LCR22352

1.Unilateral 20% Pay Reduction Without Consent In Breach Of 2003 Apfs Agreement

BACKGROUND:

2.This dispute could not be resolved at local level and was the subject of a number of Conciliation Conferences under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 18 December 2020 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 26 January 2021.

UNION ARGUMENTS:

3. 1. The Union has displayed flexibility throughout this downturn despite outstanding Industrial Relations issues not being addressed.

2. The Union is seeking the cessation of the 20% pay cut and a plan to return the monies deducted since September 2020 to the members affected.

3.The Union submits that the Employer has breached the 2003 agreement by not following the normal procedure and that the Employer is in breach of section 14.6.1 of that agreement.

EMPLOYER ARGUMENTS:

4. 1. The Employer states that the aviation sector is facing unprecedented challenges in the coming years.

2. The Employer wants to protect as many jobs as possible and needs to implement flexible operating measures where-ever possible.

3.The Employer does not accept that they were in breach of the 2003 agreement and in particular clause 14.6.1 which referred to strike/lockout.

RECOMMENDATION:

Recommendation

The issue in dispute between the parties concerns the unilateral decision by the Employer to impose a 20 percent pay cut on the staff covered by this claim and the failure by the Employer to engage in a productive manner with the Unions in respect of the need for ongoing change.

Background

This dispute arises in the context of the Covid 19 pandemic and the near total collapse in airport traffic. In 2019 the passenger footfall in Shannon airport was 1.72 million this fell to 0.36 million in 2020 and is currently forecast to be in and around 0.60 million for 2021. This estimate is totally dependent on the Government guidelines in place in respect of travel and Covid 19 and any knock on effects arising from same.

In March 2020 the Shannon Airport Authority Trade Union Group sought a meeting with the Airport Authority Management. A virtual meeting was held on the 27^thMarch 2020 where the Employer set out the impact of Covid 19 on the business. At that meeting the Employer indicated that it would have to consider reducing working hours and introducing layoffs.

A further meeting was held on the 31^stMarch 2020 where the Employer advised that lays offs and reduced hours working would have to be introduced with immediate effect. The Unions raised the issue of the Government Temporary Subsidy Scheme (TWSS) and its applicability to the Shannon Airport Authority. Further virtual meetings took place on the 6^thand 7^thApril 2020 and the Employer confirmed that they had made an application under the TWSS scheme. On 6^thMay 2020 the Employer advised the Union that staff had qualified for TWSS and provided the Unions with a break down of same.

A further meeting was held mid-May 2020 where the Unions put forward a number of proposals which involved utilising existing Workers to assist with an expected increase in aircraft movement at the Airport at that time.

Union Case

The Unions were engaging with the Employer to work through the crisis. However, without any notice to the Unions the Employer wrote to all staff on the 6^thJuly acknowledging the changes that had been implemented but advising that they were not enough. The letter stated that further initiatives were required including a temporary pay cut.

The key measures being proposed were attached to the letter and included career breaks, reduced working hours, voluntary severance and a 20% temporary pay cut for all staff earning more than €30,000 per annum. The Union group immediately sought a meeting with the Employer.

At the meeting the Employer gave a detailed overview of the current status of the company and future projections based on information available at that time. The Union side set out for the Employer the workers frustration, annoyance and upset at the unilateral action by the Employer particularly in circumstances where the Unions’ had been engaging with the Employer.

The Unions highlighted the fact they had successfully engaged with other Employers in the Aviation industry and had avoided unilateral action and the negative consequences that flowed from same.

The Employer sought to engage on the issues facing the company but refused to entertain any discussion around the 20% pay cut. The Unions at the time were having engagement through the Irish Congress of Trade Union at Ministerial and Departmental level.

At the end of August 2020, the Union Group looked for the pay cut which was due to take place from the 1^stSeptember to be postponed, to facilitate possible discussions on alternatives solutions. The Company declined to engage on that issue and proceeded with the pay cut. A further meeting was held between the Employer and the Unions on the 5^thOctober 2020.

The Unions raised the issue of the unilateral pay cut and the breach by the Employer of the agreements reached in February 2019 under the auspices of the WRC. The Unions expressed their dissatisfaction with the failure of the Employer to follow normal protocol and use the services of the WRC and the Labour Court in respect of the pay cut.

