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Ten B&Q Ireland employees taking legal action over bonus removal

B&Q store Farnborough

A legal action by ten employees of DIY chainstore B&Q Ireland over the removal of bonuses and allowances could have major implications for many workers.

The action, supported by the employees trade union Mandate, is being heard by Mr Justice Paul McDermott at the High Court.

The workers are challenging a May 2014 finding by the Employment Appeals Tribunal (EAT) that the removal of the allowances and bonuses, which had been paid for several years up to early 2012, was not a deduction of pay in breach of the Payment of Wages Act 1991.

There is no unilateral right to change the pay of employees and that is the "heart of the case", Peter Ward SC, for the workers, argued

The case concerns the company's decision of early 2012 to remove summer and winter bonus payments, amounting to six per cent of an employee's annual salary, plus zone allowances of 41 cent per hour for Dublin-based workers.

Seven of the workers made complaints the non-payment to them of a winter/summer bonus, normally paid twice annually in June and November, plus the non-payment of a zone allowance, breached the 1991 Act.

The other three workers, all employed by B&Q Ireland in stores outside Dublin, challenged the non-payment of the winter and summer bonuses to them.

It was alleged the employer declared the winter/summer bonus for the period August 2011-January 2012 but, in January 2012, it unilaterally and retrospectively purported to withdraw the accrued bonus.

A Rights Commissioner upheld the workers claims, lodged on their behalf by Mandate.

The union alleged in submissions that the company unilaterally informed staff at various countrywide general meetings in early 2012 it planned to immediately abolish the winter/summer bonus, remove the zone allowance, introduce new starter rates, new premiums and a recruitment ban to reduce numbers by 5 per cent.

Mandate complained the company had refused to meet with it to discuss the workers' concerns and also argued B&Q had given a guarantee to employees in 2003 the zone allowance would be reviewed "but not reduced or removed".

The company appealed to the EAT against the Rights Commissioner's decisions and the tribunal conducted a joint hearing related to all the applicant workers.

The company told the EAT, when the bonuses and allowances were removed in 2012, it was in an extremely difficult financial position and cost saving measures were required to safeguard the future of the business and protect jobs.

In January 2013, the company was forced to seek High Court protection and appointment of an examiner, it said. The removal of bonuses and allowances was part of the material considered by the court when it approved a survival scheme for the company, it added.

In May 2014, the EAT ruled the winter/summer bonuses were discretionary in nature and could be unilaterally reviewed or withdrawn in a manner that complied with the 1991 Act.

It also ruled the zone allowance was an expense and a form of compensation for working in a particular area. The non-payment of the allowance did not breach the 1991 Act and was not a deduction from wages payable, it ruled.

The appeal against that decision continues next week.

Source :

02 February 2015

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