FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 S2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001, AS AMENDED BY THE INDUSTRIAL RELATIONS(MISCELLANEOUS PROVISIONS) ACT, 2004 PARTIES : MCI WORLD COM IRELAND LTD REPRESENTED BY MCCANN FITZGERALD SOLICITORS - AND - COMMUNICATION WORKERS UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Referral from the Labour Relations Commission under The Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
BACKGROUND:
2. The case before the Court concerns a dispute between the Telecommunications Company MCI Worldcom Ireland Ltd and the Union in relation to an increase in the on-call allowance and the application of wage increases due under Natioanl Wage Agreements for 16 technicians employed by the Company.
The issue of the increase in the on-call allowance had been agreed between the parties but final approval had not been granted by the Company's parent department in the UK. The Company increased on-call payments to €51 for the first two hours after midnight and €32 for additional hours. Before midnight €40 per hour for the first two hours and €32 for additional hours. These increases were applied from 1st July 2005. The Union's postion is that the allowance should be increased on the basis that it has not been increased since 1999 and is now taxable in line with revenue guidelines. The Union is also seeking an increase in the hourly rate while on call to €51 per hour after midnight and €40 for every other hour worked. The Company position with relation to the on-call allowance is that it is adequate in terms of comparable employments and with regard to the overall remuneration package of the Claimants. As regards the application of national wage agreements the Company's position is that increases are awarded in line with their existing salary review process and it cannot sustain any further cost increases. The dispute could not be resolved at local level and was referred to the Labour Relations Commission in accordance with Section 2 of the Enhanced Code of Practice on Voluntary Dispute Resolution (S.I. 76 of 2004). As there was no resolution, the dispute was referred to the Labour Court for investigation under Section 2(1) of the Industrial Relations ( Amendment ) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004. A Labour Court hearing took place on the 23rd January 2006.
UNION'S ARGUMENTS:
3. 1. The Claim to increase the on-call allowance and the hourly rate while on call is fair and reasonable on the basis that there has been no increase in these payments since at least 1999. The on-call allowance is also subject to taxation in compliance with Revenue guidelines which was previously not the case.
2. It is unnaceptable that basic cost of living increases be withheld from workers.Wage increases negotiated at national level should be applied on the due dates. The Company had awarded an 8.5% increase in 2004 but this was for the harmonisation of bonus payments which resulted in a reduction in bonus from 20% to 10%.
COMPANY'S ARGUMENTS:
4. 1. The on-call allowance payment is in line with comparable employments in the telecommunications sector. The Company must excercise financial prudence to ensure continued viability and increases in costs cannot be sustained.
2.Wage increases have been applied in conjunction with the Company's wage review process. The Company cannot sustain the costs of additional national wage increases as well as those already implemented.
RECOMMENDATION:
This dispute was referred to the Court pursuant to Section 2(1) of the Industrial Relations (Amendment) Act, 2001 as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004 (the Acts), following the failure of the parties to
reach agreement in relation to the matters at issue at the Labour Relations Commission under the Enhanced Code of Practice on Voluntary Dispute Resolution (S.I. 76 of 2004).
The Court is satisfied that the conditions specified at Section 2(1)(a) to 2(1)(d) of the Acts were fulfilled in this case and that the dispute was properly before the Court for investigation and recommendation.
The Court has taken careful account of the submissions of the parties in their written and oral presentations. Section 5(2) of the Act provides that a recommendation made by the Court shall not provide for arrangements for collective bargaining. Subject only to that restriction the Court is required to give its opinion on the matter under investigation and, where appropriate, its view as to the action, which should be taken, having regard to the terms and conditions of employment, in the employment concerned.
In response to the Union’s claims, the Company contends, inter alia, that having regard to the pay and conditions of employment which it provides, when viewed in their totality, are not out of line with appropriate standards and therefore, the intervention of the Court under section 2(1) of the Industrial Relations (Amendment) Act 2001, as amended, is not warranted. In support of its contention, the Company stated that it operates a pay review system based on the employee’s performance following an assessment of the market place. It contended that employees are targeted to receive salary increases if they reach the acceptable level of performance and if their salary and benefits are low in comparison to the marketplace.
As part of the 2005 pay review process eighteen of the Company’s seventy-one employees (25%) received salary increases, typically ranging between 3% and 7.5%, four of which were represented by the Union in this claim. In addition, an average 1% of employees received further increases on the basis of an upgrading due to promotion; increased responsibly, counter-offer by another employer or an “out of cycle” increase. The Company submitted that salaries are pitched at the 80th percentile or more of the average salary/total cash benefits of a review of other telecommunications and high-technology companies surveyed.
The Court considered it desirable to first consider this aspect of the Company’s response since, if it succeeds on this point, it may be unnecessary to consider in detail the other issues raised in the case.
The Industrial Relations (Amendment) Act 2001, as amended, provides a significant addition to the powers of the Court in industrial relations disputes. In considering the nature of the new powers given to it, and the circumstances in which it is appropriate to invoke them, the Court has stated in recommendation LCR17745 (Bank of Ireland and IBOA) as follows:
“The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of our industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards”.
As the Court has previously pointed out, such protection is only required and the intervention of the Court justified, where it can be demonstrated that pay or conditions of employment are out of line with accepted standards -GE Healthcare and SIPTU, Recommendation LCR No 18013.In that context regard should be had to terms and conditions applicable to similar categories of workers in analogous employments in which there is collective bargaining.
In the present case, while the Court is satisfied that increases made under the heading of bonuses were impressive, it is not satisfied that those Technicians associated with this claim, fared better than the average worker under a national pay agreement. The Court found that the pay review system lacked a definitive correlation with national wage agreement increases to satisfy it that the system was at least in line with acceptable standards in analogous employments. Therefore, the Court can see no basis upon which it could conclude that the pay and conditions of employment of those associated with this present claim, when viewed in their totality, are in line with acceptable standards. In consequence, the Court is satisfied that its intervention is justified and it is therefore appropriate to issue substantive recommendations, under section 5(1) of the Act, on the claims under investigation.
Utilising the provisions of SI. 76 of 2004 the Union submitted two claims on behalf of sixteen technicians to the Labour Relations Commission.
Having considered the submissions of both parties, the Court recommends the following on the claims submitted by the Union on behalf of its members in the Company: -
On Call Allowances:
The Court recommends that the on-call allowance should be increased from €178.00 per week on call to €300.00 per week on call with effect from 1st July 2005. Furthermore, the Court endorses the increased rates introduced by the Company from 1st July 2005 in settlement of the Union's claim for improvement in the call out rates and recommends accordingly.
Cost of Living Pay increases:
The Court recommends that in line with the final phase of Sustaining Progress ii an increase of 2.5% in basic salary should be paid with effect from 1st June 2005.
Implementation
The recommendations herein should be implemented within one month from the date of this recommendation.
Signed on behalf of the Labour Court
Caroline Jenkinson
9th February 2006______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.