Labour Court Database __________________________________________________________________________________ File Number: CD89269 Case Number: LCR12518 Section / Act: S67 Parties: THERMO KING - and - AMALGAMATED ENGINEERING UNION |
Claim for a productivity bonus on behalf of 18 testers.
Recommendation:
5. The Court has given careful consideration to the submissions
of the parties and recognises that the workers herein concerned
had expectations that some compensation would be payable at the
end of the trial period, despite the Company's statement that
there would not be any increase arising from the introduction of
the new work methods. Nevertheless the Court is of the view that
the proposed changes are not unreasonable and accordingly does not
recommend concession of the Union's claim.
Division: Ms Owens Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD89269 RECOMMENDATION NO. LCR12518
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: THERMO KING
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
AMALGAMATED ENGINEERING UNION
SUBJECT:
1. Claim for a productivity bonus on behalf of 18 testers.
BACKGROUND:
2. The Company manufactures transport refrigeration units
primarily for the European market and employs approximately 600
workers at its plant in Galway. This claim concerns employees
working in the test area of the plant. They are responsible for
checking the working components of each unit. The Company with
the agreement of the Union, introduced new testing procedures
whereby operators checked two machines simultaneously on a trial
basis in September, 1988. Previously the operators tested one
machine at a time. The new working method has resulted in
increased productivity (approximately 25-30%). The Union is
claiming productivity payments in respect of the continuation of
the new working practice. The Company has rejected the claim and
contends that increased productivity has been achieved throughout
the plant over the years without any increases in pay. Local
discussions failed to resolve the issue and the matter was
referred to the conciliation service of the Labour Court on the
2nd March, 1989. A conciliation conference was held on the 21st
April, 1989 but no agreement was reached. The dispute was
referred to the Labour Court for investigation and recommendation
on the 24th April, 1989. A Court hearing was held in Galway on
the 26th July, 1989.
UNION'S ARGUMENTS:
3. 1. The inspectors agreed to participate in the new testing
procedure on the understanding that any savings generated
would be distributed back to the employees concerned on a
basis which would be acceptable to both sides.
2. Subsequently, after a four month period it became apparent
that there was indeed a saving to the Company. However the
workers concerned had to increase their workload over an eight
hour period. There was a gain to the Company of approximately
28%.
3. The current situation in the test area is that, whereas
originally there had been 20 testers, who are incidentally all
on Grade 8 pay scale which is the top grade within the
factory, under the current evaluation scheme there are now
only 12.
4. The Union also claims that it is reasonable to expect that
the 8 persons who have been displaced should receive
compensation.
5. The Union views the issue as a very important one and in
the event that there is no productivity payment, the workers
concerned may revert to the old system of testing one unit at
a time.
COMPANY'S ARGUMENTS:
4. 1. The Company and the Union are party to the Programme for
National Recovery (P.N.R.) and have entered a pay agreement
implementing the terms of the P.N.R. for a three year period
from 1st October, 1988. In line with Clause 4 of the
agreement the parties accepted that there would be no cost
increasing claims. It is the Company's view that the current
claim is precluded by that agreement and could not be
permitted under any circumstances without undermining that
agreement.
2. The Company has gone through a period of considerable
change in respect of its Galway plant which was perceived as
being uncompetitive when compared with other facilities within
the Group. These changes are vital to the survival of the
plant. They have been achieved with the co-operation of the
workforce in the designated areas. There have been no
consequential claims for re-grading.
3. It has been accepted that the change in question has
resulted in increased productivity however the testers are not
working above the agreed performance level of 87.5 BS1 (as
claimed by the Union). Work studies conducted by the Company
show that a tester working at 87.5 BS1 and making normal
allowances should have an output of 4 units in 7.5 hours
(heavy units) and 4 units in 6.52 hours (light units). The
actual daily output is 4 units. On this basis, it is clear
that the new method does not require employees to work above
the agreed standards.
4. The Company is very concerned that the current claim would
have the effect of undermining the integrity of its grading
structure. It is anxious to introduce a new three-grade
structure to replace the existing system. In the proposed new
system over 90% of workers would be on a uniform grade and
flexibility would be greatly increased. Against that
background the present claim represents a retrograde step. It
would lead to greater complexity rather than greater
simplicity and would run counter to good practice and common
sense.
RECOMMENDATION:
5. The Court has given careful consideration to the submissions
of the parties and recognises that the workers herein concerned
had expectations that some compensation would be payable at the
end of the trial period, despite the Company's statement that
there would not be any increase arising from the introduction of
the new work methods. Nevertheless the Court is of the view that
the proposed changes are not unreasonable and accordingly does not
recommend concession of the Union's claim.
~
Signed on behalf of the Labour Court
Evelyn Owens
______________________
22nd August, 1989 Deputy Chairman.
T.O'D./J.C.