Labour Court Database __________________________________________________________________________________ File Number: CD87423 Case Number: LCR11378 Section / Act: S67 Parties: MARATHON PETROLEUM (1) LTD - and - ITGWU;NEETU |
Claims concerning the 26th wage round.
Recommendation:
29. The Court has considered the issues raised by the parties and
recommends as follows:
(a) Wage Increase
Having regard to the submissions made by the parties
the Court recommends an increase of 3% in respect of an
agreement of 12 months duration.
(b) Cessation of Early Shift Relief
The Court is of the opinion that the original
introduction of this practice has lead to difficulties
with regard to manning and recommends that the parties
should negotiate its elimination. It seems to the
Court appropriate that such negotiations take place in
the context of proposals by the Company to clarify the
clauses of the current agreement dealing with delays in
travelling to and from the platform.
(c) Elimination of Unnecessary Overtime
The Court recommends that the Company's proposals
regarding Safety checks carried out by night crews and
clearing of workshop on platform alpha be accepted by
the workers concerned.
(d) Change to 14 days on/14 days off
The Court does not recommend concession of this claim.
(e) Increase in Annual Leave
The Court does not recommend concession of this claim.
(f) Shorter Working Week
The Court does not recommend concession of this claim.
(g) Provision of Telephone Allowance
The Court does not recommend concession of this claim.
(h) Inclusion of Long Term Disability Benefit in
Company/Union Agreement
In light of the general industrial practice and having
regard to the nature of the scheme itself the Court
does not consider inclusion of these terms within the
Union Company Agreement to be essential or useful and
does not therefore recommend concession of this claim.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
Deputy Chairman
7th September, 1987
T.O'M./J.C.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87423 THE LABOUR COURT LCR11378
CC87488 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11378
Parties: MARATHON PETROLEUM (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
Subject:
1. Claims concerning the 26th wage round.
General Background:
2. The Company, a subsidiary of a U.S. multinational company, is
the sole producer of natural gas in Ireland. It has two
production platforms 35 miles offshore in the Kinsale Head gas
field. These claims concern 28 production operatives and 15
maintenance operatives employed by the Company on the platforms.
3. The 25th wage round expired in the Company on 31st December,
1986. On 16th January, 1987 the Unions lodged 26th wage round
claims as follows:-
(a) 10% wage increase over a twelve month agreement without
any pay pause,
(b) extra holidays without loss of entitlements,
(c) shorter working week without loss of entitlements,
(d) the inclusion of the long term disability agreement in
the trade union agreement,
(e) the provision of a telephone allowance.
On 12th March, 1987 the Company made a detailed response to the
Union's claims. It informed the Unions that it was suffering
massive cumulative losses and needed to review all areas of its
operations. In relation to the offshore workers the Company
requested the Unions to co-operate with and to consider the
following:
1. 10% salary reduction, effective for 12 months from the
date of signing the 26th Round Agreement. However, in
the event that the Company is able to re-negotiate the
contract with our sole customer to obtain a
satisfactory price for the gas from the Kinsale Head
Field, the Company would be prepared to re-open
negotiations on this item.
2. Cessation of Early Shift Relief.
3. Change from a 1 week on/1 week off to a 2 weeks on/2
weeks off work cycle.
4. Review existing arrangements to eliminate all
unnecessary overtime including:
(a) Safety checks currently carried out by night crews
at overtime rates to be carried out during normal
working hours by day or night crews at normal pay
rates.
(b) Cleaning of maintenance workshop on platform Alpha
to be carried out by maintenance crews during
normal working hours, and not on overtime.
4. On 25th March, 1987 local negotiations took place but no
agreement was reached. On 16th March, 1987 the matters were
referred to the conciliation service of the Labour Court. A
conciliation conference was held on 13th May, 1987 but no
agreement was reached and on 25th May, 1987 the case was referred
to the Court for investigation and recommendation. Labour Court
hearings were held on 17th June and 29th June, 1987 in Cork. On
24th July, 1987 the Court visited platform Alpha to inspect work
and conditions.
(a) 10% wage increase
Background:
5. The workers' annual basic rate of pay at the end of the 25th
wage round was #22,658.55. In addition the workers are also paid
various allowances. The Union claims a 10% increase in the rates
of pay. The Company claims a 10% wage reduction.
Union's arguments:
6. (i) The Unions' claim is supported by the fact that the
norm for the 26th wage round emerging from I.C.T.U. and
other surveys is an average increase of 6% for 12
months.
