Supreme Court decision in H.A. O’Neil Limited v Unite the Union and others [2024] IESC 8

On 6 March, the Supreme Court delivered its judgment in H.A. O’Neil Limited v Unite the Union and others.  This is a very important decision as the Supreme Court gave detailed consideration and clarification of the law in relation to restraining industrial action. It made clear that due to the protection in the Constitution of trade unions and s.19 of the Industrial Relations Act 1990, it is “extremely difficult” for an employer to obtain an injunction to restrain industrial action. The Supreme Court held that the High Court had been incorrect in this case in granting an injunction restraining industrial action.

The Supreme Court considered in detail the law in relation to obtaining an interlocutory injunction to prevent industrial action. As the Chief Justice noted, the High Court in considering such applications is often under “considerable pressure of time” and must sometimes resolve very difficult issues of fact and law.  The Chief Justice said that this case gave the Supreme Court “an opportunity to take a more measured and comprehensive survey of the applicable law than may be possible in the course of an urgent application” (at para 21).

Supreme Court consideration of section 19 of the Industrial Relations Act 1990 and the Constitution

Section 19(1) of the Industrial Relations Act 1990 provides that where a secret ballot has been held in accordance with the rules of the trade union, the ballot outcome favours strike or other industrial action and one week’s notice is given to the employer, the employer cannot apply for an ex parte (without notice to the other side) injunction. Section 19(2) provides that a court cannot grant an injunction restraining the strike or industrial action where the respondent establishes a fair case that the he was acting in contemplation or furtherance of a trade dispute.  Article Article 40.6.1°(iii) of the Constitution provides that the State guarantees liberty for the exercise of the following rights, subject to public order and morality, the right of the citizens to form associations and unions.

The Supreme Court considered these provisions in detail.  The Supreme Court emphasised the fundamental importance of the constitutional protection of the right to form a union. The Court said that there would be little benefit in joining a trade union if the actions of the union are not also protected.  The Court noted the “simplicity and the power” of s.19. 

The Supreme Court made clear that s. 19 utterly changed the status quo that had existed before its enactment.  The Chief Justice stated (at para 64):

“It reverses the balance of the pre-existing law.  Where it was once easy to obtain an interlocutory injunction, it should now be extremely difficult to, even where an employer may have an arguable, indeed strong case, that the industrial action is unlawful. The uncertainty of the application of the law to the facts of a case which was a factor weighing strongly in favour of the grant of an injunction, has now been neutralised in the hands of the employer, and instead becomes a factor which weighs strongly against the grant of an injunction.”

The Court set out the law in relation to such applications and the conditions which must be satisfied to obtain such an injunction or defend such an injunction application.

Background to the Supreme Court decision

The appellant in this appeal, Unite the Union, is a British/Irish trade union which organises workers in areas including the mechanical engineering industry.  H.A. O’Neil, the respondent in this appeal, is a mechanical engineering firm engaged in the construction industry. On 28 February 2023, the union, having balloted its members employed by H.A. O’Neil wrote to the company giving notice of industrial action to take place ten days later.  This was due to a dispute about payment for travel time.  That proposed action involved targeted strikes on a rolling basis.  

The first such strike took place on 10 March 2023. It was clear that further targeted action was intended which at that stage involved further days of industrial action.  On 8 March, the company brought an application for an interlocutory injunction restraining the defendants from picketing, and other related orders.  In summary, the company claimed that the industrial action was in breach of a no strike clause in the contracts of employment because the dispute had not been submitted to the dispute resolution mechanism contained in the applicable Sectoral Employment Agreement. The union claimed that the SEO procedure did not apply to the dispute or, if it did, it had been complied with.

The High Court heard the application on 21 March and granted the injunction on 23 March. The union appealed this decision. The Supreme Court granted a leapfrog appeal directly to the Supreme Court as it found that the case raised important issues in respect of the law relating to the grant of injunctions in respect of industrial disputes, and of the application of s.19(2), the general rules for granting injunctions and the nature of the ballot required to satisfy the test in s.19.  

