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RTÉ is to make immediate arrangements to reinstate previously frozen incremental wage increases to affected staff, after accepting a recommendation of its internal Industrial Relations Tribunal.

Earlier today, the IRT ruled that the broadcaster had been wrong to impose a unilateral freeze on increments, which unions argued was unfair as it had a disproportionate impact on lower-paid workers.

The IRT also criticised the way in which RTÉ had inserted an “inability to pay” clause in employment contracts in recent years without consultation with the Trade Union Group.

In a letter to the IRT this afternoon, RTÉ Director of Human Resources Eimear Cusack confirmed: “RTÉ has taken the decision to accept the recommendation and will immediately apply it with respect to increments that fall due in 2020.

“Accordingly, we will shortly proceed to resume these incremental payments from their normal due date and will notify impacted staff.

However, Ms Cusack described the IRT recommendation as “very challenging, given our very serious financial position”, adding that it would would make the task of sustainably reducing RTÉ’s operating costs while protecting employment and services to the public “all the more challenging”.

She said: “Consequently, this places a greater burden on the upcoming negotiations between RTÉ and the TUG where further reductions in our costs and a fundamental reform of how we work will have to be agreed and implemented.

“This, along with reform of the TV licence system and commercial stability, will be essential if RTÉ is to return to a sustainable financial position”.

She pledged that RTÉ would report back to the IRT by its deadline of 11 December on the progress of restructuring negotiations.

The TUG has already accepted the IRT recommendation, describing it as an “emphatic victory” for members.

Freezing increments was a ‘hotly disputed proposal’

For some years, RTE has been in financial difficulty and its “Revised Strategy” presented last November aimed to secure €60 million in urgent cost savings between 2020 and 2023.

Freezing increments was included in a wide range of proposals aimed at delivering those savings as part of a renegotiation of collective agreements with the TUG. 

Last January, RTÉ told staff it was freezing annual pay rises known as increments for staff who had not yet reached the top of their pay scale.

In today’s ruling, Mr Doherty states: “It quickly became apparent that the freezing or cessation of increments was going to be a hotly disputed proposal in the negotiations as RTÉ proposed all incremental payments would cease in January 2020.” 

A further process of independent facilitation took place from January, chaired by former Labour Court chairman Kevin Duffy, during which the issue of increments was effectively parked, to allow all other negotiations to continue. 

However, in March, RTÉ said it needed to plan and prepared to deal with the unprecedented challenges posed by Covid-19 and negotiations ceased.

Those negotiations have yet to resume, and Mr Doherty said: “Clearly the cessation in negotiations has lasted longer than anyone could have envisaged at the time and this delay has contributed to the frustration surrounding the issue of increments.” 

Last July, the TUG referred the increments issue to the IRT and a full hearing was conducted on 24 September.

In its submissions to the IRT, the unions acknowledged RTÉ’s “grave financial state”, but argued other cost reduction measures should be fully explored and agreed upon, rather than the suspension of increments.

They described RTÉ’s unilateral decision to suspend increments as unfair, because it impacted disproportionately on some of the lowest-paid employees in the organsiation, as well as breaching long-standing collective agreements and the contractual entitlements of the staff concerned.

They also submitted that a new “inability to pay” term had been inserted in individual contracts in recent years without consultation and “by distinctly covert means and without wider disclosure”. 

They rejected management suggestions that increments could be compared to the Merit Pay scheme for managers. 

For its part, RTÉ highlighted its “severely challenging” financial position, saying “all the projections show the organisation is facing both persistent and growing deficits, and its continuation in its present form is highly doubtful beyond 2022.” 

It also noted that the overall financial situation has been worsened by the pandemic “with commercial revenues seriously undermined.” 

It costed the increments for affected staff at €1.1 million per year, adding that if paid, when combined with Managers Merit Pay, the overall bill could be “some €9 million” by 2022. 

RTÉ management also told the IRT that the “vast majority” of individuals’ contracts contain a reference to the broadcaster’s continuing ability to pay increments, “…and so permits RTÉ to freeze such payments under the present financial circumstances as part of an overall plan to reduce costs.” 

In his ruling, Mr Doherty described this case as the most difficult the IRT has faced in recent years, “concerning, as it does, the grave financial position regarding RTÉ’s state of finances overall, along with the effect of difficult cost saving measures that are necessary for stability to be regained, and continued viability to be restored.” 

He acknowledged that the effect on staff is likely to be “demanding” – so the integrity of the industrial relations process and procedure is “vital” to a successful outcome, as is adherence to this process and the conduct of negotiations for changes to collective agreements.

He noted the differences between how increments and Managers Merit Pay are structured. 

He also said the question of the legal standing of the content of individual staff contracts arises – but stated that the IRT is not a legal tribunal, but rather an industrial relations body – and he made his recommendation on that basis.

Mr Doherty said: “The IRT therefore recommends that incremental payments should resume with immediate effect, and those who have been affected by their non-payment be reimbursed from their normal due date.” 

He said that notwithstanding RTÉ’s grave financial position, the IRT had to recognise a previous precedent and criticised the way RTÉ had inserted an “inability to pay” clause into individual contracts.

“The change involving the insertion of a new term and condition dealing with “inability to pay”, in what now amounts to a majority of individual contracts, had limited, and lacked wider disclosure, and remains unacceptable in an Industrial Relations context.” 

Given the urgency of RTÉ’s financial situation, the IRT urged the parties to re-engage “quickly” to resume negotiations on the cost saving measures already proposed, and to report back to the IRT by 11 December.

Any discussions on the payment of increments should be addressed at the conclusion of these cost savings negotiations. 

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