Labour Court Database __________________________________________________________________________________ File Number: CD95217 Case Number: LCR14784 Section / Act: S26(1) Parties: C & C (IRELAND) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Taxation of annual allowance.
Recommendation:
The Court accepts that the effect of the change in Revenue Rules
has resulted in a significant reduction in the financial benefits,
for the employees concerned, which arose from the productivity
package.
However, the Court is of the view that the Company cannot be held
responsible for making up the shortfall resulting from changes in
taxation arrangements.
The Court, therefore, rejects the Union's claim.
Division: Mr Flood Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95217 RECOMMENDATION NO. LCR14784
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
C & C (IRELAND) LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Taxation of annual allowance.
BACKGROUND:
2. The claim is on behalf of approximately 80 workers involving
5 sections of the Company (production, warehouse,
maintenance, outdoor and canteen).
The workers have been in receipt of lump sums (in the form of
a voucher) and meal allowances twice a year (June and
December) for a number of years. The payments exist because
of a number of agreements between Company and Union.
In early 1994, the Revenue Commissioners informed the Company
that the payment of the lump sum and meal allowance would
have to be taxed in the future through the P.A.Y.E. system.
The Union maintains that the Company should pay the tax and
that the workers retain the net value of the payments. The
Company maintains that the workers must pay the tax.
The dispute was referred to the Labour Relations Commission
and a conciliation conference took place on 3rd March, 1995.
No agreement was reached and the dispute was referred to the
Labour Court under Section 26(1) of the Industrial Relations
Act, 1990, on 30th March, 1995. A Labour Court hearing took
place on 18th May, 1995.
UNION'S ARGUMENTS:
3. 1. The productivity agreements yielded significant gains to
the Company and continue to do so. The Company has
advanced in market shares and business acquisitions.
2. The net forms of the payments were accepted as a part of
the productivity agreements. They are considered part
of the workers annual earnings. It is unfair that
workers should suffer, in effect, a wage cut for
productivity already given.
COMPANY'S ARGUMENTS:
4. 1. The Company paid the tax on the payments in June and
December of 1994 for the workers involved. This was
done on the assumption that the dispute would be
resolved quickly. The Company also paid retrospective
tax on behalf of the workers.
2. The Company is in a loss making situation. It cannot
continue paying tax on behalf of the workers as this
would increase costs. Making the payments through the
P.A.Y.E. system will add additional costs, due to
increased P.R.S.I. and pension contributions.
RECOMMENDATION:
The Court accepts that the effect of the change in Revenue Rules
has resulted in a significant reduction in the financial benefits,
for the employees concerned, which arose from the productivity
package.
However, the Court is of the view that the Company cannot be held
responsible for making up the shortfall resulting from changes in
taxation arrangements.
The Court, therefore, rejects the Union's claim.
~
Signed on behalf of the Labour Court
9th June, 1995 Finbarr Flood
C.O'N./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.