Labour Court Database __________________________________________________________________________________ File Number: CD88412 Case Number: LCR11974 Section / Act: S67 Parties: DATA PRODUCTS - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim for permanent status and conditions of employment on behalf of temporary workers with more than six months continuous service.
Recommendation:
5. In light of the present situation of the firm the Court
recommends that the Union defer pursuing this claim for a period
of twelve months. At the end of that period the parties should
enter into negotiations on all items relating to temporary
employees including the question of permanency. Should the
parties fail to reach agreement the claim should be resubmitted
direct to the Court. For this purpose the hearing of the Court on
the 14th July, 1988 can be considered as adjourned.
Division: Ms Owens Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD88412 RECOMMENDATION NO LCR11974
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: DATA PRODUCTS
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim for permanent status and conditions of employment on
behalf of temporary workers with more than six months continuous
service.
BACKGROUND:
2. The Company which employs approximately four hundred people is
divided into two divisions, printers and supplies. The printers
division manufactures and distributes computer printers and the
supplies division is involved in the manufacture of inked ribbons
and other printer accessories. Because of increased competition
in the computer market, employment in the printing division has
been significantly reduced. However, employment in the supplies
division of the Company has risen from sixteen in 1984 to eighty
eight in 1988. The number of temporary staff in the supplies
division is thirty four. Temporary staff operate the evening and
night shifts and have service ranging from two months to two and a
half years. Due to the reduction in the number of jobs in the
printer division, permanent employees who have not volunteered for
redundancy have been absorbed in the supplies division and have
displaced temporary employees from their jobs. Traditionally the
Company has employed temporary workers on a week to week basis.
The Union has been pressing the Company to appoint to permanent
positions, all temporary workers with more than six months
continuous service. The Company sees further problems in the
printing division and, therefore, sees no immediate benefit in the
upgrading to permanent status of temporary workers.
As no agreement was reached in discussions at local level the
dispute was referred to the conciliation service of the Labour
Court on the 15th April, 1988. A conciliation conference took
place on the 30th May, 1988 but no agreement was reached. The
dispute was referred to the Court for investigation and
recommendation on the 1st June, 1988. A Labour Court hearing took
place on the 14th July, 1988.
UNION'S ARGUMENTS:
3. 1. The general and widely accepted definition of "temporary"
labour is that which is used to cover for absenteeism, such
as maternity cover and long duration illness - or to meet peak
demand periods in a company's business. The very essence of
temporary employment is that it is temporary not that it is
called temporary. The overwhelming majority of these
"temporary" workers have been employed continuously for
periods of between ten months and two and a half years.
2. The continued employment of these workers over relatively
long periods of time confirms without doubt, that there is and
has been an ongoing requirement for their labour. The Company
enforced status of "temporary worker" has, therefore no basis
in reality but rather is a cynical device to cut costs.
Temporary workers do the same work over the same number of
hours as their permanent colleagues but without the benefits
associated with permanent status. This imposed temporary
status effectively and deliberately deprives a substantial
proportion of the workforce from any entitlement to sick pay,
pension or progression through the category one incremental
pay scale. There is, therefore, considerable loss to these
workers.
3. Apart from the material loss suffered by our members there
is also considerable psychological injury as a result of this
forced status. Vulnerability to lay-off and termination of
employment is a major source of stress which is compounded by
local supervision and junior management who have been more
than willing to threaten dismissal, either directly or by
implication, to ensure the subordination of these workers.
Consequently, workers with this "temporary" label
understandably feel that they cannot pursue grievances with
the same vigour as permanent workers.
4. The cost to the Company of permanent status for the
temporary employees with more than six months continuous
service, is very small when examined in the context of the
total wage cost in the Company. The lowest paid group of
workers in the Company is category one and their numbers are
less than a quarter of the total number employed.
The temporary, category one, workers represent, therefore,
less than ten per cent of the total number employed. The cost
of conceding this claim, when taken in the context of the
total labour cost, both direct and indirect, is, therefore,
marginal and could in no way adversely impact on the Company's
competitiveness.
5. The workers concerned have been continuously employed by
the Company in a temporary capacity for unreasonable lengths
of time with substantial loss and undue psychological stress,
without sustainable justification. The Union's attempt to
negotiate a realistic and reasonable resolution of this issue
has been thwarted by the Company's obsession with cost cutting
without regard for their employees. The continued imposition
of a temporary status on workers who clearly are not
temporary, in order to cut costs, will ultimately generate a
greater cost in terms of frustration, discontent and a general
worsening of the industrial relations climate in the Company.
