Compulsory Bargaining
Cases
Johnson Matthey v SIPTU
LCR18387
SUBJECT:
1. Referral from the Labour Relations Commission under the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
RECOMMENDATION:
The dispute was referred to the Court pursuant to Section 2(1) of the Industrial Relations (Amendment) Act, 2001 as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004 (the Acts), following the failure of the parties to reach agreement in relation to the matters at issue at the Labour Relations Commission under the enhanced Code of Practice on Voluntary Dispute Resolution (S.I. 76 of 2004).
The Court is satisfied that the conditions specified at Section 2(1)(a) to 2(1)(d) of the Acts were fulfilled in this case and that the dispute was properly before the Court for investigation and recommendation.
The Court has taken careful account of the submissions of the parties in their written and oral presentations. Section 5(2) of the Act provides that a recommendation made by the Court shall not provide for arrangements for collective bargaining. Subject only to that restriction the Court is required to give its opinion on the matter under investigation and, where appropriate, its view as to the action, which should be taken, having regard to the terms and conditions of employment, in the employment concerned.
In response to the Union’s claims, the Company contends that the Court, under Section 5(2), must have regard to the conditions of employment, which it provides, and when viewed in their totality, are not out of line with appropriate standards.
The Company, therefore, contends that the intervention of the Court under Section 2(1) of the Industrial Relations (Amendment) Act 2001, as amended, is not warranted. In support of its contention, the Company pointed out that its terms and conditions of employment are very competitive and are comparable to those pertaining in the medical devices and manufacturing industries. The Court notes the commitment given by the Company at the Labour Relations Commission on 13th April, 2005, where it outlined its acceptance of the involvement of a Trade Union representative at disciplinary and / or grievance meetings held to deal with individual employee concerns.
The Court considered it desirable to first consider this aspect of the Company’s response since, if it succeeds on this point, it may be unnecessary to consider in detail the other issues raised in the case.
The Industrial Relations (Amendment) Act 2001, as amended, provides a significant addition to the powers of the Court in industrial relations disputes. In considering the nature of the new powers given to it, and the circumstances in which it is appropriate to invoke them, the Court has stated in recommendation LCR17745 (Bank of Ireland and IBOA) as follows:-
“The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of out industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards”.
As the Court has previously pointed out, such protection is only required and the intervention of the Court justified, where it can be demonstrated that pay or conditions of employment are out of line with accepted standards -GE Healthcare and SIPTU, Recommendation No 18013.In that context regard should be had to terms and conditions applicable to similar categories of workers in analogous employments in which there is collective bargaining.
The Court has been provided with information on the terms and conditions of employment in this Company.
In the present case, the Court cannot see any basis upon which it could conclude that the terms and conditions of employment of those associated with the claim, when viewed in their totality, are out of line with acceptable standards. In consequence, the Court does not consider it appropriate to issue substantive recommendations, under Section 5(1) of the Act, on the claims under investigation.
In respect of the claim regarding disciplinary and grievance procedures, the Court wishes to point out that in the event of a complaint alleging an infringement of the Code of Practice on Grievance and Disciplinary Procedures (S.I. 146 of 2000), such complaint can be addressed pursuant to Section 43(2) of the Industrial Relations Act 1990.”
Bank of Ireland v IBOA
LCR17745
SUBJECT:
1. Union application under the Industrial Relations (Amendment) Act, 2001.
RECOMMENDATION:
This dispute came before the Court by way of an application by IBOA (The Union) pursuant to Section 2(1) of the Industrial Relations (Amendment)Act, 2001.
The Section under which the dispute was referred prescribes a number of conditions which must be fulfilled before the Court can embark upon an investigation of the dispute. Whilst the employer in this case did not raise any issue as to the fulfilment of those conditions, the Court is of the view that there are matters arising in that regard upon which it is appropriate to comment.
The first condition precedent to an investigation is set out in Section 2(1)(a) as follows:
“It is not the practice of the employer to engage in collective bargaining negotiations and the internal disputes resolution procedures (if any) normally used by the parties concerned have failed to resolve the dispute.”
It is the practice of Bank of Ireland Group to engage in collective bargaining negotiations. It does so with the applicant Union and with other Trade Unions in respect of various grades or categories of employees. It is not, however, the practice or the policy of the Bank to engage in collective bargaining negotiations in respect of the management grades whose pay and conditions of employment is the subject matter of this application.
On a literal reading of section 2(1) the Court may only conduct an investigation where it is satisfied that it in not the practice of the employer to engage in collective bargaining negotiations, simplicitor. This may not be in accord with the legislative intent. However it appears to the Court that to read the section as permitting an investigation where it is not the practice of an employer to engage in collective bargaining negotiations with or on behalf of the applicant group, would involve interpreting the section by importing words which it does not contain. On the normal cannons of construction, as they are understood by the Court, such an approach to interpretation is not permissible.
Since this matter was not raised by the employer and was not fully argued at the hearing the Court does not make any finding on this point and wishes to reserve its position to another case in which the point may be relied upon and be fully argued.
With regard to the second limb of paragraph (a) it is noted that Bank of Ireland do have in place a grievance procedure which appears to conform to the provisions of the Code of Practice on Disciplinary and Grievance Procedures (S.I. No. 146 of 2000). There is no evidence that any of the matters now before the Court were processed through that grievance procedure. However, again, this matter was not raised by way of an objection to the Court proceeding with the investigation and the Court merely notes the point at this stage.
Conclusions and Recommendations:
The Court has taken account of the written and oral submissions made by the parties and the additional information received from them following the Court hearing.
In addition to the matters referred to above, this case differs from the generality of cases investigated by the Court under the Act of 2001 in a number of respects. Historically managers employed by the bank were covered by collective bargaining arrangements. This changed on or about 1988 when the Bank introduced new arrangements which involved a form of individual assessment. These arrangements appear to have been accepted by the managers generally. The Union continued to be recognised by the Bank as the representative of its members in management grades in all matters other than in relation to collective bargaining. When a new system of Performance Management and Remuneration System for Managers was introduced the Union were briefed on the new system but were not offered a role in its negotiation.
Thus, this is not a case where an employer is refusing to recognise a trade union per se. Rather, it is the Bank’s position that in keeping with its own policy since 1988 (and the position within the financial services sector generally), the remuneration of its managers is not determined by collective bargaining.
Section 5 of the Act provides that where the Court has investigated a trade dispute under Section 2 it may make a recommendation giving its opinion in the matter and, where appropriate its view as to the action that should be taken having regard to the terms and conditions of employment and to dispute resolution and disciplinary procedures, in the employment concerned. This provision may be contrasted with Section 68 of the Industrial Relations Act 1946, which is the statutory provision under which the Court normally issues recommendations. That section simply provides that the Court may make a recommendation setting forth its opinion on the merits of the dispute and the terms on which it should be settled. It seems clear from the wording of Section 5 that the Court should only deal with the substantive issues raised in the referral under the Act of 2001 where it is satisfied that the circumstances of the case make it appropriate to do so. What those circumstances are must depend on the facts of each case.
Legislative History:
As is well known the Act was enacted to give effect to the report of the High Level Group established under paragraph 9.22 of Partnership 2000 to consider the detailed proposal submitted by ICTU on the recognition of Unions and the right to bargain and the IBEC position on the impact of these proposals. This report reaffirmed the commitment of the Social Partners to the preferred voluntary approach to disputes resolution. Nonetheless the report went on to recommend what it described as an exceptional procedure which could apply where voluntary arrangements are not followed. These procedures are now given statutory effect by the Act of 2001.
The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of our industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards.
Comparison With other Employments.
It is agreed between the parties that the method by which Bank of Ireland Group determines the remuneration of managers is similar to that used by all other financial institutions in the case of comparable grades. In that respect this case can be distinguished from other cases dealt with under the provisions of the 2001 Act in which collective bargaining was either the norm or commonplace in similar employments. In such cases it was considered appropriate for the Court to have regard to rates of pay and other conditions of employment which were determined through collective bargaining within the sector. Such an approach is neither practical nor appropriate in this case. It is, however, noteworthy that the pay movement of the applicant grades over the past number of years has been broadly in line with that of employees of the Bank who are covered by collective bargaining arrangements.
