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The Labour Court was established under the Industrial Relations Act, 1946, to exercise the functions assigned to it by the Act. The functions of the Court have been altered and extended by subsequent legislation including the Workplace Relations Act 2015 which provided for the most profound changes since the 1946 Act. Under the provisions of the Act the Labour Court now has sole appellate jurisdiction in all disputes under employment rights enactments

The Labour Court is not a court of law. It operates as an industrial relations tribunal, hearing both sides in a case and then issuing a Recommendation (or Determination/Decision/Order, depending on the type of case) setting out its opinion on the dispute and the terms on which it should be settled.

Recommendations made by the Court concerning the investigation of disputes under the Industrial Relations Acts 1946 – 2015 are not binding on the parties concerned. However, the parties are expected to give serious consideration to the Court's Recommendation. Ultimately, however, responsibility for the settlement of a dispute rests with the parties.

The Court's determinations under the Employment Rights enactments are legally binding.