Labour Court Database __________________________________________________________________________________ File Number: CD89116 Case Number: LCR12368 Section / Act: S67 Parties: HARP (IRELAND) LIMITED - and - HARP IRELAND STAFF ASSOCIATION |
Claim for compensation for loss of earnings and payment, on a comparable basis with other workers in the brewery, in respect of implementation of the five year plan.
Recommendation:
5. The Court, having regard to the submissions made and in
particular having regard to the detailed and lengthy negotiations
which took place between the parties recommends that the terms of
settlement as set out in the I.R.O.'s letter of the 1st September,
1988 be accepted by both parties.
Division: Mr O'Connell Mr Collins Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD89116 RECOMMENDATION NO. LCR12368
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: HARP (IRELAND) LIMITED
and
HARP IRELAND STAFF ASSOCIATION
SUBJECT:
1. Claim for compensation for loss of earnings and payment, on a
comparable basis with other workers in the brewery, in respect of
implementation of the five year plan.
BACKGROUND:
2. The claim concerns salaried workers who are employed at the
Company's brewery in Dundalk. In 1987 in order to secure the
future of the Company through a programme for capital investment,
the Company and the Association entered into a five year
Agreement. Under the terms of the Agreement the parties agreed to
set up a Joint Working Party (J.W.P.) composed of representatives
of the Company and the Association to establish and report on loss
of earnings for staff arising out of changes in the Company.
Details of the report which was published in March, 1988 have been
supplied to the Court.
3. In the meantime separate talks on the five year Agreement were
taking place between the Company and Joint Union Group (J.U.G.)
representing the general operative and craft grades. These talks
concerning the payment of compensation and harmonisation of
conditions of employment were the subject of a Labour Court
Recommendation (L.C.R. 11947 refers). That recommendation and a
subsequent conciliation conference lead to an agreement between
the parties (details supplied to the Court), in August, 1988.
4. The Association on behalf of the workers here concerned claims
that they had a prior commitment from the Company that their
members who were also involved in tandem negotiations for
compensation, would receive settlement terms similar to those
offered to the J.U.G. group. The Company's offer however was less
favourable than that offered to the J.U.G. group, and was rejected
by the Association. The dispute could not be resolved in local
discussions and was referred to the conciliation service of the
Labour Court. As a result of conciliation conference held in
August, 1988 settlement proposals emerged which were confirmed by
letter to both parties in September, 1988 (details supplied to the
Court). The difference between the proposals and those accepted
by the J.U.G. group were as follows:
(1) Extension of staff attendance hours applying to all new
staff appointees from signing of agreement.
(2) The first 2 hours overtime per month would not attract
overtime payment.
(3) No #100 annual bonus.
The proposals also provided for the following payments:
On acceptance: #2,300
January, 1989 # 300
" 1990 # 300
The workers concerned in a ballot rejected the proposals as they
considered them inferior to the J.U.G. proposals and further
conciliation conferences held in October, 1988 and January, 1989
failed to resolve the issue. The dispute was referred to the
Labour Court for investigation and recommendation on the 28th
February, 1989. Court hearings were held on the 28th February and
3rd April, 1989.
ASSOCIATION'S ARGUMENTS:
3. 1. It is important to note that the acceptance of the five
year programme by one or other or preferably by both groups of
workers in the brewery was identified by Management as being
crucial to the determination of a policy decision by the
parent Company (Guinness Ireland) to commence the brewing and
production of carlsberg larger in the Dundalk brewery. At a
meeting held on the 20th December, 1987, Management strongly
emphasised this factor and requested the Association to
reconsider the Company's offer of 8th December, 1987 (details
supplied to the Court). After protracted discussions the
Company acknowledged that if the offer was accepted:
(i) On the issue of compensation the salaried staff would
be treated no less favourably in settlement than the
J.U.G., and,
(ii) In the event of the J.U.G. securing a shorter working
week the Association would be at liberty to enter
into further negotiations for a reciprocal benefit on
behalf of their members. On foot of these
assurances, albeit verbal, the Association accepted
the Company's proposals.