(ii) The Unions' consider that the Company's deficit, as
quoted in the Price Waterhouse letter of the 26th
March, 1987, appears to cover investments of the last
17 years or else is the account for subsidiaries other
than the Company. The deficit is in contrast to the
position as set out in a memo of 4th June, 1986. The
Union would need much more information to assess the
Price Waterhouse letter.
(iii) In answer to a question raised at a seminar in 1986 the
then manager said:
"It would be virtually impossible to represent the
actual M.P.I.L. financial picture because of our
intangible relationship with the parent company."
In view of this statement the Union cannot understand
how the Company can now present such figures in a
document issued only the day before the first meeting
commenced.
(iv) At the same seminar the Company also stated "a weak
Irish Pound against the U.S. dollar reduced M.P.I.L.
actual dollar cash contribution" but that "a strong
pound against the Dollar would have the opposite
effect." The pound has never been so strong as
recently.
(v) Every year with the exception of this year, the Company
has advised the Unions of its concern for government
guidelines. In other matters and guidelines which the
Company was not prepared to accept it took the
Government on, through B.G.E., through the Courts. The
Company cannot take two sides in this argument.
(vi) The precedent in the Company for a single phase payment
without a pay pause is well established.
(vii) The Company is in agreement that any agreement be of 12
months duration.
Company's arguments:
7. (a) The pay of the offshore operators has increased by 3.25
times since the original agreement was signed in 1977.
Offshore operators' average gross earnings in the
financial year 1986/1987 were IR#27,310.50. It is
clear that the Company has been a generous employer.
(b) In view of its financial position the Company has
proposed a 10% reduction in basic rates of pay to be
effective for a minimum period of twelve months from
the date of signing a new agreement. Even allowing for
the proposed reduction the increases granted in past
years will have more than kept pace with increases in
the Consumer Price Index and will have maintained the
offshore operators' premium salary status compared to
workers in similar jobs offshore.
(c) A comparison with the C.P.I. and with onshore rates of
pay clearly shows that the offshore workers have
benefited substantially over the years.
(d) Without the present exceptional times for the Company,
there would be no need to propose a reduction of pay
rates, but labour costs must inevitably be considered
in the Company's overall efforts to reduce operational
costs and thus minimise losses. A modest reduction of
earnings is preferable to other possible options to
reduce labour costs.
(b) cessation of early shift relief
Background:
8. The early shift relief is the practice whereby a worker who
has finished his seven twelve hour shifts offshore is able to
leave the platform without staying offshore for the seventh night.
The replacement crew arrives at the platform the following
morning. The practice has been in operation since 1982. The
Company considers that the practice should be discontinued. The
Union rejects this proposal.
Union's arguments:
9. (i) The Company's proposal would mean a further 322 hours
per annum, i.e. an increase of approximately 9% on time
aboard the Platforms. The operators would finish on
their seventh day at 7 p.m. but would not be permitted
to go ashore until 14 hours later on the following
morning without any compensation whatsoever.
(ii) The early shift relief is in fact a misnomer. It means
in simple terms that operators finishing their normal
84 hours tour of duty are transported home. There is
no concession here for the workers rather it would
appear that having finished their cycle the Company
requires the workers on board for that extra cover
which the Union claims the Company, at all other times
during the work cycle, takes for granted and depends
upon.
(iii) The Company in its proposal made strong reference to
the safety factor in the early shift relief. The Union
would be very concerned also for safety but to say it
is unsafe to fly in darkness is to ignore modern
technology and should result in a ban on all
helicopters flying in darkness. This would also create
problems in winter time when most crew changes take
place in darkness.
Company's arguments:
10. (a) By relieving the majority of one crew over twelve hours
before the replacement crew arrives, means that for
that period there is only a "skeleton" crew available.
It has been increasingly recognised that in the event
of a serious emergency there may be insufficient
manpower remaining to adequately control the situation.
Thus, the absence of a full crew could jeopardise the
safety of the personnel remaining.
(b) Normal crew changes occur early in the day. To operate
early shift relief it is necessary to have crew changes
around 7. o'clock in the evening. The practice of
flying in darkness or approaching darkness has been
identified as being an additional hazard in the event
of a helicopter incident. Although helicopter flight
is safe and accidents are extremely unlikely, a search
and rescue operation for the survivors of such an
incident would inevitably be hampered by darkness.
(c) The early shift relief system requires the Company to
make approximately 75 additional helicopter flights to
and from the platforms each year at a considerable
extra cost. The cost savings resulting from the
cessation of this practice would obviously contribute
to the Company's current cost reduction plans.
(c) elimination of unnecessary overtime
Background:
11. The Company is claiming that safety checks and cleaning of
maintenance workshop on platform Alpha which are carried out on
overtime should be carried out during normal working hours. The
Union rejected the proposal.
