INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Carberry
Worker Member: Mr O'Neill
1. Service charge pool - interpretation of an agreement
2. The case before the Court concerns a difference of interpretation between the parties regarding a 1998 agreement which restructured the service charge pool for Hall Porters and House Assistants.
The restructuring arose as a result of a major redevelopment of the hotel which included the opening of an additional 98 new bedrooms.
The difficulty concerns a redistribution of service charge from the 12.5% service charge pool of the Hall Porters and House Assistants to create another pool of 30% of that pool. The Union claim that only 19.5 people should transfer to this pool. The Company rejects the claim on the basis that there never was a written agreement between the parties specifying an absolute number in this pool.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 10th of December, 2002. A Labour Court hearing took place on the 11th of February, 2003.
3. 1. The Company agreed that there would be a maximum of 19/20 changing from the 2.5% service charge pool to the 12.5% service charge pool.
2. The Company offer was balloted on and accepted by the members.
3. The Company guaranteed the earnings of the present Hall Porters and House Assistants. Letters of guarantee were issued to those members.
4. 1. The 1998 document could not be regarded as an agreement. It did not contain the words "proposal" or "agreement". It was intended as an explanatory document on how to progress the change from one service charge pool to another.
2. The Company could never honour an "agreement" which would limit the number of staff members to be included in a service charge pool. If additional business was generated additional staff employed would be excluded from the service charge pool.
3. Concession of the Union claim would create a serious precedent. New staff members would receive reduced earnings in comparison to existing staff members or the Company would have to compensate these staff through the imposition of an additional service charge to its customers.
The Court has given careful consideration to the submissions of the parties to this dispute.
The agreement giving rise to this dispute concerns the distribution of receipts from service charges amongst the various grades and categories of staff employed at the hotel. As is normal practice, agreement on the appropriate formula for distribution was entered into between the staff themselves. The company was not party to the agreement.
It is clear to the Court that the Union members reached agreement on the basis of information provided by the Company. It is equally clear that they misinterpreted that information.
In the Court's view the Company should accept some responsibility for this misunderstanding. In its letter of 26th February, 1998, the Union set out the numbers who would be on 0.25 of a point. It was apparent that they were interpreting this as a fixed number on which they intended to base a proposal to be put to ballot. In the Court's view such an interpretation would be wholly impractical and an agreement for future arrangements could not be based on the numbers in any group or grade remaining static. Management should have responded to this letter and pointed out, before the ballot was taken, that the Union's understanding on this point was erroneous.
In all the circumstances of the case the Court recommends that the dispute be resolved on the following basis:
1. The Union should accept the arrangements presently in place regarding the distribution of service charges.
2. On an ex- gratia basis the Company should pay €20,000 to be distributed amongst the original 19/20 staff affected, in a manner decided by the Union. Such payment to be in full and final settlement of all claims arising from this dispute.
Signed on behalf of the Labour Court
10th March, 2003______________________
Enquiries concerning this Recommendation should be addressed to Carmel McManus, Court Secretary.