The J.U.G. rejected the Company's offer and processed their
claim through the Court. It should be noted that at the
meeting of 20th December, 1987, the Company stated that the
27th pay round offer (retrospective to 1st August, 1987) was
an integral component of the package for both groups and under
no circumstances would it be implemented on a separate basis.
The Company subsequently implemented the terms of their offer
on the 27th wage round to the J.U.G. and agreed to refer the
other issues on the five year programme to the Court as
singular elements outside the 27th wage round settlement. In
fact at the meeting of 20th December, 1987 the Company
intimated that if the J.U.G. did not accept the entire package
including the 27th wage round "the bets were off." The J.U.G.
subsequently rejected the Company's offer and L.C.R. 11947,
and following a threat of industrial action the offer was
substantially increased (details supplied to the Court) in
August, 1988.
2. The J.W.P. formula for compensation was not developed on a
like with like basis with the J.U.G. (details supplied to the
Court) which information unfortunately was not available to
the staff side representatives on the working party. The
following areas represented very real, if somewhat
non-calculable elements, which were central to the
introduction of the five year programme, and in respect of
which no comparison could be realistically drawn with the
J.U.G.:-
(1) Staff co-operation in introducing and implementing a
management team structure in the brewery which was
central to maximising efficiency, manpower utilisation
and output.
(2) Staff's ready and immediate response to securing the
brewing of Carlsberg in Dundalk.
(3) Flexibility of all grades of staff within their
respective spheres of operation, despite the unique
difference in this area between the salaried staff and
J.U.G. members.
(4) The commitment, dedication and willingness of staff at
all times, especially in emergency situations which
continually arose in relation to production.
(5) In addition to the foregoing, the continuous contribution
of all staff to in-house training was immeasurable, but
nevertheless a vital factor in the Company's operations.
3. Meetings with the Company proved abortive, in that the
Company declined to table a concrete offer on the claim, on
the alleged grounds that a proper basis for compensation had
not been established, although management did acknowledge from
time to time throughout the discussions that a "gentleman's
agreement" had been entered into at the meeting on 20th
December, 1987. The Association members are totally opposed
to any prospective interference with or dilution of their
existing conditions of service. They view the issue as being
specific to the five year programme in that the Company sought
the co-operation of all staff in the brewery on this issue,
offering similar type inducements to achieve agreement. On
the one hand the J.U.G. finally registered acceptance in
return for a lump sum of IR#2,800, paid on a graduated basis,
IR#100 per annum in perpetuity, improved annual leave, and a
reduction in working hours from April, 1989 for all their
members, whereas on the other hand the Association members,
having tendered agreement to the programme in December, 1987,
in good faith and in anticipation and expectation of
management fulfilling their commitments, have received
nothing. The requirements and obligations on Association
members as set out in the Company's letter of 8th December,
1987 have at all times continued to be met, notwithstanding
the issue in dispute before the Court.
4. Subsequently, it came to the notice of the Association
that the formula used to determine the basis for compensation
for the J.U.G. had been determined on a module of a specific
number of workers, directly involved with the change in
operations, which had not been the Association's previous
understanding of the position and which information had not
been available or indeed offered to them when the J.W.P. was
conducting their examination. The two staff representatives
then carried out a further extensive study on a direct
like-with-like basis, with the J.U.G. exercise to ascertain
the comparable effects, and this produced a comprehensive
documented report (details supplied to the Court). In an
effort to resolve the dispute, a further conciliation
conference was held on 11th January, 1989, at which the
Association submitted the aforementioned report as a basis for
both parties to re-examine and perhaps determine a mutually
acceptable mechanism, for appropriate payment to the
Association members which was fully in accord with the terms
of reference of the original J.W.P. report.
The conclusions reached in the report were rejected as invalid
by Management representatives, albeit in the view of the
Association, no cogent or realistic arguments were advanced as
to why a statistical formula used on behalf of one group of
employees, should not be appropriate for another group, where
the common denominator applied to both i.e. the effect of
changes introduced. The Association were quite willing to
have their supplementary minority report adjudicated on by a
competent body to be agreed by both parties, e.g. Irish
Productivity Centre etc. the cost of this exercise to be
mutually shared between the parties, but the Company would not
agree.