Union's arguments:
12. This could be a matter for further discussion, while the
Union has no mandate to accept this proposal it points out to the
Court that where agreements as such were reached they were either
included in a productivity agreement or compensation was made.
Management's arguments:
13. (i) Prior to the introduction of the early shift relief
system, the night shift operators at the beginning of
their week on-duty, were flown to the platforms in the
morning but did not start their normal shift until 7.
o'clock that evening. In order to keep them gainfully
employed, a practice developed whereby certain safety
checks were performed by these operators, on overtime
prior to commencing their first full shift offshore.
Changes in the helicopter flight times and a decline in
the level of activity offshore, mean that these checks
need no longer be performed on overtime. Indeed, as
safety is an integral part of any operator's work, the
Company strongly believes that these checks should be
incorporated into the normal daily routine of the
operators, whether on day-shift or night-shift.
(ii) When the "Alpha" platform was in the process of being
commissioned, the workload on the maintenance operators
was such that cleaning the maintenance workshop had to
be postponed and handled as an overtime task. With
normal operations for several years, the need to
postpone cleaning to overtime is no longer necessary.
Good housekeeping is essential to safe working and, as
such, should be part of the normal daily activities of
the maintenance operators.
(d) change from 1 week on/1 week off to 2 weeks on/2 weeks off
Background:
14. At present the operatives work one week and then have a week
off. The Company proposes changing this to a cycle of two weeks
on followed by two weeks off. The Union rejects the claim.
Union's arguments:
15. (i) The proposal to change to a 28 day work cycle would
increase time spent offshore by an additional 224
hours-an increase of 6.24%. The 28 day cycle would
greatly increase stress at work as it would require
staff to undertake 14 consecutive 12 hours shifts which
could result in unsafe and fatigued work practices as
well as adding to domestic problems due to the
prolonged absences from home.
(ii) The Union could not see the workers ever accepting such
a retrograde proposal to worsen their conditions.
Management's arguments:
16. (i) This change is being sought primarily because of the
substantial reduction in helicopter flights and the
consequential savings in logistic expenses that would
result.
(ii) Workers will be spending a longer time at a stretch on
the platforms but this change will not result in any
increase in their annual contractual hours of work. It
will also give workers two week breaks with their
families.
(iii) This change would reduce the time spent by the workers
over the year travelling to and from work. It also
increases their flexibility in planning leisure and
family activities during field breaks.
(e) increase in annual leave:
Background:
17. The workers' present annual leave entitlement is 6 weeks.
This is made up of three periods of one week on and one week off
per annum. The Union is claiming increased annual leave. The
Company rejects the claim.
Union's arguments:
18. (i) While our members have six weeks holidays, made up of 4
weeks Annual Leave and 2 weeks productivity leave. 3
of these weeks only are duty weeks. A previous Court
hearing ruled that since "the week off the Platform is
deemed to be a working week" effectively gives our
members 3 weeks off in a year from actual work. The
other 3 weeks would be "off weeks" if the workers never
got any holidays.
(ii) The workers have great difficulty in arranging
holidays, since the memo of the 26th January, 1986,
for general distribution which stated "crew members are
to be encouraged to take holidays whenever Communions
and Confirmations are due". This subjects the workers
to great pressure which oft times result in them taking
their Annual Holidays to fit in with domestic
arrangements. In making the arrangements the workers
must then do so over a 2 week, or multiplier thereof,
period.
(iii) Concession of this claim would mean no extra cost to
the Company.
Company's arguments:
19. (i) The present annual leave entitlement of the workers is
in excess of the national norm.
(ii) The Unions have argued previously that each two weeks
of leave should only be counted as one week since the
employee would be on field break each alternative week.
The Company refutes this argument and was supported by
the Labour Court when this subject was reviewed in
1980.
(iii) The six weeks leave both exceeds the requirements of
the Holidays Act, 1973 and the level of annual leave
provided to other workers in this category. The
Company sees no merit in the claim for increased leave
regardless of the present financial situation.
(f) shorter working week:
Background:
20. The operatives normally work seven shifts per week with each
shift being of twelve hours duration, i.e. a total of 84 hours per
tour of duty. The Union claims the actual total number of hours
worked should be reduced to 80 hours or less per tour of duty.
The Company rejected the claim.
Union's arguments:
21. (i) This claim is based on the principle that many workers
enjoy a working week of less than 40 hours. It is in
operation in Marathon for their clerical and
administrative staff who work only a five day week.
