FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CHESHIRE IRELAND (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION IRISH NURSES AND MIDWIVES ORGANISATION UNITE DIVISION : Chairman: Mr Duffy Employer Member: Mr Murphy Worker Member: Mr Nash |
1. 1. 5% HSE pay cut. 2. Salary increment freeze. 3. Pension contribution adjustment. 4. Public holiday entitlement adjustment and standardisation. 5. Sick pay policy adjustment.
BACKGROUND:
2. Cheshire Ireland is a not-for-profit organisation which provides accommodation and support services across Ireland to adults with primarily physical disabilities. It operates 23 residential and supported living centres around the country. It is funded almost entirely by the HSE. Traditionally pay rates have been linked to the Public Service. In May/June 2009 management met with the Union and advised that due to funding cuts by the HSE it was facing a major deficit for 2009 and further serious financial difficulties for 2010 (the Organisation's projected figure is almost €2.2 million). The Organisation's case is that immediate action must be taken if it is to maintain services and employment levels, and listed the following areas that need to be addressed: continued application of public sector pay rates, adjustment of the sick pay scheme, revision of entitlements on public holidays, pension contribution and a freeze in increment payments. The Union was unhappy with the proposals feeling that management was not making a sufficient contribution to cost savings and the parties agreed to a referral to the Labour Relations Commission (LRC). In December, 2009, management advised that it would implement pay cuts of 5 % in the Organisation, the same as those announced for public servants effective, from 1st January, 2010. Following a conciliation conference at the LRC in January, 2010, management agreed to rescind the 5% pay cut as the parties had agreed to work together on cost-saving measures. An independent assessor (Mazars, Accountants) was appointed and a further conciliation conference took place on 20th May, 2010. At this the Union agreed to recommend acceptance of the revised HSE pay scales from a current date but only if all other management proposals were "off-the-table". This was unacceptable to management and the case was referred to the Labour Court on the 28th May, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 2nd July, 2010.
UNION'S ARGUMENTS
3. 1. The report by Mazars does not support the Organisation's view that it is in serious financial difficulties. Despite this management has sought to undermine the terms and conditions of staff who have already made huge contributions to cost savings through flexibility and co-operation at local levels.
2. Management's proposal of reducing its pension contribution from 7% of total earnings to 5% of base earnings is unacceptable as it would be further dilution of members' conditions. The proposal to effectively half the terms of the sick pay scheme is also not acceptable. There is no evidence to suggest any abuse of the scheme.
ORGANISATION'S ARGUMENTS
4. 1. The Organisation needs to make the various cuts and adjustments if it is to remain viable. A 12-month implementation of pay cuts will reduce costs by €1.429 million. On the issue of increments the Organisation can no longer afford to pay them and is seeking a 12-month freeze.
2. Currently, workers receive regular pay for being rostered to work Public Holidays. However, they also receive premium payments (equivalent to one day's pay) plus time off in lieu for working the same day. The Organisation proposes that workers will no longer receive the day off as this would generate savings of €193,000 for a 12-month period.
RECOMMENDATION:
The Court has considered the submissions of the parties together with the financial information in support of those submissions.
It is noted that the financial difficulties facing the Organisation are mainly attributable to a reduction in its funding from the HSE. Those difficulties are real and necessitate cost containment measures on the part of the Organisation. However, the Court believes that any retrenchment in pay and conditions of employment pursued in furtherance of that objective must be fair and reasonable and within the bounds of what is attainable from an industrial relations perspective. In that regard the Court does not regard it as fair and reasonable to expect employees to bear the entire brunt of the reduced funding.
The pay of the staff of the Organisation is aligned with that of corresponding grades in the Public Sector. Staff have benefited from that parity in the past by obtaining general and special pay increases provided for by Public Sector Agreements. In these circumstances and having regard to the financial circumstances of the Organisation, the Court recommends that rates of pay should be reduced in line with reductions introduced in the Public Sector. However, there is no precedent for reducing pay retrospectively and the Court does not regard the Organisation's proposal in that regard as reasonable. Accordingly, the Court recommends that the reductions be implemented from the date of this Recommendation.
In relation to the other proposals put forward by the Organisation, the Court does not believe that a justifiable basis exists upon which it could recommend their concession at this time. Moreover, there is no evidence that these conditions are in any respect out of line with conditions in comparable employments.
Finally, it is clear that, notwithstanding the pay reductions provided for by this Recommendation, the Organisation will still experience financial deficits. It is in the interest of all parties that the Organisation remains financially viable. For that purpose the parties should cooperate in seeking to identify measures which can lead to cost savings in other areas
Signed on behalf of the Labour Court
Kevin Duffy
7th July, 2010.______________________
CON.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.