Labour Court Database __________________________________________________________________________________ File Number: CD87774 Case Number: LCR11541 Section / Act: S67 Parties: UNIDARE (I) LTD - and - ITGWU |
Opposition to rotational lay-offs.
Recommendation:
7. The Court is of the view that having regard to all the
circumstances and the Company's difficult trading position,
Management's approach to cost control is not unreasonable. The
Court therefore recommends that the Union should accept this
approach.
Division: Mr Fitzgerald Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87774 RECOMMENDATION NO. LCR11541
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: UNIDARE PLC
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION (NO. 2 BRANCH)
SUBJECT:
1. Opposition to rotational lay-offs.
BACKGROUND:
2. Unidare plc is part of the Unidare Group of Companies which is
engaged in the manufacture and distribution of engineering and
engineering related products.
3. In recent years a sustained programme of contraction has taken
place, with staff numbers being reduced through voluntary
severances and planned early retirements. In April, 1987
Management informed the Union that it was seeking a further cut of
thirty in graded staff positions (later revised to 28).
Management further stated that if this reduction was not achieved
by the summer shut-down, then staff would be placed on indefinite
lay-off until such time as the numbers came down to the required
level. The reason given for these cuts was the need to reduce
overhead costs in the face of declining competitiveness and site
contraction. The Union expressed strong opposition to these
proposals and was of the view that adequate progress was being
made in relation to the non-compulsory redundancies and therefore
there was no reason to proceed with lay-offs. It further claimed
that the proposals were selective in that they did not include
supervisory staff.
4. A series of local level meetings were held between May and
August and by that time fourteen had volunteered to accept the
proposal. The Union sought that the programme should be let run
on a voluntary basis to find its own level over time. Management
refused to do this but it did offer to postpone a lay-off until
September 21st, to limit its duration to the end of 1987 and to
exclude those departments where sufficient progress
redundancy-wise had been made. This was unacceptable to the Union
and on the 8th July, 1987, the matter was referred to the
conciliation service of the Labour Court. A conciliation
conference was held on the 28th August (earliest suitable date)
but no progress could be made and the issue was referred to the
Labour Court for investigation and recommendation on the 15th
October. A Court hearing was held on the 30th October, 1987.
UNION'S ARGUMENTS:
5. 1. The disputed lay-offs have nothing to do with lack of
orders or loss of trade per se. When there are insufficient
orders or work to keep the plant going, the Union has not
opposed its members being laid off along with other workers.
However, this lay-off is a mechanism being used by the
employer to reduce overheads on a selective basis.
2. The claimants have given maximum co-operation over recent
years, at considerable loss of jobs, to meet the
rationalisation and reorganisation needs of the employer. In
the period since 1983 the Union has lost approximately one
third of its numbers and has demonstrated, without the need
to have recourse to lay off, that rationalisation is soluble
given time and mutual agreement.
3. Of the 28 redundancies in the No. 2 Branch grades
required by the current 1987 plan, 14 or half had been
achieved prior to lay off and within the period May to August
- significant progress by any standards, particularly so
given the fact of the Union's serious reservations as to the
extent of the plan.
4. These recent contractions have taken place with the
maximum co-operation of the workers concerned and despite the
fact that they have not been paid, as heretofore, for
absorbing the residual task of those who have left.
5. Management is in clear breach of the 1986 New Technology
Agreement which provided for a reduction of only 4 computer -
related contractions, in the Phase 1 period of 1986 - 1988.
Indeed while the Agreement provided for the reduction of four
positions, it also guaranteed that workers affected would be
retained in the areas concerned and that work duplication
would operate pending the reduction of the designated
positions on a voluntary basis. However, when Management
outlined the rationale for the original plan for 28
redundancies it detailed 14 designated reductions as being
attributable to the impact of New Technology (details
supplied to the Court).
6. The application of the lay-offs is highly selective and
discriminatory. Insofar as the ten claimants on rotational
lay-off are regarded as 'overheads' so are the eight staff
who are excluded.
7. Those excluded are likewise within the graded structure
targeted by the plan and insofar as the lay off is posed by
Management as part and parcel of that plan logic would seem
to dictate that it also should encompass all within the
graded structure in the affected departments.
8. Contrary to what Management has argued the inclusion of
these 'excluded' positions would be feasible. Cover is
provided on an ongoing basis for sick leave and annual leave
and there is no reason why the work could not be covered on a
similar shared basis. The inclusion of more staff within the
'pool' would reduce the period of absence on lay off of any
individual staff member and would consequently reduce the
cover problem to normal leave dimensions.
9. Further, no account has been taken of service and
insofar as this lay-off is redundancy related, Management are
arguably in breach of clause 16.1.2 of the Union/Management
Agreement which provides specifically that seniority of
service within the company will be taken into account where
there is a reduction of the workforce.
COMPANY'S ARGUMENTS:
6. 1. The section of the Unidare group operating on the Finglas
site near Dublin has been in almost continuous contraction
over the past six years through loss of markets and loss of
products. This, in addition to changing technology has
caused a need to reduce operational overheads in the
clerical/administrative areas, particularly during the latter
three years of this period.
2. A sustained programme of contraction has taken place, the
reductions in numbers being achieved through severances
combined with planned early retirements. The Company
acknowledges the constructive and positive approach in
general which the Union has taken in regard to this process,
thus assisting towards resolution of the overhead problem.
3. However, on this occasion people within some of the
sections involved, particularly those with longer service,
reacted negatively to the Company's proposals, seeking to
have temporary lay-offs operated to include section heads
and/or on an overall last in first out basis with a much
wider application than simply within the particular
section(s) affected.
4. The Company, while willing to look at the possible
application of the extension of rotation within sections
insofar as feasible, was not prepared to include the heads'
of sections who hold a management responsibility in regard to
the sections they manage. While a head of section could
carry out the work of a member of section on lay-off, it is
not accepted that such individual within the section could,
at least in the short term of temporary lay-off, take on the
responsibilities of the head of section. For this reason a
degree of selectivity, i.e. the exclusion of heads of
sections, is necessary in the Company's view.
5. These responses demonstrate that the Company has tried to
solve its costs/overheads dilemma in a reasonable and
coherent manner and, other than that objective, there is no
ulterior objective, underlying the degree of selectivity
which of necessity has operated, i.e. the exclusion of heads
of sections from the lay-off rotation and the non-application
of last in first out overall process.
6. The Company operates a voluntary severance programme and
deals with retaining/adaptation issues as individuals
volunteer and come forward. It therefore knows the problems
involved in such retraining. Its experience to date confirms
its belief that an overall last in first out process would
not be in its or its employees' best interests considering,
to say the least, the fairly horrendous retraining
implications. Hence, the confining of temporary rotational
lay-offs to the immediate departments concerned.
RECOMMENDATION:
7. The Court is of the view that having regard to all the
circumstances and the Company's difficult trading position,
Management's approach to cost control is not unreasonable. The
Court therefore recommends that the Union should accept this
approach.
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Signed on behalf of the Labour Court
20th November, 1987 Nicholas Fitzgerald
D.H./P.W. Deputy Chairman