Donegal seafood company wins High Court challenge

A seafood supplier has won its High Court challenge to a decision of the Employment Appeals Tribunal upholding complaints by some of its employees about a 10 per cent cut in payroll costs.

The matter must be reconsidered by the tribunal in light of the court's findings, President of the High Court Mr Justice Nicholas Kearns directed.

Those findings include the tribunal erred in interpreting section 5 of the Payment of Wages Act, 1991 as requiring written consent of employees before the company could bring about changes to salary levels.

Earagail Eisc Teoranta, which employs 200 people at its food processing plant at Min an Aoire, Co Donegal, appealed to the court against the tribunal's February 2014 decision upholding a rights commissioner's finding in favour of a number of employees.

After the company experienced financial difficulties, it introduced a restructuring programme in 2006 involving an “annualised hours framework” and “performance-related pay” and was ultimately subject to financial rescue in 2007, the judge noted.

Anglo Irish Bank

The company was funded by Anglo Irish Bank for many years until 2011 when the bank gave notice that it intended to withdraw all loan facilities and invoice discounting services. Bank of Ireland ultimately agreed to provide funding subject to conditions.

As part of a cost-cutting process, the company decided to implement a 10 per cent reduction in payroll costs to come into effect on May 9th 2011. The nature of, and reasons for, acceptance of the cut by most staff was disputed, but some staff who disagreed with the proposals brought complaints under the 1991 Act which were ultimately upheld by the tribunal.

Mr Justice Kearns said the issue was whether the tribunal erred in law in how it reached its decision.

The tribunal had considered section 5.1.c of the 1991 Act required written consent of the employees before this company could change salary levels, he said.

The tribunal had erred in finding that exceptions set out in other sub-sections of section 5 should be treated conjunctively rather than considered independently, he ruled.