Labour Court Database __________________________________________________________________________________ File Number: CD88261 Case Number: LCR11853 Section / Act: S67 Parties: AUGHINISH ALUMINA LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS UNION;NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION;ELECTRICAL TRADES UNION;AMALGAMATED ENGINEERING UNION |
Claim by the Union that the Company's proposal for redundancy is in breach of the contractor's clause of the Company/Union Comprehensive Procedural Agreement.
Recommendation:
6. The Court has carefully considered the submissions made by the
parties in respect of the question at issue and has come to the
conclusion that in the light of paragraph 2 of the letter of
undertaking of 30th November, 1987, the proposed voluntary
redundancies are not contrary to the terms of the Agreement on the
Employment of Contractors. The Court notes the revised machinery
provided to review the employment of contractors at the plant and
recommends that it be continued beyond the agreed trial period in
whatever form the parties eventually agree.
Division: Mr O'Connell Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD88261 RECOMMENDATION NO LCR11853
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AUGHINISH ALUMINA LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
ELECTRICAL TRADES UNION
AMALGAMATED ENGINEERING UNION
SUBJECT:
1. Claim by the Union that the Company's proposal for redundancy
is in breach of the contractor's clause of the Company/Union
Comprehensive Procedural Agreement.
BACKGROUND:
2. Rationalisation/re-organisation plans were drawn up by the
Company in late 1987. On 25th January, 1988 the Company announced
that it required revisions to work practices and 53 voluntary
redundancies, 31 to take place in March/April, 1988 and 22 in
September, 1988. Local level meetings took place in February and
March, 1988 and included detailed discussions on the number of
redundancies and the departments in which they were to occur. On
4th March, 1988 the Company wrote to the Unions setting out
revised proposals. These included a reduction in the number of
redundancies required from 53 to 42 and an offer of redundancy
compensation of four weeks pay per year of service in addition to
statutory entitlements. A further meeting was held on 7th March,
1988. The Unions' position was that the use of contractors was
high and that this use of contractors was a threat to full-time
employment and that they would be used to carry out a lot of the
work previously performed by workers being made redundant and that
this was in breach of Clause 11 of the Company/Union Agreement
relating to contractors. The current article on contractors was
renegotiated in November, 1987 and a Letter of Understanding of
30th November, 1987 was also issued (see Appendix A).
3. On 8th March, 1988, the matter was referred to the
conciliation service of the Labour Court. A conciliation
conference was held on 11th March, 1988. This was adjourned and a
further local meeting was held on 22nd March, 1988. No progress
was made and on 7th April, 1988, the matter was referred to the
Labour Court for investigation and recommendation. The Court
investigated the dispute on 12th April, 1988.
UNIONS' ARGUMENTS:
4.1 The Group is not opposed to the use of contractors on the
plant, as it is accepted that in a plant of its type,
situations will arise which call for the use of outside
contractors. However, such a need would only arise in two
principal cases, where specialist contractors are required
and in peak workload times.
4.2 The agreement which was reached on the revised clause
relating to contractors in the Company/Union agreement
(details supplied to the Court) provides that contractors
will not be used in a manner or activity which would
jeopardise full-time employment. The present proposed
redundancies are not motivated by changes in the method of
operation or new technology but as a cost cutting exercise,
by direct substitution of permanent workers with contractors.
4.3 Detailed examinations have been carried out on the level of
contractor activity and the present workload of the different
departments (details supplied to the Court). The level of
use of contractors is extremely high and the indications are
that this will continue. The Company has available to it all
the necessary in-house skills and resources to carry out most
of the work handed over to contractors and there would not be
the need for the number of redundancies sought by the
Company. The terms of Clause 11, para. 3 of the Company/
Union agreement should be upheld as the use of contractors to
this extent is contrary to the spirit and intent of the
contractors clause in the Agreement.
COMPANY'S ARGUMENTS:
5.1 Production costs in the Company are above the average in the
industry. To remain competitive, costs must be kept in line
with other companies. Manpower is a significant cost and the
present redundancies are a result of a reduced workload. The
Company must address such realities and run an efficient
business. The Company's rights in this matter are clearly
recognised under Articles 4.0, 10.0 and 13.0 of the
Procedural Agreement (details supplied to the Court). It
should be emphasised that the Company is seeking voluntary
redundancies and it has already achieved the number of
voluntary redundancies required from its staff employees.
