FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LM ERICSSON IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Christmas payment.
BACKGROUND:
2. LM Ericsson Ireland (LMI) is an international Company which has a regional model of governance across the world. For LMI this means that the Irish entity forms part of the North Western Europe region (NWE). Policies and processes are adopted and endorsed at a regional level and not at country level.
The Company used to pay an annual bonus around Christmas each year. In 1999 the bonus was 2% of salary but in 2000 it was 4%. In 2001 the Company and the Union negotiated a cost saving agreement which included foregoing the Christmas bonus in 2001 and 2002. The Union reserved the right to claim the reinstatement of the bonus at a future date.
In December 2003 the Union commenced discussions on their claim to seek the restoration of the Christmas bonus. The Company announced that it was going to abolish the Christmas bonus payment and replace it with an increase of five days annual leave.
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 22nd October 2004, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 20th April, 2005.
UNION'S ARGUMENTS:
3. 1. The Union clearly stated in 2001, at the time of the agreement, that it would be claiming the restoration of the bonus and the amounts foregone in 2001 and 2002.
2. The manner in which the Christmas bonus has been removed from the terms and conditions is unfair and does not correspond to the approach by the membership in foregoing the bonus in 2001.
3. The Company did not directly sit down with the Union in 2003 to explore and negotiate the issue of the Christmas bonus.
COMPANY'S ARGUMENTS:
4. 1.In January2003 the Company's NWE region announced a pay freeze within the region. With an additional focus on cost reduction the Company was not in a position to pay the Christmas payment in 2003.
2.Following discussions in the Labour Relations Commission in 2004 proposals were issued by the Company and were accepted by 90% of the Company's employees.
3. The Company believes it has acted fairly and equitably in its implementation of a non-cash alternative to the Christmas payment.
RECOMMENDATION:
It is clear to the Court that the established arrangement within the Company was that a 2% bonus would be paid and the Union's claim for a 4% payment is not sustainable. It is noted that the Company have offered to provide additional annual leave to the value of 2% of pay in lieu of the bonus.
Since this bonus has been established as a term of employment over a prolonged period the Court is of the view that it cannot be replaced in the manner proposed by the Company without agreement. The Court does, however, believe that the group concerned should be given the option of accepting, on a collective basis, either:-
a) A bonus of 2% in respect of 2004 and subsequent years, or
b) A lump sum of 4% and 5 days additional annual leave for 2005 and subsequent
years, on the basis proposed by the Company.
Signed on behalf of the Labour Court
Kevin Duffy
26th April, 2005______________________
MG.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.