Employee

Employer

Anonymised Parties

An Electrician

An Airport Management Company

Representatives

Sean Heading, Connect

Mairéad McKenna, BL

Act

Dispute Reference No.

Date of Receipt

Dispute seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

10/04/2021

The employee is an airfield electrician and he commenced with the employer in January 1998.  In October 2020, arising from the failure of the Connect union to accept proposals on new ways of working, the employer reduced his working week to three days a week and his pay to 60% of the normal rate.  The union argues that the reduction in wages is a breach of section 12 of the Airport Act 2014, a breach of the employee’s contract of employment and a breach of section 5(1) of the Payment of Wages Act 1991.  The employer’s position is that the reduction in working hours was a proportionate and reasonable response to the impact of Covid-19 on the company’s revenue and that the employee was paid the wages which were properly payable at the time.

Before examining each side’s position in more detail, I wish to set out a brief chronology of the events that led to the reduction in hours and pay in October 2020.

Discussions commenced in June 2018 between the company and the Connect and Unite unions on a target operating model for craft workers in the DAA group.  In February 2020, when the discussions concluded without agreement, the unions referred the issues in dispute to the conciliation service of the WRC.  The Covid-19 pandemic intervened in March 2020.  Travel restrictions at the onset of the pandemic meant that there was very little activity at Irish airports, resulting in a drastic reduction in revenue.  On April 26th 2020, all employees, apart from airfield electricians, airport police and airport duty managers were moved to a four day week and pay was reduced to 80%.  As an airfield electrician, the employee remained on 100% of his hours and pay.  

In June 2020, proposals on New Ways of Working, “NWOW” were finalised between the employer’s group of companies and the unions representing employees across the group.  At the beginning of the pandemic, it was agreed that there would be no compulsory redundancies or permanent changes to core terms and conditions.  NWOW provided options such as career breaks, reduced hours and a voluntary severance scheme.  New ways of working were proposed for employees who decided to remain with the company.  The changes were summarised under five headings: follow the work, roster changes, teamworking, sanitization and the embracing of technology and associated processes.

On September 11th, at a “town hall” meeting hosted by the chief executive, employees were informed that, if the NWOW proposals were rejected, hours and pay would be reduced.  On September 16th, airfield electricians were sent a proposed 60% roster, which, the airfield manager stated was intended “…to meet the needs of the business and our staff during this challenging time for all.”

The following day, a Connect representative wrote to the airfield manager challenging the construction of the draft 60% roster and the proposal to cut hours and pay.  However, from the correspondence of September 17th which was submitted at the hearing, it is apparent that the representative gave some consideration to the proposed three-day week, on condition that employees could seek alternative work or avail of a social welfare benefit.  In part of an email to a manager in his area, on September 17th, the Connect representative wrote,

“As previously stated, due to Social Welfare entitlements and the obligatory requirement for staff to seek work, can you please sit down with your team and system managers to come up with a workable 3 day shift that adheres to the current agreements between the company and trade group.  If staff have to work a 3 day week, so be it, but we shall not be denied our right to seek work or claim social assistance.”

On September 26th 2020, Mr Heading wrote to the Head of ER at the company, confirming that the NWOW proposals would be recommended for acceptance, “as the best alternative to no agreement.”

Balloting on the NWOW proposals started on Tuesday, October 6th 2020 and the outcome was due to be confirmed on Friday, October 9th.  On October 6th, a manager in the section where the employee worked wrote to him and his colleagues, telling them that, if the NWOW proposals were rejected, the first step to manage the financial challenges facing the company would be that, with effect from Sunday, October 11th, hours and pay would be reduced to 60%.  Of around 2,000 employees who participated in the ballot, 93% voted to accept the NWOW proposals.  The outcome of the ballot by Connect and Unite members was a rejection of the proposals.  On October 9th, the employee was informed that, commencing on October 11th, his hours would be reduced to 60%.

