FULL RECOMMENDATION
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : ARGOS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - A WORKER (REPRESENTED BY MANDATE TRADE UNION) DIVISION : Chairman: Mr Haugh Employer Member: Mr Marie Worker Member: Ms Treacy |
1. An appeal of aRights Commissioner’s Recommendation No. r-160848-ir-15/EH.
BACKGROUND:
2. This case is an appeal of aRights Commissioner’s Recommendation by the Worker. On the 7 June 2019 theRights Commissionerissued the following Recommendation:-
- “I recommend that the Worker accepts the changes to the premium payments that were introduced in 2014 by stealth and accepts the need to bring this dispute to a conclusion.
I recommend that the Employer pays her compensation of €3,500 for the improper handling of that matter and the breach of her employment contract.- This is to be paid within six weeks of the date below.
A Labour Court hearing took place on the 20 August 2019.
DECISION:
Background to the Appeal
This is an appeal on behalf of a Customer Service Manager (‘the Worker’) of a Recommendation of a Rights Commissioner (r-160848-ir-15/EH, dated 7 June 2019) under section 13 of the Industrial Relations Act 1969. The dispute between the Worker and her employer – Argos Distributors (Ireland) Limited (‘the Company’) - concerns changes made by the Company in 2014 to certain premium payments for Sundays and Public Holidays. The Complainant has refused to accept the legitimacy of those changes as she maintains they were made unilaterally and without her consent.
The Rights Commissioner upheld the Worker’s complaint. However, he recommended that she accept the changes that had been introduced by the Company and the need to bring the dispute to a conclusion. He also recommended compensation of €3,500.00 be paid to the Worker.
The Factual Matrix
The Worker commenced employment with the Company in May 1997. She was promoted to the position of Customer Service Manager in June 1998. She worked full-time hours and could be rostered to work Sundays and Public Holidays. Her contract of employment provided that she received a premium rate of time-and-a-half for all hours worked on a Sunday and a premium payment of double time and a day off in-lieu for all hours worked on a Public Holiday.
On 23 April 2014, the Company’s Operations Manager for ROI chaired a conference call with all Store Managers to advise them of the Company’s trading position and ongoing financial challenges. Following the conference call, the Store Managers disseminated the information to their respective management teams.
By letter dated 24 April 2014, the Worker and her colleagues at store management level across all the Company’s stores, were informed by the Operations Manager that it was the Company’s intention to make changes to the system of premium payments that applied to hours worked on Sundays and Public Holidays as part of a comprehensive effort to reduce overheads and deliver cost savings across the business. In that letter, all Managers were requested to agree to the proposed changes and to confirm their agreement in writing. Every Manager – including the Worker – were paid a once-off payment of 2% of base annual salary in June 2014 in recognition of their ‘continued hard work and commitment to the ROI business’. The stated changes to premium payments came into effect on 1 June 2104. The Worker is one of only two Managers who did not sign up to the new contractual arrangements. Those Managers that signed up to the new arrangements received a once-off payment of €500.00. The Worker refused this payment at the time.
The Worker’s Submissions
The Worker submits that she has a contractually agreed entitlement to a premium rate of time-and-a-half for all hours worked on a Sunday and a premium payment of double time and a day off in-lieu for all hours worked on a Public Holiday. She contends that the Company cannot unilaterally change those contractual terms without her agreement. In support of her submission, the Worker cites extensively from the Law Society of Ireland’s textbook,Employment Law,and from a judgment of the UK High Court:T.Comedy (UK) Limited v Easy Managed Transport Limited[2007] EWHC 611 (Comm); [2007] 2 All ER (Comm) 189-284.
The Worker is seeking compensation for the full financial loss that has accrued to her arising from the Company’s unilateral reduction in her contractual terms and conditions.
The Company’s Submissions
The Company submits that it faced an urgent need to reduce costs in 2014. It sought to do so by adopting measures that did not impact on employees’ basic pay. For example, it negotiated with the Trade Union Mandate in order to agree a reduction in premium payments to general staff. It also implemented three redundancies. The decision to remove premium payments to Managers was made in order to avoid reducing their basic pay and in preference to making further redundancies. The Company submits that its decision in this regard brought it into line with the majority of its competitors in the retail sector as the norm in the sector is to incorporate Sunday premium into annual salary rather than paying an additional and separate Sunday premium allowance. Finally, the Company submits that the changes disputed by the Worker have been in place for over five years and the Worker has been in receipt of a composite basic salary for that entire period in lieu of the Sunday premium that was removed in 2014.
Decision
The Court is of the view that the appeal is not well-founded. The Court notes that the Worker received and retained both the once-off payment of 2% of base annual salary in June 2014 and the increased composite basic salary paid by the Company since that date. Her insistence on receiving what she perceives to be her strict contractual entitlements to premium payments notwithstanding the acceptance by almost 100% of her colleagues of the considered changes introduced by management in 2014, in good faith, in order to ensure the Company’s financial viability and to avoid job losses is unreasonable and inappropriate.
The Court is of the view that the Worker should accept the legitimacy of the disputed changes and consider her dispute with her employer closed. The Worker should receive the once-off payment of €500.00 made by the Company to her colleagues following their acceptance of the revised contractual arrangements in 2014. The Court does not recommend the payment of an additional compensation to the Worker. The Recommendation of the Rights Commissioner is varied accordingly.
The Court so decides.
Signed on behalf of the Labour Court
Alan Haugh
CR______________________
26 September, 2019Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Ciaran Roche, Court Secretary.