The background to s. 19 of the Industrial Relations Act 1990

The Supreme Court noted that “it is both remarkable and unfortunate” (O’Donnell CJ at para 22) that in order to understand the law relating to trade disputes, picketing and injunctions, it is necessary to consider the development of the law since towards the end of the 19^th century. The Court set out this history very clearly.  It noted that during the 19^th century, the UK governments and courts were mainly representative of interests hostile to organised labour. Initially trade union activity was a crime and a civil wrong. 

Legislation was introduced in the early 1900s to change this – granting criminal and civil immunity to unions and their members for certain acts, e.g. peaceful picketing, when done in contemplation or furtherance of a trade dispute. The law as it applied meant that there wasn’t a positive right to take industrial action but rather such action was essentially unlawful except where limited statutory immunity applied. The Supreme Court noted that as the law was structured in this way, the courts, based on traditional principles, construed the immunities in a narrow way (at para 29, O’Donnell CJ).

The Industrial Relations Act 1990 amended and extended the traditional immunity for trade union activity and industrial action.  Section 19 of the Act deals expressly with the grant of injunctions.  The Court noted that s.19(1) means that an ex parte injunction cannot be granted (i.e. an application without notice to the opposing party) where a secret ballot has been held in accordance with s.14(1) of the Act, the outcome of which favours the strike or industrial action.  

The Court noted that section 19(2) was “central” (para 39, O’Donnell CJ) to this case.  The Chief Justice noted that traditionally the industrial action immunities have been narrowly interpreted (at paras 56 and 57):

“In my view, it is profoundly unsatisfactory that proceedings in this area should still hark back to cases decided between half a century and a century ago….Nor do I consider it correct to approach this area of law on the basis that industrial action is presumptively wrongful and tortious and that the 1906 and 1990 Acts should be viewed as providing islands of immunity which are exceptions to the general rule, and which must accordingly be strictly construed. This, in my view, would be to ignore the clear objective of the legislation, the history against which it is to be understood, and indeed the constitutional context in which it is to be read.”

O’Donnell CJ stated that such a narrow interpretation of the immunities is not correct (at para 58):

“The [Trade Disputes Act 1906] …. as reenacted, refined and extended in the 1990 Act was intended to alter that balance to recognise in law, the legitimate views of the men and women who went on strike, and to protect what was increasingly seen as a right to engage in industrial action and neither it nor the 1990 Act can be properly be seen as limited exceptions to a general principle that industrial action is wrongful.”

The Chief Justice stated that the constitutional the right to form trade unions supports a generous interpretation of the protections in the 1990 Act (at para 59):

“Article 40.6.1(iii) of the Constitution does not itself expressly guarantee a right to strike. However, it does guarantee the right of citizens to form associations and unions.  As such it must be understood to recognise the legitimacy of trade union activity……The right to form unions would be of little benefit if the activities of the union and its members were to be regarded as presumptively unlawful….[T]he organisation of employees in a trade union gave the possibility of balancing the collective power of the employees and the economic power of the employer…. The 1990 Act should not, therefore, be read narrowly or restrictively, but should be read to give effect to the  protection of unions  and their members which the Acts were clearly intended to provide…..If anything given the constitutional context just discussed, it would be appropriate to read the provisions of the Act generously to give full effect to the rights sought to be protected.”

The s. 19(2) test for an interlocutory injunction to restrain industrial action

The Court noted that, while the approach of the court in an application for an interlocutory injunction to restrain industrial action as to the order in which to address the issues will depend on the circumstances, s.19 could in some cases be usefully used at the outset to come to a decision.

The Court said that a trade union, assuming that it is a registered trade union, must establish four things to rely on s.19(2) in defending an application for an interlocutory injunction:

1. That a secret ballot has been held in accordance with the rules of the trade union as provided for in s.14 of the 1990 Act (rules in relation to secret ballots).
2. That the outcome of the ballot favoured a strike or other industrial action.
3. That not less than one week’s notice has been given to the employer concerned of the intention to engage in the strike.
4. That the respondent to the application has established a fair case that they were acting in contemplation or furtherance of a trade dispute. The respondent must establish this on the balance of probabitlies.

