Labour Court Database __________________________________________________________________________________ File Number: CD87773 Case Number: LCR11534 Section / Act: S67 Parties: UNIDARE LTD - and - ITGWU |
Claim for an adjustment in the bonus scheme to take account of increased downtime.
Recommendation:
The Court is of the view that in circumstances similar to those
described as pertaining in the period 14th-18th September
reasonable grounds have not been established for concession of the
Union's claim.
Division: Ms Owens Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87773 RECOMMENDATION NO. LCR11534
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: TINSLEY WIRE LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim for an adjustment in the bonus scheme to take account
of increased downtime.
BACKGROUND:
2. The Company is a subsidiary of Unidare Limited and is located
in Finglas. It employs approximately 70 people. The Company
manufactures wire products for the wholesale/retail trade, and for
further use within other sections on the site. The wire drawing
operation is an integral part of the Tinsley structure, which
reduces large coils of wire into various thicknesses for further
processing. Up to 1986, one man dealt with one machine in the
wire drawing section. For this there was a bonus minimum of 80
P.I. on the B.S.I. scale, and a ceiling of 120 P.I. Bonus
earnings are approximately 40% of total earnings. Discussions
took place over 3 years to revise the scheme, so that one man
could work two machines. Agreement was finally reached in Mid
1986 which for a one-man two machines operation, gave an increase
in basic pay, and a breakdown allowance on any machine of 82.5
P.I. This means that when one machine is not in operation
(downtime) the maximum bonus is reduced to (120 + 82.5) / 2, ie.
101 P.I. The situation is exacerbated from the Union's point of
view, when a machine is not operating because it has been "planned
down" by the Company, rather than because of mechanical or
electrical failure. The Union is seeking changes in the bonus
scheme to take account of the adverse effect on earnings during
any planned downtime. During the period 14 to 18 September, 1987,
one of the machines in the wire-drawing section was not run
because of a lack of orders. The Union wants the workers
concerned to be compensated. The Company rejects the claim
because:
1. The loss of earnings (i.e. the payment of reduced bonus) was
due to a market recession.
2. It believes the grievance is based on a false premise, i.e.
that a bonus payment is due regardless of circumstances.
Since the circumstances in which the second machine was not
operated were beyond the Company's control, it contends that
no adjustment in the bonus arrangements is required.
2. Agreement could not be reached on the matter at local level,
and on 13th October, 1987, it was referred to the conciliation
service of the Labour Court. A conciliation conference took place
on the same day. Agreement was not achieved, and on 15th October,
1987, the matter was referred to the Labour Court for
investigation and recommendation. A Court hearing took place in
Dublin on 5th November, 1987.
UNION'S ARGUMENTS:
3. 1. The Company has argued that the wiredrawers were upgraded
and received increases in basic pay and differentials as part
of the 1986 settlement. However, it should be noted that the
grade increase was implemented by the Job Evaluation
Committee, following an examination of the skill, workload,
and responsibility requirements of the new one man two machine
situation. During all the negotiations on the restructuring,
the mens' main concern was to ensure that their capacity to
achieve 120 P.I. consistently would not be impaired.
Assurances were given by the Company in this regard which have
not been borne out by the facts.
2. Losses are inflicted on the workers when the current bonus
arrangements are adhered to in a "planned down" situation.
The planned non-operation of a machine is not like a
mechanical or electrical fault, as it is within the Company's
control. The current 82.5 P.I. allowance is not adequate to
cover such situations.
3. The Union's work study officer has examined the problem of
down time, and considers it to be unfair as it is outside the
control of the operator to prevent downtime. A number of
proposals were made by the officer which were rejected by the
Company. Following the planned shut down of one machine in
September, earnings fell drastically and a potentially serious
dispute loomed. The Union again sought an adjustment on the
downtime allowance and outlined several options to the Company
(details supplied to the Court).
4. The Union believes that the concessions which it is
seeking, whether by an adjustment of the 82.5 P.I. or the
application of a "taper" procedure is reasonable.
Considerable effort is now required from the wire-drawers to
reach the previously attainable bonus earnings. Any bonus
scheme must have an incentive - the Union believes that this
incentive to produce over the norm will be enhanced by the
adjustments on the downtime allowance.
COMPANY'S ARGUMENTS:
4. 1. In circumstances where one machine in the tandem set-up
is unable to run, personal and interference allowances
included in the standards for the non-running machine are not
required for that machine. Accordingly, their transfer within
the structure of the incentive scheme to the running machine
gives the operator potential to achieve significantly higher
outputs off the running machine. In addition, because of the
increased basic quality and shift premia applicable in the new
situation, potential exists to at least match the previous
earning levels applicable to the one man one machine
situation.
2. The Company is not prepared to concede the Union's claim
because the proportionate loss of earnings was due to
market recession. It believes the grievance to be
based on a false premise, i.e. that a bonus payment is
due regardless of circumstances.
3. Because output from the two machines in tandem was down in
the week in dispute the Company lost product and margin and a
proportionate loss in bonus was sustained by the operators
(but with earnings well above fall-back point). In such
circumstances, it is the Company's view that the question of
paying bonus for a non-running machine in addition to the
bonus already paid for the running machine would, if conceded,
make economic production unsustainable.
4. The Company seeks from the Court a recommendation
upholding the structure of its tandem incentive scheme, i.e.
in not paying additional bonus to operations in circumstances
where a machine is unable to run and the Company loses the
value of the lost production.
RECOMMENDATION:
The Court is of the view that in circumstances similar to those
described as pertaining in the period 14th-18th September
reasonable grounds have not been established for concession of the
Union's claim.
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Signed on behalf of the Labour Court.
Evelyn Owens
__17th___November,__1987. ___________________
P. F. / M. F. Deputy Chairman