FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BREFFNI INTERGRATED LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - IMPACT / SIPTU DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Mr Shanahan |
1. 5% Wage Reduction.
BACKGROUND:
2. The Company, which is funded by the Local Community Development Programme and managed by Pobal, provides community services in the Cavan area and is seeking savings on pay role costs in order to achieve a financial break even situation during the current fiscal year. The Unions have rejected the concept of a wage reduction and have put forward alternative proposals of their own which they maintain would produce similar savings. This plan was rejected by Management as not going far enough. As each month passes the level of correction required to bring the finances back into line grows even greater.
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 8th May, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 5th June, 2012.
UNIONS' ARGUMENTS:
3. 1. There is no directive from Pobal or the Department of Environment, Community and Local Government stating that these cuts have to come from payroll costs.
2. Any cut should be administered in hours rather than a direct salary cut, thus preserving the integrity of the pay scales.
COMPANY'S ARGUMENTS:
4. 1. The Board became aware of a very significant reduction in funding for the budget year 2012. It is the Board's view that a reduction in pay is required to balance the reduced budget.
2. Many other similar Local Development Companies delivering LCDP have introduced redundancies and higher percentage cuts in pay in order to reach reduced budget targets.
RECOMMENDATION:
The matter before the Court concerns the Company’s need to reduce payroll costs due to a reduction in funding of approximately 35% in the past four years. The Company which is part of the Local and Community Development Programme is managed by Pobal on behalf of the Department of Environment, Community and Local Government and is 100% Government funded.
The Company stated that in order to meet its payroll budget it requires a 5% pay reduction, i.e. equivalent to €30,000 reduction in payroll costs.
The Unions submitted that the Employees had already made a significant contribution since 2009 when increments were ceased and no further pay increases were given. However, the Unions indicated their willingness to offer a further reduction to the 2012 payroll and made an offer to achieve a 4.1% reduction, i.e. equivalent to €21,000 reduction in payroll costs, by all Employees taking 1.7 hours unpaid time off each week, with no diminution in service provision.
Having considered the submissions of both sides the Court recommends that the Unions’ offer should be increased from the current 4.1% to 5% reduction in time in order to meet the Company’s payroll budget and to avoid other alternative measures, including redundancies. The Court recommends that this reduction in hours worked should take effect from23rd July 2012.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
6th July 2012______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.