FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EASON & SON - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION MANDATE DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Ni Mhurchu |
1. 1. Temporary Pay-Cut. 2. Freezing Of Increments. 3. Non-Payment Of Christmas Bonus
BACKGROUND:
2. This dispute concerns the Company's proposal - in response to difficulties caused by a reduction in turnover and profits, the strengthening of Sterling and losses related to property investments - to implement several cost-saving measures to reduce payroll costs.
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 16th October, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 6th November, 2009.
COMPANY'S ARGUMENTS:
3. 1. The Company made a net loss after tax of over €21 million for the year ending 31st January 2009, and sales to-date are down significantly on 2008.
2. The Company is under severe pressure from its banks to repay loans.
3.The Company does not have the €400,000 required to pay the Christmas Bonus.
UNIONS' ARGUMENTS:
4. 1. The Company's present financial difficulties are largely due to imprudent property investments made by the Company.
2. During the years of economic prosperity the Company shared substantial profits with its shareholders - not with its Workers. Losses caused by imprudent property investments should now be the responsibility of the Company and its shareholders - not its Workers.
3.The Christmas Bonus, which has never been discretionary or related to the profits of the Company, is an integral part of the Workers' pay and recognises the additional work done by the Workers during this peak trading period.
RECOMMENDATION:
The Court notes that a number of issues, all of which related to proposals to reduce payroll costs, were in dispute between the parties at conciliation and were subsequently referred to the Court.
At the hearing the Company indicated that it only wished to proceed with the claim in respect of the proposed non-payment of a Christmas bonus for 2009. The Unions agreed to proceed on that basis.
Having considered the submissions of the parties the Court is satisfied that the bonus in issue is not discretionary. In that regard it is clear from the wording of the Company / Union Agreement, and the previous practice within this employment, that the bonus is an integral part of the conditions of employment of the workers to whom it relates. In effect, the position of the Company is that it is seeking agreement not to pay the bonus this year having regard to its current commercial and financial circumstances.
The Court accepts that the Company is experiencing severe difficulties at present. The management representatives told the Court that it is undertaking a review of its cost and related structures so as to address those difficulties. It hopes to have completed that review early in 2010.
Having regard to all the circumstances of the case the Court does not believe that it should recommend non-payment of the bonus per se. Rather, it recommends that the matter be deferred and considered again in the context of the outcome of the overall review to which management referred in the course of their submissions to the Court.
The Court further recommends that the review be concluded within the first quarter of 2010 and that the outcome, in so far as it relates to terms and conditions of employment, be then communicated to the Unions. The question concerning the payment of the bonus for 2009 should then be discussed by the parties in conjunction with any other issues that may arise for discussion at that time.
Signed on behalf of the Labour Court
Kevin Duffy
19th November, 2009______________________
JMcC.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.