FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : LUFTHANSA TECHNIK AIRMOTIVE IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr O'Neill |
1. Clause 1.11(i) of Towards 2016, Review & Transitional Agreement.
BACKGROUND:
2. This case concerns a dispute between the Company (represented by IBEC) and the TEEU in relation to the Union's claim that the Company is in breach of the Towards 2016 Review and Transitional Agreement. The Union contends that by not paying the increase from the due date and by not invoking the inability to pay or cost-offsetting clauses of the Agreement, the Company is in breach of its terms.
The Company position is that it is not in breach of the terms of the Agreement. It contends that it is not currently in a position to apply the pay increases as it has been operating in difficult trading circumstances in recent times and will continue to struggle into the future yet it is not claiming inability to pay. It fully intends to pay the increases due but there are other issues that need to be addressed before payment.
The dispute was not 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 matter was referred to the Labour Court on 22nd October 2009 in accordance with Section 20(2) of the Industrial Relations Act, 1969 and both sides agreed to be bound by the Court's Recommendation. A Labour Court hearing took place on 9th June, 2010.
UNION'S ARGUMENTS:
3 1 The Company is clearly in breach of the Agreement. It must apply the terms of the Agreement or else claim inability to pay and/or seek cost-offsetting measures in relation to the payment of the increases. It cannot refuse to pay the increases without invoking the other provisions of the Agreement.
2 The current difficulties being experienced by the Company are outside the control of the workers. The workers appreciate the current situation but need clarity as to the Company's intention for the payment of monies due.
COMPANY'S ARGUMENTS:
4 1 The Company is not currently in a position to pay the increases due. Concession of the Union's claim at this time would jeopardise the viability of the business going forward.
2 The Company is aware of the contributions that the workers have made to its success in the past and has every intentions of applying the wage increases. Given the difficult circumstances being experienced at this time, it may be necessary to seek agreement with the Union to apply the increases over an extended period of time.
RECOMMENDATION:
The matter before the Court concerns the Unions dispute with the Company over the non-payment of the third and final phase (2½% from 1st July 2009) of "Towards 2016 Review and Transitional Agreement". This claim was brought to the Court under Section 20(2) of the Industrial Relations Act 1969 on the basis of a claim by the Unions' that the Company was in breach of the Agreement.
Clause 1.11(i) of the Agreement provides that
“If a dispute arises as to what constitutes a breach of the Transitional Agreement, after local discussion, the matter may be referred to the LRC and, if unresolved, it shall jointly be referred to the Labour Court under Section 20(2) of the Industrial Relations Act, 1969, and the parties will accept the outcome”.
The Company paid phase two of the Agreement (3½% from 1st January 2009). At the time it stated that:
“The decision to pay further phases of Towards 2016 Agreement will be evaluated in the light of the business conditions prevailing at the relevant time”.
In July 2009, the Company indicated that it was postponing payment of the next phase, pending clarification of the discussions ongoing at national level at the time.
Following some local discussions the matter was referred to the Labour Relations Commission and the claim under section 20(2) was subsequently referred to the Court.
Having considered the submissions of both parties, the Court is of the view that in the absence of negotiations on the issue as indicated in January 2009, in the absence of any commitment by the Company in relation to the payment of the final phase and in the absence of the Company invoking Clauses 1.11(ii) or 1.11(iii), the Court finds that the Company is in breach of the Agreement.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
24th June 2010______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.