The Court found that these conditions were satisfied here (there was no argument before the Court as to the first condition not being satisfied). Accordingly s.19(2) precluded the granting of an interlocutory injunction restraining the industrial action.

The test for an interlocutory injunction restraining industrial action if s.19(2) does not apply

The Supreme Court went on to consider whether, if s.19(2) did not apply, the company would have been entitled to the grant of an interlocutory injunction. It did so, even though, s.19 “provides a full answer to the plaintiff company’s claim for an interlocutory injunction in this case” (at para 65, O’Donnell CJ) because of “the range of arguments raised in the case and their detail and sophistication.”  The Court held that the company would not have been so entitled.

The Supreme Court said (at para 69, O’Donnell CJ) that, “History has shown that it is exceedingly rare for a claim in relation to a trade dispute to go to a full hearing…..it is in the nature of such disputes that that they are immediate, time and fact sensitive and the grant or refusal of an interlocutory injunction is likely to be dispositive.”  The Supreme Court said:

“The default position in applications for injunctions restraining industrial action should be therefore, that it should be assumed that the case will not go to trial, and the NWL/Merck criteria should apply, unless there are particular features in the claim which may make it probable that the case will proceed to trial on the issue and in relatively early course. It should be a matter for the party seeking the injunction to displace that presumption.”

The court, therefore must (i) make its best estimate of the strength of the respective parties’ case; (ii) assess the balance of convenience; and (iii) assess “in particular” the adequacy of damages to either party in the event the injunction is granted or not (para 70, O’Donnell CJ).

The question of the adequacy of damages

The Supreme Court did not consider that the High Court’s assessment of the adequacy of damages was correct. The High Court had found that the company would suffer damage which could not be easily quantified in monetary terms and could not be compensated for by the award of damages.  This damage was claimed to be the damage done to the company’s reputation. The Supreme Court rejected this.  It stated (at para 71, O’Donnell CJ):

“The claim for damage to reputation, not protected by defamation or another tort, but said to be a loss not capable of being addressed by damages is somewhat ephemeral and will in all but the most exceptional circumstances be too vague to justify interlocutory relief, particularly given the availability of a claim for damages for defamation in an appropriate case.”

The Supreme Court held that this was not such an exceptional case.

The High Court had held that the loss to the defendants of being restrained would be de minimis.  The Supreme Court disagreed.  It said (at para 72, O’ Donnell CJ):

“The ability to engaged in lawful industrial action is an important right in civic, societal, legal and constitutional terms (and one which is much valued by employees and trade unionists). An important part of the value of any such right is that the individuals concerned choose when to exercise it.  It is not, for example, an answer to a person who seeks to exercise their right to free speech in public on a given occasion, to tell them that they cannot express their views now or here and to those they wish to address, but may be allowed to speak much later in a different place and perhaps in private or at least to a different audience. The loss of that opportunity to exercise a lawful entitlement when one chooses to do so is at the level of principle precisely the type of loss which cannot be compensated for by the award of monetary damages, or indeed, even assessed in monetary terms. In the context of an industrial dispute there is the additional consideration that the postponement of an ability to engage in industrial action may empty that right, not just of theoretical, but also practical value.”

Lack of clarity in relation to the law on industrial action

The Supreme Court noted the lack of clarity in the law regarding the right to take industrial action, the limits on such a right and the role of the courts in enforcing any of these matters e.g. whether industrial action is in breach of contract, the legal effect of a no strike clause.  It said that if the social partners and the Oireachtas are unwilling to address these matters by legislation, (at para 84, O’Donnell CJ)  “it will not be surprising if fractious industrial disputes continue to find their way into court.” 

Key contacts:

For further information on this topic, please contact Jennifer McCarthy, Partner or Evelyn Gilson, Partner. 

This update is provided for information purposes only and is not legal or other advice.