FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SODEXHO IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Pay increase
BACKGROUND:
2. The issue before the Court concerns a claim by the Union on behalf of its members, for a 2.5% pay increase as per the terms of the Towards 2016 Transitional Agreement. The Company has provided catering services at its site in Mayo for over 10 years. It is the Union's position that historically the Company has implemented pay increases in line with National Agreements. The Union claim that the Company has not implemented this phase of the Towards 2016 Transitional Agreement. It has also failed to invoke provisions of the Agreement regarding a claim of inability to pay. The Company's position is that it continually faces competition from other contractors and factors such as wages impact on competitiveness.
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 28th June, 2011, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 22nd November, 2011.
UNION'S ARGUMENTS:
3. 1 The Union contends that the Company is profitable and has the financial resources to meet this claim.
2 The Company has not pleaded inability to pay at any time during the process since 2009. It should honour its commitments. The workers concerned have co-operated fully with the terms of T2016 and have engaged with the Company on the introduction of change.
3 The Workers have suffered a reduction in pay in real terms since 2009 due to inflation.
COMPANY'S ARGUMENTS:
4. 1 The cost to the Company of implementing a 2.5% pay increase would be in excess of €500,000. This would have serious knock on implications with regard to jobs. The Company cannot afford such an amount.
2 The rate of inflation for 2009 was minus 4.5% and for 2010 it was minus 1%. Inflation will average 2.5% in 2011. It is very hard to see any justification for a pay increase with reference to these figures.
3 The Company faces competition from other domestic and UK based contractors. Any increase in pay rates will affect competitiveness.
RECOMMENDATION:
The matter before the Court concerns a claim on behalf of the Company’s employees based at the Allergen Ireland Limited site in Co. Mayo for payment of phase three, 2.5% due from 1st July 2009, underTowards 2016 Review and Transitional Arrangement (“the Agreement”).
The Company stated that it could not afford to pay the increase due and it stated that measures had to be taken in order to stabilise the Company and preserve employment levels. The Company submitted that payment of the increase due would lead to a serious loss of both competitiveness and employment.
The Court notes that the Company has not pleaded inability to pay, however, it has given a commitment to review its financial circumstances in February 2012, therefore the Court does not recommend concession of the Unions' claim at this time. The Court further recommends that the parties meet again early in 2012 with a view to revisiting the matter in the context of the circumstances prevailing at that time and the Court recommends that the Company should keep the Union briefed on its financial circumstances as they evolve.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
8th December, 2011______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.