In support of its contention that rates of pay are out of line, the Union have relied upon the salaries paid to managers in one other bank which, they claim, is Bank of Ireland’s closest competitor. For its part the Bank does not accept that the comparisons drawn with that bank are valid. Regardless of the position in that respect the Court is not satisfied that it could reasonably conclude that the remuneration package of the applicant group is out of line with those applicable to comparable grades within the sector generally on the basis of comparison with just one employment. In these circumstances the Court is not satisfied that it is appropriate to make recommendations in relation to the rates of pay of the mangers concerned.
A variety of other issues have been raised by the Union in this referral. Again, unlike other cases investigated by the Court under the 2001 Act, in this case a mechanism exists within the employment itself by which those issues may be addressed by the individuals concerned and they may be represented by their Union in so doing. As earlier observed, the Bank has in place a grievance procedure which conforms to the provisions of the Code of Practice on Disciplinary and Grievance Procedures made pursuant to Section 42 of the Industrial Relations Act, 1990. The Bank have pointed out to the Court that this procedure provides that where a grievance is not resolved during the internal stages an external appeals lies to an independent person. It goes on to point out that in the normal course of events the appeal to an independent person is conducted by a Rights Commissioner acting in a private capacity. It appears that this procedure is in line with the existing agreement between the Union and the employer. It also seems to the Court that all of the issues raised in this referral are capable of being processed through this grievance procedure.
Having regard to all of the circumstances of this case the Court does not consider that a basis exists upon which it could be concluded that the conditions of employment of managers employed by Bank of Ireland Group, taken as a whole, are significantly out of line with appropriate standards. Consequently the Court is does not consider it appropriate to recommend any action in respect of the matters raised by the Union in this referral. It does, however, recommend that where individual grievances exist they should be processed through the appropriate procedures.”
Ryanair -v- The Labour Court
[2007] IESC 6
Supreme Court Geoghegan J.
“The Decision of the Labour Court was dated the 25th January, 2005, the hearing having taken place on the 14th December, 2004. Although I will be indicating points of disagreement with some of its findings the Decision is an impressive document both in terms of its structure and the manner in which the questions are identified. The document does, however, betray an understandable mindset in favour of the way particular expressions are used and particular activities are carried out by trade unions. This is not a correct approach in my view given that the relevant legislation is intended to deal with problems arising in a non-unionised company. It is not in dispute that as a matter of law Ryanair is perfectly entitled not to deal with trade unions nor can a law be passed compelling it to do so. There is an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment. With a view to curing this possible mischief the Industrial Relations Acts, 2001 and 2004 were enacted. Given their purpose they must be given a proportionate and constitutional interpretation so as not unreasonably to encroach on Ryanair’s right to operate a non-unionised company. With those preliminary comments, I will now address the three issues which Ryanair regarded as preliminary issues as to jurisdiction. These are:
1. That there was no trade dispute within the meaning of section 2 of the 2001 Act.
2. That it was the practice of Ryanair to engage in collective bargaining negotiations in respect of the pilots who are party to the trade dispute, if any.
3. That the internal dispute resolution procedures had not failed to resolve the dispute, if any.
…………….
It would appear that a core sentence in the Decision of the Labour Court is the following:
“Ryanair, as its right, will not negotiate with IALPA. It seems axiomatic that if Ryanair do not recognise the only body which the group of employees who were party to the trade dispute wish to represent them, it could not be the practice to engage in collective bargaining negotiations in respect of that group.”
I do not think that this is a correct interpretation of section 2(1)(a). The relevant grade, group or category of employees would seem to be the Dublin pilots. Some or all of them may or may not be members of the union. The company, as is its right, does not negotiate with the union. It claims that it does negotiate with the Dublin pilots viathe ERCs and that in so far as that cannot be done at present, it is only because the pilot representatives have themselves withdrawn. This may or may not be correct but as I see it, it has never been properly investigated by the Labour Court because of the adoption of a different, and in my opinion incorrect approach to what it had to decide. It should have been addressing its mind to whether there were in place adequate collective negotiation procedures (giving an ordinary meaning to that expression) within Ryanair. If the view that I take prevails, the Labour Court will still have to determine these questions.
In taking the view which it did take it would appear from the Decision that the Labour Court was influenced by the provisions of section 6 of the Trade Union Act, 1941, as amended. Section 6(1) of the 1941 Act reads as follows:
“It shall not be lawful for any body of persons, not being an excepted body, to carry on negotiations for the fixing of wages or other conditions of employment unless such body is the holder of a negotiations licence.”
Having cited this subsection, the Labour Court goes on to observe that it must be assumed that the reference to collective bargaining negotiations in the 2001 Act is not intended to comprehend collective bargaining unlawfully conducted. The court points out however, that Ryanair contended that pilots as a category constitute an “excepted body”. The union on the other hand argued that there was no excepted body representing pilots which could lawfully negotiate with Ryanair.
“Excepted body” is defined by section 6(3)(h) of the Trade Union Act, 1941 (as inserted by section 2 of the Trade Union Act, 1942) as follows:
“A body all the members of which are employed by the same employer and which carries on negotiations for the fixing of wages or other conditions of employment of its own members (but no other employees).”
If it can be demonstrated that the ERC is an instrument in place whereby pilots may enter into collective bargaining negotiations with Ryanair then it must surely be an excepted body. The argument against this and which was accepted by the Labour Court is based on the decision of this court in Iarnród Éireann v. Holbrooke cited above. The Labour Court has, in particular, relied on a passage from the judgment of Fennelly J. speaking for this court.
“At this point it is important to note that the definition of an excepted body is one which ‘carries on negotiations for fixing wages …’ (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. No argument based on this point was advanced by the respondents, though it was raised by the court during the hearing. The court must, nonetheless, interpret the statute in what it conceives to be the manner required by law and cannot adopt an erroneous interpretation because none of the parties relies upon the correct one.
As I see it, the issue is whether a body can claim that it ‘carries on negotiations’ (noting the use of the present tense) where patently it does not and cannot do so because the employer refuses to negotiate.”
The Labour Court concluded from the judgment of Fennelly J. and in particular that passage that a body of persons can only be an exempted body if the employer consents to negotiate with the body. That, of course, is perfectly correct. But the court then went on to hold that “by parity of reasoning” if an employer wishes to negotiate with a group of its own staff rather than through a trade union but the employees are unwilling to negotiate on that basis they cannot be regarded as an excepted body. Not only do I believe that this interpretation does not follow but I believe it to be incorrect. That decision is relevant only to the situation where an employer refuses to negotiate. It is not relevant to a situation where a particular category of employees is unwilling to avail of internal machinery for negotiation within a non-unionised company where the machinery is fair and reasonable and there is no unreasonableness on the part of the company. It is important to consider the purpose of section 6 of the 1941 Act, as amended. Fennelly J. had this to say at p. 245 of the report:
“The learned trial judge was undoubtedly correct, however, in stating that the object of the section was to relieve the hardship that would arise if employees of small firms were deprived of the benefit of trade union representation in carrying on negotiations. I would go further. Trade union membership is not compulsory and, although the court was not addressed on the constitutional implications of the interpretation of the section, it can hardly be doubted that it cannot be made so by law. Even at a practical level, if an employer and its workers agreed to exclude union representation, it would be extraordinary if it were illegal for a staff committee to enter into consensual negotiations with the employer.”
Fennelly J., however, then went on to point out that the employees could not be said to be carrying on negotiations for the fixing of the wages where the employer refused to negotiate. As I read his judgment what Fennelly J. had in mind was that the statutory permission given to excepted bodies to negotiate by virtue of the amendment in the 1942 Act was designed to assist employees in small companies. For one reason or another and possibly the financial implications, the employees in a small firm might want to be able legally to negotiate with their employer rather than join a registered trade union. In many instances they might be persuaded by their employer not to join a trade union. The 1941 Act had omitted to provide for the employee counterpart of the employer conducting negotiations in-house. It was considered desirable that employee bodies “be not left exposed while employers were covered by an exception”. But under the scheme of the Acts as Fennelly J. pointed out “the activity is implicitly consensual”. The purpose of the 1942 amendment was to deal with a situation where both employer and employees in a small firm wanted to negotiate terms and conditions in a situation where the employees would not be acting illegally for not having a negotiation licence under the 1941 Act. This element of consensus is not in any way of the essence of the legislation with which this appeal is primarily concerned. What is required under these statutory provisions is that the employer has in place an appropriate system.
