The Labour Court has recommended that National Car Test (NCT) operator, Applus grant workers a 6% pay increase.

The court has made the recommendation despite Applus revealing that it sustained "significant financial losses in 2020".

Applus Car Testing Services told the Labour Court that it "is not in a financial position to concede to a pay claim" due to the 2020 losses "and a very poor performance in 2021".

The Spanish owned company stated that it had "significant operational costs due to the Covid-19 pandemic".

As a result of the pandemic cost and the suspension of the service, Applus offered a pay-rise to SIPTU of only 0.5% over three years.

Applus tabled a proposal of no pay increase in 2020 and 2021 and 0.5% in 2022.

The 0.5% pay increase offer was after Applus took an earlier 4.5% pay increase off the table due to the Covid impact.

SIPTU was seeking a cumulative pay increase of 7.5% or 2.5% increase for each of the three years.

SIPTU argued that pay provision was made in Applus's successful tender for a new 10 year NCT contract that commenced in June 2020.

The NCT work has been very lucrative for Applus - the company commenced paying out dividends on its profits from the NCT contract here in 2013 and to the end of 2019 had paid out a total of €35.5m in dividends to its Spanish based parent.

In 2019, Applus recorded pre-tax profits of €5.92m as revenues totalled €80.84m.

Last year, Applus carried out one million full NCT tests compared to 1.39m full tests in 2019.

In 2019, Applus employed 802 workers and salary costs totalled €31.9m.

Applus claimed at the Labour Court that their employees are paid above the market rate.

However, Labour Court Deputy Chairman, Louise O’Donnell said that Applus "didn’t provide any documentation to support that contention".

Applus told the Labour Court that due to drop in revenues in the early days of Covid it had to rely on the Government's Temporary Wage Subsidy Scheme grant "and that it is not in a position to fund pay increases".

It did accept that when tendering for the new contract it would have factored pay increases over the ten-year period into its calculations.

Applus stated it was prepared to look for an increase in the test fee and if it received that it would give a percentage pay increase equal to the percentage of the increase in the test fee.

The employer informed the Court that it was prepared to look at such a model for the next three years.

In its recommendation, Ms O’Donnell recommended the 6% pay increase made up of 1.5% increase from 1 September 2020, 2% from 1 April this year and 2.5% from April 2022.

SIPTU Services Division Organiser, Teresa Hannick, said on Friday that SIPTU representatives will be conducting a ballot on the Labour Court recommendation.

Ms Hannick said that the SIPTU Applus+ National committee has recommended acceptance of the recommendation.

The ballot is to be carried out over the coming weeks.

"We are currently reviewing the company’s position in relation to the recent recommendation," a spokeswoman for Applus said.