Labour Court Database __________________________________________________________________________________ File Number: CD88331 Case Number: LCR11873 Section / Act: S67 Parties: KILDARE COUNTY COUNCIL - and - FEDERATED WORKERS' UNION OF IRELAND |
Objection by the Union to the contracting out of refuse collection work.
Recommendation:
5. As the Court has already stated in L.C.R. 11816, the Court
does not find that the issue of "contracting out" is of itself
covered in the Programme for National Recovery, nor is there an
agreement between the Union and the Council. The question of a
breach of an agreement does not therefore arise.
The question for the Court therefore is the industrial relations
consequences of contracting out. In this case the Council is
offering new alternative duties at the same basic rate of pay.
The Court does not regard this as unreasonable.
The Court therefore recommends that the Council's proposals be
accepted and that any residual issue be dealt with through agreed
procedures.
Division: John Horgan Mr Heffernan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88331 RECOMMENDATION NO. LCR11873
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: KILDARE COUNTY COUNCIL
and
FEDERATED WORKERS' UNION OF IRELAND
SUBJECT:
1. Objection by the Union to the contracting out of refuse
collection work.
BACKGROUND:
2. Since the early 1970's, 60% of the refuse collection service
in Co. Kildare has been carried out by outside contractors. The
Council now proposes to contract out the balance of its refuse
collection work because of financial imperatives including the
requirement to replace its three remaining refuse collection
trucks within the next year. It is proposed to absorb the 10
employees concerned into other work with no loss in basic pay,
although opportunities for enhanced payments may be affected. The
Union object to the proposed change, stating that it is contrary
to the terms of the National Plan. Agreement was not reached on
the issue at local level, and on 20th April, 1988, the matter was
referred to the conciliation service of the Labour Court.
Agreement was not reached at the conciliation conference held on
28th April, 1988, and on 4th May, 1988, the matter was referred to
the Labour Court for investigation and recommendation. A Court
hearing took place in Dublin on 17th May, 1988.
UNION'S ARGUMENTS:
3. 1. The Union does not accept the need to replace the three
trucks involved in refuse collection within twelve months.
The Council have already unilaterally contracted out the work
of one refuse truck which could not be manned from the
workforce due to voluntary redundancy. The Union contends
that this truck and the remaining two trucks on direct labour
should be maintained on direct labour. The workers have
offered the Council a scheme to operate the three trucks on
direct labour without extra cost to it.
2. The proposal to privatise the remainder of the refuse
service is contrary to the terms of the Programme for National
Recovery. In Clause 11 of the Programme, it is stated that:
"in realising their budgetary targets the Government are
committed to the need for the achievement of a reduction
in the number of public service employees. The Government
is committed to achieving this reduction on a voluntary
basis."
Indeed in discussions with I.C.T.U. on the Programme, the
Taoiseach accepted that all redundancies, if any, in the
public sector must be on a voluntary basis. It is
self-evident that the proposed privatisation will result in
the compulsory elimination of 10 public sector positions. It
cannot be argued that these jobs have ceased to exist either
by reason of rationalisation or redundancy. The net effect of
the proposal will be the transferring of 10 local authority
jobs to a private contractor. It is the Union's contention
that Kildare County Council is not permitted to do so under
the National Programme.
3. The Union wishes to draw the attention of the Court to the
directive from the Department of the Environment dated 15th
October, 1987 to each County/City Manager (details supplied to
the Court). The directive states inter alia:
"The Minister hereby authorises all Managers to offer the
terms of the package immediately to all grades of staff....
other than key staff or those required to maintain
essential services."
The Minister has also stated regarding measures to reduce public
sector staff numbers that:
"the measures will apply in the Local Authority Service to
meet situations where indentifiable staff are surplus to
requirements. The scheme of voluntary redundancy/early
retirement terms is to be applied only in areas where
identified redundancy or overstaffing exists."
It is clear, therefore, that the Council must maintain essential
services themselves and retain adequate employee numbers. To do
otherwise is a breach of the Minister's Directive and as a
consequence, the Council's argument for privatisation is
manifestly contrary to the Directive."
