Labour Court Database __________________________________________________________________________________ File Number: CD90407 Case Number: AD9163 Section / Act: S13(9) Parties: JETMARA TEO - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Appeal by the Union against Rights Commissioner's Recommendation No. ST 43/90 concerning the Company using a worker's Tax Rebate in the calculation of sick pay.
Recommendation:
7. Having considered the submissions made by the parties and
having established that no documentary evidence exists to support
the Union's contention of past practice to the contrary the Court
takes the view that the Rights Commissioners Recommendation should
stand. The Court so decides.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD90407 APPEAL DECISION NO. AD6391
INDUSTRIAL RELATIONS ACT 1969
SECTION 13(9)
PARTIES: JETMARA TEO
(Represented by the Federation of Irish Employers)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Appeal by the Union against Rights Commissioner's
Recommendation No. ST 43/90 concerning the Company using a
worker's Tax Rebate in the calculation of sick pay.
BACKGROUND:
2. In 1979 the Company introduced a sick pay scheme, which,
depending on service, provided for payment of between 6 and 10
week's pay. In 1982 the Company improved the scheme for the
provision of payment between 8 and 12 weeks for the same service.
The scheme provides for the payment of the difference between
Social Welfare benefits and nett take home pay.
3. In early 1990 a worker who was out sick had his tax rebate
taken into account when calculating his sick pay entitlement. The
Union objected to this and claimed the tax rebate portion withheld
by the Company. The Company rejected the claim and stated that
all workers receive their nett pay while out sick and the issue
was referred to the a Rights Commissioner for investigation and
recommendation. Following an investigation held on the 12th June,
1990 the Rights Commissioner issued the following recommendation
dated 27th June, 1990:
"I have not experienced a sick pay scheme which takes account
of the individual's tax status in determining the Company's
contribution. It is however quite common for the
individual's Social Welfare status to be accounted in making
up his basic pay for sick benefit.
The Union is correct in stating that there is no specific
reference to income tax netting in the Agreement dated 11th
April, 1979. There is Social Welfare netting provided for
in clause 2(d) of the same Agreement. Clause 2(e) states
inter alia "that any dispute concerning application of the
scheme will be processed through the normal grievance
procedure". The Union has never invoked this clause since
1979 in respect of a practice which has been common place
since then i.e. income tax netting.
In these circumstances combined with the generous
qualification conditions the fact that the Labour Court has
recently ruled in favour of the principle that "topping up"
from any source should not exceed basic pay for sick
benefit. I must recommend that the claim fails for these
reasons".
4. The Union appealed this recommendation to the Labour Court
under Section 13(9) of the Industrial Relations Acts, 1969. The
Court heard the appeal in Galway on 16th October, 1990.
UNION'S ARGUMENTS:
5. 1. The Sick Pay Scheme provides for the payment of the
difference between Social Welfare benefits and normal take
home pay over an agreed duration of twelve weeks. The
practice of using tax rebates when calculating sick pay was
never negotiated within the text of the Scheme. The Company
has never formally claimed a change in the Scheme to
incorporate tax rebates.
2. Using tax rebates for sick pay purposes is
discriminatory against single workers as they are not able to
transfer their allowance to their spouse.
3. It is the Union's opinion that the Rights Commissioner
deviated from the dispute which was referred to him namely
that the Company was acting outside of the agreed Sick Pay
Scheme conditions and that the worker as a result suffered
a financial loss. Any changes in the Sick Pay Scheme should
be negotiated through normal industrial relations procedures.
The Rights commissioner acknowledged that the Sick Pay Scheme
did not provide for the use of tax rebates but went on to
recommend on the reasonableness or otherwise of the Employer's
action. The Rights Commissioner should have recommended on
the merits of the individual's case which was referred to him.
COMPANY'S ARGUMENTS:
6. 1. Refunding of tax rebates has never operated in the
Company and therefore, by custom and practice, this position
should be maintained. Also, if refunding of the rebates was
introduced, employees would be in receipt of a higher rate of
pay than if they were at work.
2. In recent times Labour Court recommendations numbers
11867 and 10940 upheld the principle that there should be no
topping-up of sick pay above normal basic pay and that the
employer has the right to alter or amend a condition of
employment unilaterally in such circumstances LCR 11952
has also upheld this principle.
DECISION:
7. Having considered the submissions made by the parties and
having established that no documentary evidence exists to support
the Union's contention of past practice to the contrary the Court
takes the view that the Rights Commissioners Recommendation should
stand. The Court so decides.
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Signed on behalf of the Labour Court
John O'Connell
11 January, 1991 _______________
M.D./M.O'C. Deputy Chairman