FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PPI ADHESIVE PRODUCTS LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr. Somers |
1. Payment of Summer and Christmas bonus.
BACKGROUND:
2. The Company is located in Waterford and is engaged in the production of specialist adhesive tapes for industrial clients. In June 2003, the Company informed the workers and the Union that its trading position had deteriorated and it would not be paying the usual Summer bonus (worth €317). The Company also indicated that if the situation did not improve, short time working might be necessary and it might not be able to pay the 2003 Christmas bonus (worth 1 months pay).
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached the dispute was referred to the Labour Court on the 14th August, 2003 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 27th November, 2003.
UNION'S ARGUMENTS:
3.1 The Company's position appears to be improving, orders have increased following the summer shutdown and they have rehired employees.
2. The Company accounts do not support the cash flow arguments put forward by the Company.
3. The Union claims that its members cannot sustain a €317 pay decrease and work under a continued threat of loss of earnings.
4. The Union requests that the Company comply with the terms of Sustaining Progress that requires them to promote industrial harmony and engage at local level to resolve issues in dispute in a meaningful way.
COMPANY'S ARGUMENTS:
4.1 The Company claims that, historically the bonuses have not been part of wages, as evidenced by the fact that deductions are not made on account of absenteeism.
2. The Summer and Christmas bonuses are discretionary and payment depends on performance. The bonuses have always been paid out when performance justified it.
3. Business pressures and performance are such that the Summer bonus could not be paid out on this occasion. Costs in particular i.e. insurance and waste management, have risen dramatically. Currency movements have gone against the company - a lot of the sales are in US dollar-linked currencies particularly in the Far East, have had a negative effect in the order of 25-30%.
RECOMMENDATION:
The bonuses at issue in this dispute may have been discretionary and linked to the Company's performance when originally introduced. They have, however, been paid regularly and automatically over many years. The amount payable or the method of calculation has also been the subject of negotiations and agreement between the parties. This, in the Court's view, has led to a legitimate belief on the Union's part that these payments have been incorporated into the conditions of employment of those associated with this claim and to a legitimate expectation that they would continue to be paid.
The Court recommends that the bonus now at issue (Summer and Christmas bonus) should be paid as theretofore. If the economic or commercial circumstances of the Company are such as to give rise to difficulty in continuing to pay these bonuses, this should be raised with the Union in the first instance and if necessary processed through the normal negotiating procedures.
Signed on behalf of the Labour Court
Kevin Duffy
4th December, 2003______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.