FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : ELECTROLUX GROUP IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - A WORKER (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Appeal against Rights Commissioners Recommendation IR6128/01/FL.
BACKGROUND:
2. The worker was employed by the Company in February, 1972. His current position is Distribution Manager. His case is as follows:
- In May 2000, the worker met his manager who agreed to pay him a £3,000 (€3,809) bonus on the 7th of February, 2001, in respect of work carried out in 2000. The worker's mobile phone and petrol expenses would also be paid. The manager confirmed that each year a new bonus would be agreed on the basis of clearly defined targets. (The worker also claims that he was told that these arrangements had been agreed with the Managing Director (MD). The worker received his bonus in 2001, but when he approached management for his bonus the following year, the Company refused to honour the agreement entered into with his manager, claiming that the manager had no right to make such an arrangement.
The worker referred his case to a Rights Commissioner and his recommendation is as
follows:
The Company should immediately enter into negotiations with the claimant or his
Union with a view to their reaching agreement on those targets for the year 2003.
He should be paid a bonus in 2003 and subsequent years if he meets the agreed
targets.
The Company should pay the claimant €7,500 in lieu of a bonus and the other
payments in the years 2001 and 2002.
The Company appealed the recommendation to the Labour Court on the 30th of May,
2002, in accordance with Section 13(9) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 12th of September, 2002.
UNION'S ARGUMENTS:
3. 1. A bonus agreement exists between the worker and his manager. The worker carries out a very responsible job and is deserving of the bonus.
2. The manager was acting in his capacity as a Senior Divisional Manager in the Company, and was qualified and empowered to make the bonus arrangement with the worker. The Company cannot now renege on this agreement.
COMPANY'S ARGUMENTS:
4. 1. The manager was not authorised to enter into a bonus agreement with the worker and, in fact, had to make out a personal cheque to him for €3,809 to sort out the situation. As such, the Company views it as a personal matter between the manager and the worker.
2. The manager was disciplined for his part in the transaction and now occupies the lesser position of Warehouse Manager with no responsibilities in regard to staff matters.
DECISION:
The Court regards it as unreasonable for the Company to disclaim all responsibility for the actions of its senior manager in entering into an agreement with the claimant on its behalf. In that regard, the Court notes that the bona fides of the claimant at the time the agreement was made is not in doubt, and that a period of 12 months elapsed before he received any indication that the agreement had not been approved. It is equally unreasonable to expect that the Company would be permanently bound by an agreement entered into by a manager in excess of his authority.
Having regard to all the circumstances of this case, the Company should agree to the payment of a bonus in the amount of €3,809.21 (£3,000) in respect of the year 2001 and that the claimed agreement should then be regarded as terminated.
No reasons have been put forward as to why the claimant should not be included in a performance-related bonus scheme on the same basis as applies to other employees covered by such arrangements. The parties should now enter into discussions on a performance-related bonus arrangement for the claimant to apply in 2002 and subsequent years.
These discussions should commence immediately and should be concluded within four weeks. If agreement is not reached, the matter may be referred back to the Court.
The Rights Commissioner's Recommendation is amended accordingly.
Signed on behalf of the Labour Court
Kevin Duffy
23rd September, 2002______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Ciaran O'Neill, Court Secretary.