Labour Court Database __________________________________________________________________________________ File Number: CD93165 Case Number: LCR14139 Section / Act: S26(1) Parties: WARD INTERNATIONAL - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the payment of a Summer Bonus for 1992.
Recommendation:
5. The Court has given considerable thought to this case, and in
particular to the information which emerged at the hearing as to
the perceptions of the state of the industrial relations held by
both sides at the plant.
The Court is satisfied that the bonus claimed has been clearly
established as a discretionary bonus, therefore the claim must
fail.
However, the Court would suggest that both parties require to sit
down in a calm and detached manner to attempt to evaluate how
relations between them might be improved so that a case such as
this might not be likely to arise in the future.
The Court so recommends.
Division: MrMcGrath Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD93165 RECOMMENDATION NO. LCR14139
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: WARD INTERNATIONAL
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the payment of a Summer Bonus for 1992.
BACKGROUND:
2. 1. The Company is a subsidiary of an American privately owned
Company. The Company manufactures, installs and services
rotary die cutters and other finishing equipment which is sold
to corrugated box manufacturers. The Company employs 60
workers in Athlone.
2. The annual wage round is negotiated in the Company in July
each year. For the years 1988, 1989, 1990 and 1991 a Summer
Bonus of #150 was paid following the completion of the
negotiations. No Summer Bonus was paid in July, 1992.
3. The Union made a claim on the Company for the payment of
the Summer Bonus. The Company refused to make the payment
citing a difficult trading position and industrial relations
difficulties during the year. The Company's position was that
the Summer Bonus was a discretionary payment and it was
exercising its discretion not to pay it.
4. The parties could not agree at local negotiations and the
claim was referred to the Labour Relations Commission.
Conciliation conferences were held on 9th September and 17th
November, 1992. No progress was possible and the claim was
referred to the Labour Court under Section 26(1) of the
Industrial Relations Act, 1990 on 9th March, 1993. A Labour
Court investigation took place on 23rd June, 1992 (the
earliest date suitable to both parties).
UNION'S ARGUMENTS:
3. 1. The bonus was first introduced on the basis of
co-operation from the workers and the overall performance of
the Company. It was paid from 1988 to 1991 without exception
and despite the fact that the Company made a loss in 1987.
The cost of concession is minimal to the Company in the
context of its overall turnover.
2. The Union is not in a position to assess the performance
of the Company as its accounts are kept secret. It is worth
considering the fact that some orders for 1991/1992 were
diverted from Europe to the parent Company in the U.S. The
Company also has significant revenue from servicing machines
already sold to the market. There is a lucrative market in
the production of spare parts.
3. The bonus is also linked to the co-operation and
flexibility which is enthusiastically given by the workforce.
During the year, workers were collectively commended and many
individuals were given thank-you letters. In addition, there
were significant departures from the Company/Union Agreement
in the interests of production. The workers' daily output and
overall co-operation merit the payment of the bonus.
COMPANY'S ARGUMENTS:
4. 1. During 1991/1992 the Company was faced with a difficult
business environment. The number of machines manufactured
dropped from 10 in 1989/1990 to 5 1991/1992. Due to the
downturn, there was not sufficient work for the production
workers. Despite this, short-time working was not considered
as an option. The cumulative effect of the trading
difficulties was that the criteria for a successful year in
1992 were not met.
2. In addition, during the year there was an unofficial
stoppage, non-co-operation in employee evaluation and other
industrial relations difficulties. As a result of the
difficulties in this regard, the Company has not achieved the
required employee co-operation and support, another criterion
for payments of the Summer Bonus.
3. The Summer Bonus was introduced on the Company's
initiative and is discretionary. This was clearly stated in
writing on each occasion on which the bonus was paid (details
supplied). The bonus is also subject to annual review by the
Company. The Company does not believe it appropriate to pay
the bonus in the present circumstances.
RECOMMENDATION:
5. The Court has given considerable thought to this case, and in
particular to the information which emerged at the hearing as to
the perceptions of the state of the industrial relations held by
both sides at the plant.
The Court is satisfied that the bonus claimed has been clearly
established as a discretionary bonus, therefore the claim must
fail.
However, the Court would suggest that both parties require to sit
down in a calm and detached manner to attempt to evaluate how
relations between them might be improved so that a case such as
this might not be likely to arise in the future.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
____________________
15th July, 1993. Deputy Chairman.
J.F./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.