It was the Union’s submission that the Employer had breached the 2003 agreement by not following the normal procedure. it was their submission that the Employer was in breach of section 14.6.1 of that agreement. The Union outlined the difficulties that this caused for them in terms of engaging with the Employer on ongoing restructuring.

The Union outlined that in order for there to be constructive engagement going forward the pay cut would have to be withdrawn. Management indicated that they were not prepared to do that and that they needed the Unions to move on. In the circumstances no more progress could be made so the Unions referred the dispute to the WRC Conciliation services.

A number of Conciliation meetings took place during November and December 2020. It is the Unions submission that while a number of avenues were explored no agreement could be reached. The Unions are seeking that the pay cut be reversed and the monies deducted be returned to the individuals affected.

Employers case

Shannon airport normally operates on a 24/7 basis as it provides night services to a number of clients. The decision was taken to close the airport to all traffic between the hours of 2200 to 0600 daily with effect from the April 6^th2020, with just a few exceptions. This decision was reversed on the 1^stJuly 2020 and the airport reopened at night.

This decision was taken to protect the core long term traffic using the airport. At that time, it became clear that the actions taken to date to make savings would not be sufficient going forward and it was on that basis that the CEO wrote to all staff on the 6^thJuly setting out the unprecedented challenges that the Airport faced and the new measures including the pay cut that had to be put in place.

It was the Employer’s submission that due to the severity of the challenge they were facing they had to push on with the new measures. The Employer met with the Union group on the 14^thJuly 2020 and outlined its proposals contained in the letter of 6^thJuly to all staff and indicated that it wanted to continue engagement with the Unions.

The pay cut was implemented from 1^stSeptember 2020. The value of the savings from the pay cut is €45,000 per fortnight. On the 5^thOctober 2020 a further meeting was held with the group of Unions where the Employer presented the latest business updates and forecasts. The Employer shared details of the Voluntary Severance Scheme and other cost reduction measures.

However, no progress could be made in respect of other operational matters because the Unions required the pay cut issue to be addressed. The Employer did not accept that they were in breach of the 2003 agreement and in particular clause 14.6.1 which referred to strike/lockout.

It was their submission that there was no lockout. The issue was then referred to the Conciliation services of the WRC. It was the Employers submission that they felt some progress was being made at Conciliation.

They had put forward proposals which they felt would remove the need for a straight pay cut but would require the ability for the Employer to flex working hours to meet demand. They had also committed to the restoration of the pay reduction amounts when passenger levels reached one million. These proposals were rejected by the Unions.

Discussion

After the parties read their submissions the Court met with the parties separately to better understand their positions. The Trade Unions while acutely aware of the difficulties that the current climate presents stated that the manner in which the pay cut had occurred had created a distrust in respect of engaging with the Employer in a full and frank manner.

Their members feared that at any stage the Employer could once again revert to unilateral action. They felt the only way to address this concern was for the pay cut to be reversed and for engagement to take place in respect of both the short term and long- term future of the airport.

The Unions informed the Court that they had engaged successfully in other aviation bodies and felt the same could happen with this Employer if the pay cut issue was resolved.

The Employer while acknowledging that taking unilateral action was not productive in a collective bargaining arena, submitted that they felt at that time that they had to act. The Employer informed the Court that it wanted to move forward in a partnership manner with the Unions.

The difficulty for them was because of the uncertainty in the aviation industry they needed the savings generated by the pay cuts, but they were happy to re commit to their commitment at the WRC to the restoration of the pay reductions when passenger numbers reached one million.

The Court noted the existence of the 2003 agreement and its purpose which was to promote collective bargaining the Court noted that it also provides for binding decisions of the Labour Court. The Court notes the Unions position that they were not seeking to have this issue addressed under that particular clause.

The Court having considered the submissions of the parties and the ongoing difficulties facing the aviation industry as a whole recommends that the parties engage over the next six weeks to see if an alternative solution can be found to achieve savings that would remove the need for the pay cut going forward.

If the parties are unable to come to an agreement, then this issue should be referred back to the Court for the Court to make a recommendation without the need for a further hearing.

The Court also recommends that the Employer re state their commitment to restoration when passenger numbers reach one million and that the Employer and the Union group engage in a process to address going forward the ongoing challenges posed by Covid 19.

The Court so recommends.

	Signed on behalf of the Labour Court
	Louise O'Donnell
MK	______________________
4 February 2021	Deputy Chairman