The interpretation which I have placed on the legislation to the effect that the employer must have in place an appropriate internal system of collective negotiations is not admittedly a literal interpretation. In fairness to the Labour Court, it is the normal rule that legislation must be interpreted according to the words used but if a literal interpretation would potentially destroy the whole purpose of the legislation as would be the case here then it is appropriate that a purposive interpretation be applied. Ryanair may be right or wrong in perceiving the steps which have been taken by the pilots as effectively an attempt to force Ryanair to deal with the trade union. It would be especially important where that potentiality at least might exist and might indeed involve an element of unconstitutionality that a purposive interpretation be applied”.
Fennelly J.
“I fully agree with the judgment that has been delivered by Geoghegan J. I write only to explain that I also am of opinion that the Labour Court has misunderstood part of the reasoning in my judgment in Iarnród Éireann v. Holbrooke [2001] 1 IR 237.
The Labour Court relied on this judgment as an alternative to its principal conclusion that it is not the practice of Ryanair to engage in collective bargaining negotiations in respect of the relevant grade, group or category of workers. What it said was that, even if it was the practice of Ryanair to engage in such collective bargaining negotiations, it, the Labour Court, “would hold that any such body could not lawfully do so in respect of the group of pilots who are party to the instant dispute.”
It must first be recalled that what the Labour Court had to be satisfied of was that:
“it [was] not the practice of the employer to engage in collective bargaining negotiations in respect of the relevant grade, group or category of workers who are parties to the trade dispute…”
The Labour Court cited the following passage from my judgment in Iarnród Éireann v. Holbrooke:
“At this point it is important to note that the definition of an excepted body is one which ‘carries on negotiations for fixing wages …’ (my emphasis), whereas, as in this case, it cannot actually carry on such negotiations where the employer refuses to negotiate. ………
As I see it, the issue is whether a body can claim that it ‘carries on negotiations’ (noting the use of the present tense) where patently it does not and cannot do so because the employer refuses to negotiate.”
Patently, the employer in the present case has not stated that it refuses to negotiate and the Labour Court does not claim that it has. However, its decision says:
“It is clear from this judgment that a body of persons can only be an excepted body if the employer consents to negotiate with the body. By parity of reasoning, if an employer wishes to negotiate with a group of its own staff rather than through a trade union, but the employees are unwilling to negotiate on that basis, they cannot be an excepted body.”
Those statements are not justified by the cited passages in my judgment in Iarnród Éireann v. Holbrooke. As I explained at page 245 of the judgment, “the legislative intent was to relieve against the obvious hardship which would have resulted from depriving employees in small firms of the right to negotiate directly their pay and conditions of work with their employer.” Without the provision for “excepted bodies,” it would have been unlawful for a group of employees to negotiate with their own employer. The first sentence in the quoted passage from the Labour Court decision is puzzling. A body cannot be excepted unless it negotiates. It cannot negotiate with the employer without the latter’s consent. The second sentence seems to be to the same effect. But I do not see how either sentence justifies the conclusion reached by the Labour Court that “any such body [apparently an excepted body of pilots] could not lawfully do so in respect of the group of pilots who are party to the instant dispute.” This, with respect, is circular reasoning. If any group of pilots is willing to negotiate with Ryanair, it being accepted that Ryanair is willing to negotiate, it follows that that group is an excepted body. Thus, there would be no illegality.
To be fair to the labour Court, I should cite the intervening passage, from which it appears to deduce this conclusion. It is as follows:
“If…… there is an excepted body comprising pilots employed by Ryanair, membership of the body could only be voluntary and could not extend to those who do not wish to be members. It seems equally clear from the plain wording of Section 6(3)(h) of the Trade Union Act, 1941 that such an excepted body could only lawfully negotiate on behalf of its own members and no other employees. On the uncontradicted submission of IALPA those pilots which it represents do not wish to be represented in negotiations with their employer other than by their trade union. On that account they could not be realistically described as members of an excepted body constituted for the purpose of negotiating directly with Ryanair and any such body could not lawfully engage in collective bargaining on their behalf.”
Again, this passage seems open to the charge of circularity. I leave aside the question of the sufficiency of evidence, which has been dealt with in the judgment of Geoghegan J. The Labour Court uses the unwillingness of those pilots who are members of IALPA to negotiate directly, in order to reach the conclusion that it would be unlawful for Ryanair “to engage in collective bargaining negotiations…” It does so in reliance on the pilots’ wish to be represented by a trade union, when Ryanair’s acknowledged policy is not to negotiate with a trade union. The essential step in the reasoning is the statement that the pilots “could not be realistically described as members of an excepted body…” But the question before the Labour Court was whether it was the practice of Ryanair to engage in collective bargaining. The conclusion of the Labour Court would implicitly oblige the company to negotiate with a trade union. Even though it says it is willing to engage in collective bargaining, it is said that it could not lawfully do so, because the employees do not consent.
Iarnród Éireann v. Holbrooke involved an attempt by a group of employees to compel their employer to negotiate with them and/or a Trade Union which did not have a negotiating licence. The employer refused. In the present case the employer has refused to negotiate with a trade union but maintains that it is willing to negotiate with the employees.”
LCR21242
FRESHWAYS FOOD COMPANY v SIPTU
Ashford Castle Limited v Services Industrial Professional Technical Union
[2006] IEHC 201 (21 June 2006)
JUDGMENT of Mr. Justice Clarke delivered 21st June, 2006.
1. Introduction
1.1 The defendant (“SIPTU”) represents a significant number of employees who work at Cong, Co. Mayo for the plaintiff (“Ashford Castle”) in the five star hotel of the same name. Ashford Castle does not negotiate collectively with its employees but instead determines pay on an individual basis by agreement with each member of staff. Over a number of years grievances have been expressed by staff in relation to terms and conditions, which grievances which were ultimately referred to the Labour Court.
1.2 It will be necessary to set out the statutory regime within which the Labour Court considered the matter in due course. However in simple terms the court, in accordance with that statutory regime, made a non-binding recommendation on 22nd July, 2004. That recommendation was followed by a binding determination (No. DIR 051) dated 14th January, 2005. That determination was made under s. 6 of the Industrial Relations (Amendment) Act 2001 (“the Act”) and therefore is, by virtue of s. 11 of the Act, open to an appeal to this court by either party “on a point of law”.
1.3 The proceedings which I have to decide are, therefore, an appeal on a point of law by Ashford Castle against the determination of the Labour Court. It should also be noted that while the issues which were originally canvassed before the Labour Court related to a range of aspects of the terms and conditions of the employees concerned, the only matter remaining at issue at this stage concerns rates of pay.
2. The Statutory Scheme
2.1 The statutory framework within which the determination of the Labour Court was made is both recent and involves, at least in some respects, a significant new jurisdiction. It, therefore, is appropriate to commence by analysing that statutory scheme.
2.2 The first relevant provision is s. 2 of the Act which governs the circumstances in which the other provisions of the Act arise. Section 2(1) of the Act, as amended by s. 2 of the Industrial Relations (Miscellaneous Provisions) Act 2004 (“the 2004 Act”), provides as follows:-
“Notwithstanding anything contained in the Industrial Relations Act, 1946 to 1990, at the request of a trade union or expected body, the Court may investigate a trade dispute where the Court is satisfied that –
(a) it is not the practice of the employer to engage in collective bargaining or negotiations in respect of the grade, group or category or workers, who are party to the trade dispute and the internal dispute resolution procedures (if any) normally used by the parties concerned have failed to resolve the dispute,
(b) either,
(i) the employer has failed to observe –
(I) a provision of the Code of Practice on Voluntary Dispute Resolution under section 42 of the Industrial Relations Act 1990 specifying the time for the doing of any thing (or such a provision of any code of practice amending or replacing that code), or
(II) any agreement by the parties extending that period of time,
or
(ii) the dispute having referred to the Commission for resolution in accordance with the provisions of the such code, no further efforts on the part of the Commission will, in the opinion of the Commission, advance the resolution of the dispute and the Court has received a report from the Commission to that effect,
(c) the trade union or the expected body or the employees, as the case may be, have not acted in a manner which, in the opinion of the Court, has frustrated the employer in observing a provision of such code of practice, and
(d) the trade union or the expected body or the employees, as the case may be, have not had recourse to industrial action after the dispute in question was referred to the Commission in accordance with the provisions of such code of practice.”