5.2 The use of contractors is a fact of life in this Company and
the Unions' have accepted the need for involvement of
contractors on site. When the new Article on contractors was
negotiated the Unions stated that it should not be viewed by
the Company as an obstacle to managing its affairs. These
issues are dealt with in the Letter of Understanding of 30th
November, 1987 (details supplied to the Court). The Company
has assured the Unions' that the 42 redundancies are required
due to a reduction in workload and that contractors are not
being used either to displace or replace redundant jobs in
the Company. Contractors are used due to an ongoing
programme which requires substantial capital involvement each
year. This investment programme keeps this large and complex
plant in a safe, reliable and productive state and is a vital
contribution to the job security of the permanent workforce.
Due to an investment of £6.5m which has been made to increase
the production capacity of alumina there will be some extra
use of contractors this year. However, the Company hopes to
reduce its future use of contractors as much as possible.
RECOMMENDATION:
6. The Court has carefully considered the submissions made by the
parties in respect of the question at issue and has come to the
conclusion that in the light of paragraph 2 of the letter of
undertaking of 30th November, 1987, the proposed voluntary
redundancies are not contrary to the terms of the Agreement on the
Employment of Contractors. The Court notes the revised machinery
provided to review the employment of contractors at the plant and
recommends that it be continued beyond the agreed trial period in
whatever form the parties eventually agree.
~
Signed on behalf of the Labour Court
13th May, 1988 John O'Connell
U.M./P.G. Deputy Chairman
APPENDIX A
30 November, 1987
Mr T Walsh Mr N Young
Branch Secretary District Secretary
IT&GWU AEU
Mr F Dorgan Mr D Miller
Provincial Secretary Assistant General Secretary
NE&ETU ETU
Subject: Letter of Undertaking - Contractors
At our Company/Group of Unions meeting of 4th November, 1987, we
reached agreement on the outstanding issue of Contractors, i.e.
Article 11.0 of the Comprehensive Procedural Agreement. This
concluded our negotiations on the second generation "Grey Book".
Consequently the revised Comprehensive Agreement will be issued
shortly.
You asked us to embody our mutually agreed position on Contractors
in this Letter of Understanding. The revised text of Article 11.0
forms Appendix 1.
It is agreed and accepted by all parties to the Comprehensive
Agreement that:-
1. Aughinish Alumina Limited has an on-going need and entitlement
to employ Contractors over and above its own workforce;
2. The circumstances and exigencies of the Company's operations
and needs dictate the particular and varying breakdown between
permanent and contract labour at all times. The key
requirement is the need to always manage efficiently and
effectively so as to sustain and strengthen the Plant in an
environment that is international, competitive, changing and
cost focused.
3. The revised Article 11.0 as per Appendix 1 attached will
operate initially for a trial period of six months.
4. During the trial period, regular consultative meetings will
take place as follows:-
a. On the first Wednesday of each calendar month commencing
on 6 January, 1988, venue: Conference Room, Area 73.
Time 1.30 p.m.
b. Two Management Unit Managers, one Industrial Relations
Officer and four Shops Stewards will attend each meeting.
c. The agenda for each meeting will involve provision of
information and discussion of:
. work gone out to contract.
. work being considered for contract.
. practical alternatives.
. the nature and scope of the contract work involved.
d. The representations and proposals of Shop Stewards/Union
Officials will be fully considered but final decisions as
to the allocation of work/employment of Contractors shall
necessarily and per our mutual agreement be reserved to
management.
5. After the trial period, both sides will consider the following
systems:
a. Permanently adopt the above or
b. Permanently adopt the above subject to agreed
modifications, or
c. Adopt Article 11.0 as per our original Agreement of May
1987.
We trust that the above embodies what has been agreed and provides
a practical framework for its harmonious operation.
Yours faithfully
J P Kennedy
Personnel Manager
APPENDIX I
to Letter of Understanding
of 29th November, 1987
Article 11.0 Contractors
11.1 It is agreed that the Company may send work outside or
employ contractors within the works in such circumstances
as:
(i) Contractual obligations and/or guarantee work by
manufacturers.
(ii) Tasks involving the use of specialised knowledge,
methods or equipment.
(iii) Periodic tasks and/or Peak Workloads, e.g. when
in-house skills are unavailable in the quantities/
timeframes required.
(iv) Building maintenance, housekeeping, and catering
services.
The Company, in conjunction with the Unions, will ensure
that full information is given to Shop Stewards relating to
above or any similar matters.
11.2 The Company will ensure that all Contractors are bona fide
and that their Employees hold current cards of the
appropriate Trade Unions.
11.3 On the understanding that outside contractors will not be
used in a manner or on activities which jeopardise the
employment of full time employees of the Company, Company
employees agree to work and co-operate with such
contractors.