FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : WEST HOTEL TRADING CO LTD T/A THE WESTBURY HOTEL - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Change Project
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union on behalf of approximately 170 of its members in relation to the implementation of proposed changes. The Employer is experiencing substantial financial difficulty and is currently in a loss-making situation. In order to alleviate the financial strain and to become more competitive, the Employer contends that it needs to make savings of €800,000 per annum. In order to achieve these savings the Employer has proposed several changes to the Union including, amongst others, the elimination of service charges, new rates of pay, reductions in premium pay for Sunday, nights and Public Holiday working and a three year pay freeze. The Employer has offered compensation for loss of earnings while the proposed changes are implemented. The Union disputes the Employer's proposed changes and asserts that the Employer is profitable on a day-to-day basis and that the losses incurred by the Employer is as a result of pre-existing debt carried by the owners. The Union further contends that it is unfair for its members to suffer any loss of earnings or changes to terms and conditions of employment as a result of the proposed changes. Agreement could not be reached and the parties engaged the services of the Labour Relations Commission. A Conciliation Conference was held and it was agreed that a third party independent review of the Employer's financial position would be carried out. The findings of the review concluded in a report confirming that the Employer requires the savings of €800,000 per annum in order to remain viable. The Union remains in dispute of the Employer's proposed changes and agreement could not be reached.
The dispute was referred to the Labour Court on 27th May 2011, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 27th June, 2011.
UNION'S ARGUMENTS:
3. 1. The changes proposed by the Employer are unfair and unacceptable.
2.A further reduction in pay would cause greater financial hardship to employees and their families.
3.The Union is seeking to retain current terms and conditions of employment for existing staff and for the proposed changes to be applicable to incoming staff only. The Union in this case believes that it is appropriate to "red-circle" existing staff members.
4.The Union accepts that changes need to be implemented and that reductions in pay are required. However, the Union maintains that these reductions should be carried out amongst all staff across the board up to and including managerial level.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer is in a worsening financial position and the savings required are crucial to its future viability. This was also confirmed in an independent financial review of the Employer's position.
2. The Employer has offered compensation to cover the immediate financial losses incurred by employees as changes are being implemented. The Employer contends that in the current economic climate this is a generous offer and is not in line with customs and practices within the industry.
3. The Employer does not agree with the principle of "red-circling" certain employees and asserts that with the low rate of staff turnover this would not be practical and would not result in any savings for the Employer.
RECOMMENDATION:
- The Court is satisfied that the Hotel is experiencing serious financial difficulties and that this has been verified by a jointly agreed independent assessor. The report of the assessor confirms that costs reductions are necessary in order to maintain the commercial viability of the business and to maintain employment within the enterprise. Against that background the Court recommends as follows: -
Service Charge
The Court accepts that none of the comparator hotels referred to in the course of the hearing, including those in which collective bargaining with a trade union takes place, retain a system of service charges. In these circumstances, and having regard to the acknowledged need to achieve savings and modernise the business, the Company’s proposal to discontinue service charges is reasonable and should be accepted. It is noted that the Company’s proposal involves the adjustment of basic pay consequent upon the abolition of service charges. Nevertheless those affected will experience reductions in earnings of different amounts dependent on the allocation of the service charge collected. The Court recommends that the Company’s proposal be modified so as to provide that the current basic pay and service charge earnings of individuals should be maintained at not less than 90% of their average level over the 52 weeks preceding the date of this Recommendation.
Premium Payments
The Court recommends that the premium in respect of rostered working on Sundays should be set at time plus one-third.
For rostered working on Public Holidays the premium should be time plus one- third together with the additional statutory entitlement.
The premium for night work should be set at 20%.Benchmarking against Comparable Hotels
The Court recommends that the parties should negotiate revised rates for new employees. These negotiations should have regard to the rates paid by competitor enterprises and in particular those in which rates of pay are determined by collective bargaining.
Compensation for Loss of Earnings
The Court recommends that loss of earnings arising from the implementation of this Recommendation should be compensated at a twice the proven annual loss. The formula for calculation and the stage payments proposed by the Company should be utilised.
Pay Pause
The Court recommends that there be a two-year pay pause and that the position be reviewed thereafter.
Redundancy
The Court recommends that a redundancy lump sum of 5.5 weeks’ pay per year of service, inclusive of statutory entitlements, should be paid to those being made redundant.
Any further clarification required by the Union in relation to the proposed new roles and the manner in which they are to be filled should be provided by the CompanyEffective Productive Use of Paid Time
The Court recommends that the Company’s proposal on this matter be accepted.
Automatic Time Recording
It is noted that agreement has been reached on this matter.
Introduction of On-Going Change and New Technology
The Court notes that agreement has been reached between the parties on Company’s proposals on this matter and recommends that the proposals be implemented.
Revised Job Descriptions
The Company’s proposals should be accepted. It is noted that the Union have expressed concern at what it regards as an absence of clarity in some aspects of these proposals. The Court recommends that appropriate clarification should be provided by the Company.
Signed on behalf of the Labour Court
Kevin Duffy
1st July 2011______________________
SCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.