5. Although different rates of pay and salary scales apply as
between the salaried staff and the J.U.G. workers, there is a
rate of pay benchmark agreement, between the grades, which
ensures a specific relativity in the event of basic pay being
increased above the normal pay round increases, which by
tradition anyway have always been comparable for all workers
in the brewery. Furthermore, in the past, by custom and
practice, lump sum payments to the J.U.G. have always been
paid to the salaried staff. The Association members, although
diversified in different categories relative to their
particular functions, are collectively responsible for the
front-line management of the brewery, and consequently, were
and are directly involved in the implementation of the
Company's five year programme at the brewery on a day to day
basis. The members of the Association understandably feel
totally frustrated and let down, and indeed simply fail to
comprehend why the Company have not made a single concrete
offer of a lump sum payment, on the issue of the five year
programme.
6. Insofar as the claim proper is concerned, the principle
difference between the parties is the basis for payment of
compensation. The Company maintain that because there has not
been a collective loss of earnings across the board for all
the salaried staff, they should concede a mitigation in their
existing conditions of service to justify payment (details
supplied to the Court).
7. It must be emphasised in this regard that whereas
flexibility and interchangeability obtains between the J.U.G.
workers in practically all areas of the brewery's operations,
the same concept does not and indeed cannot apply in the
various elements of salaried staff duties (details supplied to
the Court). This factor represents a fundamental difference
in any assessment between the salaried staff and the J.U.G.
overtime patterns, quite apart from the argument that the
Association strongly maintain that the Company's insistence on
offsetting overtime earnings for grades which were not
directly related to changes in plant operations is incorrect.
The Company in determining the basis for compensation for the
J.U.G. used a module which was directly addressed to the
changes in plant and operations affecting an equation of 15.5
J.U.G. workers directly involved in the change. The Company
should have applied a similar mechanism to the salaried staff,
especially in that the comparable objective, agreement with
the five year plan, was achieved. The Association have, on a
like-with-like comparison with the J.U.G., established a basis
for compensation as summarised in the supplementary report.
The claim for a lump sum payment, and annual payment of
IR#100, having regard to the settlement for the J.U.G.
workers, be conceded and the Company should fulfil their
undertaking to enter into discussions with the Association on
the implications of harmonisation of conditions of service for
J.U.G. staff, on salaried staff.
COMPANY'S ARGUMENTS:
4. 1. The Company gave serious consideration to the issues
involved before making the concessions required to facilitate
the development of the settlement proposals reached at
conciliation. These settlement proposals are consistent with
all the terms of the five year Agreement and are regarded by
the Company as the mechanism supporting the payment of the
substantial lump sums. The Company is satisfied that the
terms of the proposals protect and benefit both parties. In
rejecting the settlement proposals and the recommendation of
their own negotiating team it is not reasonable that the
workers should pursue their claim on the basis that they were
treated differently to the J.U.G. employees. They should
acknowledge the fact that they were offered and accepted
exactly the same facilities (details supplied to the Court).
2. The Company in accepting the settlement proposals acted in
a manner which was fully in accord with its obligations under
the terms of the five year Agreement. The Company was
justified in pursuing the extension of hours for new staff as
a key element of the settlement proposals given that the five
year Agreement ruled out specific payments for co-operation
with change and the need, acknowledged by both parties, to
support the negotiation of substantial lump sums.
3. The Company responded in good faith in setting out the
lump sums offer on the clear understanding that these
proposals had been established as an acceptable basis for
settlement.
4. It also responded to the Association's proposals to
negotiate on closer harmonisation of conditions. The Company
made it clear that the question of duplicating the settlement
proposals reached with the J.U.G. was not acceptable and this
was reflected in the Company's resistance to conceding an
annual sum in the final offers.
RECOMMENDATION:
5. The Court, having regard to the submissions made and in
particular having regard to the detailed and lengthy negotiations
which took place between the parties recommends that the terms of
settlement as set out in the I.R.O.'s letter of the 1st September,
1988 be accepted by both parties.
~
Signed on behalf of the Labour Court
John O'Connell
__________________________
27th April, 1989. Deputy Chairman
T.O'D/J.C.