FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 25(2), PROTECTION OF EMPLOYEES (TEMPORARY AGENCY WORK) ACT, 2012 PARTIES : IRE RECRUITMENT LTD (REPRESENTED BY DENISE MULCAHY B.L, INSTRUCTED BY FINGHIN O'DRISCOLL, SOLICITORS) - AND - DENIS COAKLEY, KEVIN JAMES, JASON MARTIN, JAKUB BOJANOWICZ & GEDIMINAS JANISIONIS (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Hayes Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Appeal against Rights Commissioner's Decision r-137860/137862/137851/137857/137702-taw-13/JOC.
BACKGROUND:
2. The Employer appealed the Rights Commissioner’s Decision to the Labour Court in accordance with Section 25(2) of the Protection of Employees (Temporary Agency Work) Act 2012 on the 1st August, 2014. The Court heard the appeal on the 13th November, 2014, the earliest date suitable to the parties.
DETERMINATION:
This is an appeal by IRE Recruitment Ltd (represented by Denise Mulcahy B.L., instructed by Finghin O’Driscoll Solicitors against the Decision of a Rights Commissioner in a claim by Mr Coakley, Mr James, Mr Martin, Mr Bojanowicz and Mr Janisionis under the Protection of Employees (Temporary Agency Work) Act 2012 (the Act).
In this Determination Mr Coakley, Mr James, Mr Martin, Mr Bojanowicz and Mr Janisionis are referred to as the Claimants and IRE Recruitment Limited is referred to as the Respondent.
The Respondent is an employment agency. The Claimants are employed by the Respondent as truck drivers. Their basic pay is €11.50 per hour. They are assigned by the Respondent to a third party, namely Greenstar Limited, hereafter referred to as the ‘hirer’. It is agreed that the same facts apply to each of the Claimants.
The Union contends that the Claimants are being paid less in terms of basic pay than that which they would have been paid had they been employed directly by the hirer to perform the same work. The claim is made in reliance on s.6(1) of the Act.
The Rights Commissioner found that the claim was well-founded. The Respondent appealed to the Court.
The facts
The material facts of the case are not in dispute and can be summarised as follows: -
The Hirer, Greenstar limited, provides a refuse collection and removal service to both domestic and commercial clients. The Claimants are employed as lorry drivers by the Respondent and are assigned to the Hirer.
The Hirer initially grew by way of a series of takeovers. It has now established itself as a leading provider of refuse removal services in the State. The companies it acquired had different rates of pay in place at the relevant times. Those rates were not changed when taken over by the Hirer.
In 2011 the Company went into receivership. In an effort to prepare the business for sale the Receiver concluded a collective agreement on pay and conditions of employment for all staff with SIPTU a trade union that represents workers in the sector. Directly employed workers are paid in accordance with the terms of that agreement. It provides for a new basic hourly pay rate of €12.50 per hour for all drivers. The agreement further provides for a reduction in the basic hourly rate to €11.90 per hour 12 months after it came into effect. It is common case that the reduction in the basic hourly rate was not put into effect.
The Company was then sold by the receiver to the current owners being the Hirer in this case. It is common case that the employees of Greenstar Limited continued in employment under the terms and conditions agreed between the Receiver and SIPTU.
The Respondent was contracted to provide agency workers to the Hirer. The Respondent pays its drivers €11.50 per hour. The Union is claiming that the claimants are entitled to be paid the agreed basic rates of pay that are set out in the collective agreement concluded by the Receiver that applies to directly employed workers.
Preliminary Issue
Time Limits
Section 25(4) of the Act states:
- A rights commissioner shall not entertain a complaint under this paragraph if it is presented to him or her after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.
The Complainants argue that the infringement of Section 6 of the Act constitutes an ongoing breach of the Act. It submits that it has identified a series of contraventions of the Act that have occurred within the statutory time limit. It submits that the Respondent’s arguments are misconceived.
Findings of the Court
The Court finds that the alleged infringement of the Act is ongoing and that the Complainants have identified contraventions of the Act that have occurred within the statutory time limit. The Court finds that the complaint is not statute-barred.
Position of the Parties
The Complainants argue that there is a collective agreement in place in the Hirer that sets out the rate of pay for directly employed drivers. It argues that Section 6 of the Act establishes a statutory entitlement to a collectively agreed rate of pay where such a collective agreement is in place. It argues that the existence of the collective agreement was established by this Court as a matter of fact in the case of QED Recruitment Ltd v Patrick Mulholland [2014] AWD146. It also argues that the terms of that agreement were accepted as operational in the Hirer and cannot be disputed before this Court. On that basis it argues that the Court should uphold the complaint and order the Respondent to increase the Claimants basic hourly rate to €12.50 per hour.