On October 10th, the employee sent an email to the Head of ER making it clear that he did not agree to the reduction in his hours:

“I …do not agree with any change to my contract of employment.  I do not agree to the stated reduction of my hours of work and pay. I have been classed as an essential worker/employee since the start of this pandemic. My hours and pay have been at 100% since the start of this crisis.  I have not been given notice that my status as an essential worker/employee has changed.  Therefore, I would be grateful if you can confirm by return that my contract hours and pay will not be altered.”

For the remainder of 2020 and into 2021, the majority of employees remained subject to 80% working hours and pay.

On January 17th 2021, the employee wrote again to the Head of ER saying that he did not consent to “the breach of contract you imposed on my by forcing me down to 60% hours & 60% pay.”  He said that he was available to return to his normal working hours.

A Frequently Asked Questions document issued on January 20th 2021 contained the following question and answer:

“What needs to happen for my working hours to be returned to 100%?

In areas where new ways of working and structures are agreed and fully implemented, then, from March 28, employees will move back to 100% pay and hours.

In areas where new ways of working are not agreed, employees will remain on 60% pay, until NWOW have been agreed and implemented.

This is to avoid the introduction of changes to employee’s core terms and conditions and the need for compulsory redundancies.”

Connect referred the 60% reduction in hours and pay to the conciliation service of the WRC.  With no resolution emerging after three meetings in late 2020, a hearing took place at the Labour Court on March 19th 2021.  The Court recommended that,

“…the Employer puts in train the process to restore the Worker’s pay and hours.  That, over a four-week period commencing no later than Monday, 29th March 2021, the parties, with the assistance of a representative from the Irish congress of Trade unions, have intensive discussions with a view to reaching a solution to the issues…”

Mr Liam Berney of the Irish Congress of Trade Unions was appointed by the Court to liaise with the company and the union and to provide a report on how the dispute would be resolved.  Two further Court hearings took place in April and May 2021 and a recommendation was issued on May 18th.[1]  The Court recommended that,

“The Unions should accept the New Ways of Working and in particular the employer’s proposals in respect of rosters, to include the carparks team, team working and following the work across the campus to include technicians working as technicians in Terminal 1 and the proposals in respect of the MIS system.  The Parties should establish a joint Union / Employer small group to oversee the rollout of these changes and to oversee any local tweaking of the rosters.  The Court recommends that co-operation with new technology and the assurances sought be as set out above in this recommendation.

In return for the Union’s co-operation with these changes which the Court believes are significant both in terms of the benefits they will provide to the smooth operation of the DAA and the impact they will have on this cohort of workers, the Court recommends that on acceptance of this recommendation by their Union, the workers be restored to 100% hours and pay with immediate effect and the voluntary severance scheme in line with management’s proposal be made available to them.”

Connect members did not vote on this recommendation.  The outcome from the ballot of Unite members was split and therefore, the result was inconclusive.  In August 2021, the parties re-engaged on the NWOW proposals and came to an agreement.  The hours and pay of Connect and Unite members was restored to 100%.

The Unions’ Submission

In his submission, Mr Heading recalled that, like all travel-related organisations, DAA was significantly affected by the Covid-19 pandemic.  Cost-reduction measures were introduced which impacted on employees across the company, including a blanket reduction to 80% of hours and pay.  Due to the nature of their work, the hours and pay of airfield electricians was not reduced – until the outcome of the ballot on NWOW produced a “no” vote on October 9th 2020.

As part of the cost-reduction strategy, unions representing the different categories of workers engaged with the company to seek agreement on five work-related pillars which would form part of the NWOW agreement.  These have been referred to in the previous section as, follow the work, roster changes, teamworking, sanitization and the embracing of technology and associated processes.  Agreement was concluded on September 25th 2020.  A copy of the final proposal was included in the union’s book of documents at the hearing.  When the proposals were rejected by Connect and Unite in October 2020, the parties engaged in conciliation and, when matters were not resolved, they attended three hearings at the Labour Court in the spring of 2021.  The Labour Court issued a recommendation on May 18th 2021.  This was also referred to in the previous section. 

The unions’ position is that the 60% reduction in hours and pay was implemented before the agreed dispute resolution procedures were exhausted, in breach of the Airport Act 2014 and the employee’s contract of employment.  Mr Heading suggested that the reduction was a tactic to force union members to accept the NWOW proposals and was also a breach of section 5(1) of the Payment of Wages Act 1991 and an unlawful deduction from the employee’s wages.  In his submission, Mr Heading noted that the employee lost €23,271 in earnings because of the cut in hours and pay. 

