Favourable Ruling on Bonus for Temps
28 February 2006
On February 10, the Employment Relations Authority (ERA) released its determination on the eligibility of temporary workers to receive the Fonterra Ingredients Bonus, who had not made application by the cut off date applied by the company.
This had been a long standing dispute which first arose in August 2004 and related to the interpretation of the Letter of Settlement arising out of the 2003/2004 Collective Agreement.
The Terms of Settlement stated:
"The productivity incentive will be extended to permanent staff who leave during the year and temporary workers who have worked more than 640 hours between 3 August 03 and 1 August 04 in a salary year ................The payment will be made upon application by the worker concerned. Application should be made to the site payroll officer before the last Friday of July each year. It will be paid on a pro rata basis, by the end of August."
Our contention was always that temporaries should make application by the last Friday of July each year (this date was extended in 2004) to ensure they get paid promptly and for ease of administration but that if the deadline was not met, this would mean the payment would be made in a later pay run.
Fonterra contended that the cut off date had to be met or payment would not be made.
They even argued that payment of the Bonus was voluntary, even though it was in the Collective Agreement.
The ERA concluded: "Clause 24(of the Letter of Settlement) extends the productivity bonus to temporary employees. If they lodge an application before the last Friday of July in any given year they will be paid out by the end of August. If they fail to lodge an application by the last Friday of July they will be paid however, the clause is silent as to when they can expect to receive that payment."
Since the dispute arose, Fonterra have made further arbitrary decisions about the bonus and have not paid out to all permanents who left during the season, despite agreeing to do so in the Terms of Settlement.
The 2004/2006 Letter of Settlement states "The productivity incentive will be paid on the same basis as in the 2003/04 year."
The DWU will discuss with Fonterra their timetable for complying with the decision and paying the bonus out to temporaries upon application and permanents who left during the year.
We will keep members informed of progress and provide information to assist those who are eligible to receive their entitlements.
The Company have a period of 28 days in which they may lodge an appeal to the Employment Court.
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