Labour Court Database __________________________________________________________________________________ File Number: CD88435 Case Number: LCR11976 Section / Act: S67 Parties: PREMIER DAIRIES - and - FEDERATED WORKERS UNION OF IRELAND |
Loss of earnings due to rationalisation.
Recommendation:
6. Having carefully considered the submissions made by the
parties, the Court is of the opinion that there is scope for
further serious negotiations between the two parties. The Court,
mindful of the lack of any real progress to date, recommends that
renewed negotiations should take place immediately - these to be
concluded by 31st August. The Court will make an Industrial
Relations Officer available to assist in these negotiations should
the parties so wish.
In the event of it not being found possible to reach agreement at
these negotiations the Court will arrange for an early hearing and
the issue of an early recommendation in an effort to finalise the
matter.
Division: Mr Fitzgerald Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD88435 RECOMMENDATION NO. LCR11976
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: PREMIER DAIRIES
(Represented by the Federated Union of Employers)
and
FEDERATED WORKERS UNION OF IRELAND
SUBJECT:
1. Loss of earnings due to rationalisation.
BACKGROUND:
2. In January, 1988, the Company announced to all Unions
representing workers in both the Finglas and Rathfarnham plants a
rationalisation plan involving over 200 redundancies and changes
in work practices. One of the major aspects of the
rationalisation plan includes a change over from a seven day
operation to a six day operation in both milk production and
distribution. The change over to six days will involve a major
reduction in Sunday staff requirements and will result in a loss
of premium payments in "the losing day", "Sunday payment" and in
bonus and overtime.
3. Local level meetings on the various aspects of rationalisation
have taken place since January, 1988. The Company has offered to
pay six months loss of earnings as compensation to be calculated
at the end of a six month period (now changed to a twelve month
calculation period) and to guarantee all existing payments and not
to introduce the six day week until all processes had been gone
through to resolve the issue. The Union is seeking a new
comprehensive wage structure which will guarantee the workers no
loss of earnings. On 9th May, 1988, the matter was referred to
the conciliation service of the Labour Court. A conciliation
conference was held on 27th May, 1988, at which no progress was
made and on 7th June, 1988, the matter was referred to the Labour
Court for investigation and recommendation. A Court hearing was
scheduled for 4th July, 1988, however the Court decided to adjourn
the hearing until 12th July as the Irish Transport and General
Workers Union, who had been present at the conciliation
conference, did not attend. The ITGWU was informed by letter on
4th July, 1988, of the postponement and by letter of 7th July,
1988, responded to the Court to the effect that it would not be
attending the hearing as it was not present at local discussions
which led to the referral to conciliation and therefore did not
feel that it had reached the appropriate stage in negotiations
with the Company for a referral to the Court. The Court hearing
therefore resumed on 12th July, 1988.
UNION'S ARGUMENTS:
4. 1. The Company's proposals for general changes in work
practices will result in a massive reduction in earnings for
the workers. The introduction of a six day working week will
result in a substantial loss of Sunday payment, and as a
result of the loss of the losing day, which is an inherent
feature of the 7 day working system, there will be an
additional loss of twelve days per annum. Overtime in the
Company arises from workers being asked to work their days
off and this amounts to approximately 40% to 50% of earnings
per annum. There is also a possibility that the workers will
lose twelve days bonus per annum.
2. The redundancy of over 200 workers assures the Company of
a huge reduction in labour costs however, the Company also
wishes to reduce the wages of those workers remaining. The
Company's offer of a lump sum compensation payment of six
months loss of earnings is unacceptable and a new
comprehensive wage structure should be set up to guarantee
that the workers suffer no loss of earnings. There have been
no realistic attempts by the Company to negotiate on this
issue and the Court should recommend that the Company should
go back to negotiations with all parties involved.
COMPANY'S ARGUMENTS:
5. 1. Rationalisation throughout all areas of the Company's
operations is necessary in order to try to return to
profitability and to protect the jobs remaining after
completion of the rationalisation programme. Together with
the cost of any compensation paid the Company will be
financing over two hundred redundancies calculated at four
weeks pay per year of service and augmentation of pensions.
If the Union's claim is conceded, the benefit of the
rationalisation programme will be negated. As it is, the
reduction in the number of workers through redundancy and
early retirement will not be sufficient to ensure a return to
profitability and therefore it is necessary to effect
on-going cost savings.
2. There is already a precedent of six months compensation
for loss of earnings paid to workers in both Finglas and
Rathfarnham on two occasions over the last four years. Any
compensation awarded will not only be applicable to the
immediate group affected by the change from seven days to six
days but will also have repercussive effects with other
groups of workers who will experience losses as the whole
rationalisation programme has yet to be finalised. The
Company, in an attempt to negotiate the rationalisation in
the fairest manner possible, has incurred extra costs as it
has already agreed there will be no loss of earnings and has
prolonged the introduction of the six day week along with its
cost saving effect pending the outcome of the Labour Court
recommendation. The Company's offer is a fair and just
formula for the calculation of loss of earnings.
3. Since the Company made the offer of six months
compensation based on a six months calculation period it is
now of the opinion that a twelve month calculation period
would be more appropriate, as it is anticipated that no
worker will suffer a complete loss of premium payments and to
take into account the peaks and valley's of premium payments
throughout the year.
RECOMMENDATION:
6. Having carefully considered the submissions made by the
parties, the Court is of the opinion that there is scope for
further serious negotiations between the two parties. The Court,
mindful of the lack of any real progress to date, recommends that
renewed negotiations should take place immediately - these to be
concluded by 31st August. The Court will make an Industrial
Relations Officer available to assist in these negotiations should
the parties so wish.
In the event of it not being found possible to reach agreement at
these negotiations the Court will arrange for an early hearing and
the issue of an early recommendation in an effort to finalise the
matter.
~
Signed on behalf of the Labour Court
28th July, 1988 Nicholas Fitzgerald
U.M./P.W. Deputy Chairman