FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AN POST - AND - ASSOCIATION OF HIGHER CIVIL & PUBLIC SERVANTS DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Bonus Payment.
BACKGROUND:
2. The Worker concerned joined An Post in February 2000 at the General Manager Grade. A new Performance Related Pay system was proposed in 2001 and the Company redesignated the Worker to 'Senior Manager', increased his salary by 10% and increased his bonus potential to 20%.
In January 2007 the Worker was assigned to An Post's Resource Centre and remained there until October 2007. Staff are assigned to the Resource Centre when there is no work available for them.
Following an assessment of his performance in his new role during the last quarter of 2007 a decision was taken to award him a bonus payment of 16% of his salary. As he had only worked in this role for eleven weeks during 2007 the bonus was calculated on a pro-rata basis, i.e at 16% of 11/52 of his annual salary and a performance related payment was paid to the Worker.
The Worker did not agree with the amount the Company had paid him and argued that the Company should have applied the 16% as a percentage of his salary for the full year.
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 September, 2008, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 13th November, 2008.
UNION'S ARGUMENTS:
3. 1.The Union maintains that the Company denied the Worker the opportunity to participate fully in the organisation by not providing him with work during the period January to October 2007 and thereby denying him the opportunity to earn his full bonus for the year.
2.The Union maintains that the Worker was available for work in the Company throughout 2007 and made several requests for work. The Union maintains that suitable work existed within the Company and that the Worker could have been assigned to the Strategy & Business Excellence Directorate earlier.
3.The Union contends that the Worker was the only Manager in An Post who had his performance bonus reduced pro-rata in this manner.
COMPANY'S ARGUMENTS:
4. 1. The Company operates a performance related reward system for its managers which is designed to incentivise and reward actual performance against the achievement of specific goals/agreed objectives. Bonus payments are not an entitlement but are based on an assessment of actual performance and as such are at the discretion of the Company.
2. There is no contractual basis for the Worker's claim that he should be paid a bonus for the full year 2007 in circumstances where he was surplus and only employed on effective work for eleven weeks of that year.
3. Prior to the conciliation conference Management made an offer of an additional €7,486 ex gratia payment to the Worker in order to settle the claim. The Worker rejected this.
RECOMMENDATION:
The Union's claim before the Court, on behalf of a Senior Manager, concerns an alleged underpayment of a performance bonus for the year 2007. The bonus is made up of a maximum 10% for Company performance and maximum 10% personal performance. The Claimant's bonus for 2007 was determined at 6% personal performance and 10% for Company performance.
As the Claimant was surplus to requirements and assigned to the Resource Centre up to October, 2007, and thereafter he was actively engaged within the Strategy and Business Excellence area for the period of 11 weeks, the Company only paid him the bonus based on his performance from October to December, 2007. The Union claimed that he was entitled to the full bonus for the year, amounting to €15,192.
The Company stated that it was not normal practice to apply the performance bonus to those placed in the Resource Centre. The Union contended that by being assigned to the Resource Centre, the Claimant was denied the opportunity to earn the bonus and therefore he sought payment of the balance - €11,978, 16% of his salary.
As a gesture of goodwill, the Company offered to pay him the full 10% Company performance bonus for the year 2007, in addition to the 11 weeks personal performance bonus. This offer was made in writing to the Claimant on 21st May, 2008. When he rejected the offer it was withdrawn by the Company.
Having considered the submission of both parties, the Court is of the view that the Claimant was entitled to the full Company performance bonus despite his assignment to the Resource Centre and accepts that the personal performance is subject to an assessment of the employee's work. Therefore, the Court upholds the Company's actions in not paying the personal performance bonus for the period when he was not actively engaged - through no fault of his own.
Consequently, the Court recommends that the Company's offer of 21st May 2008 should be reoffered to the Claimant and should be accepted in full and final settlement of his claim.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
1st December, 2008______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.