FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PREMIER PERICLASE LTD - AND - UNITE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Tanham |
1. Pro-rata reduction applied to service leave on retirement.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union in relation to the Employer's practice of a pro-rata reduction applied to service leave on retirement. The Employer, a leading chemical manufacturing Company located in Drogheda, Co Louth, currently employs approximately 120 employees. The Employer operates a practice whereby additional annual leave days are accrued in accordance with employees' length of service with the Company. Service leave is granted once a period of ten years' service has been reached with the Company. The maximum amount of days that may be accrued is five days which are granted to an employee with fourteen years' or more service. The Employer also operates a policy whereby on retirement, these accrued additional leave days are treated in the same manner as annual leave for the purpose of calculating entitlements and a pro-rata reduction is applied accordingly. The Employer contends that this is an established practice that has been in operation for a period of over thirty years and there is no apparent need to alter it in any way. The Union is of the view that the accrued service leave should not be treated in the same manner as annual leave and should not be subject to a pro-rata reduction at retirement.
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 March, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 29th June, 2012. A subsequent hearing took place on the 22nd August, 2012.
UNION'S ARGUMENTS:
3. 1. There is no existing Company/Union agreement which provides for a pro-rata reduction to be applied to service leave.
2. The Union contends that Employees are not aware of this practice nor has the Employer made any effort to inform them of same.
3. The Union is seeking the cessation of the Employer's practice of reducing accrued service leave pro-rata at the time of retirement.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer maintains that for the purpose of calculating entitlements, accrued service leave is treated in the same manner as annual leave. There is no distinction between them.
2. The Employer asserts that the practice of pro-rating service leave at retirement is long established and there is no requirement for it to be altered.
RECOMMENDATION:
The issue before the Court concerns the Union’s objection to the Company’s practice of applying pro-rata reduction to service days on retirement. Employees accrue service days depending on the number of years’ service with the Company. When employees retire or leave the employment for any reason the Company applies annual leave and service days on a pro-rata basis. The Union submitted to the Court that there is no provision in any document which gives rise to the Company’s actions.
Having considered the submissions of both sides the Court notes that it has been the custom and practice in the Company for the past 33 years to apply a pro-rata deduction to both annual leave and service leave in circumstances where an employee leaves the employment during the leave year. Furthermore, the Court is satisfied that the Company’s application of pro-rata in such circumstances is within the norm in industry and is in accordance with its Agreement on “Holidays and Holiday Entitlement”. That Agreement outlines the details of annual holiday entitlement in accordance with an employee’s length of service and specifically states that “Holidays will be in accordance with the [Organisation of] Working Time Act, 1997”.
On that basis the Court upholds the Company’s application of pro-rata reduction to service days on retirement.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
24th August 2012______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.