For the purposes of the Act the “Court” is the Labour Court.
2.3 Thereafter s. 5 of the Act empowers the Labour Court, having investigated a trade dispute under s. 2, to make a recommendation:-
“… giving its opinion on the matter and, where appropriate, its view as to the action that should be taken having regard to terms and conditions of employment, and to dispute resolution and disciplinary procedures, in the employment concerned”.
2.4 Where a recommendation under s. 5 does not resolve the dispute, s. 6 of the Act provides:-
“(1) Where in the opinion of the Court, a dispute that is the subject of a recommendation under Section 5 has not been resolved, the Court may, at the request of a trade union or excepted body and following a review of all relevant matters, make a determination.
(2) A determination under subsection (1) may have regard to terms and conditions of employment, and to dispute resolution and disciplinary procedures, in the employment concerned but shall not provide for arrangements for collective bargaining.
(3) A determination under subsection (1) shall be in the same terms as a recommendation under section 5 except where –
(a) the court has agreed a variation with the parties, or
(b) the court has decided that the recommendation concerned or a part of that recommendation was grounded on sound or incomplete information”.
2.5 It should also be noted that s. 9 of the Act provides for a review of a determination on the application of either party. Section 9 provides for the vacation of the determination in circumstances where the dispute as originally referred has been resolved or its affirmation where, in the opinion of the court, the dispute has not been resolved.
Section 9(c) provides that the court may:-
“vary the terms of the determination and the order giving effect to the determination where –
(i) the court agrees such variation with the parties, or
(ii) the court is satisfied that the determination or a part of the determination was grounded on unsound or incomplete information”.
2.6 Finally s. 10, as amended by s. 4 of the 2004 Act, provides as follows:-
“(1) Where an employer fails to comply with the terms of a determination under section 6 within the period specified in the determination for those terms to be complied with (or, if no such period is so specified, as soon as may be after the determination is communicated to the parties) a trade union or expected body may make an application under this section to the Circuit Court for an order under subsection (2).
(2) On application being made to it in that behalf, the Circuit Court, shall, without hearing the employer or any evidence (other than in relation to the matters referred to in subsection (1) make an order directing the employer to carry out the determination in accordance with its terms.”
2.7 It will, therefore, be seen that the section introduces a new and important measure into the industrial relations legislation in this jurisdiction. It provides for a mechanism whereby determinations of the Labour Court as to pay and conditions can, in certain circumstances, become legally enforceable. Therefore, ultimately, the Circuit Court can make an order under s. 10 which has the effect of making it mandatory on the employer concerned to carry out the terms of a determination or review of the Labour Court, made in accordance with the statutory scheme.
2.8 As will also be seen, the essential elements of that statutory scheme are:-
(a) The scheme only applies in circumstances where there is no collective bargaining. The only reasonable inference to draw from that provision is that the intention of the Oireachtas was to confer upon employees who did not have the benefit of collective bargaining, a means of attempting to achieve terms and conditions comparable to those who had the benefit of collective bargaining. It is clear that the statutory scheme does not impose collective bargaining on an employer (s. 6(2) expressly excludes from the competence of the Labour Court an entitlement to include a provision for collective bargaining in a determination). It is, therefore, clear that an employer is entitled to maintain a position of not engaging in collective bargaining. However where an employer does so determine, that employer is exposed to the possibility of industrial disputes arising being determined in a mandatory fashion by the Labour Court, with enforcement of any such determination by the Circuit Court.
(b) The scheme is designed to minimise the risk of industrial action. Section 2(1)(d) excludes from the benefits of the scheme, any employees who have recourse to industrial action after an initial reference of any dispute to the Labour Relations Commission in accordance with the code of practice referred to in s. 2(1)(b). This provision must be seen in the light of the provision noted at (a) above. To give rise to the jurisdiction an employer must decline to engage in collective bargaining and the employees concerned must refrain from industrial action.
(c) The statutory scheme involves at least a two stage process with a non binding recommendation under s. 5(1) being the first stage. If, as a result of such a recommendation, the dispute is not resolved, the Labour Court then has an entitlement to make a determination under s. 6. Thereafter the possibility of a third stage, whereby a review under s. 9 may be engaged in, also arises. It is clear that both in a consideration of whether to issue a determination, or in a review, the Labour Court has a discretion to vary the original recommendation where it is satisfied that the recommendation or a relevant part thereof “was grounded on unsound or incomplete information” (see s. 6(3)(b) in respect of a determination and s. 9(c)(ii) in respect of a review).
2.9 In the context of that statutory scheme it is now necessary to turn to the dispute that arose this case.
3. The Dispute
3.1 The original grievances giving rise to the dispute considered by the Labour Court involved six separate issues namely:-
(a) the operation of service charges,
(b) improvements in basic rates of pay;
(c) improvements in pension schemes;
(d) introduction of a sick pay scheme;
(e) commission for boutique workers; and
(f) clarification of the operation of grievance procedures.
3.2 It will be necessary to specify in some more detail the precise process followed with particular reference to the issue remaining before this court (that is the provision for minimum rates of pay) in due course. While there was, initially, an issue as to whether the necessary prerequisites for the existence of the jurisdiction of the Labour Court existed (i.e. that s. 2 of the Act was satisfied) the Labour Court was satisfied that the relevant conditions were met and no challenge to that decision is now made. I must, therefore, operate on the assumption that each of the requirements set out in s. 2 of the Act was met in this case. It is also important to note that the Labour Court engaged in a consideration of each of the issues referred to it. The Labour Court issued an interim recommendation (LCR 17760) dealing with disciplinary and grievance procedures. Thereafter on 22nd July 2004 the Labour Court made recommendations in respect of each of the other issues including recommendations in respect of rates of pay to which I will return. Thereafter correspondence followed seeking clarification of the recommendation. By letter dated 19th October, 2004 SIPTU requested the court to make a determination under s. 6(1) of the Act. It was accepted that the dispute which had been the subject of the investigation under s. 2 and the recommendation under s. 5, had not been resolved. The Labour Court, having received further submissions from both sides, issued its determination on the 14th January 2005. Some further correspondence concerning interpretation followed.
3.3 While the only issue which remains for consideration by this court is the question of the determination insofar as it relates to rates of pay, it is appropriate to note that separate aspects of the terms and conditions of any employee have, in a general sense, the capacity to affect each other. The overall terms and conditions (including pay) of any employee form a package of arrangements which have, at least to some extent, the capacity to interact with each other. Thus, for example and in particular, those aspects of the terms and conditions which relate to the financial rewards for work done, have a particular capacity to form a single package. A generous pension scheme, for example, can and may well require to be taken into account in assessing rates of pay.
3.4 In that context it is of particular relevance to note that issues relating to tipping/service charges have the capacity to play an important role in the overall financial package which employees in certain sectors may benefit from. While the specific issues which arose in respect of tipping/service charge are no longer, in themselves, part of the dispute so far as this court is concerned, it will be necessary to refer to certain aspects of the issues which arose under that heading insofar as it might reasonably be said to have impacted upon the determination of the Labour Court in relation to basic rates of pay. In that context I now turn to the course of the process before the Labour Court insofar as it related to rates of pay and, for the reasons which I have indicated, matters which might be said to impact upon rates of pay.