Discussion at the Hearing

Mr Quigley argued that there is nothing in the employees’ contracts of employment that gives the employer a right to reduce hours and wages.  During the period of the reduction, there was work that could have been done by Connect and Unite members and the company was paying contractors to do work that they could have done.  He claimed that there were 3,300 open corrective jobs on the airfield maintenance system.  Mr Quigley said that there was no need for the employer to introduce the hours and wages reductions.

Claiming that the company acted outside normal industrial relations procedures, Mr Quigley said that when people voted against the proposals, they thought there was the option of referring the issues on to the WRC and the Labour Court.

Mr Heading referred to email correspondence between him and Head of ER on September 8th 2020 in which Mr Heading said that both unions were available for immediate local discussions to resolve the issues preventing the NWOW proposals from being recommended for acceptance.  Mr Heading said that this indicates that they were 80% of the way towards getting agreement on the outstanding issues.  He said that the company imposed the 60% regime on the unions’ members because they rejected the proposals.  The unions were prepared to continue to engage and the employer’s action has had a very souring effect.

Mr Heading said that the employer unilaterally decided to reduce hours and pay to 60% in circumstances when work was continuing at the airport terminal.  He said that the union referred the dispute about the NWOW to the WRC on October 9th 2020, the day that the ballot result emerged.  He said that the company stepped outside normal industrial relations procedures when it imposed the cut in hours and pay.  He argued that the cut was imposed not because of the impact of Covid-19 on the business, but because the unions rejected the NWOW proposals. 

The employee said that he and his colleagues were required to be at work on a full-time basis until they rejected the NWOW proposals on October 9th 2020.  Then it appears that they were no longer essential.  He said that airfield police and the fire service remained at work 100% of the time as they were essential services. 

Mr Heading referred to the recommendation of the Labour Court on April 27th 2022 concerning the employer’s decision in 2020 not to pay increments or pay progression payments[2].  He claimed that this was another example of the company’s failure to follow procedures for dealing with disputes.  

Submission of the Employer

The employer’s submission provided a chronology of the progress of discussions on NWOW up to the ballot of Connect and Unite members on October 9th 2020.  This chronology is summarised in the “Background” section above.  At the hearing, Ms McKenna said that there was active and ongoing communication with union members up to the ballot taking place and employees were clearly informed that if the proposals were rejected, cost-savings would have to be achieved by cutting hours of work and pay to 60%.  It was submitted that the employee was always aware of the ongoing negotiations and of the consequence of a rejection of the NWOW proposals.

Ms McKenna said that the reduction in working time was because of the impact of Covid-19 on the company’s revenues, with passenger numbers down by 78% at Dublin and Cork Airports, with a resulting decline in turnover from €935m in 2019 to €291m in 2020.

It is the company’s position that there was no unlawful deduction of wages that contravened the provisions of the Payment of Wages Act.  The employee’s pay was not reduced, but he was assigned to reduced working hours.  Ms McKenna submitted that, at all times, the employee was paid the wages that were properly payable to him.

The company argued that the Covid-19 pandemic and government restrictions led to instances where passenger numbers were reduced to such an extent that a full team was not required to work.  Its position is that the reduction in working hours was a proportionate and reasonable response to the Covid-19 pandemic on revenue and available work. 

Discussion at the Hearing

Up to August 2020, Head of ER said that there was swift engagement with the unions and that it was agreed that dispute resolution procedures would be set aside to reach a speedy conclusion on the NWOW.  A weekly call was held every week with the unions and the chief executive officer and the chief financial officer.  From the outset, the company met the unions collectively to agree how to deal with the crisis.  Early on, it was agreed that there would be no compulsory redundancies or permanent changes to terms and conditions of employment.  The Head of ER said that, in certain respects, this “hamstrung” the company with regard to options for dealing with issues. 

