INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr McHenry
Worker Member: Mr O'Neill
1. Appeal against Rights Commissioner's Recommendation No. CW194/96.
2. Shannon Development is a State-sponsored organisation with statutory responsibilities for industrial, tourism and rural development in the mid-west region. The Company currently employs 190 executive and clerical staff. In 1987, the Government decided to transfer the functions and responsibilities of Shannonside Tourism, the regional organisation at that time which had responsibility for tourism services and promotion of the Shannon region, to Shannon Development. Nine permanent and four seasonal temporary Shannonside staff accepted offers of employment in Shannon Development.
The appeal concerns one worker who had 18 years' service with Shannonside Tourism prior to accepting the offer of employment with Shannon Development. By letter, dated 23rd of December, 1987 from the then personnel manager of Shannon Development, he was advised that he would commence on his (then) current salary and would retain his "current scale and grade on a personal basis".
In Shannonside the worker had been on point 6, then £24,191, of a scale which ranged from £20,686 to £28,776. When he transferred to Shannon Development, the Company placed him on what they deemed to be an appropriate point on their E3B scale which then ranged form £18,497 to £25,718. He had benefited from all relevant increases since, including increments and both "general" and "special" increases. Since August, 1990 he was on the maximum point of this scale, worth £39,786 as of the 1st of October, 1996.
The Union claimed that the worker became aware, in July, 1995, of a major discrepancy between the salary being paid to him and that which had been promised in his letter of appointment. It was claimed that his correct salary figure was £46,771 and that he had repeatedly tried to have the matter addressed, without any success.
The Company responded that the worker had been dealt with in accordance with the E3B scale since 1987, confirmed as such in job-evaluation in 1989 and had not raised the issue for seven years. Accordingly, the Company rejected the claim as being essentially for a pay adjustment on top of a rate he had enjoyed since 1987 and was, therefore, cost-increasing. The Union referred the matter to a Rights Commissioner for investigation and recommendation. The Rights Commissioner found, inter alia, that the issue was whether or not the worker was entitled to the benefits specified "on a personal basis", dispute the fact that he had accepted, unwittingly or otherwise, a salary based on a different scale, over a period of seven and a half years. He concluded that it was more likely than not that the worker had been aware of the discrepancy long before July, 1995 but that he did not pursue the issue thinking that it might have been resolved in some other way. The Rights Commissioner concluded further that the worker's silence on the matter over seven and a half years meant that he was, in effect, accepting the salary scale which he was being paid at the time. The Rights Commissioner found that the conclusions, however, did not absolve the Company from all responsibility for the discrepancy vis-�-vis the letter of offer. He recommended that, in the particular circumstances of the case, and given the current large differential between the two salary figures, the Company pay the worker an ex-gratia sum of £12,000 in full and final settlement of his claim.
The recommendation was appealed by the Union to the Labour Court, on the 26th of February, 1997, in accordance with Section 13(9) of the Industrial Relations Act, 1969. The Court heard the appeal, in Limerick, on the 2nd of October, 1997 and in a resumption of the hearing, in Limerick, on the 25th of March, 1998.
3. 1. When the worker joined the Company his contract was disregarded, not implemented. He was immediately placed upon a grade which was considerably lower than the Regional Tourism Managers (RTM) grade that he was promised verbally and in writing. His contract of employment was never honoured: it was changed without any discussion or reference to him.
2. If the worker was on the RTM grade and salary as he was promised he would have been at the maximum of that scale and earning £46,771 per annum. However, because he was wrongly put on the E3B scale he was earning £39,786 at the maximum of that scale when he retired on the 31st of January, 1997. Overall, because the Company has not fulfilled its contractual obligations to the worker they owe him significant arrears of money.
4. 1. On his transfer from Shannonside, in 1987, the worker retained his then salary and was assimilated onto the Company's E3B scale. All of his annual increments were based on this scale without any issue being raised by him or his Union. In addition, any national wage round increases have been solely based on the same E3B scale. Accordingly, the E3B scale had applied fully to the worker for almost ten years, since his transfer in December, 1987. Moreover, the E3B grade was formally assigned to his post when it was evaluated in 1989, and neither his post up to retirement, nor any of his previous posts, warranted a higher grading.
2. The scale being sought by the worker corresponds very closely to the scale enjoyed by the manager to whom he reported. The E1 scale is the most senior management grade in the Company, being the confirmed scale for the Company's nine senior management positions. It would have been wholly inappropriate to assimilate the worker to a scale that does not exist within the Company and over which the Company has no control. Additionally, the worker did not have the responsibilities commensurate with the RTM scale. To concede its application would effectively mean that the worker's salary would be determined by another organisation with no connection to the Company.
3. The worker accepted the E3B scale for seven and a half years, before raising the issue with the Company. The Rights Commissioner clearly identified the significance of this factor, particularly in the light of his senior position. He clearly understood that he was on an E3B scale and accepted it as such, as the generous salary scale it was when comparisons are made with other public service organisations or the private sector. To claim the application of an entirely different scale almost eight years later is untenable and could not be conceded.
4. The cost of conceding the worker's claim for a retrospective higher salary to December, 1987 and similar pension adjustments would be astronomical and could not be conceded on those grounds alone. The Rights Commissioner's recommendation is significant in money terms and whilst unacceptable, the Company was prepared to implement it to resolve the issue. However, that as the Company is not solely self-funded and is subject to Departmental approval, the funding of this money will be problematic.
The Court had two hearings on this case and carefully considered the written and oral submissions.
The Court is satisfied, based on the evidence presented, that the commitment by the Company, as outlined by the claimant, was in fact made but not subsequently implemented.
The Court, therefore, decides that the parties should meet to agree how this situation should be rectified.
Signed on behalf of the Labour Court
Enquiries concerning this Decision should be addressed to Michael Keegan, Court Secretary.