FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : WYETH MEDICA IRELAND - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Inclusion of average overtime in holiday pay.
BACKGROUND:
2. The Company is a manufacturer of pharmaceuticals. An agreement between the Company and the Union contains a clause which states that all employees are obliged to work up to four hours' overtime per week. This dispute concerns a claim by the Union that average overtime earnings should be included in holiday pay. The company rejects the claim on the basis that overtime is not compulsory.
This dispute could not be resolved at local level and 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 18th January 2008, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 15th May 2008, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The Labour Court has been consistent in recommending that overtime be included in the calculation of holiday pay where overtime is a feature of working patterns.
2. Workers are contractually obliged to work regular overtime every week.
3.The Company has never provided documentary evidence to support its claim that its competitors do not include overtime in the calculation of holiday pay.
COMPANY'S ARGUMENTS:
4. 1. The Organisation of Working Time Act, 1997 does not provide for the inclusion of overtime in the calculation of holiday pay, and thisis a cost-increasing claim which is precluded under the provisions of 'Towards 2016'.
2. All overtime is worked on a voluntary basis and while the agreement between the Company and the Union states that all employees are obliged to work up to four hours' overtime, this clause has never been invoked as there has always been sufficient workers willing to work overtime.
3. The concession of this claim would place the Company at a significant disadvantage in relation to its competitors.
RECOMMENDATION:
It is noted that the Company / Union agreement provides that employees are contractually obliged to work up to four hours overtime per week. The Company told the Court that this clause has never been invoked because staff have been prepared to work overtime voluntarily. Nonetheless, there is an obligation on those associated with this claim to work overtime and they do so on a regular basis.
The Court has recommended in a number of previous cases that overtime which is regular and rostered, and therefore compulsory, should be taken into account in the calculation of holiday pay. In the present case overtime is not rostered but it is compulsory under the collecive agreement. In these circumstances overtime of up to four hours per week can reasonably be regarded as part of the normal working week.
On that basis the Court recommends that average overtime, of up to four hours in any week, should be taken into account in calculating holiday pay.
Signed on behalf of the Labour Court
Kevin Duffy
20th May, 2008.______________________
JMcC.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.