LCR18574

FULL RECOMMENDATION

CD/06/356

RECOMMENDATIONNO.LCR18574

INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969

PARTIES :

MUSGRAVE, SUPERVALUE, CENTRA LTD

- AND -

SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION

DIVISION :

Chairman: Mr Duffy
Employer Member: Mr Doherty
Worker Member: Mr O'Neill

SUBJECT:
1. Non Payment of ½% Payment terms under Phase 1 of Part 2 of Sustaining Progress

BACKGROUND:

2. Musgrave Supervalu-Centra is the retail franchise division of the Musgrave Group and it services independent retailers who operate the Supervalu and Centra brands. The dispute before the Court concerns the interpretation of Clause 2.4 of Part 2 of the Sustaining Progress (SP) Agreement and what is meant by basic pay.

- "It is agreed that basic pay shall be increased;
  
  In Phase One, by 1.5% for six months, as it applies in each particular employment or industry - except for those employees on an hourly basic rate of €9 per hour or less on commencement of the first phase, where a 2% increase will apply"
The Union contends that two hundred and fifty of its members are affected by Clause 2.4 of SP, in that they earn a basic hourly rate of €8.87 and therefore they are entitled to the 2% increase.
- The Company rejects the Unions contention on the basis that the workers are paid in accordance with an industrial engineering performance related bonus system. This scheme provides for a maximum achievable bonus of of basis pay. Although the basic pay at the time was €8.87, their actual pay was much higher. On an hourly rate, this equated to an overall maximum hourly rate of €14.63. All employees are required to perform at a minimum 33% bonus level. This equated to €11.80 per hour in March, 2005.
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 27th February, 2006, in accordance with Section 20(2) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 10th May, 2006.
- Both parties agreed to be bound by the Court's recommendation.

UNION'S ARGUMENTS:

3. 1. The basic rate is the only guaranteed rate for thirty nine hours. All add-ons, e.g overtime, shift pay, Sunday premium etc are applied to the basic rate.

2. If the authors of SP had intended the % increase to be applied to other than basic it would have said so. It specifically refers to basic pay and it was intended that the % increases would apply to basic. The Company is unreasonable in trying to include bonus earnings as part of basic pay for the purposes of applying the terms of SP when this was never intended by the agreement.

COMPANY'S ARGUMENTS:

4. 1. It is the Company's view that the spirit of this clause under SP was intended to provide for low paid employees. This clause was not intended to refer to employees with access to additional earnings arising from structured bonus systems.

2. The minimum acceptable of performance in the Company's Galway and Waterford Depots is 33%. This equated to €11.80 per hour in March, 2005. Employees who perform below this level on a consistent basis are subject to disciplinary action up to and including dismissal. The clause was not intended to cover the category of worker party to the current dispute.

RECOMMENDATION:

The relevant provision of the pay agreement associated with Sustaining Progress is written in language which is clear and unambiguous. While the result of applying the provision in this case may be somewhat anomalous, the Court cannot ignore the clear wording used in the agreement or rewrite its terms.

Accordingly, the Court recommends that the agreement be applied in the terms in which it was written.

Signed on behalf of the Labour Court

Kevin Duffy
16th May 2006______________________
JO'CChairman

NOTE

Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.