Hotel fails to overturn binding pay ruling

An attempt by the five-star Ashford Castle Hotel in Cong, Co Mayo, to overturn a binding Labour Court determination sanctioning higher pay rates for 150 workers was dismissed by the High Court yesterday.

Mr Justice Frank Clarke said it was "regrettable" that "significantly misleading" information had been included in a schedule of hotel workers' pay rates attached to an affidavit sworn by the hotel's general manager in support of the hotel's claims that the Labour Court's recommended pay rates were excessive.

That information had suggested that the recommendation of January 14th, 2005, was for pay rates significantly higher than in similar hotels but the claims to that effect were "unsustainable", "highly contrived" and "of no merit whatsoever", Mr Justice Clarke said.

While also noting the hotel's claim that implementing the pay rates would involve a 17 per cent increase of €300,000 a year in payroll costs and place the hotel at "a crisis point", the judge said those claims should be seen in the context of a hotel with annual revenues of some €8 million in 2002 and 2003 and operating profits of €2 million.

The Labour Court had taken the hotel's ability to pay into account but it also had regard to the employees' rights to fair and equitable pay. He said other hotels could maintain financial viability while paying similar rates.

Afterwards, Siptu national organiser Noel Dowling said the judgment sent "a very strong message" to the thousands of workers whose employers were refusing them the right of representation.

In its submission to the Labour Court, Siptu had argued that "significant issues" relating to pay and conditions existed and alleged that management's refusal to deal with its current rewards system in an objective or fair manner was central to the dispute.

Because the hotel was only unionised about 2002, management had only started to apply the Programme for Prosperity and Fairness late into the term of that agreement and a significant catch- up pay claim arose, it contended. Pay at Ashford was considerably lower than within the industry and compared to other hotels.

Ashford's general manager Niall Rochford said the hotel "cannot withstand the imposition of additional labour-related costs over and above the terms of the national agreements . . . as this would have the effect of wiping out what modest profit is currently being forecast."

Mr Rochford said the recommended pay increase would lead to an immediate loss of employment, that the hotel would be at a crisis point and would not have a future.

Mr Justice Clarke said he was satisfied there had been information and materials before the Labour Court on which it could reach its determination and that it had taken all relevant matters into account.

He said a schedule of pay rates attached to an affidavit by Mr Rochford contained "significantly misleading" information relating to certain pay rates.

Its inclusion was "regrettable" and showed the "extreme danger" of permitting in High Court appeals the inclusion of materials not put before the Labour Court.