4. The Union would question the cost effectiveness of a
private operation. On the surface it might appear cheaper,
but in reality and in the long-term, private contractors could
be more expensive and less effective. Firstly, the private
contractor would not be able to provide the necessary
supervisory control, back up facilities, and audit control
which the Local Authority quite rightly has in existence.
Secondly, with the passage of time, the County Council would
become solely dependent on private enterprise to maintain the
service which it is statutorily required to provide. This
could lead to a monopoly situation arising whereby the Local
Authority would be at the mercy of private enterprise and the
community could be faced with exorbitant charges for the
service. Thirdly, there is no guarantee that reasonable rates
of pay would be paid to a private contractor's employees.
This would result in an obvious drop in income tax payments.
Similarly, there is no guarantee that P.R.S.I. payments would
be made or that the service would not operate in what is now
commonly known as the 'Black Economy'. All of this could lead
to a position whereby the community would be faced with
excessive charges for the service, whilst at the same time the
State would not be receiving proper and adequate returns from
taxation and social insurance contributions.
5. The Union contends that the case before the Court is
similar to that dealt with in L.C.R. 11816, in which the Court
recommended in favour of the Union. In the light of the above
arguments, the Union requests the Court to recommend in its
favour.
COUNCIL'S ARGUMENTS:
4. 1. The Council is proposing to contract out the collection of
refuse purely on the basis of financial necessity. On the
basis of tenders received, the Council can demonstrate that
the direct labour system would cost £150,000 per annum more
than the contract alternative. The Council is in a grave
financial situation (details supplied to the Court). It has
already had to terminate certain services, and severely
restrict others. With regard to the refuse collection service
it must be pointed out that in addition to wage costs other
factors had to be taken into account viz. the cost of the
running, maintenance, and replacement of vehicles. If the
Council was to continue operating the refuse collection
service under the existing system, three refuse collection
trucks would have to be replaced within twelve months at a
cost of £80,000 each.
2. Financial cutbacks have necessitated reorganisation of a
whole range of state services. This reorganisation could not
take place without redeployment of existing staff. There has
been large scale redeployment of staff as a result of the
amalgamation or closure of state agencies and the closure or
partial closure of many hospitals. Local Authorities are also
required to reorganise services and thus the consequential
necessity to redeploy staff arises. If County Managers were
denied the right to redeploy staff, their ability to implement
necessary rationalisation measures would be rendered
impossible. It must be pointed out that rationalisation
measures have been put into effect in the following areas of
the Councils activity; Road Construction and Maintenance,
Housing Construction and Maintenance, Parks and Amenity
Development and Maintenance, Drainage and Refuse Tips.
3. One of the principal objectives of the Programme is to
control and curtail public expenditure. To this end the
Programme includes the commitment to the achievement of a
reduction in the number of public service employees on a
voluntary basis. Kildare County Council have complied with
the terms of the Programme in all respects. The Union is
alleging a breach of the Programme by reason of the abolition
of the post of refuse collector. On this point it must be
made clear that the Programme makes no mention of "posts" but
states that the reduction of public service "employees" will
be on a voluntary basis. Contracting out the refuse
collection service does not involve the loss of employment for
the workers concerned as they will be continued in the
Council's employment in other work areas. Finally if posts
could not be abolished then the reorganisation measures so
essential to the Local Authorities' contribution to the
Government's objective of reducing the number of public
service employees could not be achieved.
4. Contracting out services is not a new phenomenon, it has
always been a feature of Local Authorities operations and
there is no agreement in force which precludes such Management
prerogative. The Council requests the Court to recommend in
its favour.
RECOMMENDATION:
5. As the Court has already stated in L.C.R. 11816, the Court
does not find that the issue of "contracting out" is of itself
covered in the Programme for National Recovery, nor is there an
agreement between the Union and the Council. The question of a
breach of an agreement does not therefore arise.
The question for the Court therefore is the industrial relations
consequences of contracting out. In this case the Council is
offering new alternative duties at the same basic rate of pay.
The Court does not regard this as unreasonable.
The Court therefore recommends that the Council's proposals be
accepted and that any residual issue be dealt with through agreed
procedures.
~
Signed on behalf of the Labour Court
John M. Horgan
________________________
30th May, 1988. Chairman
P.F./J.C.