FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : TELECOM EIREANN - AND - A WORKER DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Appeal against Rights Commissioner's recommendation No. IR19/98 CW, concerning a dispute over entitlement to E.S.O.P. (Employee Share Ownership Plan) and/or productivity bonus for a worker.
BACKGROUND:
2. The worker concerned commenced employment with the Department of Post and Telegraphs on the 1st of March, 1976 and was transferred to Telecom Eireann on the setting up of the Company on the 1st of January, 1984. He was appointed to the grade of customer operations technician in 1996, and retired from the Company on reaching 65 years of age on the 26th of September, 1998.
The dispute concerns the worker's claim that he was discriminated against by the Company when it introduced the E.S.O.P. with effect from the 1st of November, 1998. He claims that its introduction deprived him of bonus payments for the years 1996/97 and 1997/98. Management rejects the claim. It argues that the termination of the bonus scheme was effected in accordance with a collective agreement entered into between the Company and the Trade Unions.
The matter was referred to a Rights Commissioner for investigation and recommendation. The Rights Commissioner's findings and recommendation are as follows:
"I believe that the worker is properly before me at least with regard to his dispute regarding the Bonus Scheme. I consider that he does not have entitlement to either benefit. He is clearly excluded from the E.S.O.P. The Bonus Scheme was terminated by a consultative process about which the worker cannot reasonably complain.
I recommend that the worker accepts that he has no entitlement to either benefit."
(The worker was named in the recommendation).
The Rights Commissioner's recommendation was appealed by the worker to the Labour Court on the 21st of April, 1999, under Section 13(9) of the Industrial Relations Act, 1969. The Court heard the appeal on the 28th of May, 1999.
WORKER'S ARGUMENTS:
1. It is reasonable to assume that in the two years prior to the worker's retirement 1996/97 and 1997/98 he would have benefited from the bonus scheme. There is no doubt that the imminent introduction of the E.S.O.P. affected the operation of the scheme.
2. There is a considerable gap between the worker's financial entitlements on retirement and that of his former colleagues under the E.S.O.P. This is inequitable and contrary to natural justice.
3. The worker is seeking that the Company in an attempt to redress this inequity compensate the worker with a bonus based on the average of the last three annual bonuses paid.
COMPANY'S ARGUMENTS:
1. Telecom Eireann is undergoing a period of great change. It must adapt itself to compete in the new liberalised marketplace against some of the world's biggest telecommunications companies. This had been recognised by the staff and Trade Unions. A new plan for the complete transformation of Telecom Eireann has been agreed and is being implemented. The Employee Share Ownership Plan is a key aspect of this transformation. It is a carefully constructed contractual arrangement between the Government, the strategic partners, Telecom Eireann and the Trade Unions which was arrived at following a series of intensive negotiations. It provides that participation is open to employees serving on or recruited after 1 November, 1998. Any amendment to the arrangements would have implications for over 10,000 people who are on pension or who have left Telecom Eireann and are preserved pensioners and it would have serious consequences for the entire E.S.O.P. process.
2. The termination of the bonus scheme was effected in accordance with a collective agreement freely entered into between Telecom Eireann and its recognised Trade Unions. There is no mechanism to make a bonus payment in respect of the years where no collective agreement provided for such a bonus payment. A concession to the worker would have inevitable consequences for all of the other serving and retired staff.
3. Telecom Eireann is a highly unionised company and it has put in place a structure for the negotiation of pay and conditions with its recognised Trade Unions. This structure and the collective agreements are of primary importance. The Court is requested to accept the primacy of the collective bargaining process within the Company and to dismiss the worker's appeal.
DECISION:
The Court has given careful consideration to the submissions made by the parties in this appeal.
It appears to the Court that the decision not to continue the Company's bonus scheme in the years 1996-1997 or 1997-1998 was related to the anticipated introduction of an employee share ownership plan. For this reason, the Court finds it quite understandable that the claimant in this case may have anticipated that he would have received some benefit to offset the loss of bonus payments to which he would otherwise have been entitled.
It is clear, however, that the collective agreement between the Company and the Unions representing its staff (including the claimant) simply provided for the discontinuance of the bonus scheme and did not relate this discontinuance in any way to the subsequent provision of the employee shareholding in the Company. While the Court has some sympathy for the claimant, in the situation in which he now finds himself, it is not possible for the Court to ignore the terms of the Company's collective agreement.
In these circumstances, the Court upholds the recommendation of the Rights Commissioner and the claimant's appeal is disallowed.
Note:
The Court notes that since this case was heard Telecom Eireann has publicly announced that a specialarrangement will be provided for retired workers of Telecom Eireann, to purchase extra shares.
Signed on behalf of the Labour Court
Kevin Duffy
18th June, 1999______________________
F.B./D.T.Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Fran Brennan, Court Secretary.