1.Methodology Used In Loss Of Pay Calculations Arising From LCR21438
2. A bespoke solution is now required which would compensate workers who did not benefit as much as they believe they should have under the company’s calculation methodology and which would not penalise workers who had actually received more compensation than they would have on a ‘straight line’ methodology.
3. While rest day working behaviours of drivers post implementation of the 2017 agreement was a factor in losses suffered driver fatigue and related matters impacted drivers’ capacity to work on rest days
2. The lack of comprehensive consultation in advance of deciding the methodology for calculation of losses is acknowledged as a contributory factor in this dispute.
3. It is not accepted that the nature of the 2017 agreement impacts on drivers’ capacity to work rest days.
This matter arises from the parties’ acceptance of Labour Court Recommendation number 21438 which issued in April 2017. That Recommendation set out a range of operational and work practice changes and addressed the matter of potential losses of earnings in the following manner:
Loss of Earnings
Loss of earnings, if and when they occur, will be assessed in 12 months. Loss of earnings will be based on average earnings over the previous three years and compensation of 12 months the loss will be paid. Payment will be made upon completion of the assessment subject only to the ability of the company to pay at that time. In the event of an inability to pay at that time, it is understood that payment will be made at the point where the company has the ability to pay.
The parties did not engage on the issue of methodology for implementation of this element of the 2017 Recommendation prior to calculation of losses for the purpose of compensation. Compensation in the amount of €1.6m was nonetheless paid to 600 drivers in 2018. The dispute before the Court was referred to the Workplace Relations Commission in March 2020.
The company employed a calculation methodology which it calls ‘daily average earnings’ to establish the level of compensation to be paid to each driver. Essentially the company calculated the average daily rate paid per day worked to the driver over the three years prior to the date of LCR 21438 and compared that with the average daily rate paid in the 12 months after implementation of LCR21438 and compensated in respect of the difference. This methodology was submitted by the Company to be fairer and to be more reflective of the losses suffered by drivers as a result of implementation of LCR21438 rather than any other factor and was based on the amount of time actually spent working in the refence periods. This methodology removed any possible negative impact during the reference periods of industrial action or periods of illness and took fair account of rest day working by the driver.
The Trade Unions contend that the company should have calculated losses based on a straightforward calculation of average P60 values in the three years prior to LCR 21438 versus the P60 value in the year following, adjusted to discount periods of sickness.
There is no dispute that if the Trade Union claim was conceded at this point 333 drivers who received compensation payments arising from the implementation of LCR 21438 in the manner applied by the company would not be entitled to compensation if the methodology proposed by the Trade Unions were to be retrospectively applied. A retrospective application of the calculation methodology would consequently raise overpayment issues for these drivers.
It appears clear that the fundamental difference between the parties relates to patterns of rest day working after implementation of LCR21438. There does not appear to be a dispute that the level of rest day working available for drivers after implementation was at least equal to that which was available prior to implementation. However, while some drivers continued to avail of rest day working other drivers who had previously taken up rest day working opportunities reduced or eliminated their take up of such opportunities following implementation. The Court established at its hearing that this change in behaviour was the key matter underpinning the fact that certain drivers received less compensation than they feel they should have received arising from implementation of LCR 21438.
The Trade Unions submitted that the reason certain drivers reduced or ceased their take up of rest day working was that the working arrangements implemented following acceptance of LCR21438 were onerous to the degree that they were not able to take up such opportunities for health and safety, regulatory and fatigue reasons. In addition, drivers placed more value on work life balance in the period. The Company does not accept that these factors impacted upon the capacity of drivers to take up rest day working opportunities.
The Court notes that all parties agree that an arrangement which resulted in overpayment issues arising for 333 drivers would be ‘an industrial relations nightmare’. The Trade Unions proposed to the Court that a ‘bespoke’ arrangement should be devised an implemented so as to achieve the concession of the claim. No party was able to set out to the Court what such a ‘bespoke arrangement’ might look like or how it could be constructed so as to avoid an ‘industrial relations nightmare’.
The Court believe that the failure to consult effectively in advance of implementation of compensation calculation arrangements is a significant factor in the current dispute. The Court however is now asked to address a claim referred to the Workplace Relations Commission some two years after implementation of compensation arrangements and to retrospectively adjust the arrangements applied in 2018 to compensate 600 drivers at that time.
In all of the circumstances, the Court can find no reasonable basis to recommend in favour of the Trade Union claim. In the view of the Court the arrangement implemented by the Company fairly compensated drivers for losses suffered as a direct result of the implementation of LCR 21248. Other losses which might have arisen from a change in driver behaviour for whatever reason were not compensated and at this remove there can be no practical basis for a revision of that approach.
The Court does not recommend concession of the claim.
The Court so recommends.