INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
- AND -
GUINNESS STAFF UNION
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr Nash
1. Senior Manager's Car Allowance.
2. The dispute relates to the Company's decision in 2004 to change the Company Car agreement in relation to Senior Managers (Level 4). From 2002 Senior Managers who did not avail of a Company car were paid €12,825 per year over a three year period. In 2004 the Company decided that instead of leasing cars on a three year cycle they would lease them on a four year cycle. The Union agreed to this but a dispute arose over the Managers who had taken the allowance instead of the car. Their annual payment would reduce to €11,525. The Union sought that the Company protect those senior managers who sustained a fall in income by using the rotation of a salary agreement which allowed for payment of 100% of the difference between the original amount and the new amount in year one, 35% in year two, and 15% in year three. The Company refused to utilise the agreement on the basis that its use was for loss of earnings and the Company maintained that this did not arise in the claimants' case. The Union claimed that it sought to refer the issue to the Labour Relations Commission but the Company objected to such a referral. The Company rejected this claim stating that procedures had not been exhausted at local level that the Union's referral under Section 20(1) was premature and that the Company was at all times willing to attend conciliation. The Union referred the dispute to the Labour Court on the 13th December, 2005 under Section 20(1) of the Industrial Relations Act, 1969 and agreed to be bound by the Court's recommendation. A Court hearing was held on the 22nd of March, 2006.
3. 1. The change in relation to the three to four year cycle for Company cars saved the Company in the region of €250,000 per year. The compensation arrangement for a small number of workers sought by the Union who were financially disadvantaged would amount to approximately €2,000 per Senior Manager who had opted for the allowance.
2. The Company's attitude if conceded will open up the opportunity for management to reduce the terms and conditions of staff and is a recipe for significant problems.
3. It is unacceptable that the Company can unilaterally change an agreement that directly impacted on the claimants' income. The Company has refused to apply an agreed procedure that would offer some compensation to the claimants.
4. 1. The changes that were made to the car policy were necessary for economic reasons. The savings delivered as a result has led to increased bonus payments being made to employees including the claimants. These bonuses were in excess of what had been paid in previous years and has ensured that the claimants have received more than adequate compensation for their perceived loss of earnings. In two sample cases (details supplied to the Court) two workers individual package values were increased by approximately 5% and 12% respectively despite changes to the car policy.
2. The Company accepts that the cars and cash are an emotive issue for employees. The Company did attempt to recognise this and made an offer of a charitable donation of €15,000 to the Union.
The Union is in dispute with the Company over a change in the Company's Car policy for senior managers. When the Company reviewed its car policy in 2004, it decided to make changes to the lease arrangements by increasing the term of the lease. This change resulted in cost savings and consequent benefits for both sides.
With effect from January 2005, Company cars are now being replaced after 60,000 miles or 4 years instead of the previous arrangement 50,000 miles or 3 years. However, the specification of the cars provided has been improved. For those senior managers who elected to avail of a cash equivalent, their allowance was reduced from €12,825 per annum to €11,525 per annum, which was an equivalent amount to the reduction in the lease cost.
The Union, while not having difficulty with the new car replacement policy, sought compensation for those in receipt of the cash equivalence allowance on the basis that they have been financially disadvantaged by the change in the Company's policy.
Having considered the submissions of both sides, the Court is of the view that the Company's cash equivalent policy going forward is fair and reasonable and consequently does not recommend concession of the Union's claim for compensation.
However, the Court accepts that the changes were put in place before agreement on this issue was achieved and without sufficient consultation with the Union. Therefore, as a gesture of goodwill the Court recommends that each of the Senior Managers who opted for the cash equivalent option should be paid the sum of €400 in full and final settlement of this claim.
Signed on behalf of the Labour Court
28th March, 2006______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.