FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : CAPITAL BARS PLC (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MANDATE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr Nash |
1. Failure to pay increases under Sustaining Progress.
BACKGROUND:
2. Capital Bars plc is a bar hotel group located in Dublin's city centre comprising of two hotels and nine high profile bar restaurants. These units are predominately late night bars and not traditional public houses. The Group currently employs approximately 400 staff.
The issue before the Court is on behalf of 15 employees in one of their outlets in the Capital Bar Group employed in the bar, kitchen and cleaning areas and the Group's failure to pay all elements of Sustaining Progress.
The dispute could not be resolved at local level and was the subject of conciliation conference on the 15th July, 2004 under the auspices of the Labour Relations Commission. As agreement was not reached, an Independent Assessor was appointed and his Report issued in October, 2004 stating"Based on the financial information supplied to and reviewed by IPC, the group has valid grounds for its claim of inability to pay under the terms of Sustaining Progress".A further conciliation conference took place on the29th November, 2005.
The Union agreed to refer the matter to the Labour Court on the 3rd December, 2004 in accordance with Section 20(2) of the Industrial Relations Act, 1969 and agreed to be bound by the Court's recommendation. On the 28th January, 2005 the Company's representatives agreed to be bound by the Court's recommendation. A Labour Court hearing took place on the 30th March, 2005.
UNION'S ARGUMENTS:
3. 1 The workers have been more than flexible both in their working patterns and also with the Company when requested.
2. Workers at present, are at a loss of increases negotiated under the Social Partnership Agreement, Sustaining Progress:
- 3% 1st October, 2003 1st Phase
- 2% 1st July, 2004 2nd Phase
- 2% 1st January, 2005 3rd Phase
4. While not disregarding the comprehensive Assessor's report outlining the Company's financial position, the workers need a certain level of assurances going forward regarding their financial security.
5. Bonuses decreased in 2003, in 2004 workers received no Christmas bonus. However, bonuses are paid to those at the appropriate level of seniority on a quarterly basis.
COMPANY'S ARGUMENTS:
4.1 The assessors report states clearly that the Company is not in a position to pay Sustaining Progress .
2. Figures from the Licenced Vintners Association show that on average trade has declined in Dublin by 14%. The areas that the Company trade in have been affected more severely.
3. Issues which have affected the licenced trade include: the growth in off licence trade, home consumption, the smoking ban and general overhead increases.
4. The situation since the Assessors report issued has worsened and sales figures continue to decline on a weekly basis. The trend is likely to continue into the future with further reductions in sales.
RECOMMENDATION:
This dispute concerns a plea by the Company of inability to pay the terms of phase one, two and three of the pay agreement under Sustaining Progress I.
Clause 1.8 of the agreement provides that an employer may plead inability to pay the terms of the agreement where this would lead to serious loss of competitiveness and employment. Clause 1.10 sets out the procedure to be followed where such a plea is made and Clause 1.10(ii) deals with situations where an employer claims inability to meet the terms of the agreement in full.
The agreement provides that the onus is on the employer to substantiate the plea. The procedures prescribed by the agreement involve an examination of the economic, commercial and employment circumstances of the employer by an Independent Assessor appointed by the LRC.
Having examined the financial information supplied by the Company, the Assessor concluded:-
"Based on the financial information supplied to and reviewed by IPC, the group has valid grounds for its claim of inability to pay under the terms of Sustaining Progress".
As the dispute remained unresolved following the Assessors report, it was referred to the Court pursuant to Section 20(2) of the Industrial Relations Act, 1969. The Court is confined to determining whether the employer can or cannot pay the terms at all.
The Union accepts that the Company has provided full disclosure of information to the assessor in accordance with Clause 1.10(ii).
The Court has considered the submissions made by both sides and has considered all of the financial and related information with which it was provided. The Report of the Assessor has also been fully considered and given serious weight. The Court is satisfied that the Company is experiencing significant financial and competitive pressures and is therefore, satisfied that the employer has demonstrated that it cannot pay the terms of phase one, two and three of Sustaining Progress I.
The Court so decides.
Signed on behalf of the Labour Court
Caroline Jenkinson
1st April, 2005______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.