FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LICENSED VINTNERS ASSOCIATION - AND - MANDATE DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Mr. Somers |
1. 2% additional payment under the revised terms of the Programme for Prosperity and Fairness (PPF).
BACKGROUND:
2. The Licensed Vintners Association (LVA) was established in 1817 and represents approximately 735 licensed premises and hotels in the Greater Dublin area. On the 26th of March, 2001, the Union submitted a claim to the Association for a 2% wage increase for bar staff to take effect from the 1st of April, 2001, under the revised terms of the Programme for Prosperity and Fairness (PPF).
The Union’s claim was rejected by the Association, on the grounds that the parties had concluded an agreement for pay increases of 26% in June, 2000. The issue was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 5th of September, 2001. Agreement was not reached, and the dispute was referred to the Labour Court on the 17th of October, 2001, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 16th of January, 2002.
UNION'S ARGUMENTS:
3. 1. The Agreement of June 2000 is an extensive productivity agreement, which included the consolidation of existing allowances, a reduction in overtime formula, increased flexibility of rosters and the introduction of shift working. All parties entered into the Agreement freely.
2. The June 2000 Agreement pre-dates the PPF, which commenced on the 1st of November, 2000, for bar staff. As the increases were agreed before the implementation of the PPF, the LVA cannot claim protection from payment of the claim on the basis of pay increases over and above the PPF.
3. In previous cases, the Labour Court stated that the issue was whether the payment of the 2% would put competitiveness and employment at risk. The LVA has failed to claim or to prove that this would be the case.
ASSOCIATION'S ARGUMENTS:
4. 1. Dublin bar staff are among the most highly paid employees in the Irish retail and hospitality sectors. The June 2000 Agreement provided increases of 26% and improvements in working conditions, such as the reduction of the working week from 41.5 hours to 39 hours on the basis of a single shift arrangement.
2. Many employers in the Dublin licensed trade have suffered severe financial hardship as a result of the Intoxicating Liquor Act, 2000, and a freeze on drinks prices for eight months, only two weeks after the parties had agreed the wage increases of 26%.
3. The licensed trade is a highly labour intensive service industry with labour costs at approximately 64% of internally generated overhead. Over the past ten years the on-licensed trade has been steadily losing ground to the off-license sector. Any further increase in wage costs would have a detrimental effect on competitiveness.
4. The structure of the trade has changed over the past ten years. There are now many different types of outlets, with differing cost structures and wide variations in net sales. The LVA is no longer capable of knowing what each outlet can afford to pay in terms of wage increases. The Union should pursue its claim on a house by house basis, having regard to specific economic circumstances existing.
RECOMMENDATION:
The employer in this case has argued that substantial increases in excess of the PPF were paid to the employees as part of the PPF. However, the Union argues that these increases relate to the agreement reached between the Union and the Licensed Vintners Association as a result of the introduction of the Intoxicating Liquor Act, 2000.
The Court, in previous cases, has indicated the specific criteria for payment of the 2% as follows:-
"Companies where pay costs have increased significantly over and above the terms of the
amended PPF may argue against paying the 2%, if the payment of the 2% would put competitiveness and employment at risk. It is for the employer to demonstrate to the Court that
the effect of paying this supplementary increase, combined with the effect of the additional increases already paid, would put competitiveness and employment at risk."
The Court, having considered the written and oral submissions made, does not accept in this case that the significant pay rise mentioned is part of the PPF.
The Court is also not satisfied that the employer has supplied sufficient evidence to the Court to indicate that competitiveness and employment would be undermined by the payment of the 2%.
The Court, therefore, recommends that the 2% under the PPF be paid from the 1st of April, 2001.
Signed on behalf of the Labour Court
Finbarr Flood
11th February, 2002______________________
D.G./M.B.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.