FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CORK ASSOCIATION FOR AUTISM - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Haugh Employer Member: Mr Murphy Worker Member: Mr McCarthy |
1. Maternity leave pay and annual leave pay.
BACKGROUND:
2. This dispute concerns a claim for maternity leave pay and annual leave pay . This 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 2nd November, 2015, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 23rd March, 2016.
UNION'S ARGUMENTS:
3 1The Employer has altered the contract of employment for those employed prior to January 2013. This breach of contract has been imposed without consultation and agreement with the employees or their union.
2 The Employer has imposed a cost-saving measure which targets only female employees of childbearing age who may decide to have children.
3 There is only a total of 22 employees with contracts prior to January 2013 who may apply for paid maternity leave.
EMPLOYER'S ARGUMENTS:
4 1 Between 2009 and 2013 all possible steps were taken to reduce operating costs without impacting on historical benefits enjoyed by employees of the Association. By 2013 this was no longer sustainable and non-contractual benefits were cut.
2 Over the course of 2015 the ongoing financial pressure intensified and the Employer estimates a deficit of approx. €350,000 for this period.
3. The Association cannot afford to pay any maternity payments to the Workers at this time. When the Association is in a position to do so, it will do so.
RECOMMENDATION:
Background
The Respondent provides a broad range of services to approximately 350 adults within the Autism and Asperger spectrum in the Cork area. It is a voluntary organisation structured as a company limited by guarantee. It is also a registered charity. The organisation employs approximately 140 staff including care assistants, social care workers and support workers.
The Respondent is a so-called Section 39 Agency and provides services under a service level agreement with the HSE. 94% of the Respondent’s funding is proved by the HSE; the remaining 6% comes from fundraising and client contributions. Between 2008 and 2015, the funding from the HSE was reduced by 14%. Initially, the Respondent relied on its cash reserves to maintain service levels and to avoid making cuts to staff benefits. Nevertheless, the Respondent recorded an annual loss for the four years up to and including 2012. The recorded loss for 2012 was €174,895. The Respondent informed the Court that its estimated deficit for 2015 is likely to be c. €350,000. However, it is currently in discussions with the HSE regarding its financial well-being.
Complaints
Following a conciliation conference under the auspices of the Workplace Relations Commission in October 2015, the parties agreed to refer two issues to the Court:
(a) Restoration of maternity leave pay; and(b) Calculation of pay during annual leave.
(a) Maternity Leave Pay
Neither the standard contract of employment issued to staff members nor the Respondent’s employee handbook commits the Respondent to paying employees during periods of maternity leave. However, it is not disputed that the custom and practice of doing so was well-established prior to 1 January 2013. On that date, and as part of its efforts to reduce its financial deficit, the Respondent implemented a unilateral decision to cease payment of staff on maternity leave. The Respondent had given approximately one year’s notice of this change but staff, although informed in advance, had not consented to the change.
The Respondent informed the Court that the cost to it of paid maternity leave in 2012 was €109,842. It regrets that it was forced by financial circumstances to remove this benefit from employees and says that it intends to restore this benefit as soon as its financial situation permits. The Union is seeking the immediate restoration of this benefit and backdated payment for those employees who availed of maternity leave since 1 January 2013.
(b) Calculation of Pay during Annual Leave
The Union submits that in October 2015 the Respondent unilaterally changed the manner in which it calculates payment for annual leave. Prior to that date, the Respondent calculated payment for annual leave entitlement by reference to the number of hours worked by an employee during his/her normal shift. The formula used by the Respondent for calculating payment was: number of days’ leave x number of hours per shift x basic hourly rate. The Union’s view was that although this was not strictly in accordance with the regulations made under the Organisation of Working Time Act 1997, as the formula used by the employer did not specifically account for time worked at a premium rate, employees were, nevertheless, effectively compensated for any shortfall in the rate of pay because they received extra annual leave.
On 1 October 2015 the employer introduced an alternative formula which has been applied retrospectively to cover the entire 2015 annual leave year. In line with other health service providers the Respondent now calculates annual leave as follows:
(i) In the case of those whose contractual entitlement was 20 days’ annual leave per year: those workers’ entitlement is now calculated at 8% of the hours worked(ii) In the case of those whose contractual entitlement was 22 days’ annual leave: these workers continue to receive 22 days’ annual leave; however, if, and when, they work in excess of their normal 39-hour week, the 8% calculation is applied to the additional hours worked.
The Union submits that the revised arrangement complies neither with the regulations made under the Organisation of Working Time Act 1997 nor with a 1975 collective agreement negotiated between the then Health Boards and the unions, in so far as the revised arrangements continue to provide that payment for annual is reckoned by reference only to the basic rate of pay and fail to take account of hours worked at a premium rate. The aforementioned collective agreement provides for a yearly payment to compensate workers who work variable shifts for a shortfall in payment for annual leave when the worker’s leave entitlement is calculated on the basic rate of pay only.
The aforementioned agreement, the term so of which - in the form of an extract from the HSE Employee Handbook - were provided to the Court following the hearing, provides for the following:
“Calculating Holiday Premium Pay
To calculate holiday premium the total premium pay received by the employee should be divided by the number of contracted hours worked by the employee in a year (this gives the average premium earnings per hour) and multiplied by the number of annual leave days in hours that the employee is entitled to.”
(a) Maternity leave pay: The Court recommends that the Respondent restore maternity leave pay, subject to the HSE providing the necessary funding. The parties should jointly approach the HSE with a view to securing that funding.(b) Calculation of pay during annual leave: The Court recommends that the Respondent make a an annual payment in respect of holiday premium pay, based on the aforementioned formula, to qualifying employees on 1 May each year, having regard to the annual leave accrued by that employee in the previous annual leave year, subject to the HSE providing the necessary funding. The parties should jointly approach the HSE with a view to securing that funding.
The Court so recommends.
Signed on behalf of the Labour Court
Alan Haugh
18th April, 2016______________________
CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ceola Cronin, Court Secretary.