COMPANY'S ARGUMENTS:
4. 1. Because of increased competition in the computer market,
the Company's profitability has been seriously affected and in
the fiscal year ending April, 1988, the Company lost twenty
million dollars. Despite this loss the Company has made
significant efforts to return to profitability by investing in
new technology and in research and development. The present
Company has recently closed a major plant in the USA and while
the work performed there has been transferred to other
sources, the Irish company, which has spare capacity, has
received none of this work. The opening of a new supplies
manufacturing operation in Portugal has just been announced in
order to compete more successfully with the severe competition
being experienced by the Company in Europe. This plant will
in addition to the Dublin plant service the European market
place.
2. While traditionally the Company has employed temporary
employees, they are never mislead into thinking that their
contract of employment may become permanent. They are
informed at the time of their hire and at all subsequent
references to their status. They are employed on a week to
week basis (details of employment contracts have already been
furnished to the Court) and the Company has found that when
many of the temporary employees gain experience they find jobs
elsewhere before or shortly after their temporary contracts
end. The Company has utilised temporary labour over the years
to cover short term increases in production or other
circumstances where additional output is required. In the
supplies division in particular where the Company manufactures
a consumable product it needs to be able to respond to urgent
and additional requests for product, otherwise customers will
give their business to a competitor. In practice the Company
retains temporary employees subject to the needs of the
business even when their requirement has diminished, in the
hope of additional orders. Consequently the service of some
temporary employees is longer than might be expected. Up to
1986 when a twenty six million dollar loss was recorded all
permanent supplies operator appointments were made from
temporary operators present at that time. Since then, excess
printer permanent operators have been transferred to supplies.
The Company had redundancies in 1986 and 1987 and additionally
twenty two temporary employees were let go or not replaced.
4. 3. To cope with the decline in the printer business the
Company offered voluntary redundancy and transferred twenty
two permanent printer operators to the supplies division and
by so doing not renewing twenty two temporary contracts for
supplies operators. This preserved the jobs of the permanent
operators, who as permanent employees are paid on an
incremental scale. By safeguarding these jobs in the supplies
division, the Company's labour costs rose significantly.
4. The supplies business is fiercely competitive with many
companies closing in Europe including two in Ireland.
Supplies operators in the plant are paid the same rate of pay
as printer operators, and rates of pay in the Company are
approximately thirty per cent higher than those paid in
comparable industries. The minimum start rate in the plant is
£150.25 per week. All rates of pay quoted reflect the
increases due under the Programme for National Recovery, the
terms of which have been offered to the Unions effective as
from May 2nd, 1988, but not yet accepted. The average actual
rate of pay of temporary operators in supplies is £188.71
which includes shift premium. The average labour cost in the
plant is eighteen per cent higher than in the USA. UK
competitors pay an average weekly wage of £102.00. This
highlights the difficult situation which the Company faces.
The Company, because of high labour rates, has endeavoured
unsuccessfully to get Union agreement on a lower starting rate
of £120.00 per week. The Company considers that this rate
reduction is necessary because of considerable price pressure
being experienced in the marketplace. Any action to make the
supplies division more uncompetitive in Ireland would increase
the risk of losing further business leading to greater job
losses.
5. The Company has recently lost two major contracts
representing approximately twenty per cent of its supplies
business. One of the aforementioned companies wrote to the
Company advising that the price quoted was not competitive
enough. High labour rates and remoteness from the continent
make it extremely difficult for the Company to compete
successfully. Any action to further disimprove this situation
could result in significant job losses in the supplies
division. The number of temporary operators has reduced in
the past two months from forty six to thirty three. The
parent Company has placed a ban on permanent appointments in
1986 because of the overcapacity within the corporation.
Prior to 1986 in excess of fourteen permanent appointments in
supplies were made from the temporary operators in house at
the time. The Company feels that it is inopportune to discuss
cost increases in a situation where there is overcapacity and
uncompetitive labour rates in a highly competitive
marketplace.
RECOMMENDATION:
5. In light of the present situation of the firm the Court
recommends that the Union defer pursuing this claim for a period
of twelve months. At the end of that period the parties should
enter into negotiations on all items relating to temporary
employees including the question of permanency. Should the
parties fail to reach agreement the claim should be resubmitted
direct to the Court. For this purpose the hearing of the Court on
the 14th July, 1988 can be considered as adjourned.
~
Signed on behalf of the Labour Court.
Evelyn Owens
___28th___July,____1988. ___________________
T. O'D. / M. F. Deputy Chairman