FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : YVES ROCHER (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - A WORKER (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Flood Employer Member: Mr Grier Worker Member: Mr. Somers |
1. Payment of outstanding bonus.
BACKGROUND:
2. The dispute concerns a worker who was employed by the Company for a number of years. The Union claims that the Company did not pay an objectives bonus to the worker and sought to refer the issue to an Rights Commissioner for investigation. The Company objected to such a referral. On the 20th May, 2003 the Union referred the dispute to the Labour Court under Section 20(1) of the Industrial Relations Act, 1969 and agreed to be bound by the Court's recommendation. A Court hearing was held in Cork on the 8th October, 2003.
UNION'S ARGUMENTS:
3. 1. During the period of her employment the worker received an objectives bonus on a yearly basis.The worker resigned from the employment two weeks before the date of the objectives bonus. The Company refused to pay the bonus to the worker on the basis that she would not be employed on the date it was due to be paid even though the worker had contributed to the scheme for the previous eleven months.
2. The Company policy on the objectives bonus was not communicated to either the Union or its members. The only documents communicated at any stage was a statement outlining the monetary details of the scheme. The Company policy on the objectives bonus allows for the payment of the scheme, at the Company's discretion, to temporary production workers if the employment is terminated by the Company. Consequently it is possible for the Company to use its discretion to pay the bonus to a worker who is no longer an employee, provided the worker is temporary. This is discriminatory to the permanent employees who leave the Company, sometimes following years of service and loyalty.
3. It is unacceptable that workers who contribute to a scheme which benefits the performance of the Company, yet they cannot receive a pro rata payment for their contributions, should leave for any reason.
COMPANY'S ARGUMENTS:
4. 1. The Company has implemented the scheme strictly in accordance with the terms on which it was established. The claimant has been treated the same as other employees when in the employment of the Company and also treated as a former employee with no entitlement to payment of bonus when such former employees left the employment before the bonus assessment date.
2. The Company should not be obliged to extend the terms of the bonus to former employees. This would in effect be creating an obligation in contractual terms to those who were no longer employees of the Company. This would have significant consequential impacts in practice and be wrong in law.
3. This was a discretionary bonus based on the achievement of objectives. Because no decision was made about the payment of a bonus before the claimant left the employment it would be unfair to imply that a retrospective payment should be awarded.
RECOMMENDATION:
While the Union may not have been given the written copy of the rules of the objectives bonus policy, it was aware of the method of application of the scheme, over the years of its existence.
The scheme clearly states "if an employee resigns his/her position on any date prior to the date of bonus payment they are not eligible for payment".
The Company has indicated that the discretionary payment of the bonus to temporary Company production operations employees, if their employment is terminated by the Company before the bonus payment date,would also apply to permanent staff in similar circumstances.
The Court notes that other employees have left the Company without payment over the years and that this is the first claim.
The Court, having considered the submissions made, does not recommend concession of this claim.
Signed on behalf of the Labour Court
Finbarr Flood
16th October, 2003______________________
TOD/BRChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.