Labour Court Database __________________________________________________________________________________ File Number: CD88665 Case Number: LCR12110 Section / Act: S67 Parties: BEMICO (IRELAND) LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claims by the Union that (a) warnings issued by the Company to three named employees should be withdrawn, (b) a Sick Pay and Pension Scheme should be implemented before the end of 1988, (c) payment to seasonal workers in respect of public holidays.
Recommendation:
(1) Final Warnings
The Court, having regard to the circumstances in which
consolidation of part of the bonus took place in 1983 is
of the opinion that the Company is entitled to expect a
level of performance at least to the standard of level 2
of the old scheme and consistent failure to reach this
may be reasonably deemed to be unsatisfactory
performance. The Court therefore recommends that the
warnings issued in this respect should be cancelled but
in light of the above would consider that future warnings
related to the same behaviour to be completely valid.
(2) Sick Pay and Pension Scheme
It is to the advantage of all concerned that the plant be
operated at optimum efficiency. In light of the failure
over a long period to arrive at agreed means to bring
this improvement about, and the plant continues to
operate at efficiencies lower than its capacity, the
Company is entitled to withhold benefits the means of
payment for which it is being deprived of by virtue of
the stalemate on efficiency.
The Court recommends that the parties should make every
possible effort to reach agreement on change as soon as
possible and would recommend that the Company introduce a
Sick Pay and Pension Scheme on the successful conclusion
of such agreement.
(3) Holiday Pay
Insofar as the Company is making such payments in
accordance with the terms of the Holidays (Employees)
Act, 1973 the Court does not recommend any amendment of
such payments.
Division: Mr O'Connell Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD88665 RECOMMENDATION NO. LCR12110
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BEMICO (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claims by the Union that
(a) warnings issued by the Company to three named employees
should be withdrawn,
(b) a Sick Pay and Pension Scheme should be implemented
before the end of 1988,
(c) payment to seasonal workers in respect of public
holidays.
GENERAL BACKGROUND:
2. The Company is engaged in the manufacture of garden furniture
and produces both conventional and "all weather" furniture. No
agreement could be reached on the above mentioned claims at local
level and on 8th June, 1988, the matters were referred to the
conciliation service of the Labour Court. A conciliation
conference took place on 18th August, 1988. No agreement was
reached, and on 18th August, 1988, the matters were referred to
the Labour Court for investigation and recommendation. A Court
hearing took place in Waterford on 12th October, 1988.
CLAIM A: Warnings against three named workers should be
withdrawn
BACKGROUND:
The Company operates a production bonus scheme, which was first
agreed in 1979, and which has undergone a number of subsequent
revisions.
Following a strike in 1983 #10 of the bonus payment was
consolidated into basic pay. The Company contend that as a result
of this, the current production level for basic pay lies somewhere
between 100 and 110 springbeds per day i.e. between level 2 and
level 3 of the old scheme. The workers concerned are employed on
springbed work and produce 80 per day which the Union claims is
the target figure in respect of basic. In a letter issued to the
workers on 31st March, 1988, (which was not a formal warning) the
managing director made reference to an alleged conversation
between a chargehand and the workers. In this conversation the
workers are alleged to have stated that under no circumstances
would they cover more than 80 springbeds a day. The Union denies
that this conversation took place. The Company insists that it
did. Formal written warnings were issued to the three workers in
respect of their production level, on 4th July, 1988, culminating
in final written warnings on 18th July, 1988. A written warning
which was issued to the workers on 1st April, 1988 was for
reporting late to their place of work. This warning was also
rejected by the Union.
UNION'S ARGUMENTS:
3. 1. The warnings relating to production levels are being given
in respect of the non-achievement of bonus performance up to
100%, or 125 springbeds. There is no justification for any
form of disciplinary action provided that basic performance is
achieved which in the case of springbeds is 80 per day, or 400
per week. In support of its position, the Union can point to
correspondence issued by the Company in March, 1983 (details
supplied to the Court).
