ADJUDICATION OFFICER DECISION/RECOMMENDATION
Adjudication Reference: ADJ-00004384
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969
Date of Adjudication Hearing: 05/04/2017
Workplace Relations Commission Adjudication Officer: John Tierney
In accordance with Section 41 of the Workplace Relations Act, 2015 [ and/or Section 13 of the Industrial Relations Acts 1969] following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
The Claimant is seeking restoration to the increased pay level which were sanctioned for him by the Respondent in 2014.
Summary of Complainant’s Case:
The Claimant worked for a state body that has been merged with other state organisation. He originally commenced employment on a fixed term contract in 2004. He was given a contract of indefinite duration in 2012 with a salary of €91, 056. He was appointed Acting Chief Executive of a new authority which was later to become part of the new organisation from 1 January 2014 to 1 October 2015. In this position, his salary increased to € 96,726 (inclusive of directors allowances). The temporary contract provided for him to revert to his former position as development manager on his former salary of €91,056 upon the event of the proposed merger with the new organisation. He took on substantial responsibility in his new role. These responsibilities are still carried out by him and have increased due to the rapid expansion of the new merged organisation.
In October 2015 the Claimant learned that a CEO had been appointed to the new organisation. His salary was then reduced to €83,510 – a cut of €13,216. This also included an imposition of pension levy, despite the failure of the Respondent to provide a pension. His old roles of Development Manager and Director of operations were not available and he was given the title of Director of Campus. This position was provided for in the organisational structure proposed by consultants engaged to advise on both the pre-and post-merger period. However, his salary was not marched with a reduction in responsivities or duties.
He raised the issue of his salary reduction with the CEO, who informed him that he had sought approval from the relevant Department to resolve the matter but he did not receive the same, so no progress was made. In April 2016 the Claimant raised this issue through the Grievance Procedure. In July he was informed that the Chairman of the Board had raised his situation at Ministerial level but to no avail.
Over the course of April/May, Departmental sanction was received for several senior appointments at principle and assistant principle level. This included the creation of the role of Chief Operating Officer (COO) reporting directly to the Claimant as Director of Campus. This new COO role, which previously had been undertaking, was at a salary of €105,000 with a performance bonus of a further €10,000.
The Claimant is seeking an award of a 15% increase above his subordinate’s salary of €105,000 and a performance bonus of €15,000 retrospective to 1 October. He is also seeking a pension entitlement backdated to 2007.
Summary of Respondent’s Case:
The Respondent legally requires the approval of its government Department with the consent of the Minister for Public Expenditure & Reform Department (DEPER) in determining the remuneration and terms for its staff. It is not open to the Respondent to increase remuneration of staff without this approval. It was always clear that the Claimant’s appointment as Acting CEO of then organisation prior to merger was actually sanctioned by DEPER only for the period up until the point of the merger.
The Claimant’s increased salary as Acting CEO was sanctioned in that context and it was always clear that that appointment and the pay increase would only be a temporary period and that he would revert to his previous position and pay on the establishment of the new organisation. This is entirely with the letter of appointment issued to him from the Chairman on 3 April 2014 and his reply fully accepting the appointment conditions (copy provided to the Hearing).
The Claimant’s role changed on 1 October 2015 when the organisation merged and a different person was appointed to a single CEO role, meaning that there was no longer a need for an Acting CEO role.
The Respondent disputed the salary level presented by the Claimant prior to this role as Acting CEO. They further disputed that his salary was reduced without notice of any kind to €83,510. In fact, the HR manager, Director of Finance and the new CEO discussed his salary position with him on several occasions both formally and informally prior to his salary reverting to the previous level on the establishment of the new organisation. This is supported in emails between the parties between 15/20 October 2015.
In regard to the emphasis by the Claimant on the remuneration level set for the COO within the subsidiary company of the new organisation this is not a valid comparison . He seeks to use this as a primary for his claim for a salary of €135,000. The COO is employed in a wholly owned subsidiary of the new organisation, which is the holding company. This subsidiary is a commercially focused company, with its own board of directors, constitution and memorandum and articles of association under the Companies Act 2014. It is not a state agency and is not required to implement Government policy in relation to remuneration of employees. As such it is not bound by public sector pay policy.
This subsidiary company is a separate legal entity. COO of it is the most senior executive member and reports to its board. Therefore both the Claimant and the Coo are employed by separate organisations. The Respondent considers it unfair that a new grievance has been raised at stage 4 of the Grievance Procedure and has not been offered a prior opportunity to address this issue.
The basis for the Claimant’s pension claim is equally unclear. Participation in the new organisation pension scheme was offered to him on its establishment. He elected not to partake in this pension scheme (see his email of 27 October 2015 in reply to the Director of Finance as provided).
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
[Section 13 of the Industrial Relations Acts, 1969 requires that I make a recommendation in relation to the dispute.]
After the Hearing the Respondent made detailed written submission, only a verbal submission was made at the Hearing. This was forwarded on to the Claimant for observation and comment. I have decided to accept this submission based on the claim by the Respondent that the Claimant had raised matters at the Hearing that had not been subject to their Grievance Procedures (i.e. the pension and the COO remuneration) .
I have considered the submissions of both parties. The Claimant accepted the terms of his appointment as Acting CEO as contained in the Chairman’s letter of 3 April 2014 which stated;
This sanction is conditional upon a 12 month appointment or to the date of the proposed establishment of ……….. (whichever is the earliest). Following this you will revert to your previous salary and duties (as per your existing contract….)
The Claimant accepted these terms when he stated in a written reply on 8 April 2014 I accept the full conditions as outlined……………(please find my signed form of acceptance).
Therefore this was a temporary arrangement agreed between all the parties. When the merger took place there were further discussions between the Claimant and senior staff about his situation. The CEO is on record through correspondence with the Department making a case for him not to have to revert to his previous salary. However, this was only in the gift of the Department and not the new organisation. In fact the Department were clear that they would not entertain such a claim. Therefore the terms of the Acting CEO deal stood.
In regard to the claim made based on the comparison with the COO remuneration package, this is a separate legal entity from the new organisation. It is not subject to DEPER control and a commercially driven body unlike the one the Claimant worked for. Therefore I do not accept it as a valid comparison.
In dealing with the matter of the Claimant’s pension claim, the Respondent offered him participation in the scheme in October 2015 and he declined this. The matter was never pursued again until it was raised at the Hearing. I therefore do not find the claim well-founded.
Therefore in considering all the claims presented at the Hearing I do not find them well- founded and they fail.
Dated: 20th July 2017
Workplace Relations Commission Adjudication Officer: John Tierney