Labour Court Database __________________________________________________________________________________ File Number: CD94307 Case Number: LCR14505 Section / Act: S26(1) Parties: L.M. ERICSSON LIMITED - and - MARINE PORT AND GENERAL WORKERS UNION |
Payment of Annual Voucher.
Recommendation:
Having considered the submissions, the Court has concluded that
the Company's position is reasonable and, accordingly, the Court
does not recommend concession of the Union's claim.
Division: Ms Owens Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD94307 RECOMMENDATION NO. LCR14505
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
L.M. ERICSSON LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
MARINE PORT AND GENERAL WORKERS UNION
SUBJECT:
1. Payment of Annual Voucher.
BACKGROUND:
2. The Company is a wholly owned subsidiary of Ericsson Telecom
A.B. of Stockholm. It was established in 1964 and employs
215 workers in Clonskeagh. Two associated companies employ a
further 570 workers.
In May, 1989, an agreement was reached between Company and
Union, covering a wide range of changes to work and
operational practices. Part of the agreement provided that:-
" An annual voucher equivalent to one week's basic salary
will be given to all employees covered by this
agreement, effective July, 1989."
The dispute concerns 108 members of the Union who, since
June 1992, are entitled to the vouchers.
In 1991, a PAYE audit was made by the Revenue Commissioners,
who were of the view that the responsibility of paying income
tax rested with each individual.
Ericsson Ireland paid retrospective tax of #250,000 to cover
years up to 1991 (#49,485 in respect of the Company). It
paid a further #50,000 in respect of vouchers payable in 1992
(#19,800 in respect of the Company).
The Union claims that, as per the agreement, the Company
should continue to pay the tax due on the annual vouchers.
The Company maintains that it is willing to continue paying
the vouchers but that, following the Revenue Commissioners
audit, each worker must pay the tax on the voucher.
A number of meetings were held at local level to find a
solution, including additional voluntary contribution to
pension schemes (A.V.C.'s), but no agreement was reached.
The dispute was referred to the Labour Relations Commission
and a conciliation conference was held on 17th November,
1993. No agreement was reached and the dispute was referred
to the Labour Court on 25th May, 1994 under Section 26(1) of
the Industrial Relations Act, 1990. A Labour Court hearing
took place on 4th July, 1994.
UNION'S ARGUMENTS:
3. 1. There was a specific and separate agreement between the
Company and the workers concerned. The agreement was
for one week's basic salary as a net payment. The use
of the word "equivalent" in Clause 2 indicates this.
2. The tax liability existed at the time the agreement was
reached. The Company was aware of this at the time.
There is nothing in the agreement to indicate that the
workers are liable to pay the tax.
COMPANY'S ARGUMENTS:
4. 1. The Company has always been agreeable to the payment of
the vouchers subject to the tax legislation under the
PAYE system.
2. Almost all the workers in the associated Companies, and
the majority in the Company, have accepted the
situation. The Company has already paid a total of
#300,000 in settlement with the Revenue Commissioners.
It would be unfair to expect it to continue paying tax.
3. Conceding the Union's claim would have a serious
knock-on effect on the Company and associated companies.
This would effect employment levels, which the Company's
has managed to increase in last two years.
RECOMMENDATION:
Having considered the submissions, the Court has concluded that
the Company's position is reasonable and, accordingly, the Court
does not recommend concession of the Union's claim.
~
Signed on behalf of the Labour Court
14th July, 1994 Evelyn Owens
C.O.N./M.M. __________________
Deputy Chairperson
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.