4. Rates of Pay
4.1 I will deal with the specific submissions made by the parties to the Labour Court on the pay issue in the context of the grounds of appeal to which I will turn in due course. Before dealing with the recommendation and determination of the Labour Court in regard to pay, some preliminary matters need to be stated. Firstly, as will be apparent, both parties filed detailed submissions and included within their submissions examples of what were contended to be comparable rates of pay in other hotels.
4.2 In considering and analysing the evidence put forward it is necessary to have regard to a number of distinguishing features which are relevant to any such comparison.
4.3 Particular reliance is placed by SIPTU on comparisons with hotels in respect of which collective bargaining arrangements were in place. Having regard to what I have identified as a clear policy in the legislation of seeking to afford additional rights to employees who did not have the benefit of collective bargaining, it does seem to me that it was legitimate for SIPTU to urge that particular weight should be attached by the Labour Court to comparisons with employees’ pay rates where the pay rates concerned were in comparable hotels and had been arrived at as a result of a collective bargaining process. The precise weight to be attached to such comparisons (in distinction from other comparisons) was a matter for the Labour Court but it was clearly open to the Labour Court to pay particular attention to comparators which came from hotels of a similar nature where the terms and conditions of employees in those hotels had been fixed by collective bargaining.
4.4 Secondly it is clear from all of the materials and submissions put before the Labour Court that the practice and policy of a hotel in relation to service charges and tipping had the potential to affect the overall financial rewards which employees might obtain. It would appear from those materials that some hotels apply a service charge and some do not. It would also appear to have been contended on behalf of SIPTU (and it would appear to be a logical inference to draw) that the likelihood of customers paying tips above and beyond the amount actually billed would, at least in part, be influenced by whether customers believed that they were already paying a service charge which would be passed on to employees. In the event that customers did not feel that they were paying a service charge then it was likely that tips (whether paid directly to the employee concerned or by an addition to the bill) would be larger than in cases where the customer felt that he or she was already making a contribution to the service staff by means of a service charge.
4.5 For that reason SIPTU placed particular emphasis on the need to have regard to the service charge/tipping policy of a hotel when engaging in a comparison between the pay rates applicable.
4.6 The process before the Labour Court followed the following chronology (which I have taken from the written submissions filed on behalf of SIPTU and which, it seems to me, is fully supported by the evidence).
Chronology of Material Events
7th July 2003 Initiation of claim by Respondents
20th October 2003 Written Submission of Appellant
22nd October 2003 Written Submission of Respondent
22nd October 2003 Preliminary Hearing by Labour Court
19th November 2003 Decision of Labour Court NO. DECP032
18th February 2004 Written Submission of Respondent
18th February 2004 Written Submission of Appellant
18th February 2004 Substantive Hearing by Labour Court
20th February 2004 Additional Written Submission of Appellant
23rd February 2004 Interim Recommendation by Labour Court NO. 17760
14th April 2004 Additional Written Submission of Respondent
7th July 2004 Additional Written Submission of Appellant
7th July 2004 Substantive Hearing by Labour Court
22nd July 2004 Recommendation by Labour Court NO. 17914
August 2004 Request by Appellant for Clarification
19th August 2004 Respondent’s submission on Recommendation
1st September 2004 Clarification by Labour Court
19th October 2004 Respondent’s request for Determination
14th December 2004 Written Submission of Appellant
14th December 2004 Written Submission of Respondent
14th December 2004 Hearing by Labour Court on Determination
14th January 2005 Determination by Labour Court, NO. DIR051
26th January 2005 Appellant’s request for Clarification
16th March 2005 Clarification by Labour Court
4.7 Insofar as relating to pay the original recommendation of the Labour Court of 22nd July 2004 stated the following:-
“In support of its claim the Union submitted information on rates of pay and conditions of employment in a number of hotels, which were fixed by collective bargaining. The Employer supplied information obtained from a comprehensive survey of pay and conditions of employment in comparable five star hotels. This information was provided to the Court and to the other party to the dispute on a confidential basis and the Court requested that it be used only for the purposes of this investigation …. Having considered all the information with which it was provided the court recommends as follows:
Rates of pay
The rates of pay set out in the schedule to this recommendation should apply to the categories covered by the union’s claim and detailed in its submission of 18th February 2004.
All rates are expressed in Euros per 39 hour week and are inclusive of live-in/live-out allowances as stipulated by the Minimum Wage Act 2002. They are also inclusive of the payment derived from one point of the service charge in the case of those categories to which service charge is applicable. The rates are in respect of the basic grade in question and apply to staff who are trained and qualified in the duties of the grade. They are not applicable to trainees or those having extra responsibilities. Where individuals have rates higher than those recommended, the difference should be retained on a personal to holder basis”.
There followed a schedule in the following form setting out the rates of pay applicable to each category specified.
Receptionist : €350 pw.
Day Porter: €372 pw.
Night Porter: €411 pw.
Housekeeping Assistant: €372 pr.
Linen Porter: €372 pw.
Bartender: €450 pw.
Still Room Assistant: €337 pw.
Wash up Assistant: €337 pw.
Waiter/Waitress: €450 pw.
Chef: €450 pw.
4.8 When approaching the issue of pay in the determination of the Labour Court of the 14th January 2005 the court said the following:-
“In the course of its investigation of this dispute both parties provided the Court with comprehensive information concerning rates of pay and other conditions applicable to comparable grades of staff in similar employment. The court had full and careful regard to all of the information with which it was provided. In formulating its recommendation under s. 5 the court considered it appropriate, in the circumstances of the case, to have particular regard to rates of pay and other conditions of employment established by collective bargaining in establishments providing a broadly similar level of service to customers, and apply to staff having levels of skill and experience similar to those expected of the workers associated with the present claims”.
4.9 On that basis the Court was not satisfied that its recommendations were based on “unsound or incomplete information” so as to trigger a variation under s. 6(3)(b).
4.10 The court then proceeded to make a determination in accordance with the terms of its earlier recommendation. In order to understand the determination it is necessary to explain the reference to “one point of the service charge”. It was common case that the system operated by Ashford Castle gave employees an entitlement to a guaranteed rate of service charge payment. Therefore, irrespective of the amount of service charges actually collected within the hotel as a whole, those employees who were entitled to participate in receiving funds in respect of service charge were given a guarantee of a certain amount of money dependent on the number of points on a scale which the employee concerned had. The recommendation (and ultimately the determination) of the Labour Court had the effect of incorporating the first point on such scale into the minimum pay of the employee. It is clear, therefore, that those employees who were entitled to more than one point on the scale remained entitled to receive, in addition to their minimum pay, a guaranteed service charge payment based on the number of points, less one, which that employee had on the scale.
4.11 It is also relevant to these proceedings to note that, in its submissions to the Labour Court at the determination stage, Ashford Castle produced a financial review, supported by PricewaterhouseCoopers, concerning the effects on Ashford Castle of complying with what was then the recommendation of the Labour Court.
4.12 The position of Ashford Castle on this issue was as follows:-
“Ashford Castle struggled to break even in 2003. The forecast for 2004 is only slightly better with the profit dependent on one month’s trading. Also of concern is the fact that there is no immediate end to this trend, even without the recommended increases being applied …
Ashford Castle has reached a crisis point and does not have a future unless profitability can be restored. This problem is made worse by the lack of resources available to carry out much needed refurbishment of the property. Ashford cannot withstand the imposition of additional labour related costs over and above the terms of the national agreements which Ashford Castle has implemented consistently over the last five years as this would have the effect of wiping out what modest profit is currently being forecast. Ashford must be restored to profitability to protect its very existence.”
4.13 In relation to that aspect of the matter the court, in its determination, said the following:-
“The court has had regard to all relevant circumstances and has decided to make a determination in this case. The court has had particular regard to the cost implications for the employer of the determination which follows. However this consideration must be balanced with the entitlement of the workers associated with this claim to rates of pay and other conditions of employment which are fair and reasonable in all the circumstances. In formulating its recommendation under s. 5, and in this determination, the court has balanced both considerations and has sought to produce a result which is fair and equitable to both the employer and the worker”.
