FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EBS LIMITED - AND - UNITE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Withdrawal of 13th month payment for non-management staff of EBS Limited in 2011.
BACKGROUND:
2. This dispute arose from the Company's decision to withdraw a 13th month payment from non-management in 2011. 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 December, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 2nd April 2013.
UNION'S ARGUMENTS:
3 1 The 13th month payment is a contractual entitlement.
2 This payment has never been and should not now be treated as a bonus payment.
3 Management continues to receive comparable payments.
EMPLOYER'S ARGUMENTS:
4 1 This payment is clearly a bonus, payable at Christmas.
2 This bonus payment was never part of pensionable salary.
3. Concession of this claim is not possible given the Company's huge losses.
RECOMMENDATION:
The matter before the Court concerns a claim by the Union on behalf of 300 employees up to Assistant Manager grade for retrospective payment and continuation of a thirteenth month payment. The Union stated that this payment was part of core pay and was included in employees’ contracts of employment. The Union stated that the payment was paid out in December each year and had been paid in full until 2010.
Management stated that the payment was classified as a “Christmas Bonus” as specified in the contract of employment. It stated that it was obliged by the terms of a Ministerial Placing Agreement with AIB to discontinue the payment when EBS Building Society was incorporated into AIB from 1stJuly 2011,this was reinforced by a letter sent by the Department of Finance, on behalf of the Minister dated 29thDecember 2011.The Placing Agreement stipulated that as a result of the extensive financial support provided to AIB by the Irish taxpayer that no employment bonuses whatsoever, howsoever described, should be paid to any employee. As a wholly owned subsidiary of AIB, EBS is subject to the same instruction.
When industrial action took place over the non-payment in December 2011, an agreement was reached to pay half the payment, this concession arose due to“the timing and poor communication of the fact that no bonus would be payable to the affected staff”.
The contract of employment outlines the details of the payment, under the heading “Christmas Bonus” as follows:-
- “You will be paid a bonus during December each year, on the basis of 1 week's basic salary per 3 months or part thereof worked during the course of the year. If you leave the Society’s employment before the due payment date of bonus in December, you will not be entitled to either a full or pro-rata bonus payment for that year.”
The Court notes that the employees were officially notified of the discontinuation of the bonus by letter dated 29thDecember 2011 from the Department of Finance. This letter states:
- “In the interests of clarity, I can confirm that the Minister has issued an explicit instruction to Allied Irish Bank plc. (AIB) that no employment bonuses whatsoever, howsoever described, are to be paid to any employee; this instruction rises as a consequence of the extensive financial support provided to AIB by the Irish tax payers.”
On 1stFebruary 2012 an agreement was reached in settlement of the industrial action and this agreement provided for the payment of half the normal payment for 2011 with the Union reserving its position on the question of future payments.
Having considered the submissions of both sides the Court is satisfied that the thirteenth month payment is correctly classified as a “bonus” payment and consequently the Court is debarred by the “Placing Agreement” from recommending in favour of any future payments.
However, the Court is of the view that as the effective position of the Minister for Finance was not known until 29thDecember 2011, the balance of the payment due from 2011 should be paid.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th April, 2013______________________
JMcCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.