2. In its submission to the Labour Court on the 23rd pay
round dated 16th August, 1983, the Company included an
appendix setting out the details of the bonus scheme which
include reference to springbeds similar to the ones now under
construction. "Basic rate = 400 pieces per week, after that
.15p per bed on piece rate." There is therefore no doubt that
the figure required is 80 per day and not 125 as argued by the
Company.
3. The success or failure of a bonus scheme depends on how
attractive are the rewards for increased productivity, in
other words on the incentive. There can be no question of a
bonus scheme being operated under penalty of dismissal as in
this case. The operation in question is one of the most
physically difficult in the whole operation and very many
workers over the years have not found it possible to achieve
even the basic level of production required, yet these workers
were not subjected to disciplinary action.
4. Negotiations on a new replacement bonus scheme have been
taking place over the past four years. The Union is convinced
that at the root of this dispute lies the Company's belief
that acceptance of the new bonus is being prevented by the
three employees concerned in this case. The Company seems to
think that if the three are dismissed then the new bonus will
be agreed. The best efforts of the Union to persuade the
Company that this view is not only totally unfounded but
dangerous would appear to have failed and the Company appears
to be bent on confrontation.
COMPANY'S ARGUMENTS:
4. 1. The employees' assertion that the level of production
appropriate to basic pay is 80 pieces is not correct, since it
does not take account of the consolidation of part of the
bonus into basic pay in December, 1983, as part of an
agreement arrived at following a strike (details supplied to
the Court).
2. The rest of the workforce have consistently reached bonus
targets and have been paid at bonus level. Furthermore, other
employees on springbed covering have consistently reached
production levels of at least 125 per day. The Company is
convinced that the employees' performances constitutes a
deliberate restriction of output.
3. The Company has used all means available to encourage
improved performance. When these efforts failed the Company
had no option but to issue warnings to the employees. The
Company must be seen to be able to take action to bring about
reasonable standards of performance.
CLAIM B: that Sick Pay and Pension Scheme proposals should be
implemented before the end of 1988
BACKGROUND:
In L.C.R. 10881 the Court recommended that the Company give more
urgent attention to the introduction of a sick pay and pension
scheme. The Union has sought the implementation of a scheme. The
Company's position is that when the bonus has been finalised the
matter of a sick pay pension scheme can be discussed.
UNION'S ARGUMENTS:
5. 1. Since the issue of L.C.R. 10881 on the 7th January, 1987,
the Union has sought discussions with the Company in order to
progress its implementation. The response from the Company
has been to make any consideration of this recommendation
conditional on agreement being reached on a new bonus scheme
which is a totally unrelated matter.
2. In view of the total lack of progress the Union now
requests the Court to issue a further recommendation setting
out specific provisions in relation to sick pay and pension
schemes to be brought into effect by a date not later than the
end of 1988. The Union would expect that the specific
provisions referred to would reflect those set out in the
Union's submission of 26th November, 1986 (details supplied to
the Court).
COMPANY'S ARGUMENTS:
6. 1. There is a relationship between the Company's ability to
improve conditions of employment and the operating efficiency
of the plant. Clearly improved conditions have to be
financed. It is clear also that a company's preparedness to
improve conditions would be diminished where an asset was not
performing at optimum level and providing the returns of which
it is capable. The Bemico plant in New Ross operates at
approximately 77% efficiency. This is largely because the
level of output is much lower than is achievable.
2. That the factory is operating significantly below capacity
level has been amply demonstrated. At one stage in
discussions on a bonus scheme the Company stated that on
reaching existing targets employees could go home. Many
employees were finished work by 4 p.m. (normal finishing time
is 4.45 p.m.) and some were finished by 2 p.m. and 2.30 p.m.
3. Since 1983, discussions on a formal bonus scheme have been
ongoing. In a letter of 10th May, 1984 the Union agreed to
the referral of the question of a bonus scheme to the Irish
Productivity Centre. The report of the I.P.C. was intended to
be binding, but since the report was issued in 1985, the Union
has refused to abide by the agreement.
