Ashford Castle hotel in Cong, Co Mayo, has brought a High Court challenge to overturn a Labour Court pay determination for 150 workers who are members of Siptu.
The hotel says implementing the new pay rates would involve a 17 per cent increase in payroll costs of €300,000 per year.
This would lead to an immediate loss of employment, and put the hotel in a situation where it would not have a future.
It claims the Labour Court did not appear to have shown any regard for the hotel's ability to pay the higher wages.
However, in a submission to the Labour Court seeking improved pay and conditions at Ashford Castle, Siptu said "significant issues" existed relating to pay and conditions. Management's refusal to deal fairly with its rewards system was also central to the dispute.
Siptu said the distribution of service charges to hotel staff was in "an unorthodox and unacceptable manner", and certain grades did not get a service charge payment.
It said because workers at the hotel were only unionised around 2002, management only started to apply the Programme for Prosperity and Fairness late into the term of that agreement. Because workers had failed to get certain pay agreements a significant catch-up claim arose.
In its proceedings against Siptu, which opened before Mr Justice Frank Clarke yesterday and continues today, Ashford Castle Ltd is seeking an order setting aside the determination of the Labour Court dated January 14th, 2005.
In an affidavit, Niall Rochford, the hotel's general manager, said the hotel's problem was made worse by the lack of resources for a much-needed refurbishment.
"Ashford cannot withstand the imposition of additional labour-related costs over and above the terms of the national agreements which Ashford Castle has implemented consistently over the last five years as this would have the effect of wiping out what modest profit is currently being forecast."
