INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
BROWN THOMAS GROUP
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
Chairman: Mr Duffy
Employer Member: Mr Grier
Worker Member: Mr. Somers
1. Non application in full of the 1% lump sum due under the revised terms of the Programme for Prosperity and Fairness (PPF).
2. The Union claims that the Company did not adhere to the National Implementation Body (NIB) guidelines when calculating the lump sum payable to (i) staff with less than one year's service or (ii) staff who are paid commission. The Company rejected the claim. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. On 10th December, 2002 the Labour relations Commission referred the dispute to the Labour Court in accordance with Section 26 (1) of the Industrial Relations Act, 1990. A Court hearing was held on the 11th April, 2003.
3. 1.The Company pays a commission rate of 1.25% of sales. The pay scale for commission staff is significantly lower than non-commission staff to reflect the fact that sales staff earn, as part of their normal regular income, commission on all sales. This commission is also reflected in holiday pay.
2.It is unfair that commission staff should have received a lump sum of less value than their non commission colleagues simply because they earn commission.
3.The 1% calculation ought to have been applied to the average gross earnings of commission staff, as is the case in calculating holiday pay payment.
Staff with less than one year's service.
4.The Company calculated the 1% lump sum on gross basic earnings earned in the twelve months ending on 31st March, 2002. The affect of this application was that workers with less than twelve months service on 31st March, 2002 received an amount proportionally less than a 1% lump sum equivalent to 1% of annual basic pay on 1st April, 2002.
5.This is incorrect and at variance with the NIB clarification of 6th March, 2002, regarding the application of the 1%.
4. 1. The terms of the PPF expressly state 1% of basic pay. It is clear, therefore, that only basic pay is reckonable when calculating the lump sum. In effect the Union is seeking that the 1% should be calculated on earnings, contrary to the provisions of the PPF.
2. The NIB statement refers to the 1% being applied to basic pay.
3. The primary motivation behind the amendment to the PPF, was inflation proofing. Commission has never been varied by virtue of the direct application of National Wage Agreements. However, as prices rise, accordingly, commission earnings rise.
Staff with less than one year's service.
4. A number of workers had not attained a full years service on 1st April. 2002, the date of application of the lump sum payment. In this instance there was no annual basic rate of pay.
5. The Company calculated the 1% lump sum on the basic pay that workers had earned from their date of commencement ( in each case sometime after 1st April, 2001 up to 1st April, 2002. This manner of calculation applied to both full time and part time staff and is fair and equitable.
These matters before the Court relate to the interpretation of the statement issued by the National Implementation Body on 6th March, 2002. concerning the application of the 1% lump sum provided for by the PPF as amended.
The statement is as follows:
"The National implementation body wishes to confirm that the implementation of the agreement to pay 1% lump sum effective on 1st April 2002, agreed in December, 2000, is to be interpreted as applying to annual basic pay on 1st April, 2002, as it has been determined in each employment or industry, especially in the context of implementation of the standard terms of national agreements, including PPF. Implementation is subject to the other terms of PPF, as amended."
In the Court's view this statement can only be interpreted as meaning that the 1% should be applied to the annualised value of basic pay as it applies on 1st April, 2002. Furthermore, basic pay is to be taken as the rate to which percentage increases, arising under National Agreements, including PPF, have been applied.
Applying that interpretation to the issues before it, the Court recommends as follows:
1. Basic pay does not include commission or overtime.
2. The basic weekly rate of pay applicable in each case on 1st April, 2002 should be multiplied by 52 and the 1% applied to the result.
Signed on behalf of the Labour Court
22nd April, 2003______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.