EMPLOYMENT APPEALS TRIBUNAL
CASE NO.PW275/2015 - PW282/2015
APPEAL(S) OF:
John Alexander
- Appellant 1
Paul Watt
- Appellant 2
John Egan
- Appellant 3
Edward Reynor
- Appellant 4
Martin Dooley
- Appellant 5
Joseph Kiernan
- Appellant 6
James Gregory
- Appellant 7
Pascal Walsh
- Appellant 8
against the recommendation of the Rights Commissioner in the case of:
ESB
- Respondent
under
PAYMENT OF WAGES ACT 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms N. O'Carroll-Kelly BL
Members: Mr M. Noone
Mr J. Maher
heard this appeal at Dublin on 10th August 2016 and 9th November 2016
This case came before the Tribunal by way of the employees appealing the recommendations of the Rights Commissioner under the Payment of Wages Act 1991 references:
Appellant 1 – r-139812-pw-13/RG, Appellant 2–r-139809-pw-13/RG,
Appellant 3 –r- 140012-pw-13/RG, Appellant 4 –r- 139816-pw-13/RG (r-140055-pw-13/RG)
Appellant 5 –r- 139736-pw-13/RG (+ others), Appellant 6 - r-140006-pw-13/RG,
Appellant 7 –r-141321-pw-14/RG, Appellant 8 –r- 141221-pw-14/RG.
Representation:
Appellant(s): Mr Dan O'Connell, O'Connell & Associates, Castle Park, Ashbourne, Co Meath
Respondent: Mr. Marcus Dowling BL instructed by: Janice Kavanagh, ESB, Legal Dept, Business Service Centre, 27 Lower Fitzwilliam Street, Dublin 2
The decision of the Tribunal was as follows:-
Background:
The appellants, Training Officers, were all employees of the respondent electrical supply company. The appellants state unlawful deductions were made from their wages at different dates in May 2013 as follows:
Appellant 1: unlawful deduction by the respondent from his wages of €636.57 per month from the 10th of May 2013.
Appellant 2: unlawful deduction by the respondent from his wages of €59.51 per week from the 10th of May 2013.
Appellant 3: unlawful deduction by the respondent from his wages of €593.13 per month from the 30th of May 2013.
Appellant 4: unlawful deduction by the respondent from his wages of €636.56 per month from the 30th of May 2013.
Appellant 5: unlawful deduction by the respondent from his wages of €91.24 per week from the 10th of May 2013.
Appellant 6: unlawful deduction by the respondent from his wages of €600.67 from May 2013.
Appellant 7: unlawful deductions by the respondent from his wages from May 2013.
Appellant 8: unlawful deduction by the respondent from his wages of €78.40 per week from the 10th of May 2013.
The respondent states the appellants’ complaints arose from a binding collective agreement that bound the appellants, i.e the Payroll Cost Base 2011/2015 Agreement (PCBA). This agreement arose on foot of proposals agreed between the respondent and the group of unions that were balloted on, by the majority of the affected employees of the respondent, including some of the appellants.
History:
In 2010/2011, GT, a predominant financial advisory firm was commissioned by the respondent to conduct a payroll survey across the entire company with a view to establishing a level of viability and sustainability of profits. GT’s reported a substantial payroll saving needed to be attained to ensure ongoing profitability. The findings were accepted by the company and the Group of Unions (GOU) which lead to the agreement - the Payroll Cost Base 2011/2015 Agreement (PCBA).
A nationwide roadshow was set up to sell this agreement, which had the active approval of the respondent and the affected Trade Unions, to the employees. The agreement was voted on in by the vast majority of the employees and it became the wage agreement for period of 2011-2015.
On the 25th of October 2012 GT undertook an inspection and determined one section Generating and Wholesale market (GWM) where the appellants were employed, had fallen short of its target saving amount.
On the 29th of January 2013 the Joint Industrial Council (JIC) which comprised of management for the respondent and the Group of Unions (GOU) to examine, negotiate and test a decision that eventually became binding. A decision issued on the 19th of March 2013 bringing into operation a range of wage reductions known as “interlock” which would impact the GWM business unit and would be subject to specific wage reductions to the employees concerned.
On the 17th of April 2013 the appellants were notified they would be affected by “interlock”.
On the 29th of April 2013 the appellants received a further letter which explained how “interlock” would affect them personally. The appellants wrote to the Human Resources Manager. On the 9th of May 2013 the appellants contacted the respondent’s management and their individual unions stating they were not consenting to the pay cuts.
The appellants tried to convene a meeting to discuss the issues. Meetings were cancelled over a period of time. To the appellants it appears no internal resolution could be found.
The appellants took the above claims under the Payment of Wages Act, 1991 regarding these deductions. The hearing took place on the 29th of April 2015.
Having heard evidence and submissions from all parties the Rights Commissioner determined as follows:
“I find the Claimants do not have an individual Contract of employment with the Company. Rather their terms and Conditions of Employment has been amended, altered their pay and conditions increased down through the years through Collective Agreements entered into by the Company and the Group of Unions. This has been to the benefit of the Claimants.
I find the Company and the Group of unions entered into a Collective Agreement in February 2012 – Payroll Cost Base 2011-2015. I note section 5 of this Agreement does not provide for Dispute Resolution to the Joint Industrial Council for binding Determination.
I note that issues were submitted to the joint Industrial Council who issued its binding Determination on the 19th of March 2013…….
In accordance with Section 6 (2) of the Act I declare the complaints by the Eight Claimants are not well founded. The deductions arose from a Binding Determination of the Joint Industrial Council of the (respondent named), which is a component part of the Collective Bargaining Process agreed between the Company and the Group of Unions.”
The appellants appealed this decision to the Employment Appeals Tribunal on the 28th August 2015.
At the hearing before the Employment Appals Tribunal two named appellants and the Human Resources Manager, who was summonsed to attend by the appellants, gave sworn evidence of behalf of the appellants. The respondent did not adduce sworn evidence in the matter. Both representatives gave detailed submissions.
Determination:
The Tribunal have carefully considered the evidence adduced over the two day hearing, the documentation submitted and the legal argument made.
In 2010/2012 GT, were commissioned to carry out a payroll survey across the entire company. Following that survey GT concluded that a substantial payroll saving needed to be attained to ensure ongoing profitability. The company and the group of unions entered to talks which said talks lead to the Payroll Costs Base Agreement 2011/2015. Within the agreement it specifically stated:
“ In the event that the overall target in any one year has not been met, a further payroll adjustment will be applied.”
The methodology for determining how those savings would be made were set out in the section “ Interlock Mechanism”. The interlock process was the subject of submissions by the respondent and the Group of Union to the Joint Industrial Council. The JIC made a binding determination on the 19 March, 2013. They determined that the interlock will apply to ‘All ESB parent company staff who were part of the SEM Generation business on the 31st December, 2012.’ The Joint Industrial Council determined that ‘the interlock should require employees contribution, taking into account of contributions already made, to be brought to the following levels:
Persons total interlock reckonable earnings level*
Contribution as a % of total interlock reckonable earnings
€50,000 to €79,999 11%
€80,000 to €99,999 13%
€100,000 to €129,999 15%
€130,000 + 17%”
In evidence the complainant stated that he was unaware of the potential consequences of ‘Interlock’. The consequence should have been made clear to all staff member who potentially could have been affected by it. From the documentation submitted it is not sufficiently clear. However, that failure, whether it lies at the feet of the respondent of the group of union does not affect the validity of the agreement. The Tribunal is satisfied that the appellants are bound by the collective agreement.
The appeals fail.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)