FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : DAVENPORT HOTEL (REPRESENTED BY MR EUGENE MC CARTHY) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Hayes Employer Member: Ms Cryan Worker Member: Mr Shanahan |
1. Pay reduction.
BACKGROUND:
2. Persian Properties own and operate a number of hotels in the centre of Dublin including the O'Callaghan Davenport Hotel, where the five (5) members of the SIPTU union involved in this dispute are employed. The Workers concerned in this dispute were Accommodation Assistants and were paid the NMW of €8.65per hour.
At a meeting on the 25th January 2011 the five Workers concerned in this dispute and colleagues from the four hotels in the group were advised of a pending pay cut. It was claimed that the cut was necessary because of the reduction in the National Minimum Wage (NMW).
On the 28th January 2011 all the minimum wage earners were again called to a meeting at which they were called on individually to sign a form giving their Employer consent to implement a 10% cut in their pay with effect from 1st February 2011, thereby reducing their pay from €8.65 per hour to €7.80 per hour. The five Workers concerned refused to sign the form and were called to a third meeting on the 1st February 2011 and advised that if they did not sign the form they would be removed from the roster. As the Workers still refused to sign the form they were removed from the roster and also from the payroll.
Some correspondence was exchanged between the Union and the Company's Solicitor but did not produce a resolution to the dispute.
An official strike commenced on Thursday 17th February 2011 and was lifted on the 1st March 2011 following agreement between the parties to have the subject matter of the dispute heard by the Labour Court.
The dispute was referred to the Labour Court on the 1st March 2011 in accordance with Section 20(2) of the Industrial Relations Act, 1969, with both parties accepting the outcome. A Labour Court hearing took place on the 4th March 2011.
UNION'S ARGUMENTS:
3. 1. The Union contends that there was no agreement with the Workers, collectively or otherwise for a reduction in the hourly rate of pay.
2. The Union maintains that the Employer did not make a proposal or offer to the Workers. They were not presented with the opportunity to seek independent advice.
3. The Union maintains that the Employer sought the Workers' consent to the pay reduction but with the clear implication that if it was not given they (the Workers) would be removed from the payroll, with the possibility of having no earnings as opposed to earning less.
COMPANY'S ARGUMENTS:
4. 1. The Company maintains that due to a most difficult trading period it had no choice but to take out significant costs and stay open for business. Labour costs are a very significant heading in the context of total operating costs.
2. The Company maintains that its primary interest is one of job security for its employees and hence the approach to all employees to reduce pay.
3. The Company believes that its approach to cost reduction was fair and reasonable in all the circumstances.
RECOMMENDATION:
The case came before the Court pursuant to Section 20(2) of the Industrial Relations Act 1969 and both sides agreed to be bound by the Court’s Recommendation.
The Court has carefully considered the written submissions of both sides.
On the basis of the evidence presented to it the Court makes the following observations: -
1. Because the Court was not given any information on the trading or financial performance of the hotel it cannot support the Company’s submission that the reduction in pay was necessary to sustain jobs. In this regard the Court notes that the Company was not pleading inability to pay in respect of this matter.
2. Where a reduction in pay is sought the Court takes the view that the Employees affected should be provided with all the relevant information necessary to enable them make an informed decision on the matter. They should also be given a reasonable period of to reflect on the information provided and to take advice on the matter should they wish to do so. In addition the Company should engage meaningfully with the Employees to examine alternative measures that might be taken to address the issues confronting it.
From the evidence available to it the Court is not satisfied that such information or facilities were afforded to the employees affected in this case.
3. Where individual Employees decide not to agree to such a reduction in pay the Company should put in place a clear procedure for resolving such disputes in a fair and reasonable way and this should be communicated to all concerned.The Court is not satisfied that such procedures were employed in this case.
Conclusions: -
4. In the absence of any financial or trading information that would justify the need for a pay reduction or the availability of fair and reasonable procedures for securing worker’s approval thereto or for resolving disagreement with the proposal, the Court finds that the Employer’s actions were not fair and reasonable in all the circumstances of this case.
Recommendation: -
5. Accordingly the Court recommends that the Employees concerned be reinstated in their employment, on their contract rates of pay, with effect from the date on which they were removed from the duty roster and that they be paid all the monies they would have earned had they not been so removed.
6. In order to allow for an orderly return to work the employees affected should be included in the duty roster that is due to take effect from Wednesday 9th March 2011.
The Court so recommends.
Signed on behalf of the Labour Court
Brendan Hayes
7th March, 2011______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.