INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
P.J. CARROLL & COMPANY LIMITED.
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS UNION
Chairman: Mr McGee
Employer Member: Mr Doherty
Worker Member: Mr. Somers
1. Bonus Payment.
2. For many years the Company has paid workers an annual bonus. The workers are based at the Company's two plants in Dundalk (production) and Dublin (marketing). Up to the end of 1999 the same bonus was paid to workers at the two locations. In 2000 the Company set separate performance targets under a bonus scheme for employees based in Dundalk and Dublin. This relates to the owner's British American Tobacco (BAT) policy of treating its locations as part of the Operations set up or Selling set up. The following are the performance targets with the operating profit for Ireland being common to both locations:
Operating Profit 5% 5%
Conversion Costs 5%
Market Share 5%
Sales Volume 5%
The maximum bonus which can be earned is 15%.
The change to the bonus scheme was not discussed with the Unions. The Unions claimed that as a result of this unilateral change, workers in Dundalk, in 2000, and in Dublin, in 2001, received a reduced level of bonus. The Unions claimed compensation for the loss. Management rejected the claim. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. The dispute was referred to the Labour Court on the 16th February, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 30th June, 2004.
3. 1. Once the Company agreed to allow a bonus scheme, the criteria for which have been set, then workers should be paid their bonus entitlement for that year.
2. The Company, in mid bonus year, implemented changes to the bonus scheme without negotiation or agreement. This action was contrary to the agreement reached at the Labour Relations Commission in 1997. The net affect resulted in a financial loss to the claimants.
3. The Unions are seeking full compensation for the financial loss suffered. In future the Company should consult with the Unions before implementing any such changes.
4. 1. The Company regards the bonus scheme as discretionary. However, it accepts that it should have consulted with the Unions in relation to the changes made in 2000. The Company was experiencing serious decline in its market share at the time. Also its new owners (BAT) structured operations worldwide in a different manner to that of P.J. Carroll's and the new arrangements would have to be brought in to conform with the Company structure.
2. The average bonus achieved by workers between the years 2000 and 2003 was 8.6% for Dundalk and 8.0% for Dublin.
3. The structure of the bonus accurately rewards the types of activities at the two locations and is part of a world wide system of bonuses in BAT. To change this for a small location in Ireland would be inappropriate.
For the Company to change the Bonus criteria mid-year in 2000 was against the spirit of clause (7) of the Labour Relations Commission Agreement of 14th April, 1997. It is, however, noted that the Union group accepts the validity of the different weightings given to Dublin and Dundalk in the current system. The Court would urge the parties to deal with any future changes in the Bonus system by way of the 1997 Agreement, and recommends a once-off payment of €500 to each worker concerned in both locations in full and final settlement of this claim.
Signed on behalf of the Labour Court
2nd July, 2004______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.