Labour Court Database __________________________________________________________________________________ File Number: CD88103 Case Number: AD8814 Section / Act: S13(9) Parties: CORAS IOMPAIR EIREANN - and - TRANSPORT SALARIED STAFFS' ASSOCIATION |
Appeal by the Company against Rights Commissioner's recommendation No. CM/18017.
Recommendation:
5. The Court accepts that the changes made involving this worker
were due to a decline in business in the Tours Department. The
Court considers accordingly that compensation is not warranted in
these circumstances. The Court decides that the Company's appeal
be upheld.
Division: Mr Fitzgerald Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD88103 APPEAL DECISION NO. AD1488
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 13(9)
PARTIES: CORAS IOMPAIR EIREANN
and
TRANSPORT SALARIED STAFFS' ASSOCIATION
SUBJECT:
1. Appeal by the Company against Rights Commissioner's
recommendation No. CM/18017.
BACKGROUND:
2. In December, 1986, there took place a re-organisation of the
C.I.E. Tours Department. The worker concerned in this case was at
that time an Executive Grade 4 in the department. The worker was
transferred to the passenger Marketing Department in Abbey Street
pending his relocation to a more suitable position. Prior to the
re-organisation, the worker in his previous position had earned a
substantial amount of overtime (details supplied to the Court).
The Association, on behalf of the worker concerned, served a claim
on the Company for compensation for loss of earnings. The Company
rejected the claim on the grounds that the losses incurred are a
direct result of a falling off in business. No agreement could be
reached at local level, and the matter was referred to a Rights
Commissioner for investigation and recommendation. On 2nd
October, 1987, the Rights Commissioner issued the following
recommendation -
"It is certain that some of his losses are a direct result of
a decline in business but more of them are due to a
re-organisation which has generated savings for C.I.E. but it
is impossible to determine the proportions of cause.
The fairest solution I can perceive is that the Company
compensate him with half of his 1986 earnings, that is a sum
of £1733.00".
On 3rd February, 1988, the Company appealed the Rights
Commissioner's recommendation to the Labour Court under Section
13(9) of the Industrial Relations Act, 1969. A Court hearing took
place in Dublin on 26th February, 1988.
ASSOCIATION'S ARGUMENTS:
3. 1. Prior to the re-organisation, the worker in his previous
position earned a substantial amount in overtime payments
over a period of seven years (details supplied to the Court).
On the basis of this, the worker had a clear expectation that
his level of overtime earnings would continue and he made
commitments accordingly.
2. The Company's principal argument against the claim has
been that the worker's loss of overtime was a direct result
of a fall off in business and that it is the Company's
practice not to compensate for earnings lost in such
situations. That argument was clearly negated at a meeting
with the C.I.E. Tours Manager on 2nd January, 1987, when he
clearly acknowledged that the duties formerly performed by
the worker prior to the re-organisation of his Department,
had in fact been re-allocated and "split-up" and were
continuing to be performed by two ungraded executives in his
department. The Union has in its possession a letter from
the Company supporting this contention, (details with the
Court).
3. The Association would also contend that the overtime
working in dispute is of a seasonal nature and that it occurs
in the peak Summer period and has continued to obtain for all
residual staff both clerical and executive who remained in
the Tours Department subsequent to the re-organisation which
gave rise to this claim.
4. All of the foregoing clearly substantiates that if
the worker had been left in his position and continued to
perform the duties thereto, he consequently would have had an
expectation of a reasonable degree of overtime earnings, as
was the case in previous years.
5. The Rights Commissioner in his recommendation clearly
took this factor into account along with the content of the
Company's letter to the Union, and on those grounds I would
therefore ask the Court to dismiss the Company's appeal.
COMPANY'S ARGUMENTS:
4. 1. The worker's transfer was a direct result of a fall-off
in earnings due to a loss of business (details with Court).
Drastic action was needed to maintain the viability of the
operation and there has been a reduction in permanent staff
from 36 to 21 in Dublin and from 20 to 11 in New York. This
had the effect of staunching the outflow and reducing the
losses. There was negotiation with the Clerical and
Supervisory Trade Union Group before these changes took
place.
2. In his new position the worker is not in receipt of
overtime, but this does not mean he will never work overtime.
Indeed Irish Rail is extremely conscious of the necessity to
increase its share of the market - its carrying capacity is
underutilised at present - and as Market Research Officer in
the Business Development Section this could result in
overtime working by the worker in the future.
3. The Company is under constant pressure from the Clerical
and Supervisory Group to reduce the incidence of overtime
working. The Company have no quarrel with the Group on this
matter. Good management calls for the reduction of overtime
to the absolute minimum consistent with good service. The
work flow in the Tours Department as in booking offices in
the rail section or in the sales office in Dublin Bus is
periodic and can best be met by overtime working rather than
by the employment of additional staff. However, no-one in
CIE or in the constituent companies of the Group has a
guarantee of continuous overtime. Hours of work have to be
adjusted to meet the exigencies of the service.
4. As regards the statement that the worker should be
compensated in accordance with the agreement, there is no
such agreement covering compensation for loss of earnings
arising out of a reduction in business or recession. There
is a productivity agreement for clerical and executive staff
which makes provision for the payment of compensation for
loss of earnings arising out of re-organisation, but this
agreement specifically excludes loss of traffic or
retrenchment.
5. The Association contends that the worker's redundancy was
occasioned by re-organisation because work he was doing is
still being carried out in the Tours section. This is an
over simplification of the position. The Tours department is
still operating, but at a reduced level, and so far as the
Dublin office is concerned with 15 fewer employees. This
means that the work generated by available traffic has to be
spread over the remaining staff. However, this is not a
saving in the sense of productivity but a cost cutting
exercise to maintain the viability of the Tours section and
the reduction in earnings is not a unilateral gain accruing
to the Company.
6. It has been well established in industry that companies
are not required to pay compensation where a loss of earnings
is a result of a reduction in business. It has never been
the practice of the Company to pay compensation where a loss
of earnings is a result of a reduction in business, the
recession, cut back in capital programme, normal changes in
working, or economies introduced to curtail expenditure in
the face of the Company's critical financial position.
7. Similar claims for loss of earnings have been made in the
past and the Court has not seen fit to recommend concession
of the claims for compensation (details supplied to the
Court).
8. The Company submits that the Rights Commissioner
misdirected himself in finding that some of the worker's
losses are due to re-organisation which has generated savings
for the Company. There was no re-organisation as such. What
has happened is that to keep the operation afloat the
residual work has been spread over the staff remaining after
the Tours section was slimmed down by reducing staff numbers
in line with the business offering.
9. The Company submits that it has met any obligation it may
have to the worker by providing him with employment in his
own grade within the CIE Group. If the Tours section were an
independent business such as one of the many travel firms
which have gone under in the course of the current recession,
in all probability the worker would have been paid off.
DECISION:
5. The Court accepts that the changes made involving this worker
were due to a decline in business in the Tours Department. The
Court considers accordingly that compensation is not warranted in
these circumstances. The Court decides that the Company's appeal
be upheld.
~
Signed on behalf of the Labour Court
25th March, 1988 Nicholas Fitzgerald
P.F./P.W. Deputy Chairman