4.14 Against that factual background Ashford contends that this court should overturn the determination of the Labour Court in relation to rates of pay on six grounds which are summarised in the written submissions filed on behalf of Ashford Castle. It is suggested that the Labour Court was in error in that it fixed wage rates in the following manner:-
(a) By reference to broad categories and not by reference to the position of workers actually employed by the Plaintiff notwithstanding that the dispute related to those particular workers.
(b) Failed to take into account the actual guaranteed service charge received by workers within the particular categories in respect of which wages were fixed.
(c) Fixed the wages rates for many of the workers within the categories far in excess of the minimum required by the Determination and at a level which by definition was beyond what was required by the fair and reasonable criterion invoked by the Labour Court.
(d) The Labour Court fixed many (though not all) wage rates at levels higher than those requested by the Defendant.
(e) Did not have regard to the surveys and rates of pay in the hotel sector submitted by the Plaintiff comprising 75 hotels not in just in Dublin but all around the country. It appears to have had regard to pay rates in the Herbert Park Hotel and the Conrad Hotel which are described as non-service charge hotels and an unspecified Holiday Inn which is described as a service charge hotel and to pay rates in Great Southern Hotels and Jurys Hotels cited by SIPTU in its letter to the Labour Court of the 14th April 2002.
(f) Required the Plaintiff to pay rates which, on the undisputed evidence, is it is financially unable to pay.
4.15 Before considering the detail of the case made under each heading it is necessary to deal with the basis upon which this court should consider an appeal from a body such as the Labour Court. There is no significant difference between the parties as to the basis upon which an appeal such as this should be considered.
5. The Basis of Appeal
5.1 An appeal on a point of law from an expert tribunal exists in a number of areas of Irish law. In Henry Denny & Sons (Ireland) Limited Trading as Kerry Foods v. Minister for Social Welfare [1998] 1 IR 34 at 37 Hamilton C.J. said the following:-
“ … the courts should be slow to interfere with the decision of expert administrative tribunals. Where the conclusions are based on an identifiable error of law or an unsustainable finding of fact by a tribunal such conclusions must be corrected. Otherwise it should be recognised that tribunals which have been given statutory tasks to perform and exercise their functions, as is now usually the case, with a high degree of expertise and provide coherent and balanced judgments on the evidence and arguments heard by them it should not be necessary for the courts to review their decisions by way of appeal or judicial review”.
5.2 In Orange v. Director of Telecommunications Regulation and Another (No. 1) [2002] 4 I.R. 159 at 184 Keane C.J. quoted with approval a passage from the judgment of the Canadian Supreme Court in Southan v. Director of Investigation and Research (1997) 1 FCR 748 in the following terms:-
“ … (an) appeal from a decision of an expert tribunal is not exactly like an appeal from a decision of a trial court. Presumably if Parliament entrusts a certain matter to a tribunal and not (initially) to the courts, it is because the tribunal enjoys some advantage that the judges do not. For that reason alone review of the decision of a tribunal should often be of a standard more deferential than correctness …
I conclude that the … standard should be whether the decision of the tribunal is unreasonable. This is to be distinguished from the most deferential standard of review which requires courts to consider whether a tribunal’s decision is patently unreasonable. An unreasonable decision is one that, in the main, is not supported by any reasons that can stand up to a somewhat probing examination. Accordingly a court reviewing a conclusion on the reasonableness standard must look to see whether any reasons support it”.
5.3 I agree with the recent summary of the authorities set out by Gilligan J. in Electricity Supply Board v. The Minister for Social Community and Family Affairs and Others (Unreported, High Court, Gilligan J., 26th February, 2006) where, at p. 30, the following is stated:-
“I take the view that the approach of this court to an appeal on a point of law is that findings of primary fact are not to be set aside by this court unless there is no evidence whatsoever to support them. Inferences of fact should not be distributed unless they are such that no reasonable tribunal could arrive at the inference drawn and further if the court is satisfied that the conclusion arrived at adopts a wrong view of the law, then this conclusion should be set aside. I take the view that this court has to be mindful that its own view on the particular decision arrived at is irrelevant. The court is not retrying the issue but merely considering the primary findings of fact and as to whether there was a basis for such findings and as to whether it was open to the appeals officer to arrive at the inferences drawn and adopting a reasonable and coherent view, to arrive at her ultimate decision”.
5.4 Many other decisions (such as Faulkner v. The Minister for Industry and Commerce) (Unreported, High Court, Murphy J., 25th June, 1993) and Brides v. Minister for Agriculture [1998] 4 IR 250) are to a similar effect. Much of the jurisprudence also draws on the celebrated passage from the judgment of Kenny J. in Mara (Inspector of Taxes) v. Hummingbird Limited [1982] ILRM 421 which, while related to the proper approach to an appeal by way of case stated in revenue matters, has been taken to be equally applicable to an appeal on a point of law from a body such as the Labour Court.
5.5 To those authorities I would merely add one further observation. The tasks which administrative bodies are given under statute vary significantly. The issues which have to be decided can be of very different types. At one end of the spectrum are issues which involve the same sort of mixed questions of law and fact with which the courts are frequently faced. A person may, for example, be entitled to a social welfare benefit provided that a certain set of facts, as specified by statute, are found to exist. The issue at a hearing within the social welfare system may well, therefore, turn on whether, as a matter of fact, the necessary qualifying requirements have been established or disqualifying requirements have been shown to exist. In such cases the findings of fact will be very similar to the facts which will be found by a court should a comparable issue arise in judicial proceedings.
5.6 At the other end of the spectrum, expert bodies may be required to bring to bear upon a situation a great deal of their own expertise in relation to matters which involve the exercise of an expert judgment. Bodies charged with, for example, roles in the planning process are required to exercise a judgment as to what might be the proper planning and development of an area. Obviously in coming to such a view the relevant bodies are required to have regard to the matters which the law specifies (such as, for example, a development plan). However a great deal of the expertise of the body will be concerned with exercising a planning judgment independent of questions of disputed fact. In such cases the underlying facts are normally not in dispute. Questions of expert opinion (such as the likely effect of a proposed development) may well be in dispute and may be resolved, in a manner similar to the way in which similar issues would be resolved in the courts, by hearing and, if necessary, testing competing expert evidence. However above and beyond the resolution of any such issue of expert fact, the authority concerned will also have to bring to bear its own expertise on what is the proper planning and development of an area.
5.7 Some of the cases use terminology such as “evidence” and “finding of fact” which are borrowed from the approach of the courts. That terminology is entirely apposite where the issue which the statutory body has to decide is towards the end of the spectrum identified above which most closely approximates to the sort of issues which a court has to determine.
5.8 Where applied to decisions towards the other end of the spectrum, language such as “evidence” and “findings of fact” has, in my view, a capacity to mislead and has to be adapted to reflect the different sort of matters which statutory bodies dealing with issues of that type have to consider. It may, in those circumstances, be more appropriate to talk of “materials” rather than “evidence”. It may also be more appropriate to speak of “conclusions” rather than “findings of fact”.
5.9 Subject to the overriding requirement that any party who may be potentially effected in an adverse way by the result of the process, is entitled to a reasonable opportunity to deal with any factors (to use a neutral term) which may influence the decision, a body may well have an entitlement to place reliance on “materials” which might not be “evidence” in the sense in which that term is used in the courts. This will be particularly the case were the nature of the matter to be determined by the body concerned does not resemble, to any significant extent, a finding of fact (or even a finding of expert fact) in the sense in which the courts use such a term.
5.10 Furthermore such bodies will have to reach conclusions which involve the exercise of their expertise within the statutory framework as a whole. A decision, for example, that a particular project is in accordance with good planning and development is, in my view, better described as a “conclusion” rather than a “finding of fact”.
5.11 In those circumstances it seems to me that the Labour Court, when exercising its role under the Act, is very much towards the end of the spectrum where it is required to bring to bear its own expert view on the overall approach to the issues. It, correctly in my view, identified that its decision must be one which is fair and reasonable to both sides. Precisely what is fair and reasonable in the context of terms and conditions of employment is a matter upon which the Labour Court has great expertise and, in my view, the Labour Court is more than entitled to bring its expertise to bear on the sort of issues which arise in this case.