The Respondent argues that the complainants are statute-barred. If it is not successful in that argument it argues that the court must take into account all aspects of the constituent parts of what the Act defines as basic pay for the purpose of making the comparison between directly employed drivers and agency workers. In that regard it argues that directly employed drivers are paid at the rate of 1.25 times the hourly rate for the first five hours and 1.5 times the hourly rate thereafter. Agency workers are paid at the rate of 1.5 times the hourly rate immediately upon commencing overtime working. It argues that a like for like comparison of basic rates of pay must take this difference into account.
Discussion
Section 6(1) of the Act states:
- Subject to any collective agreement for the time being standing approved undersection 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.
The Act defines Basic Working and Employment Conditions as:
- 'basic working and employment conditions' means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer, and that relate to—
- (a) pay
(b) working time,
(c) rest periods,
(d) rest breaks during the working day,
(e) night work
(f) overtime
(g) annual leave, or
(h) public holidays;
- (a) pay
The Act defines pay as:
- 'pay' means-
(a) basic pay, and
(b) any pay in excess of basic pay in respect of-
(i) shift work,
(ii) piece work,
(iii) overtime,
(iv) unsocial hours worked, or
(v) hours worked on a Sunday
but does not include sick pay, payments under any pension scheme or arrangement or payments under any scheme to which the second sentence of the second subparagraph of paragraph 4 of Article 5 of the Directive applies.
It is common case that there is a collective agreement in place that sets out the pay and other terms and conditions of employment of directly employed staff. It is also common case that the hourly rate of pay set out in the collective agreement was not reduced in accordance with the terms of the collective agreement.
Accordingly, it is common case that the effective agreed hourly rate of pay for drivers directly employed by the Hirer is €12.50 per hour.
Section 6(1) of the Act entitles an agency worker to the same basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.
Basic working conditions includes “pay” which the Act goes on to define as basic pay and any pay in excess of basic pay in respect of shift work, piece work, overtime, unsocial hours worked or hours worked on Sunday. The Complainants argue that the Respondent is infringing the Act by paying them a basic hourly rate of €11.50 while the Hirer pays directly employed comparable workers €12.50 per hour. The Respondent argues that the basic hourly rate does not stand in isolation. It argues that it pays higher premium rates to its workers for the first five hours of overtime and that this must be taken into account when determining the pay of directly employed and agency workers under the Act.
The question before the Court is whether the constituent parts of the term Pay are to be considered separately or together for the purposes of comparison with the pay of agency and directly employed workers.
The pay of an Agency worker is protected under the Act. Its constituent parts are listed in section 2(1) of the Act but are not individually protected by Section 6(1). Rather the Act protects the sum total of those constituent parts rather than each part individually.
The term “pay” in the Act is a composite entity. It consists of all of the elements that go to make up the overall term “pay”. Those elements include basic pay, shift work, overtime, unsocial hours worked or hours worked on Sunday. Accordingly, when determining the pay of a directly employed and an agency worker one must have regard to all of its constituent parts. It is not sufficient to consider basic pay in isolation.
The purpose of the Act is to ensure that an agency worker’s pay, as defined in section 2(1) of the Act is no less favourable than that of the pay of comparable directly employed workers. While individual parts of the elements that collectively constitute pay for the purposes of the Act may vary as between agency and directly employed workers, when added together they must equate with each other. Or to put it another way both pay systems should be interchangeable and produce identical results.
In this case directly employed drivers are paid a basic hourly rate of €12.50 per hour while the Complainants are paid €11.50 per hour. The Complainants argue that this pay difference infringes section 6(1) of the Act.
However directly employed drivers are paid overtime at the rate of 1.25 times the basic hourly rate for the first five hours of overtime and 1.5 times the basic hourly rate thereafter whereas the Complainants are paid overtime at the rate of 1.5 times the basic hourly rate from the first hour of overtime worked.
The Respondent argues that in considering whether the Complainants are receiving the same pay as directly employed drivers the Court must have regard to all of the elements that go to make up pay. In this case that includes the differing overtime rates that apply to direct employed and Agency drivers. The Complainants reject that argument.
The Court does not uphold the Complainants’ contention that they are entitled to the same basic hourly rate of pay as that which applies to directly employed workers undertaking the same work. The Court finds that what the Act provides is that the Complainants are entitled to the same “pay” as comparable directly employed workers. Pay is the sum total of its constituent parts and not any one of them taken in isolation.
Determination
On the evidence before it the Court determines that the Complainants that do not work overtime hours are paid less than comparable directly employed workers. The Court further determines that Agency workers that work overtime hours may or may not, depending on the number of overtime hours worked, be paid more or less than comparable directly employed workers. There is a calculation to be undertaken in respect of each worker for all hours worked over the last six months.
The Court will meet the parties again to hear submissions on the application of this point and determine the economic loss, if any, due to each of the workers concerned.
The Court at that time will hear the parties and make its determination regarding the level of compensation to be awarded to each of the Complainants for any infringement of their entitlements under the Act.
The Court so determines.
Signed on behalf of the Labour Court
Brendan Hayes
19th December, 2014______________________
JMcCDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Jonathan McCabe, Court Secretary.