FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : REHAB GROUP (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Non-payment of Christmas Bonus
BACKGROUND:
2. The Group is an independent not-for-profit organisation which relies mainly on funding from the HSE and FAS. The Union's claim is for the payment of a Christmas bonus (an additional one week's pay) with effect from December, 2008. The bonus has been paid for the last 20 years at least and the workers regard it as part of their wages. The Union claims that it averages approximately €500 per worker, costing in total less than €500,000 for those employees in its membership. The Group's case is that the bonus is actually paid to 2,225 employees, at a cost of €1,381,000, and that it cannot afford to pay it due to a number of cuts in funding in late 2008.
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 27th May, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 23rd September, 2009.
UNION'S ARGUMENTS:
3. 1. There was no consultation with the Union in regard to bonus not being paid although the Union would have been prepared to discuss the situation. All funding for the expenditure budget was received by the Group at the time of the claim.
2. The bonus is not discretionary as the Group claims as the amount did not differ from year to year. It is included in calculations for redundancy and, as such, its non-payment constitutes withholding of wages.
GROUP'S ARGUMENTS:
4. 1. The Group suffered significant cuts in funding in late 2008, with the HSE's cut equating to €1.2 million. There are also problems with the Group's pension scheme and a number of redundancies have taken place in early 2009. The Group had to take swift action to review and manage its finances and there was not time to enter into detailed discussions with the Union although it was kept informed of the situation.
2. The bonus is a discretionary good-will gesture, it is not a payment for performance. The Group cannot afford to pay it given its very difficult economic situation.
RECOMMENDATION:
The matter before the Court is a claim by SIPTU on behalf of its members employed in Rehab Group for payment of the Christmas Bonus to employees with effect from December, 2008. The Union objected to the unilateral withdrawal of the Christmas Bonus, which had been paid to workers on a consistent basis for the past 20 years. The Union stated that its removal at the end of November, 2008, had occurred at short notice and without any form of consultation.
Management stated that the Christmas Bonus was not paid in December, 2008, due to necessary cutbacks it was required to make in order to ensure the continued financial stability of the organisation as a result of cuts in its funding.
Having considered the oral and written submissions of the parties the Court accepts the Board of Management’s necessity to take remedial action and the non-payment of the Christmas Bonus in December, 2008, formed a part of that remedy. However, given the late notification, the lack of consultation and the consequential high level of expectation that the Christmas Bonus would be paid in time for Christmas, the Court recommends that the December, 2008, Christmas Bonus should be paid in December 2009.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
8th October, 2009______________________
CONDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.