Labour

Court will still have to determine these questions.

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.”

Having cited this subsection, the Labour Court goes on to observe that it must be assumed that the reference to collective bargaining

negotiations in the 2001 Act is not intended to comprehend collective bargaining unlawfully conducted. The court points out however,

that Ryanair contended that pilots as a category constitute an “excepted body”. The union on the other hand argued that there was

no excepted body representing pilots which could lawfully negotiate with Ryanair.

“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:

“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 no other employees).”

If it can be demonstrated that the ERC is an instrument in place whereby pilots may enter into collective bargaining negotiations with

Ryanair then it must surely be an excepted body. The argument against this and which was accepted by the Labour Court is based on

the decision of this court in Iarnród Éireann v. Holbrooke cited above. The Labour Court has, in particular, relied on a passage from

the judgment of Fennelly J. speaking for this court.

“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 Labour Court concluded from the judgment of Fennelly J. and in particular that passage that a body of persons can only be an

exempted body if the employer consents to negotiate with the body. That, of course, is perfectly correct. But the court then went

on to hold that “by parity of reasoning” if an employer wishes to negotiate with a group of its own staff rather than through a trade

union but the employees are unwilling to negotiate on that basis they cannot be regarded as an excepted body. Not only do I believe

that this interpretation does not follow but I believe it to be incorrect. That decision is relevant only to the situation where an

employer refuses to negotiate. It is not relevant to a situation where a particular category of employees is unwilling to avail of

internal machinery for negotiation within a non-unionised company where the machinery is fair and reasonable and there is no

unreasonableness on the part of the company. It is important to consider the purpose of section 6 of the 1941 Act, as amended.

Fennelly J. had this to say at p. 245 of the report:

“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.”

Fennelly J., however, then went on to point out that the employees could not be said to be carrying on negotiations for the fixing of

the wages where the employer refused to negotiate. As I read his judgment what Fennelly J. had in mind was that the statutory

permission given to excepted bodies to negotiate by virtue of the amendment in the 1942 Act was designed to assist employees in

small companies. For one reason or another and possibly the financial implications, the employees in a small firm might want to be able

legally to negotiate with their employer rather than join a registered trade union. In many instances they might be persuaded by their

employer not to join a trade union. The 1941 Act had omitted to provide for the employee counterpart of the employer conducting

negotiations in-house. It was considered desirable that employee bodies “be not left exposed while employers were covered by an

exception”. But under the scheme of the Acts as Fennelly J. pointed out “the activity is implicitly consensual”. The purpose of the

1942 amendment was to deal with a situation where both employer and employees in a small firm wanted to negotiate terms and

conditions in a situation where the employees would not be acting illegally for not having a negotiation licence under the 1941 Act.

This element of consensus is not in any way of the essence of the legislation with which this appeal is primarily concerned. What is

required under these statutory provisions is that the employer has in place an appropriate system.

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.”

I would summarise the position, as I see it, as follows. The Labour Court did not adopt fair procedures by permitting complete non-

disclosure of the identity of the persons on whose behalf the union was purporting to be acting. There was a second and equally

important element of unfair procedure. Two senior management figures in Ryanair appeared at the hearing and made submissions

which were in effect unsworn evidence and accepted as such by the Labour Court. It would appear that they maintained at all stages

that appropriate procedures were in place. That may or may not be true but the Labour Court was not entitled to disbelieve that

evidence in the absence of hearing evidence from at least one relevant pilot who was an employee of Ryanair. Otherwise it was

impossible to challenge the views put forward by the union which could only be characterised as opinion. The Labour Court decided

the issue against Ryanair to a large extent on foot of omissions in Ryanair documentation and on foot of a view put forward by the

union that the ERCs were consultative bodies only. This was not a fair procedure.

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.

Ryanair v. The Labour Court