INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
Chairman: Mr Duffy
Employer Member: Mr Murphy
Worker Member: Ms Ni Mhurchu
1. Loss of hours work arising from loss of contract.
2. The Company is a field marketing organisation and contracts personnel to carry out work on behalf of many clients across sections of the Irish marketplace. The issue in dispute relates to a loss of hours by a number of workers who are employed by the Company as Merchandisers.The Company has recently lost a long standing contract ( with MFL) and this has resulted in a substantial loss of hours for the Claimants. The Union is seeking compensation in the amount of 1.5 times the annual loss in respect of all hours lost as a result of the contract termination. The Company made an offer of six months' compensation for the loss of hours subject to the following:
Employees must be at least two years on the MFL contract as of 9th June, 2005.
Payments will be made only to staff that have lost in excess of 10 hours per week. All hours offered in the latest document issued on August 17th, 2005, must be included.
Staff in excess of 35 hours per week in the latest document will be exempt.
The Union rejected the offer. 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 28th September, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 3rd November, 2005.
3. The Union is seeking the payment of 1.5 years' compensation for the loss of all the hours that it has identified using a base of two years' average from the date that the reduction took place i.e 17th October, 2005. This is the industry norm. All members should be included with no service criteria being applied.
2. The Union accepted the introduction of the reduced hours under protest and without precedent or prejudice to this claim. The working of the hours under protest has highlighted a number of difficulties which have been experienced by the Claimants (details supplied to the Court).
3. There are a number of previous Labour Court Recommendations where compensation of 1.5 times the annual loss were awarded (AD 0072, AD 0071, AD9739 refer).
4. 1. The Company's Clients' requirements may grow or reduce depending on circumstances present in the marketplace. These are mostly beyond the Company's control. Reductions in hours of work are taking place but the Company has endeavoured to reduce the impact on workers and to retain as many of them with as many hours as possible.
2. The Company has sustained substantial additional costs due to the delay in implementing the reduced hours .The Company has invested significant amounts to secure additional hours now offered to workers. To add additional costs involved in paying compensation for loss of hours would impact significantly on the Company's ability to honour all of the commitments offered to date and make it uncompetitive in the marketplace.
3. The Company believes that in a short period of time it can once again offer the required hours to its workers from a combination of sources.
The Court is satisfied that there is a number of unusual factors in this case which distinguish it from other cases involving claims for loss of earnings. The type of employment involved is one where hours of work fluctuate having regard to a variety of factors and there is no history of compensation being paid in such circumstances. However, in this case, many of the claimants have long service with the employer and their hours of work have been reasonably( but not totally) consistent. Moreover the level of reduction in hours arising from the loss of the contract which gave rise to this dispute is significant. In these circumstances, and in the particular circumstances of this case, the Court is of the view that some level of compensation is warranted, a fact which was recognised by the Employer in making an offer at Conciliation in settlement of the Union's claim.
The representative of the Employer told the Court that it is anticipated that other hours will become available through new contracts which will, in part at least, offset the losses at issue. Hence the extent of any on-going loss in earnings, which the Claimants will suffer, is not presently capable of ascertainment. In the Court's view it is only when this becomes clear that compensation can be calculated.
Having regard to all the circumstances in this case the Court recommends that the Company should offer and the Union should accept that compensation be based on the measured annual loss of earnings suffered on an individual basis based on the following criteria:
1. Loss should be ascertained by taking the earnings of each individual for the period commencing with the introduction of the reductions up to 1st March, 2006. Those earnings should then be measured against the average earnings for a corresponding period in respect of the time worked in the two years preceding the introduction of the reductions.
2. Earnings should be ascertained by reference to wage records. The Company should provide those records to either the individuals or to the Union acting on their behalf.
3. Any loss of less than 10% should be disregarded.
4. Only those employees with twelve months' service or more should qualify for compensation.
5. Any hours offered in compensation for those lost should not be unreasonably refused.
This Recommendation is made having regard to the particular and unusual circumstances arising in this case. It should not be quoted or relied upon as a precedent in furtherance on any other claim in similar employments.
Signed on behalf of the Labour Court
10th November, 2005______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.