FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CARRIGORAN NURSING HOME (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Mr Nash |
1. Payment of Christmas Bonus 2009
BACKGROUND:
2. The issue before the Court concerns the non payment of the 2009 Christmas bonus to the workers concerned. The workers are employed in support staff grades at the nursing home. The value of the bonus is related to a workers length of service and ranges from 1 days pay up to 7 days pay. The Company's position is that due to its financial position it is unable to pay the bonus. It offered to pay half the bonus but this was rejected by the Union's members. The Union position is that it believes the Company is in a position to pay the bonus.
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 the 21st May, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 25th September, 2011.
UNION'S ARGUMENTS:
3. 1 The Christmas bonus has formed part of the Company/Union agreement since 1990 and is in the workers contract of employment since 1978. Therefore, in order for the bonus to cease it must be negotiated between the parties.
2 The Union does not believe the Company's claim of inability to pay as a week after stating it would not be paying the bonus it offered to pay half.
COMPANY'S ARGUMENTS:
4. 1 The Company's operational income is dependant on residents/families paying their bills in full and in a timely manner. This has been a huge challenge for the Company. Labour costs for the Company amount to 75% of turnover as opposed to 57% in other comparable Companies. The Company had an operating loss for 2009. The Company did not increase residential rates for that year. The annual 5% increase in rates has historically contributed to sustaining staff salaries and benefits.
2 The Company are firmly of the view that all bonuses are discretionary and can only be paid when the Company is in a viable financial position to do so.
RECOMMENDATION:
It is clear that the bonus in issue is contractual in that it is provided for in the Union/Company agreement and the terms of that agreement do not afford the Company any element of discretion in its payment.
The claim before the Court relates to 2009 only. Having regard to all the circumstances of the case the Court recommends that the bonus be paid in respect of that year. The parties should then enter into negotiations on the continued payment of the bonus having full regard to the financial circumstances of the Company.
Signed on behalf of the Labour Court
Kevin Duffy
13th June, 2011______________________
DNChairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.