ADJUDICATION OFFICER RECOMMENDATION

Adjudication Decision Reference: ADJ-00003669

Dispute for Resolution:

Date of Adjudication Hearing: 1st December 2016

Workplace Relations Commission Adjudication Officer: Seán Reilly

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act 2015 and Section 13 of the Industrial Relations Act 1969 and following the referral of the dispute to me by the Director General, I inquired into the dispute and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the dispute.

Background:

SIPTU were in dispute with the Respondent in relation to the Complainant’s agreed pay rate and the Respondent was rejecting the claim.

Summary of Trade Union Case:

SIPTU said the Complainant began working for the Respondent in March 2004 and that her starting pay rate was based on the then minimum wage of €7 per hour.

SIPTU said that in September 2012, the Complainant was given additional responsibilities and duties as part of her appointment to the new position of Kennel Supervisor.   On 13^th September 2012, the Complainant’s appointment to the position of Kennel Supervisor was confirmed in writing to her.   In that correspondence, reference was made to the discussions that were held to decide on the pay rate appropriate to the new position.   SIPTU said the new agreed rate was to be “minimum wage plus an additional 15% in recognition of extra duties of this role”

SIPTU said that all permanent employees working for the Respondent had their pay set by reference to the minimum wage, i.e. 1 on the minimum wage and 2 on minimum wage plus a percentage for additional duties.   SIPTU said that in January 2015, they received a complaint from all 3 employees to the effect that their pay had not increased in line with the increase in the minimum wage that applied from 1^st January 2016.

SIPTU said that in their reply to them raising the issue the Respondent denied that there was any direct connection between employee pay rates and the minimum wage.   SIPTU said that in March 2016, they sought a meeting with the Respondent to discuss the wages issue and they also sought confirmation that the basic minimum wage rate had been applied to the one member it applied to.   They said that once again the request for a meeting was declined.

SIPTU said the Respondent’s position on how pay rates were set was:

• The hourly rate of pay has no direct link to the minimum wage

• There had never been any fixed percentage above the minimum wage rate for carrying     out additional duties.

• The Respondent did not have the resources to provide any pay increases

SIPTU said the first two points above are contradicted in the letter that was issued to the Complainant at her request in September 2012 (copy submitted to the hearing)   SIPTU said it is clear and undeniable from the letter from the Respondent to the Complainant that her wages were to be and remain at the level of the minimum wage plus an additional 15%.

Based on the foregoing SIPTU sought a recommendation that the claim be upheld and that the Complainant be paid an hourly pay rate of €10.52 per hour (€9.15 + 15%) with effect from 1^st January 2016.

Summary of Respondent’s Position:  

The Respondent said that they are a registered charity established in 1997 and have developed into one of the largest rescue centres in Ireland housing up to 80 dogs at any one time.

The Respondent said that there are 7 employees currently employed.   The Respondent’s staffing and operational costs are funded from income from the named Local Authority and Dogs Trust.   The Respondent had previously received funding in the sum of €108,000 per year, which was specifically used for employees wages and the non renewal of this funding has resulted in significant financial pressure being placed on the Respondent.

The Respondent said the Complainant commenced employment with them on 15^th March 2004.   In September 2012, the Complainant took on the position of Kennel Supervisor and she received an increase in pay for the additional duties, which at the time was negotiated as a percentage on top of the minimum wage.  

The Respondent said a contract amendment was issued and signed on 28^th September 2012 and this amendment indicates an increased pay rate to €9.94c per hour with no link to the minimum wage.   They said the pay increase afforded to the Complainant in September 2012, was granted in good faith at that point in time, and based on an underlying calculation of a percentage increase on top of the prevailing minimum wage.   They said it was never intended or agreed that it would increase further in line with any future minimum wage increases.     The Respondent said that furthermore in accordance with the provisions of Section 43 of the National Minimum Wage Act 2000, there is no legal obligation under that Act to grant a pay increase to any employee, who is not entitled to a pay increase under the 2000 Act on the basis that an employee wants to restore the pay differential that existed between an employee who was entitled to a pay increase under the 2000 Act

The Respondent said that in addition, notwithstanding that there is no legal or contractual entitlement to a pay increase by the Complainant, the situation with regard to the financial situation of the Respondent remains under significant pressure.   Due to the withdrawal of Pobal funding that was the primary source of funding for full-time employees’ wages the Respondent now faces a very uncertain future.   The Respondent is currently operating without the position of a paid manager and 2 other employees that had been Pobal funded.   The Respondent has recently had to seek the assistance of the Local Enterprise Office, who appointed a Mentor to assist with cash flow projections and financial advice on how to keep the enterprise open and viable.   The Respondent said that cost reduction measures that will need to be considered include a potential reduction of working hours for all employees.   However, the Respondent is most reluctant to take this measure coming up to Christmas and they have deferred a final review and decision until the new year.   The Respondent are also currently working on a number of other cost cutting measures and means of increasing income.

The Respondent stated that for the foregoing reasons they are unable to agree to the Complainant’s request for a pay increase due to their current financial position and in addition they are not contractually or legally obliged to offer and such pay increase to the Complainant.   Based on the foregoing the Respondent sought that their position be upheld and that the claim be rejected.

Findings and Recommendation:

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the dispute in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 13 of the Industrial Relations Act 1969 requires that I make a recommendation setting forth my opinion on the merits of the dispute.

I have carefully considered the evidence and the submissions made and I have concluded as follows.

I note that the Complainant received a letter from the Respondent, signed and dated 13^th September 2012, which states as follows:

“I confirm, as requested, that with effect from Monday, September 17^th, you will be taking on the new role of Kennel Supervisor.

As discussed, you will receive the minimum wage plus an additional 15% in recognition of the extra duties of this role.”

This is a simple straightforward letter confirming that the Complainant will be taking on additional duties and responsibilities and in return for this will be paid the pay rate of the minimum wage plus an additional 15% on an ongoing basis and I do not accept that this correspondence is reasonably capable of any other interpretation or that any reasonable person could or would interpret it any other way.

If it had simply been a case of calculating a new and ‘once off’ or fixed rate of pay then it is to be expected that that fact would be explicitly stated or indeed that there would be no mention of the minimum wage at all and it would simply state you will paid at the hourly rate of pay of €9.94c per hour with effect from Monday 17^th September 2012.

Based on the foregoing I must find, declare and state that there is considerable merit in the complaint and that based on the letter of 13^th September 2012, the Complainant was/is entitled to be paid at the hourly rate of €10.52c per hour (€9.15 + 15%) with effect from 1^st January 2016.

Notwithstanding the foregoing I accept that the Respondent has genuine financial problems that would make it difficult to pay this increase and with a full year of arrears.  

Accordingly, I recommend that the parties, SIPTU and the Respondent and/or their Representative enter into discussions with a view to identifying ways and means by which the underlying principle of the Complainant’s entitlement to a hourly pay rate of the minimum wage + 15% be protected while accepting the constraints placed on the Respondent by the precarious financial position of the Respondent and it should be recognised that this may mean temporary deferments or adjustments of wages due on foot of the letter of 13^th September 2012.

I recommend that both parties enter into these negotiations in good faith on a genuine basis, in a spirt of goodwill and with a genuine effort to resolve the matter.

I so recommend

Seán Reilly, Adjudication Officer

Dated:   6^th March 2017