5.12 For those reasons it does seem to me that a very high degree of deference indeed needs to be applied to decisions which involve the exercise by a statutory body, such as the Labour Court, of an expertise which this court does not have. Similarly in assessing whether a decision could legitimately have been come to by the Labour Court, it is necessary to consider all of the materials which were properly before the court and to identify whether those materials could reasonably have led to the conclusion reached, taking into account the legitimate exercise by the Labour Court of its own expertise in the matter.
5.13 In that context it is necessary to consider the specific manner in which it is alleged that this court should allow the appeal of Ashford Castle against the determination of the Labour Court.
6. The grounds of appeal
6.1 I deal with each of the grounds in turn.
6.2 Ground (a)
Under this heading it is contended that the decision of the Labour Court is defective by virtue of the fact that the determination (and, indeed, the recommendation before it) fixed the minimum rates of pay by reference to certain broad categories of employee rather than by reference to the different rates then applied to those actually employed by Ashford Castle. The factual background to this issue stems from the fact that Ashford Castle, in the course of its submissions to the Labour Court at the recommendation stage, supplied details of the basic pay of each employee. It is clear from the relevant materials that a very large number of different rates of pay applied in respect of those employees. This fact may, indeed, have stemmed from the absence of collective bargaining. However, as will be seen from the terms of the schedule to the recommendation referred to above, that recommendation refers only to ten separate categories of employee. Both the recommendation (and the determination which followed it) and the clarifications which were issued, make it clear that each rate is to be applicable to any fully trained person carrying out a job of the relevant description. Therefore, as a matter of fact, it would appear that the Labour Court made a determination which had the effect of fixing a single minimum rate of pay in respect of all of the employees within a category where different rates of pay had, in fact, existed in respect of different members of the same category.
6.3 It is, however, clear that the Labour Court paid particular regard to the rates of pay presented by SIPTU for comparable hotels in respect of which the employers concerned engaged in collective bargaining. The categorisation of employees by Ashford Castle varied significantly from that applied in each of those comparable employments. In my view it was open to the Labour Court to take the view (which, in terms, it did) that it would place a very heavy weight indeed upon rates of pay negotiated as a result of collective bargaining. In those circumstances I can see nothing wrong with the Labour Court having placed particular reliance on the rates of pay produced by SIPTU in support of its case. Having regard to the fact that those rates of pay could not be married, on a one-to-one basis, with the categories applicable in Ashford Castle, it does not seem to me that there was anything inappropriate in the Labour Court deciding on the overall approach which it did. It should be remembered that the Labour Court was fixing minimum rates of pay. Whether any or all persons within any category should receive higher rates is a matter for negotiation between the individual concerned and Ashford Castle as employer. Insofar as the payment of the minimum rate fixed by the Labour Court would give rise to a reduction in the pay of any individual, then that individual’s former pay was to be retained for as long as he or she should continue in employment. It does not seem to me that it could be said to be in breach of a “fair and reasonable to all sides” approach to the question of pay that same should be fixed by reference to the categories identified in the recommendation and the determination.
6.4 Furthermore, the recommendation and determination expressly exclude persons within any category who have additional responsibilities. If one excludes such persons from the comparable lists of pay submitted in respect of the Conrad Dublin and the Herbert Park Hotel, (being two of the hotels relied on by SIPTU in its submission to the Labour Court) then it is clear that a relatively small number of comparable categories of pay existed in those hotels. For example, under the heading “accommodation” in respect of the Conrad Dublin there are nine separate categories. However, the first three of those categories involve managers and supervisors who undoubtedly carry extra responsibility. The next four categories all receive the same pay and one of the remaining two categories is a trainee grade (which grades are, again, excluded from the Labour Court determination in this case). Thus it will be seen that in the Conrad Dublin, virtually all employees in the housekeeping area who are neither in a management or supervisory role on the one hand or trainees on the other hand, receive the same basic rate of pay.
6.5 In the light of considerations such as those, I am not satisfied that this ground provides any basis for overturning the determination of the Labour Court.
Ground (b)
6.6 Under this heading it is suggested that the Labour Court failed to take into account the actual guaranteed service charge payment to which I have earlier referred. I can see no basis for this contention. It is manifestly clear that the Labour Court was mindful of the guaranteed service charge payment. Indeed the Labour Court specified in the course of its determination that one point of that service charge payment was to be included in the basic rates of pay. It is clear, therefore, that the Labour Court was well aware of the fact that each employee would be entitled, as a result of the implementation of its determination, to receive his or her basic pay together with the guaranteed service charge payment for all but one of the points applicable to that employee. It is necessary, in respect of some of the other grounds of appeal, to consider whether the accumulation of those two matters gives rise to rates of pay which were outside the scope of what could reasonably have been determined by the Labour Court. I will return to that aspect of the guaranteed service charge under that heading. However, it does not seem to me that there is any basis for the narrow suggestion set out at ground (b) to the effect that the guaranteed service charge (and the benefit to be obtained therefrom by a number of employees) was not taken into account.
Grounds (c), (d) and (e)
6.7 Under each of these grounds complaint is made that the overall level of the minimum pay fixed by the determination was, in substance, excessive. This is put in different ways. It is said that the levels exceeded those required by the fair and reasonable criteria adopted by the Labour Court. It is also said that the rates, in many cases, exceeded those sought by SIPTU. Finally, it is said that no regard was had to the surveys on rates of pay in the hotel sector submitted on behalf of Ashford Castle.
6.8 For the reasons which I have indicated above, it seems to me that the Labour Court acted within its discretion in determining that it should pay particular regard to the rates of pay which had been fixed as a result of a collective bargaining process. There is no evidence to suggest that the Labour Court did not, also, have some regard to the other information concerning rates of pay placed before it by Ashford Castle. Indeed, in its determination it says that it had regard to all of the information. In the circumstances it does not seem to me that this Court should attempt to second guess the judgment of the Labour Court as to which comparators it considered to be appropriate and the weight to be attached to same. The only circumstances in which, in my view, a point of law might arise under that heading (that is to say ground (e)) would have been if I were persuaded that the Labour Court was incorrect, as a matter of law, in placing the weight, which it undoubtedly did, on the collective bargaining comparators. For the reasons which I have already set out I am not satisfied that the Labour Court was wrong in law in approaching the matter in that way.
6.9 In respect of ground (d) it should be noted that, in its original submission to the Labour Court, SIPTU sought an increase in basic pay of between 25% and 30% across all non-managerial grades. That increase was specified as being necessary to address what was contended to be a disparity between the rates paid in Ashford Castle and those applicable in what were suggested to be appropriate industry comparators. It was also suggested that such a rate of increase in basic pay was necessary because of the fact (which does not appear to be disputed) that Ashford Castle has not, for an appreciable period, applied the terms of national pay understandings, although it was common case that such increases (in accordance with National Pay Agreements) had been paid for two or three years prior to the matter coming before the Labour Court.
6.10 Counsel for Ashford Castle makes the point that the purpose of the statutory scheme is to resolve disputes. It follows, he argues, that a determination cannot go any further than the parameters of the dispute and is, therefore, confined to the competing positions of the employer and employees concerned. That may well be so. However, the position adopted by SIPTU on behalf of the employees was that an increase in basic pay of 25% to 30% was warranted. I will turn, in early course, to the question of whether it was reasonable for the Labour Court to come to the conclusions which it did as to basic pay. However, it does not seem to me that there is any factual basis for the assertion that the determination exceeded the amounts claimed.
6.11 It may well be that Ashford considered (and continues to consider) that granting an increase of 30% on basic pay while continuing to meet the guaranteed service charge payment at the same time, would amount to an unsustainable and excessive rate of pay in many cases. However, that is not the issue which is raised in ground (d). I cannot see any true factual basis for allowing the appeal on the grounds that the Labour Court went beyond the amounts claimed by SIPTU on behalf of the employees.
