High Court Rules Sectoral Employment Order (SEO) law unconstitutional

High Court Rules Sectoral Employment Order (SEO) law unconstitutional

Last year, the National Electrical Contractors of Ireland (NECI) lodged proceedings in the High Court seeking to challenge the validity of a sectoral employment order (SEO). If left unchallenged, the SEO would have dictated the minimum rates of pay, pension entitlements and sick pay entitlements electrical contractors must pay to employees. This week, the High Court delivered its judgment in favour of NECI by ruling that the electrical contracting SEO is invalid for both procedural and constitutional reasons.

Not only was it concluded that the SEO was invalid, the High Court also concluded that the legislation which allows the creation of SEOs was also invalid. This decision therefore has very wide-reaching implications as it means no further SEOs can be introduced and it also means that all other existing SEOs are also invalid (such as the construction SEO and mechanical engineering SEO).

What now for SEOs?

As well as the 2019 SEO governing the electrical contracting sector, two other SEO’s were already in force in the construction and mechanical engineering sectors. The High Court decision renders all three SEO’s invalid.

It should be noted that the SEO system was introduced after a similar pre-existing system was struck down by the Supreme Court in 2013. Thus, the Industrial Relations Act 2015 was supposed to fix the flaws that existed previously, but it has now also been struck down as being unconstitutional.

There will no doubt be a considerable push to amend the legislation to allow such SEOs to be reintroduced and employers in the electrical, construction, and mechanical engineering industries should watch this space. However, this will require new legislation to be introduced, which will no doubt take the form of a further amendment to the Industrial Relations legislation.