FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TULANE BUSINESS MANAGEMENT T/A MALDRON HOTEL DUBLIN AIRPORT (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms O'Donnell Employer Member: Mr Marie Worker Member: Mr McCarthy |
1. Pay Restoration.
BACKGROUND:
2. 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 30 June 2017 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 30 August 2017.
UNION’S ARGUMENTS:
3. 1. The Union is seeking the restoration of 7% pay reduction which was agreed in 2009 as part of a cost saving plan.
2. The Company loyalty pay scheme should be reinstated.
3. The Union is also seeking to review the value of the service charge point.
EMPLOYER'S ARGUMENTS:
4. 1. The survival plan agreed with the Union in 2009 was explicit in its terms and did not refer to pay restoration or the reinstatement of the 7% pay cut.
2. The reduction in pay while referred to as a 7% reduction was in fact, in real terms less than 7%.
3. All employees have received three pay increases since 2015effectively restoring or increasing pay to the levels of 2009.
RECOMMENDATION:
The issues in dispute in the main relate to a Survival Plan agreed in 2009 between SIPTU and the then Clarion Hotel. SIPTU are seeking
1) the restoration of a seven per cent pay reduction2) the opportunity to review the value of the service charge point
3) re-instatement of the company loyalty scheme.
The parties relied on the Survival Plan Agreement to support their positions in relation to the restoration of the pay cut and the review of the value of the service charge point.
SIPTU initially claimed that the Loyalty payment had been unilaterally withdrawn by management but during the course of the hearing accepted that it had been capped at 2009 rates for the people affected by this claim. It was management’s position that loyalty pay was a discretionary payment which was withdrawn by the company in terms of new staff and capped at 2009 rates for existing staff. Both parties agreed that it did not form part of the 2009 Survival Plan.
In relation to the service charge the agreement states “The parties agree that it is in the best interest of both the Company and employees that service charge as a constituent of gross pay is removed…….. A consolidated pay rate will be put in place that would compensate current employees in the company for the loss of service charge” the agreement then set out the value to be put on the service charge point from 1/08/2009 and committed to a review based on the 2011 financial results. It was accepted by both parties that the service charge was consolidated in the manner set out and that the review took place albeit it did not generate an increase because of the financial position at that time. SIPTU are seeking a current review of the service charge point.
On the issue of pay the agreement sets out the wage reduction of 7 per cent excluding the service charge from 1stAugust 2009 and then goes on to say “The union reserve the right to look for pay increases in the future and will not be bound by any cost increasing clauses that may be agreed through any form of social partnership, employment regulation order or registered agreement. The company agrees to enter into discussions and negotiations with this union using the mechanism of the state that are available to both parties at that time.”
It is SIPTU’s contention that this paragraph was put into the agreement to facilitate the restoration of pay. While they accept there is no mention of full restoration in the agreement it is their view that the paragraph allows for negotiation in relation to pay increases above the norm.
Management’s position is that while the paragraph allows the union look for pay increases no such claim has been lodged. The claim currently before the court is for pay restoration. They also informed the court that pay increases were provided in 2015, 2016 and 2017 which had more than recouped the pay cut.
The Court considered the detailed submissions of both parties and the oral arguments made on the day. On the issue of the loyalty payment SIPTU were not in a position to dispute management’s position that it was a discretionary payment. In view of the fact that the vast majority of staff are not in receipt of this payment the Court does not believe it would be appropriate to re-introduce it uncapped for this small cohort of staff.
It is clear from the agreement that the service charge was consolidated into pay in 2009 and therefore no longer exists. The agreement makes no proviso for a review of the service charge point other than the 2012 review which both parties accepted took place.
In the view of the Court while pay restoration is not specifically mentioned in the agreement the wording of the paragraph dealing with the pay reduction does envisage a situation whereby SIPTU could make a claim for a pay increase over and above any standard increase and that the employer would enter into discussions and negotiations in relation to same.
In order to resolve this dispute the Court is recommending the following;
- 2.75% pay increase from 1/3/17
1.75% pay increase from 1/5/18
Signed on behalf of the Labour Court
Louise O'Donnell
31 August 2017______________________
MNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Neville, Court Secretary.