FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LEIBHERR CONTAINER CRANES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Foreign earnings.
BACKGROUND:
2. The Company is involved in the construction and installation of container and harbour cranes. The dispute concerns a number of craftspersons who were employed to work abroad on the erection of these cranes. The 1994 Finance Bill changed the rules of residency in that Irish employees working abroad for more than 90 days in a tax year were entitled to a foreign earnings deduction of up to €31,750 from their taxable income. This represented savings of up to €13,335 for an employee on the higher tax band.
In April, 2002, the Union wrote to the Company when it learned that the tax-back incentive for working abroad would be eliminated from 1st January, 2004. The Union's position was that the net value of the financial package would not be affected. The Company's position is that the decision to withdraw the concession was by the Department of Finance and outside the control of the Company.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 1st of October, 2004, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 24th of May, 2005, in Tralee.
UNION'S ARGUMENTS:
3. 1. There are only a small number of workers involved in the claim. Their losses range from €3,000 to €13,000 per annum. The Union is only seeking that the value of the package be maintained by the Company.
2. Workers were assured that there would be no negative impact on their net earning arising from taxation legislation changes.
3. At no time between April, 2002, - when the matter was first raised by the Union, - and 2004 did the Company indicate that it had a problem with Union's stated position.
COMPANY'S ARGUMENTS:
4. 1. The Company completelyrejects that it is in any way liable for compensating its employees in respect of the changes to the taxation system.
2. Employees working abroad already enjoy a very attractive wage and expenses package - typically, an employee earns €1,500 - €1,700 per week plus expenses.
3. The claim is clearly cost-increasing and, therefore, is precluded under the stabilisation clause of Sustaining Progress. Concession of the claim would lead to knock-on claims from Unions for compensation arising from changes in tax legislation.
RECOMMENDATION:
The Union's claim before the Court is for maintenance of the net value of the remuneration package applicable to Craftsmen on Crane Erection Crews working abroad. The Union contends that assurances were given by the Company that the package would be maintained, irrespective of legislative changes in Revenue rules, and that it sought assurance on this stance in anticipation of Revenue changes which took place in 2004.
The Court notes that management agreed a remuneration package for the crew inclusive of salary, subsistence and allowances and pointed out that net take home pay under the package was enhanced by the foreign earnings deduction allowed by the Revenue Commissioners. However, the Court does not accept that management guaranteed a net remuneration package.
The Court acknowledges that changes in Revenue rules since 2004 have resulted in substantial losses in the remuneration packages of the crews working abroad. However, since this originates from a change in Revenue policy the Court does not recommend in favour of the Union's claim.
Signed on behalf of the Labour Court
Caroline Jenkinson
7th June, 2005______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.