LCR11673

Subject:
Claim for compensation for loss of shift and the retention of established manning levels.

Recommendation:
6. The Court having considered the submissions from both parties
recommends that the Union accept the management proposal to pay
compensation according to the terms of the 1984 Agreement.

The Court further recommends that the Union accept the Company's
proposed staffing levels at present and that the Company agree to
transfer the foreman in question to the first vacancy for working
foreman which occurs in the plant.

Division: Ms Owens Mr Heffernan Mr Devine

Text of Document__________________________________________________________________

CD8833 RECOMMENDATION NO. LCR11673


INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67

PARTIES: LEO LABORATORIES
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)

AND

FEDERATED WORKERS' UNION OF IRELAND



SUBJECT:
1. Claim for compensation for loss of shift and the retention of
established manning levels.

BACKGROUND:
2. This claim arises from the discontinuation of shift working in
the Company's diuretic synthesis plant. Since January, 1977 a
double shift system has been operated in this plant. Each shift
was manned by one working foreman and one grade 6 operator. A 20%
shift allowance was paid. In October, 1987 the Company informed
the Union of its intention to discontinue shift working in the
synthesis plant with effect from 1st January, 1988. The Company
proposed to compensate the workers concerned in the four weeks
following termination of shift as follows:

1st Week 100%, 2nd Week 75%, 3rd Week 50% and 4th Week 25%.

This was in accordance with an agreement on shift working
concluded on 22nd May, 1984. In addition the Company proposed
that the plant would be operated on day work by the two working
foremen and that the two grade 6 operators would be absorbed into
other sections where vacancies existed for them. The Union
rejected the Company's entire proposal and claimed compensation of
1.50 times the annual loss of shift premium and that the established
staffing levels of one grade 6 operator and one foreman be
continued.

3. No agreement was reached through local negotiations and on
14th December, 1987 the matter was referred to the conciliation
service of the Labour Court. A conciliation conference was held
on 6th January, 1988 but no agreement was reached and the parties
sought that the case be referred to the Court for investigation
and recommendation. A Labour Court hearing was held on 18th
January, 1988.


UNION'S ARGUMENTS:
4. 1. The basis for the discontinuation of the shift set out in
the Company's production schedule does not stand-up to
scrutiny. A comparison of the production programme for 1987
with that proposed for 1988 shows that 27 batches were
produced in 1987 yielding 2486.13kg of finished material which
in 1988 it is proposed to produce 16 batches, which would be
22 batches due to production methods with a total yield of
2800kg of finished material. The Company's position will
clearly be seen to be contradictory from an analysis of the
production figures.

2. The nonsense of the Company's decision to discontinue
shift is all the more stark when it is realised that this work
has all been measured by the work study department and is
performed at full bonus rates under a bonus scheme clearly
establishing the need for 2 shifts.

3. The Company's figures for production time are a nonsense
and 2 shift working is fully justified (details supplied to
the Court).

4. The figure for the volume of finished material scheduled
for 1988 is not out of line with the equivalent figures for
approved finished material for 1985/86/87 (details supplied to
the Court). The average volume of approved finished material
in the eleven years 1977 to 1987 is 3158kg. The proposed
figure for 1988 which is 2800kg equals 89% of this figure.
Clearly therefore the schedule for 1988 does not warrant any
discontinuation of this shift.

5. Should the Company insist on discontinuing the shift then
adequate compensation should be paid to the staff. This
compensation should be in line with settlements generally in
cases of loss of shift allowance. The level of compensation
should also take account of the effect of loss of shift
premium on the workers earnings (details supplied to the
Court).

6. All of these workers have been on continuous shift work
for the past ten years. To take them off shift after such a
period demands fair and adequate compensation to, allow them
address any commitments they have entered based on the
earnings the Company allowed them become accustomed to.

7. Staffing levels in the synthesis plant have been agreed at
1 grade 6 operator and 1 foreman per shift. The Company's
proposal that the plant be staffed by two foremen is a direct
breach of this long standing agreement and is totally
unacceptable to the Union. In addition the Company's position
is not tenable as there are at least 2 current vacancies into
which one of the foremen from the plant could be allocated and
the agreed staffing levels maintained.


COMPANY'S ARGUMENTS:
5. 1. Because of trading difficulties and health service cut
backs the Company has found it necessary to implement a
rationalisation programme aimed at reducing costs and
increasing efficiency at every level. This has resulted,
among other measures, in a reduction in the numbers employed
by the Company from 430 in 1986 to 340 in January, 1988.

2. It is the Company's policy where possible to avoid
compulsory redundancies and lay-offs among permanent
employees. So far it has been able to achieve the 21%
reduction in employee numbers since 1986 by a combination of
voluntary redundancy, early retirement, career breaks,
transfers, promotions and re-organisation.

3. In October, 1987 when the production programme for 1988
was prepared it became apparent that the level of production
required in 1988 would not sustain the continuation of shift
work in the synthesis plant. This was due to the
non-availability for production of the Company's new
hypertension agent Pindac (Pinacidil), and the reduced demand
for the Synthesis Plant's usual products. It was therefore
necessary to temporarily cease shift work from 1st January,
1988. Since vacancies existed elsewhere for operators and no
such vacancies existed for foremen the Company had no choice
but to transfer the two grade 6 operators. The only other
alternative open to the Company was to make redundant or
lay-off, two employees.

4. No guarantee of the continuation of shift working has ever
been given to employees of the synthesis plant or to any other
employees. On several occasions since shift was introduced in
the synthesis plant claims have been made by the Union that
shift should be guaranteed and be considered for pension
purposes. The Company has always rejected such claims
unequivocally.

5. The Company/Union agreement of 22nd May, 1984 was
negotiated specifically for termination of shift situations
such as the one under consideration here. In addition all
terminations of shift which have occurred in the past have
been dealt with by the application of that agreement which has
been found acceptable to employees. These terminations have
involved both foremen and operators.

6. The Company has never paid compensation for loss of
earnings due to the termination of shift other that the terms
of the Company/Union agreement of 22nd May, 1984. The Company
has paid compensation for loss of earnings due to loss of
overtime when that loss resulted from productivity measures
instituted by the Company. The Company has never paid
compensation for loss of earnings when the cause was loss of
production or some other mutually undersirable and detrimental
development. In addition no loss of earnings can be proved at
present since overtime earnings under the new system in the
future may nullify the loss of shift allowance. Any claim for
compensation, however unjustified, is therefore premature.





5. 7. Concession of the Union's claim for extra compensation is
not justifiable in the context of the Company wide cost
reduction programme.



RECOMMENDATION:

6. The Court having considered the submissions from both parties
recommends that the Union accept the management proposal to pay
compensation according to the terms of the 1984 Agreement.

The Court further recommends that the Union accept the Company's
proposed staffing levels at present and that the Company agree to
transfer the foreman in question to the first vacancy for working
foreman which occurs in the plant.
~

Signed on behalf of the Labour Court.




Evelyn Owens
___8th____February,___1988. __________________
T. O'M. / M. F. Deputy Chairman