6.12 That leads to what is one of the central issues in the case. It is contended that there were no materials upon which the Labour Court could reasonably have concluded that the rates of pay recommended were fair and reasonable. In particular it is said that the rates were significantly above any of the comparators put forward. In this context it is necessary to refer to a schedule exhibited on behalf of Ashford Castle by Niall Rochford as exhibit “NR2” to an affidavit of 25th April, 2005. This schedule sets out a range of materials which, it was argued, were derived solely from the materials before the Labour Court and certain mathematical calculations that could have been made in respect of those materials. Objection was taken to the introduction of the exhibit on behalf of SIPTU. Reliance was placed on Bates –v- Model Bakery [1993] 1 I.R. 359, for the proposition that this Court can only consider materials which were before the Labour Court. Having regard to the contention on the part of Ashford Castle that the exhibit represented only materials which were otherwise before the Labour Court but presented in a convenient fashion, I accepted that the document should be admitted but subject to the entitlement of counsel for SIPTU to argue that any particular aspect of the schedule should be disregarded if it could not be shown to be directly derived from the materials before the Labour Court.
6.13 The merits of SIPTU’s objection to the admission of the exhibit were, in my view, amply demonstrated in the course of the hearing. It was clear that the exhibit contained significantly misleading information. To take but two examples I should refer firstly to the category of junior waiter/ess. As part of an attempt to show that the amounts awarded by the Labour Court in respect of that category of employee exceeded any amounts in respect of which a comparator had been provided by SIPTU, the schedule suggests that the rate applicable to a junior waitress in the Herbert Park Hotel was €339. However, it is clear from the original document produced to the Labour Court on behalf of SIPTU that the rate of €339 is applicable only to waiting staff for the first six months of training. It is therefore abundantly clear that that rate (and indeed the rate of €382.17 attributed in the exhibited schedule to what are described as intermediate waiter/ess) are applicable only to trainees. As was clear from the recommendation and determination of the Labour Court, the rates of pay recommended had no application to trainees. The attempt, therefore, to suggest that there was any comparison between those two rates and the rates recommended in respect of waiter/ess by the Labour Court is wholly unfounded. It has to be said that the inclusion of those matters in the schedule as deposed to on oath by Mr. Rochford is regrettable.
6.14 Furthermore, it could not be said to have been an isolated error. An identical error (although the sums were different) appears in the case of a second example, being bar staff. Similar issues arise in the case of night porters and other categories.
6.15 The exercise also shows the extreme danger of permitting any materials other than those which were before the statutory body in question to be introduced at an appeal. Indeed it provides a strong argument for a return to the procedure advocated by Finlay C.J. in Bates which sought to confine the evidence to an affidavit which exhibited only the materials which were before the body in question and the determination of that body and excluded any additional matter. It does not appear to me to be appropriate for affidavits filed either in support of or against appeals of this type to include any additional materials whether by way of argument or background.
6.16 Finally, before leaving the question of the disputed schedule, it is appropriate, again by way of illustration, to have regard to the calculations in respect of non trainee waiter/ess. In that regard the comparable rate for the Herbert Park Hotel was €424.64. The amount of basic pay recommended in respect of that category by the Labour Court for Ashford Castle was €450 to include one point of the guaranteed service charge payment. It was common case that that one point amounted to a payment of €21.25. In those circumstances the basic pay (exclusive of any service charge payment) in respect of the category was €428.75 (a figure almost identical to that paid in respect of the comparable category in the Herbert Park Hotel). Other examples of a similar variety could be quoted. I am afraid I have to describe the argument put forward by Mr. Rochford in his affidavit (which is designed to suggest that the rates of pay determined by the Labour Court were significantly in excess of those in respect of the SIPTU comparator hotels) as highly contrived and of no merit whatsoever.
6.17 Insofar as it is contended that the rates of pay for comparator purposes should have included the guaranteed service charge payable in respect of Ashford Castle employees, it again seems to me that this argument misses the point. The Herbert Park Hotel is, it is common case, a non service charge hotel. For the reasons indicated above there was a more than ample basis for the Labour Court to conclude that employees in such a hotel would achieve significant sums by way of tips or service charge. On that basis it does not seem to me that there was anything inappropriate in the Labour Court coming to a view as to the appropriate basic rates of pay in Ashford Castle (which, of course, included one point of the guaranteed service charge payment) which were comparable to the basic rates payable in other hotels but which did not have regard to the service charge payments or tips which might be earned in addition to basic pay in either case. It may or may not be that the guaranteed service charge payment in Ashford (including the one point included, where applicable, in the basic rates of pay) maybe less than, broadly equal to, or greater than the tips or service charge payments received by employees in a hotel such as the Herbert Park which does not operate a service charge per se. Whatever maybe the case it does not seem to me that it was outside the discretion of the Labour Court, having regard to its own expertise, to conclude that the basic pay of employees in the broad categories defined by it in respect of Ashford Castle should be comparable to the basic pay (exclusive of whatever tips or other payments might be received) in other comparable establishments such as the Conrad Dublin and the Herbert Park Hotel. On the basis of that factual analysis, it seems to me that the contention that rates of pay (on a comparable basis) as determined for Ashford Castle were not supported by reference to those applicable in the Herbert Park Hotel and the Conrad Dublin, was unsustainable.
6.18 I am therefore not satisfied that any of the grounds put forward under these headings would justify allowing an appeal.
Ground (f)
6.19 The final ground relied upon stems from a contention that the amounts recommended and determined were such that Ashford Castle was, on the only available materials, unable to pay them. As will be recalled, subsequent to the recommendation and in the course of the process leading to the determination, Ashford Castle put before the Labour Court certain financial information from which it was suggested that the payment of the rates recommended to all existing staff would amount to an additional labour cost of €300,000 per annum and that this sum (if applied, as an exercise, retrospectively to the previous three years trading) would have led to a reduction in the profits for the year 2002 from a sum in excess of €400,000 to a sum just in excess of €100,000. It would also, it was suggested, have led to the more or less break even situation that obtained in 2003 being converted into a loss of just less than €300,000 and would have had the effect of converting the projected profit for 2004 of just short of €280,000 to a loss of €20,000. It was also suggested that the projections for 2005 were marginally worse than those for 2004.
6.20 It is clear from the relevant passages of the determination of the Labour Court that regard was had to that situation. However the court was of the view that it also should have regard to ensuring that the pay of employees in Ashford Castle was comparable, taking all relevant factors into account, to other similar hotels. For the reasons which I have analysed in some detail above I am satisfied that the Labour Court was more than entitled to come to the conclusion that the rates of pay which it was recommending and determining were so comparable, when proper regard was had to all relevant factors.
6.21 In those circumstances the question arises as to the range of discretion open to the Labour Court in circumstances where it is faced with, on the one hand, an apparent need to increase significantly rates of pay so as to bring same into conformity with other comparable businesses and, on the other hand, a contention on behalf of the employer concerned, that the increased personnel costs which would flow from such an increase would have the effect of making the business unprofitable. It should be noted that the high watermark of Ashford Castle’s case under this heading would have demonstrated that profits over the three years under consideration would have been extinguished and replaced by a very marginal loss. The average loss over the four years (if one includes the projections for 2005) if one were to factor in an increase of €300,000 in respect of labour costs in each year would appear to be between €50,000 and €60,000. That figure needs to be seen in the context of a business with an annual total revenue of the order of €9 million, total operating profits of €2 million and an annual payment into a replacement reserve of the order of €450,000. The ability of Ashford Castle to take measures to restore profitability needs to be seen against the background of a business of that size.
6.22 In those circumstances it does not seem to me that it necessarily followed that the only fair and reasonable decision which the Labour Court could have come to would have been to the effect that to award rates of pay which were, for the reasons which I have analysed above, comparable to other similar hotels would place such a burden upon the business as would make it unreasonable to make a determination providing for such rates of pay. Many businesses are faced with difficult choices when confronted with a lack of acceptable profitability. The court was entitled, in my view, to have regard to the fact that other comparable hotels seem to be able to maintain financial viability while paying rates of pay comparable to those which were recommended in respect of Ashford Castle.
6.23 In all the circumstances it does not seem to me that the determination of the Labour Court fails a reasonableness test on this ground either.
7. Conclusions
For the above reasons it does not seem to me that any of the grounds put forward for suggesting that the determination of the Labour Court was unreasonable are sustained. For those reasons I would propose disallowing the appeal.