4. In an attempt to progress the matter the Company met the
Union at various stages to discover where the problem(s) lay.
The Company has repeatedly asked the Union both verbally and
in writing to advise the Company of the problem areas. To
date the Union has not done so. In 1987 the Union's
industrial engineer studied some of the jobs. The Company
agreed to this in an effort to progress the matter. It was
not intended that such a study would cancel out or undermine
the binding nature of the original agreement - the Company
agreed to it in good faith. The Company has repeatedly asked
the Union for a copy of the industrial engineer's report. To
date this has not been forthcoming.
5. The nett result is that the New Ross plant is inefficient.
Currently there are a large number of employees who produce
target outputs by early afternoon and who then sit in the
canteen. The Company does not have any principled objections
to the introduction of a pension and sick pay scheme. In
depth consultations have taken place with pension consultants
and the Company has also indicated to the Union certain of the
parameters within which a sick pay scheme could be operated.
6. The Company cannot proceed with these improved conditions
while the operating efficiency of the plant is at its present
level. The Company's position on these matters has been
outlined in a letter to the Union dated 26th June, 1987
whereby the company states that when the bonus, (a matter
outstanding since 1983,) has been finalised, the next matter
on the agenda of a pension and sick pay scheme can be
discussed.
CLAIM C: Payment to seasonal workers in respect of public
holidays
BACKGROUND:
The Company employs seasonal workers who would normally be in
employment for a period of six months in the year. They are
employed on a monthly contract which is renewed until the period
of seasonal employment is completed. The Union maintains that
these employees are covered by the Public Holiday provisions of
the Holiday (Employees) Act, 1973 in exactly the same way as other
permanent employees. In particular the Union claims there is no
requirement for these seasonal employees to have worked 120 hours
during the five weeks ending on the day before the Public Holiday.
The Union contends that this requirement only applies to persons
employed on a day to day or part-time basis.
UNION'S ARGUMENTS:
7. 1. The seasonal workers are neither day to day nor part-time
workers and must therefore be covered by the general
provisions of the Act in the same way as the permanent staff.
The workers concerned are being abused by the Company. The
legislation in relation to public holidays was amended
precisely in order to avoid such abuses. The Union requests
the Court to concede its claim.
COMPANY'S ARGUMENTS:
8. 1. The Company has as a matter of policy paid public holiday
entitlement to temporary employees in keeping with Section 4
(2)(a) and Section 5 (3) of the Holidays (Employees) Act,
1973. The Company has honoured its commitments, and has no
case to answer.
RECOMMENDATION:
(1) Final Warnings
The Court, having regard to the circumstances in which
consolidation of part of the bonus took place in 1983 is
of the opinion that the Company is entitled to expect a
level of performance at least to the standard of level 2
of the old scheme and consistent failure to reach this
may be reasonably deemed to be unsatisfactory
performance. The Court therefore recommends that the
warnings issued in this respect should be cancelled but
in light of the above would consider that future warnings
related to the same behaviour to be completely valid.
(2) Sick Pay and Pension Scheme
It is to the advantage of all concerned that the plant be
operated at optimum efficiency. In light of the failure
over a long period to arrive at agreed means to bring
this improvement about, and the plant continues to
operate at efficiencies lower than its capacity, the
Company is entitled to withhold benefits the means of
payment for which it is being deprived of by virtue of
the stalemate on efficiency.
The Court recommends that the parties should make every
possible effort to reach agreement on change as soon as
possible and would recommend that the Company introduce a
Sick Pay and Pension Scheme on the successful conclusion
of such agreement.
(3) Holiday Pay
Insofar as the Company is making such payments in
accordance with the terms of the Holidays (Employees)
Act, 1973 the Court does not recommend any amendment of
such payments.
~
Signed on behalf of the Labour Court,
John O'Connell
___________________
11th November, 1988
P.F./J.C. Deputy Chairman.