If the NWOW proposals were accepted, efficient ways of working would be introduced and a voluntary severance package had been agreed for those who wanted to leave the company.  The proposals were accepted by all the union groups, apart from 130 members of Connect and Unite.  The Head of ER said that the management was clear all along that, if the proposals were rejected, then less palatable measures would have to be taken.  He said that the decision to reduce hours and pay to 60% was not a unilateral decision.  Members of the two unions were informed early on of what the outcome of a “no” vote would be.  He said that there were no surprises in this respect.

The Head of ER said that four different sets of proposals were presented to Unite and Connect.  When the NWOW proposals were rejected at the ballot, two further workshops were held and then other issues were raised.  Three visits to the Labour Court produced no outcome when Connect members didn’t put the recommendation to a ballot and the outcome from the Unite ballot was a split vote.  He said that, at that point, the executive of DAA believed that relations with the two unions had broken down. 

The Head of ER disagreed with the union’s argument that the jobs of airfield electricians were essential.  He said that the company made a judgement call and decided that asset management jobs were not essential when there was limited air traffic during the pandemic.  Responding to the union’s argument about the use of contractors, the Head of ER said that contractors did not do the work of unionised employees.  He said that, in truth, with no passengers or staff at the airports, there was work for around 10% of employees.  Responding to the employee’s argument that the 60% working arrangement put people at risk, he said that there were no accidents and no health and safety issues when the asset management team were on reduced hours.

The complaint under the Payment of Wages Act was heard at the same time as the hearing on this dispute under the Industrial Relations Act and a decision on that complaint is in ADJ-00032849.   My task now is to make a recommendation concerning the reasonableness or otherwise of the employer’s decision to reduce the employee’s working hours and pay to 60% in October 2020.

I understand the unions’ point that the reduction in hours and pay was outside normal industrial relations procedures.  However, when they rejected the proposals in October 2020, the employees did so in the clear knowledge that the employer planned to reduce their hours and pay to 60% immediately.  Contrary to what Mr Heading said at the hearing, the employer did not unilaterally reduce working time to 60%.  This was flagged in the letter from the chief executive on August 14th 2020 when he said that, if the NWOW proposals were not accepted, the business had some painful decisions to make and that it could not continue to lose €1 million per day without taking action to reduce costs.

On September 16th 2020, a manager in the complainant’s work area wrote to the airfield electrical team with a proposed roster based on 60% of working hours, which would come into effect if the ballot on the NWOW produced a negative outcome.  The following day, three weeks before the ballot, one of the complainant’s colleagues replied and said,

“As previously stated, due to Social welfare entitlements and the obligatory requirement for staff to seek work, can you please sit down with your team and system managers to come up with a workable 3 day shift that adheres to the current agreements between the company and trade group.  If staff have to work a 3 day week so be it, but we shall not be denied our right to seek work or claim social assistance.”

This, in my view, demonstrates a degree of acceptance of the company’s plan to reduce hours and the laying down of conditions to ensure that it was as palatable as possible.  It seems to me therefore, that the proposed reduction in working hours was an “up front” component of the negotiations on the NWOW, with the company clearly communicating what would happen if the proposals were not accepted. 

Ultimately, the parties returned to talks in late 2020 when they engaged in conciliation and this led to three hearings at the Labour Court in early 2021 and the appointment of Mr Liam Berney to work on a solution that would be acceptable to both sides.  On May 18th 2021, when the Court recommended that the unions accept the NWOW proposals with certain supports, it also recommended that, on acceptance of the recommendation, the employees were returned to 100% of hours and pay with immediate effect.  The Court did not recommend reinstatement of 100% of pay from October 11th 2020.

In the circumstances faced by the employer in October 2020, it is my view that the decision to reduce the employee’s working time to 60% was a reasonable and considered response.  With more than 90% of employees having accepted the NWOW proposals, it was necessary for the rejecting cohort to also shoulder some of the burden of the cost-reduction.  It is my view that an inherent unfairness and inequity would have resulted if the employer had not taken the action that it did.

I recommend that the employer takes no further action regarding the reduction in the employee’s hours and pay to 60% between October 2020 and August 2021.

Reduced working hours, reduced wages, three-day week