(ii) The present work schedule requires attendance offshore
for 3,588 hours per annum for which the workers are
paid 1932 hours. The operators are resting, but on
call, for the other 1,656 hours.
(iii) Normal industrial 4 cycle shifts require 2058 hours per
annum from which it can be seen the workers spend 74%
more time at work than the average industrial worker.
It is also worth remembering that the operators work 7
consecutive 12 hour shifts while the normal on-shore
shift worker works only between 2 and 4 consecutive 12
hour shifts.
iv) If the Company is sincere in its stated anxiety over
night flights a quite simple solution would be to
reduce the shift week to 40 hours actual, crews could
then depart after completion of 80 hours work, giving a
four hours earlier crew change on crew change day.
Management's arguments:
22. (i) Normal work schedule for these employees is seven
12-hour shifts followed by a week off (i.e. 84 hours
per fortnight), which is equivalent on a per-week basis
to 42 hours. Two of these 42 hours are already
compensated for as an overtime element (the former
"40/42 hour payment") in their consolidated basic
salary, in recognition of the national norm of a
40-hour week for their employee - category. There is
no significant trend in Ireland to reduce the basic
working week below 40 hours and, even if such a trend
existed, the financial difficulties of this Company and
the practical difficulties of incorporating it into an
offshore schedule, would not allow this claim to be
considered at present.
(g) provision of telephone allowance:
Background:
23. The Union is claiming the payment of a telephone allowance.
The Company rejects the claim.
Union's arguments:
24. The claim for this payment is based on the simple fact that
the Company can and frequently has availed of the private phones
of operators to make contact with them in matters pertaining to
the Company's operations.
Management's arguments:
25. (i) The Company does not require employees to have
telephones in their homes. It is purely a matter of
choice on the part of employees whether to have a
telephone. Neither is it normal national industrial
practice to make much a payment to this employee
category.
(ii) The Company is not prepared to entertain this claim
regardless of its financial position and would ask the
Court to endorse its decision on this matter.
(h) inclusion of long-term disability benefit in Company/Union
Agreement
Background:
26. The Union is claiming the inclusion of long-term disability
benefit in Company/Union agreement. The Company rejects the
claim.
Union's arguments:
27. (i) This is simply a request and does not in fact
constitute a claim. The Union feels that it would only
be an addition to Clause X111 which relates to
illness/injury benefit. The Company's reaction in
considering the claim "surprising" is putting a very
liberal but biased interpretation on the December, 1983
Agreement whereby no negotiation on the long term
Disability Scheme can take place until December, 1991.
(ii) The Union is not looking for re-negotiation of that
agreement but rather its inclusion in the signed
agreement to which both sides are committed.
Management's arguments:
28. (i) This non-contributory benefit is included under the
umbrella of the Company's Retirement and Death Benefit
Plan which is the normal means by which this scheme is
provided.
(ii) There is an agreed 8 year moratorium in effect with the
Union which prohibits any negotiation concerning the
Pension Scheme and this moratorium will not expire
until 1991. This moratorium was agreed, in return for
an improvement given by the Company in terms of reduced
contributions on the part of its employees and was
concluded under the chairmanship of a Labour Court
appointed Conciliation Officer in 1983.
RECOMMENDATION:
29. The Court has considered the issues raised by the parties and
recommends as follows:
(a) Wage Increase
Having regard to the submissions made by the parties
the Court recommends an increase of 3% in respect of an
agreement of 12 months duration.
(b) Cessation of Early Shift Relief
The Court is of the opinion that the original
introduction of this practice has lead to difficulties
with regard to manning and recommends that the parties
should negotiate its elimination. It seems to the
Court appropriate that such negotiations take place in
the context of proposals by the Company to clarify the
clauses of the current agreement dealing with delays in
travelling to and from the platform.
(c) Elimination of Unnecessary Overtime
The Court recommends that the Company's proposals
regarding Safety checks carried out by night crews and
clearing of workshop on platform alpha be accepted by
the workers concerned.
(d) Change to 14 days on/14 days off
The Court does not recommend concession of this claim.
(e) Increase in Annual Leave
The Court does not recommend concession of this claim.
(f) Shorter Working Week
The Court does not recommend concession of this claim.
(g) Provision of Telephone Allowance
The Court does not recommend concession of this claim.
(h) Inclusion of Long Term Disability Benefit in
Company/Union Agreement
In light of the general industrial practice and having
regard to the nature of the scheme itself the Court
does not consider inclusion of these terms within the
Union Company Agreement to be essential or useful and
does not therefore recommend concession of this claim.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
Deputy Chairman
7th September, 1987
T.O'M./J.C.