FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ARNOTTS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MANDATE DIVISION : Chairman: Mr Flood Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Non application in full of 1% lump sum due under Programme for Prosperity and Fairness (PPF).
BACKGROUND:
2. The dispute before the Court concerns a claim by the Union that the Company did not adhere to the National Implementation Body (NIB) guidelines when calculating the 1% lump sum due under the revised terms of the Programme for Prosperity and Fairness to (i) staff who are paid commission and (ii) staff with less than one year's service on the 1st of April, 2002.
Staff who are paid commission.
The Company calculated the 1% lump sum on a basic pay excluding commission. The Union maintains that commission should have been included as it is part of basic pay and is included when calculating holiday pay.
Staff with less than one year's service on the 1st April, 2002.
When calculating payment of the 1% lump sum the Company paid the staff concerned 1% of their actual earnings from their date of commencement of employment which was after the 1st of April, 2001, up to the 1st April, 2002. The Union maintains that the basic pay should have been annualised for the purpose of calculation.
The dispute 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 30th of January, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 17th of April, 2003, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
Staff who are paid commission.
3. 1. The basic rate for staff on commission is significantly lower than the basic rate for non-commission staff. It is unfair that staff who receive commission should receive a lump sum of less value than the non-commission staff.
2. The 1% lump sum should have been calculated on the average gross earnings including commission of the staff concerned, as is the case in calculating holiday pay.
Staff with less than one year's service on the 1st April, 2002.
1. For the staff concerned the Company calculated the 1% lump sum on the gross basic earnings in the twelve months ending on the 31st of March, 2002, which meant that these workers received an amount proportionally less than a 1% lump sum equivalent to 1% of annual basic pay on the 1st of April, 2002.
2. This method of calculation is incorrect. The basic pay should have been annualised for the purpose of calculation.
COMPANY'S ARGUMENTS:
Staff who are paid commission.
4. 1. The terms of the Programme for Prosperity and Fairness state "1% of basic pay". Therefore, only basic pay is reckonable when calculating the 1% lump sum.
2. The National Implementation Body statement which issued on the 6th of March, 2002, refers to the 1% as being applied to basic pay.
Staff with less than one year's service on the 1st April, 2002.
1. A number of employees did not have a full years service on the 1st of April, 2002, the date of application of the 1% lump sum payment. In this instance, there was no annual basic rate of pay.
2. The method of calculation is fair and equitable.
RECOMMENDATION:
There are two issues before the Court:
1. Non-inclusion of commission when calculating the 1% PPF lump sum.
2. The method of calculating the 1% for employees with less than one full year's service.
The National Implementation Body interpretation of the payment of the 1% is as follows:-
"The National Implementation Body wishes to confirm that the implementation of the agreement to pay 1% lump sum effective on 1st April, 2002, agreed in December, 2000, is to be interpreted as applying to annual basic pay on 1st April, 2002, as it has been determined in each employment or industry, especially in the context of implementation of the standard terms of the national agreements, including PPF. Implementation is subject to the other terms of PPF , as amended".
It is the view of the Court that basic pay is pay to which increases under national agreements have been applied. Therefore, commission would not qualify for calculation of the 1%.
In the case of employees who have not served a full year, the Court is conscious that there is no mention of a pro-rata application in the National Implementation Body statement.
The Court, therefore, recommends that the calculation for employees with less than 1 year's service be the weekly rate of pay on 1st April, 2002 x 52 weeks, and the 1% to be applied to that figure.
Signed on behalf of the Labour Court
Finbarr Flood
7th May, 2003______________________
GB.MB.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Gerardine Buckley, Court Secretary.