FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 S2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001, AS AMENDED BY THE INDUSTRIAL RELATIONS(MISCELLANEOUS PROVISIONS) ACT, 2004 PARTIES : GLOBAL TELE SALES LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - COMMUNICATIONS WORKERS UNION DIVISION : Chairman: Mr Hayes Employer Member: Ms Cryan Worker Member: Ms Ni Mhurchu |
1. Referral from The Labour Relations Commission under the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
BACKGROUND:
2. The Company is an Irish subsidiary of a German-based company called GTS Group, which is a wholly owned subsidiary of Deutsche Lufthansa AG. The Company provides services such as reservations, customer service and ticketing to the airline Lufthansa and, to a lesser extent, other airlines within the Deutsche Lufthansa AG group.
For a period of years until 2007 the Company was loss-making. A crisis solution was devised and resulted in operations being slimmed down substantially. Significant redundancies occurred and reductions in staff numbers. A total of 190 people are now employed in the Company.
A new pay and reward system was introduced which the Union claim has had a detrimental effect on the income of some workers. The Union also maintains that the Company has breached the terms of employment contract.
The matter was referred to the Labour Relations Commission and was dealt with through procedures outlined at Section 2 of the Enchanced Code of Practice on Voluntary Dispute Resolution (SI 76 of 2004). A number of issues were resolved satisfactorily. The remaining issue concerning Salary Bands was referred at the request of the Union to the Labour Court on the 19th February 2010, for investigation under Section 2(1) of the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004. A Labour Court hearing took place on the 25th February, 2011.
RECOMMENDATION:
Both sides agreed that the matter was properly before the Court pursuant to Section 2 of the Industrial Relations (Amendment) Act 2001 as amended. Both sides agreed that a trade dispute exists between the parties and that the Court is, empowered to hear and deal with the dispute pursuant to Section 5 of the Act.
The Court has carefully considered the written and oral submissions made by both sides in this case.
Findings of the Court:
The Court is satisfied that, as a result of the salary restructuring undertaken in November 2007, some workers on the former Salary Band II were uniquely disadvantaged at that time. Whilst the minimum point of that band increased from €8.49 per hour the maximum point was reduced from €13.08 to €11.25 per hour. Workers who were earning in excess of €11.25 per hour at that time were red circled on their current rate. Workers below €11.25 per hour were capped at that level.
These Workers had a reasonable expectation that they would, subject to performance reviews, progress over time to the maximum point of the Salary Band.
This reduction was unique to Band II. The Company increased all other Salary Bands by varying amounts.
The Company contends that the effect of this reduction in salary potential was offset by the introduction of a performance bonus scheme that provided all affected staff with the opportunity to earn significantly increased levels of income over and above the maximum of the former Band II.
The Court further notes that the matter is complicated by the fact that the work that was being performed by the staff on Salary Band II has ceased to exist and that they
have been integrated into the new Salary Band A and are performing work appropriate to that band.
Observations of the Court:
Whilst the case was presented to the Court in the context of a restructuring of salary scales arising out of trading difficulties the Court is satisfied that the real issue to be addressed arises out of a decision by the Company to discontinue a line of work that removed the raison d’etre for the continuation of Salary Band II. The Company approached this issue by reassigning the staff affected to the former Salary Band I and red circling the earnings of staff on Salary Band II who were at that time earning in excess of the maximum of what was effectively the recast Salary Band I now described as Salary Band A. Staff who were on Salary Band II but who were earning less than the maximum of the new Salary Band A were assimilated onto that grade.
The Union is contending that this latter category of Workers had a legitimate expectation that they would, over time, reach the maximum of Salary Band II and that this opportunity had now been denied them.
The Court is satisfied that there is some merit in the Union’s arguments.
However the Court is equally satisfied that it is unreasonable to insist that the Company maintain a grade where the work associated with it no longer exists.
The Court also notes that no individual actually lost money but rather lost potential earnings into the future. Furthermore the Court notes that almost all of the Workers affected have in fact earned more money under the new pay structures than they would have earned under the discontinued structures albeit subject to the achievement of higher and different performance standards.
Recommendation:
Taking all matters into account therefore, the Court recommends that the dispute be disposed of in the following way: -
- The Company should pay all those Salary Band II staff who were earning less than the maximum point of the scale in November 2007 a once off lump sum of €2,000 euro as compensation for any loss attendant on the elimination of the grade and consequent acceptance of the new salary structure..
The Company examine the actual pay outcomes for the staff affected over the years since 2007 and put in place an appropriate training and support program to assist those affected maximise their earnings levels through the performance related payment system.
The Court so recommends.
Signed on behalf of the Labour Court
Brendan Hayes
7th June 2011______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.