FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : WEXFORD CREAMERY LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Reduction in Terms & Conditions of Employment.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union on behalf of its members in relation to changes to terms and conditions of employment resulting from a restructuring initiative implemented by the Employer. As part of its restructuring, the Employer effected a number of redundancies and eliminated a number of roles within the Company. Employees who were affected by the elimination of roles were offered alternative lesser-paid roles, however these employees were compensated accordingly. The Employer at a later stage as a further cost-saving measure sought pay reductions and proposed a Company-wide pay cut. Agreement could not be reached on this pay reduction and the Employer unilaterally took the decision to freeze its Defined Benefit Pension Scheme. It is the Union's claim that employees who previously suffered a loss in pay when they moved to alternative positions in the Company, have suffered a double loss as a result of changes to the Defined Benefit Pension Scheme. The Employer rejects the Union's claim and agreement could not be reached.The dispute could not be resolved at local level and was the subject of a number of Conciliation Conferences held under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 6th December, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 13th February, 2013.
UNION'S ARGUMENTS:
3. 1. The Claimants have suffered a significant financial loss through a reduction in pay and the freezing of the Defined Benefit Pension Scheme.
2. The Employer has acknowledged that an imbalance exists and has previously offered compensation to the Claimants to address the issue.
3. The Union on behalf of its members is currently seeking a pay increase to rectify the double loss suffered by the Claimants.
EMPLOYER'S ARGUMENTS:
4. 1. The Claimants applied for and accepted their current roles and were previously compensated for losses ensuing from a reduction in pay.
2. The Employer contends that there is no double loss in this instance and furthermore it is not in a position to revert to pay rates which were previously reduced as a necessary cost-saving measure.
RECOMMENDATION:
The Union’s claim is based on the assumption that had pay cuts not been in contemplation the rate of pay applied in respect of the jobs in issue would have been 15% higher than that actually set. The wording of the agreement entered into with some of the individuals concerned, coupled with the background negotiation then in train, may have been open to that interpretation. However, at that time the Union was clearly determined to resist pay reductions and a commitment that the rates agreed would be adjusted upwards in the event of the proposed pay reductions not been implemented was neither sought nor given.
Each of the claimants freely accepted the rates offered and accepted a buy-out of the difference between it and their previous rate. The only qualification in the agreement was that in the event of there being general pay reductions some of the agreed rates would be unaffected. That was a specific and limited concession which cannot be interpreted as implying a commitment to increase the rates in the event of the proposed general pay reduction not being pursued.
In these circumstances the Court does not recommend concession of the Unions claim. The Court notes that the Company made an offer to resolve the dispute at conciliation and that the offer is still open. The Court recommends that the Union should accept that offer in full and final settlement of its claims.
Signed on behalf of the Labour Court
Kevin Duffy
6th March 2013______________________
SCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.