A legal action by 10 employees of 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, represented by Peter Ward SC, are challenging a May 2014 finding by the Employment Appeals Tribunal 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”, Mr Ward argued
The case concerns the company’s decision in early 2012 to remove summer and winter bonus payments, amounting to 6 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 that the non-payment 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 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.
In submissions, the union alleged that B&Q unilaterally informed staff at countrywide general meetings in early 2012 that it planned to immediately abolish the bonuses, 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 it to discuss the workers’ concerns and also argued that B&Q had given a guarantee to employees in 2003 that the zone allowance would be reviewed “but not reduced or removed”.
B&Q appealed to the Employment Appeals Tribunal against the Rights Commissioner’s decisions and the tribunal conducted a joint hearing related to all the applicant workers.
The company told the tribunal that 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.
Last May the tribunal ruled that the bonuses were discretionary in nature and could be unilaterally reviewed or withdrawn in a manner that complied with the 1991 Act.
The tribunal also ruled that non-payment of the zone allowance did not breach the 1991 Act and was not a deduction from wages payable.
The appeal against that decision continues on Wednesday.