FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH AVIATION AUTHORITY - AND - (IAA GROUP OF UNIONS) DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Company’s proposal to defer payment of the increase due under Towards 2016 Review and Transitional Agreement.
BACKGROUND:
2. This dispute concerns the Irish Aviation Authority's claim that it is not in a position to pay increases due under the Review and Transitional Agreement of 'Towards 2016'. The Labour Relations Commission, with the consent of both parties, appointed an Assessor who found that the Authority was in a position to pay. This 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 1st September, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 26th January, 2010, the earliest date suitable to the parties.
UNIONS' ARGUMENTS:
3. 1. The Authority is in a healthy financial position.
2. The Authority has failed to prove an inability to pay the increases due underthe Review and Transitional Agreement of 'Towards 2016'.
3.There is no provision in the Review and Transitional Agreement of 'Towards 2016' for the deferral of the increases.
EMPLOYER'S ARGUMENTS:
4. 1. The Assessor's decision, which was based on historical financial information, ignored the financial difficulties experienced by the Authority due to the severe worldwide downturn in the aviation sector.
2. The Authority financial difficulties have worsened since the Assessor issued his report.
3.Concession of this claim would lead to an increase in the serious deficit in the Authority's pension scheme.
RECOMMENDATION:
This dispute came before the Court by way of a referral from the Labour Relations Commission under Clause 1.11 (iii) of the Pay Agreement Associated with the Review and Transitional Agreement of Towards 2016. It was confirmed by the parties at the commencement of the hearing that the Court was being asked to consider the case by reference to the provisions of that clause in the Agreement.
An assessor was appointed by the parties under the terms of the Agreement who concluded that the Authority was in a position to pay the terms of the Agreement in full. However the Authority do not accept the findings of the assessor.
It is noted that the Authority have made a number of offers to pay the increases claimed from various dates later than those on which the increase fell due by the strict application of the Agreement. These offers were made both before and after the assessor reported. The latest offer was made at conciliation on 25th August 2009. The Authority now contends that circumstances have deteriorated significantly since it made these offers. It referred, in particular, to the significant deficit in the Company pension fund which has been identified since that time.
In or about July 2009 the conciliation process terminated when the Authority indicated its intention to plead complete inability to pay the increases in issue. It was then agreed that the dispute would be referred to the Court pursuant to Clause 1.11 (ii) of the Agreement (for a binding recommendation under s.20(2) of the Industrial Relations Act 1969). Subsequently the Authority contacted the IRO of the LRC and indicated its willingness to make a revised offer and was now proposing that the increase be paid in 2011with retrospection to 1st January 2009,in the case of the first phase, and 31st December 2009 in the case of the second phase. The IRO conveyed this offer to the Union side. It is clear that this proposal found favour with the Unions. The reference to the Court was withdrawn and the conciliation process was reconvened. At the reconvened conciliation conference held on 25th August the Authority again revised its position and indicated that it was proposing to pay the increases in 2011 but without retrospection.
In making this recommendation the Court has taken account of all relevant considerations, including the prevailing economic circumstances and the need for the parties to address the acknowledged problems relating to the Authority’s pension fund.
The Court recommends that the original offer conveyed through the IRO, prior to the conciliation conference held on 25th August 2009, should form the basis for a resolution of this dispute. In that regard the Court does not accept that there have been such substantial changes in the circumstances of the Authority since that offer was made which could justify its subsequent decision to withdraw the offer. Accordingly the Court recommends that the first phase of 3.5% be paid with effect from 1st January 2011 with retrospection to 1st January 2009 and that the second phase of 2.5% be paid from 1st July 2011 with retrospection to 31st December 2009.
However, having regard to the current deficit in the pension scheme the Court recommends that the retrospection be paid into the pension fund as a once-off cash injection.
The parties should accept this recommendation on the following conditions: -
1. The Unions and their members commit to full cooperation with normal ongoing change, adaptation and flexibility.
2. That the parties undertake to engage in an intensive process aimed at addressing the current difficulties identified in the Authority’s pension scheme. This process should take place over a period not exceeding three months.
Signed on behalf of the Labour Court
Kevin Duffy
29th January, 2010______________________
JMcCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.