FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH NATIONWIDE - AND - IRISH BANK OFFICIALS' ASSOCIATION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Ms Ni Mhurchu |
1. December payment and pay for 2010
BACKGROUND:
2. The issue before the Court concerns a claim by the Union on behalf of its members for unpaid bonuses in December 2009 and 2010 and for the non payment of wage increases in 2010 and 2011. It is the Union's case that non-managerial staff in the Society had been in receipt of a bonus of two weeks pay each December for 30 years until 2009. It was stopped with little notification to staff. The Union argues that the bonus makes up a key part of the staff's remuneration and that staff have not receive pay increases for 2010 or 2011 despite the increase in the cost of living. The Society's position is that it is subject to the Credit Institutions (Stabilisation) Act, 2010 which prohibits the payment of bonuses or increases in remuneration without the approval and consent of the Minister for Finance.
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 6th April, 2011, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 20th July, 2011.
UNION'S ARGUMENTS:
3. 1 The December bonus payment is considered a key part of non-managerial staff's contractual remuneration. It has existed for 30 years and is well established by custom and practice.
2 Staff were given only one month's notice of the non-payment of the bonus. Many staff had already budgeted for the payment in that year's expenditure.
3 Staff at the Society are poorly paid relative to the industry norm. They are now facing redundancies. They have supported significant change and have given huge commitment to ensure the business is run down in as cost effective way as possible. Pay increases stopped in 2010 despite the fact that the cost of living began to rise again half way through 2010.
COMPANY'S ARGUMENTS:
4. 1 Although a December bonus has been paid in the past it does not amount to a contractual entitlement. There is no reference to the bonus in any contracts of employment.
2 Given the unprecedented economic circumstances and the emergency financial measures introduced by the Government, the Company must take every measure possible in relation to the reduction of expenditure generally.
3 The Society is in a position of uncertainty and no longer exists for all practical purposes. As a result the payment of a bonus would be inappropriate and impossible.
RECOMMENDATION:
The matter before the Court concern the Union’s claims on behalf of 110 non-executive grades for payment of a bonus payment for 2009 and 2010 and secondly for an increase in rates of pay for 2010 and 2011.
The Union stated to the Court that there had been a long tradition of paying a bonus payment of two weeks pay in December each year, this payment had not been paid in December 2009 and December 2010. Furthermore, the Union sought the payment of a pay award of 3.5% in recognition of cost of living and outstanding pay in 2010 and 2011.
Management rejected the claims and pointed out that due to the exceptional financial losses incurred by the Bank since 2007, coupled with the emergency measures taken by the Government under the Credit Institutions (Stabilisation) Act, 2010 to guarantee and support the Bank, that it was not possible to concede the Union’s claims.
Having considered the submissions of both parties the Court is of the view that in the context of the excessive losses incurred by the Bank and the conditions under which the Government is supporting the Bank in accordance with the 2010 Act, there is no justification for the payment of the bonus payments and the pay increase claimed.
The Court notes that the members in the Bank are newly organised by the Union and in that regard the Court recommends that the parties should continue to develop appropriate negotiating procedures for the future.
Signed on behalf of the Labour Court
Caroline Jenkinson
29th July, 2011______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.