FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DONEGAL MEAT PROCESSORS LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Foley Employer Member: Ms Doyle Worker Member: Ms O'Donnell |
1. Application of pay increases to Red Circled Staff
BACKGROUND:
2. This dispute relates to the application of pay increases to 4 red-circled staff at Donegal Meat Processors Ltd. This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 1st September, 2016 in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the18th November, 2016.
UNION’S ARGUMENTS:
3. 1. The Union argues that the members agreed to be red-circled with the expectation that they would receive any pay increases agreed for their red-circled grade.
2. The Union say that there is at least one member who is red-circled and receives pay increases.
3. The Union does not enter into red-circled agreements with such conditions as described by the company without first agreeing and clearly outlining such conditions to its members.
EMPLOYER'S ARGUMENTS:
4. 1. The Company argues that red-circling is a common feature in any industrial relations environment and that it protects the current salary/wages of employees which is usually higher than equivalent employees doing the same or similar work.
2. It was accepted by SIPTU since 2013 that the four red-circled employees were all in receipt of a skilled pay rate for performing roles which were classified as unskilled.
3.From 1 January 2017 the red-circled pay rate of three of the four red-circled employees will be overtaken as a result of the application of general pay increases.
RECOMMENDATION:
The Court has given detailed consideration to the written and oral submissions of the parties.
The parties entered into an unwritten agreement in 2013 as regards the protection of the rate of pay of four employees whose role in the agreed ‘skills matrix’ was not classified as ‘skilled’ but whose rate of pay was equal to or higher than the ‘skilled’ rate. The parties both referred to this agreement as a ‘red circling’ of the four employees’ rate of pay. The parties however are disagreed as to whether the employees’ rate of pay was ‘frozen’ at its 2013 level until the rate of pay of colleagues not performing roles classified as ‘skilled’ caught up with the rate of pay of the four claimants or whether the arrangement was such as to provide for continuing pay increases to the ‘red circled’ employees in the normal way.
The Court is aware that the four employees were offered and continue to have available the opportunity to undertake the training necessary to occupy a ‘skilled’ role commensurate with their pay. None of the four employees has taken up that opportunity.
In the Court’s view ‘red circle’ arrangements normally come into existence against the background of a specific if not unique set of circumstances. For that reason parties commonly specify, often in writing, the detail of the ‘red circle’ arrangement which, by definition, is specific to the particular situation to which it applies. In this case no agreement was articulated and in particular there was no explicit agreement as regards the matter at issue before the Court.
The Court notes that the employer has applied phased pay increases to other employees since 1stJanuary 2014. The Court also notes that an agreed pay increase is due to other employees on 1stJanuary 2017 which will bring the rate of pay of other employees not performing ‘skilled’ roles up to the level of three of the claimants.
In all of the circumstances the Court finds that it is not unreasonable for the employer over time to achieve uniformity of rates of pay in the framework of the agreed ‘skills matrix’ and thereby to eliminate the red circling of these employees.
The Court therefore recommends that the rate of pay of the four employees concerned in this claim should be maintained until the rate of pay of their colleagues carrying out similarly classified roles in the agreed ‘skills matrix’ catch up with their rate of pay. In the meantime, with effect from 1stJanuary 2014, the employees concerned should be paid an annual ex-gratia payment equal to 50% of the value of the pay increases applied since 1stJanuary 2014 had they been applied to the rate of pay of the employees concerned.
Signed on behalf of the Labour Court
Kevin Foley
29th November, 2016______________________
CCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ceola Cronin, Court Secretary.