FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CHADWICKS LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION UNITE DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Ni Mhurchu |
1. Company Removal of Attendance Bonus
BACKGROUND:
2. This case concerns a dispute between Chadwicks Limited and SIPTU and UNITE in relation to the removal of attendance bonus payments. The Union contends that the quarterly bonus which is linked to pay was unilaterally withdrawn by management without exhausting third party dispute resolution mechanisms. The Union contends that the workforce is absorbing the additional work created by previous redundancies and that the bonus payments form part of a collective agreement between the parties.
Management's position is that the economic downturn specifically within the construction sector has led to a major downturn in business and the removal of the bonus was one of the initiatives introduced by the Company to remain competitive and protect employment into the future.
The dispute was not 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 matter was referred to the Labour Court on 29th February 2012 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 24th May, 2012.
UNION'S ARGUMENTS:
3 1 The Company unilaterally withdrew the bonus payments without negotiation with the Unions and at variance with agreed procedures. This is unacceptable and cannot be condoned
2 The workers are not in receipt of high earnings and are dependent on the payment of the bonus. The Company proposal to buy out the bonus was totally inadequate and unacceptable.
3 Management also misrepresented itself and the position of the workers by writing to staff and indicating that an agreement had been reached on the buy out. This is totally untrue as the offer of the buy out was rejected.
COMPANY'S ARGUMENTS:
4 1 The Company had no option but to cease the payment of the bonus. There has been a significant downturn in business and the Company was no longer able to sustain the additional costs involved.
2 The Company made a generous offer of buying out the bonus payment but this was rejected by the Union. In the circumstances the Company has done all it can to resolve the dispute.
3 Management issued the letter relating to the supposed agreement in error. It is acknowledged that no agreement was in place in relation to the buy out of the bonus payments.
RECOMMENDATION:
- It is clear that the bonus in issue in this case was provided for by a collective agreement entered into between the parties. The terms of the agreement were set out by the Company in a letter to the Union(s) dated 19thAugust 1998. The agreement does not provide for its unilateral termination nor was it subject to review. Essentially, the case advanced by the Company is that the seriousness of the changes in its economic and commercial circumstances left it with no viable option but to cease paying the bonus provided for in the agreement.
The Court has frequently pointed out that no agreement is immutable for all time and that changes in circumstances may arise which may make it necessary to revise or terminate an agreement. However, it is for the party seeking change to obtain the agreement of the other party or parties. Where agreement is not obtained established industrial relations machinery should be used to resolve the disagreement. While the Company did engage in negotiations with the Unions, both directly and through the LRC, with a view to obtaining agreement on the discontinuance of the bonus, the established disputes resolution procedure had not been exhausted before the Company acted unilaterally.
In particular, the Company should have referred the dispute to the Court for investigation and awaited the Court’s recommendations before proceeding further. In that regard this Court has always been prepared to facilitate parties with an early hearing in circumstances of particular urgency. It is further noted that in seeking the consent of individual employees to a buy-out of the bonus the Company had misrepresented the outcome of negotiations with the Unions by stating that agreement had been reached on the terms proposed.
In these circumstances the Court cannot condone the actions of the Company in unilaterally discontinuing the bonus in dispute.
The Court, nevertheless, accepts that the economic downturn and the degree of decline in the construction sector in particular had led to a serious decline in the financial and commercial circumstances of the Company. In the course of negotiations the Company did disclose details of its financial circumstances to the Union. The Union did not dispute the accuracy of the information provided nor did it seek to have its own assessment of the Company’s financial position undertaken. In these circumstances the Court takes it that the financial basis relied upon to justify the discontinuance of the bonus is not disputed.
In all the circumstances of the case the Court is satisfied that the case for discontinuing the payment of the attendance bonus is made out. However the Court recommends that the bonus be paid for all of 2011 and that it be bought out in respect of 2012 and subsequent years at 1.75 times its annual value.
Signed on behalf of the Labour Court
Kevin Duffy
25th June 2012______________________
AHChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.