Labour Court Database __________________________________________________________________________________ File Number: CD88919 Case Number: LCR12202 Section / Act: S67 Parties: SAVAGE SMYTH - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Rationalisation of the transport section.
Recommendation:
8. The Court, having considered the submissions made by the
parties, recommends that the claimants should accept the Company's
package of proposals on the basis that:-
(i) the Company would make available the sum of #20,000
compensation to be divided among the employees
concerned.
(ii) redundancy to be paid on the basis of three weeks'
pay per year of service plus statutory entitlements
and
(iii) discussion to take place on clarification of the
bonus alterations.
Division: Mr Fitzgerald Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88919 RECOMMENDATION NO. LCR12202
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: SAVAGE SMYTH
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Rationalisation of the transport section.
BACKGROUND:
2. The Company is engaged in the manufacture of soft drinks and
the distribution of these and bottled beers to the retail and
licensed trade. There are twenty two transport staff employed,
eleven drivers and eleven helpers. In February, 1988, the Company
convened a meeting of transport staff and stated that the
transport section was not viable. It proposed the privatisation
of the transport section by selling its fleet to the existing
drivers and contracting the work out to them. This proposal was
rejected by the workers. Discussions then took place on
alternative rationalisation proposals in the transport section.
The matter was referred on 15th March, 1988 to the conciliation
service of the Labour Court and conciliation conferences took
place on 5th, 13th and 26th May, 1988.
3. The Company sought the following:-
1. Changes in the bonus system
2. Reduced manning levels at agreed "drops"
3. Increased use of contractors
4. Non replacement of transport staff should they accept
redundancy terms
5. Reduced overtime earnings
6. Changes in other practices e.g. Number of pallets
carried.
The Union agreed to have an independent expert appointed to
examine the bonus scheme and his report was made available in late
May.
4. In August, 1988 the Company put the following final package of
proposals to the Union.
1. The elimination of the existing guaranteed overtime of 5
hours. Only necessary overtime to be worked.
2. Full pallets of product to be accepted when necessary
i.e. All pallets to be carried at regulation height,
with the exception of mixed pallets (within legal
limits).
3. Third Man Drops, as per a detailed list (copied to
Court).
4. Full co-operation with the use of outside contractors
when customer demand cannot be met by own transport.
5. Bonus system to be amended as per the independent
report.
6. Approximately six redundancies. Compensation to be
three weeks pay per year of service plus statutory
entitlements.
7. Compensation of #10,000 to be divided amongst the twenty
two workers dependent on an early settlement and
immediate savings.
In relation to points raised by the Union the Company in a letter
dated 24th August, stated that, regarding Point 4, it agreed that
loads with high bonus potential would be given to Savage Smyth
crews on the morning runs. Afternoon runs would be allocated as
at present.
Regarding Point 3 the Company stated that it had no objection to
the protection of overtime for the regular core of overtime
workers provided that all the overtime working required is
completed. It did not anticipate a problem in everybody reaching
new overtime targets.
5. A further Labour Court conciliation conference took place on
26th August, 1988. The Union's response to the Company's
proposals was as follows:-
1. It would agree to the reduction in overtime subject to
an increase in the compensation offered.
2./3.
Points 2 and 3 were agreed subject to meeting legal and
safety requirements and a trial run to prove
feasibility.
4. The Union noted the Company's committment as stated in
its letter of 24th August.
5. The Union felt that the information given was too vague
and wanted further clarification. It was not opposed in
principle to a reduction in the bonus and was prepared
to discuss the matter further.
6. The Union was prepared to agree to between four and six
redundancies but sought an increase in the level of
redundancy compensation offered. Five weeks pay per
year of service was sought.
7. The Union was not prepared to accept the offer of
#10,000 compensation to be divided amongst the workers.
It sought one and a half times the annual loss to each
individual.
6. Agreement on the package was not reached at the conciliation
conference held on 26th August, 1988. Further local level
attempts to resolve the matter were unsuccessful and on 6th
December, 1988 the matter was referred to a full hearing of the
Labour Court. The Company indicated that the #10,000 compensation
was no longer on offer. The hearing took place on 9th December,
1988.
UNION'S ARGUMENTS:
7. 1. Implementation of the Company's proposals would have a
detrimental effect on the workers' earnings. The losses
incurred will be ongoing. The gross loss per week to each
worker is estimated at #28 or #1,456 per annum. Those workers
who regularly work Saturday overtime could lose double that
amount. Average gross earnings in the Company are below the
level of earnings in comparable companies. The Union is
seeking adequate financial compensation to the workers.
7. 2. The Company's offer of three weeks' pay per year of
service as redundancy compensation is inadequate. Previous
redundancy negotiations have taken place between individuals
and management. The Union has not been involved in such
negotiations where this formula was previously used.
3. The Union wants clarification of the bonus adjustment
issue from the Company.
4. The Union's position in relation to the other items is
as stated in Paragraph 5 above.
COMPANY'S ARGUMENTS:
8. 1. The Company's business is divided approximately 60/40
between bottled beer distribution and manufacture and
distribution of 1.5 litre soft drinks. The Company suffers
very intense price competition in bottled beer distribution
where the market is dropping 8% to 10% per annum. On the 1st
January 1988 the Company lost a contract which represented
approximately 25% of its business profitwise. Due to the
persistent annual drop in sales and the continued presence of
a relatively large number of companies competing for falling
business, margins are extremely tight. This Company suffers
disproportionately due to the relatively high basic and bonus
rates, guaranteed overtime and restrictive practices. The
same position applies with soft drinks. The Company cannot
compete effectively with lower cost companies.
2. The Company's difficulties have continued to worsen as
inefficiencies are maintained. Consequently the #10,000
compensation that the Company was willing to make available as
part of a package agreement is no longer available.
Over the last number of years all sections of the Company,
production, office, sales, supervisors and maintenance have
experienced redundancies (details supplied) and the remaining
employees have accepted changes and reduced earnings
potential. No employees received compensation for loss of
earnings or for accepting necessary changes.
3. The Company is faced with a very serious and difficult
situation. Unless it achieves substantial reductions in the
transport area, it will not be able to continue as a viable
concern. All of the other categories in the Company have
accepted change on an ongoing basis and have agreed and
implemented the necessary efficiency improvements. The
transport employees have continually refused to do so. This
has led to a situation where it is no longer viable to
maintain the transport section with its cost inefficiencies.
The Company considers that the employees in the transport area
should accept, without compensation, the rationalisation
proposals necessary to consider maintaining own transport on a
viable basis.
RECOMMENDATION:
8. The Court, having considered the submissions made by the
parties, recommends that the claimants should accept the Company's
package of proposals on the basis that:-
(i) the Company would make available the sum of #20,000
compensation to be divided among the employees
concerned.
(ii) redundancy to be paid on the basis of three weeks'
pay per year of service plus statutory entitlements
and
(iii) discussion to take place on clarification of the
bonus alterations.
~
Signed on behalf of the Labour Court
Nicholas Fitzgerald
6th January, 1989 --------------------
A.K./U.S. Deputy Chairman