FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CAPITAL BARS PLC (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MANDATE DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Mr. Somers |
1. Claim for ex-gratia payment for workers who transferred from the O'Dwyer Leisure Group to Capital Bars Plc.
BACKGROUND:
2. The Company was established in 1999 following the merger of the O'Dwyer Leisure group and Break for the Border PLC. It owns and manages public houses, restaurants and hotels in the Dublin area. The O'Dwyer Leisure Group continues its connection with the chain of public houses but not as a majority shareholder.
The dispute concerns the Union's claim for an ex-gratia payment on behalf of approximately 15 workers employed in O'Dwyers Public House, Mount Street, which was originally part of the O'Dwyer Leisure Group. The Union argues that the owners of O'Dwyers received in excess of £5 million in cash and £12 million in shares as part of the transaction and that the workers concerned should receive some financial recognition for their contribution to the success of the network of public houses.
Management rejects the claim. It argues that the safeguarding of the employees' Rights on Transfer of Undertaken applied and the company has honoured all of its legal obligations. The matter was the subject of a conciliation conference held under the auspices of the Labour Relations Commission. As agreement could not be reached the dispute was referred to the Labour Court on the 27th of March, 2000 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 15th of August, 2000, the first date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. During the 1980's the O'Dwyer Group experienced trading difficulties. As part of its survival plan the employees, many of whom are still with the Company, agreed to forfit annual bonus payments and wage increases negotiated through national wage agreements.
2. Considerable financial benefit accrued to the O'Dwyer Group as a result of the merger.
3. The belt-tightening contribution of the workers in the 1980's appears to have been forgotten.
4. The employer involved has resisted trade union organisation and has refused to agree to a procedural agreement.
5. In the age of social partnership the Union's claim for an ex-gratia payment in recognition for the workers' contribution to the success of the Company is reasonable and justified.
COMPANY'S ARGUMENTS:
4. 1. The Union did not have a difficulty with the transfer of undertakings. Its silence on this matter would imply its acceptance of the regulations applying with regards to the merger. The actual referral to the Court uses the term " members who transferred". It is the Company's contention that it honoured all legal obligations.
2. The Union referred to various ex-gratia deals that were negotiated directly between unions and employers. These references raise an important point, namely the fact that in the majority of incidents, a sale as opposed to a merger occurred. In this instance O'Dwyers has kept its shareholding and continues its active management. Such arrangements are not generally within the remit of industrial relations and in the one incident where such a claim was brought before the Court the claim was not upheld.
3. The cash element of the transaction was re-invested into the companies which were the subject of the take-over. These new companies will double the numbers of staff employed at the time of the take-over. It is unjust and disingenuous of the Union to seek a share of a 'bounty' it perceives to exist as was incorrectly reported in the media at the time. The Union believes that its members are entitled to money because of their contribution to the company over the years. The Company contends that it has comprehensively and fairly acknowledged the role of the staff in the operation. The new company now offers the staff greater potential for promotion as well as enhanced terms and conditions of employment.
4. Concession of this claim would have grave implications for any future mergers or transfers within the industry and others. The company has difficulty in finding validity in the claim because, in its view, the claim is based on an unreasonable expectation arising from the merger. The company has honoured all its obligations and agreements in respect of the transfer and has maintained very good relations with its staff in all properties. Not only is the claim unusual and unjustified it is also out of context in how the company does its business.
RECOMMENDATION:
The Court notes that the transaction giving rise to this dispute is not a sale of the business, nor does it involve any material change in its beneficial ownership.
The Court in not aware of any precedent for the concession of a claim for ex-gratia payments in circumstances similar to those of the present case. In these circumstances the Court does not recommend concession of this claim.
Signed on behalf of the Labour Court
Kevin Duffy
24 August, 2000
FB/SH______________________
Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.