Labour Court Database __________________________________________________________________________________ File Number: CD89371 Case Number: LCR12488 Section / Act: S67 Parties: CADBURY IRELAND PLC - and - AMALGAMATED TRANSPORT & GENERAL WORKERS' UNION;FEDERATED WORKERS' UNION OF IRELAND |
(A) Claim on behalf of approximately 243 evening shift employees who work 29.15 hours per week for an increase of 2.5% in basic and shift rates following the introduction of a 39 hour week for forty hour employees. (B) Claim on behalf of 695 40 hour production employees for the payment of retrospection on the shorter working week at the rate of one hour per week at time and a half (back to 30th January, 1989).
Recommendation:
9. Hourly Rate of Part-time Workers:
The fundamental purpose of the Framework Agreement on Working
Hours was to reduce by one hour the working time of employees
whose standard working week was forty hours or more. It was a
specific condition of the agreement that the earnings for the
revised standard week would be the same as for the original
standard week - in other words there would be no loss or gain of
pay. From an employee point of view the application of the
agreement related to time and not to money.
The agreement was also specific that only employees who worked a
normal week of 40 hours or more would benefit from the agreement.
This position was modified by a minute to the agreement which,
without conferring an automatic entitlement to benefit, permitted
claims to be submitted on behalf of part-time employees provided
they had a formal pay-relationship with their full-time
colleagues.
It is quite clear that where an agreement says that part-time
employees will be paid the same hourly rate as their full-time
colleagues or an agreed proportion of it, it is a "formal
pay-relationship" and there is a strong case that part-time
workers should benefit. If on the other hand there is no such
explicit or definite agreement and there has simply been a tacit
arrangement in existence over time, then the question arises as to
whether a "formal pay-relationship" existed.
The agreement and the minute were concluded by the representative
organisations I.C.T.U. and F.U.E. without agreed published
reference to any particular situation, and without definition of
the critical words in the minute - "formal pay-relationship."
Accordingly the Court must consider what was the most likely
understanding between the parties or what is a reasonable
interpretation of the agreement as written and within the ambit of
the Programme for National Recovery.
Having regard to the P.N.R. background of the Framework Agreement
on Working Hours and to the specific clauses of that Agreement,
the Court is of the view that had it been the intention to permit
all or a wide-range of part-time workers to submit claims as a
result of the reduction in working hours, the terminology of the
minute would have been clearer and more direct.
Accordingly, the Court regards the language used as purposely
restrictive. In this case, the Court is satisfied that a "formal
pay relationship" was established by the 1976 agreement and was
maintained ever since. Accordingly the Court recommends
concession of the Union claim for the rate of part-time workers to
be calculated in accordance with reduced weekly hours of full-time
workers.
Retrospection:
Having considered the question of retrospection, the Court
recommends that the Production Workers be paid 22 weeks
retrospection.
Division: CHAIRMAN Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD89371 RECOMMENDATION NO. LCR12488
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CADBURY IRELAND PLC
and
AMALGAMATED TRANSPORT & GENERAL WORKERS' UNION
FEDERATED WORKERS' UNION OF IRELAND
SUBJECT:
1. (A) Claim on behalf of approximately 243 evening shift
employees who work 29.15 hours per week for an increase of 2.5% in
basic and shift rates following the introduction of a 39 hour week
for forty hour employees.
(B) Claim on behalf of 695 40 hour production employees for the
payment of retrospection on the shorter working week at the rate
of one hour per week at time and a half (back to 30th January,
1989).
GENERAL BACKGROUND:
2. A major element of the negotiations on the 29th wage round in
the Company centred around reducing the working week by one hour
for forty hour employees as provided for in the Programme for
National Recovery. Following lengthy discussions, a final package
of proposals was agreed (details supplied to the Court) and was
recommended for acceptance by the Unions' Negotiating Committee.
However, in a secret ballot at a general meeting on the 29th
April, 1989, the proposals were rejected, mainly because the
evening part-time workers were dissatisfied with the arrangements
for the 39 hour week that were negotiated. (Since 1976 those on
the evening shift enjoyed the same hourly rate as the 40 hour
workers. By reducing the working week to 39 hours this link was
effectively broken and two hourly rates now exist).
Disagreement also arose concerning the issue of retrospection for
40 hour employees. The Unions are claiming that following the
rejection of the proposals the Company reneged on a commitment
given concerning the payment of retrospection on the shorter
working week. This is denied by the Company. As no agreement
could be reached at local level discussions, the matter was
referred to the conciliation service of the Labour Court on the
4th May, 1989. No agreement was reached at a conciliation
conference on the 23rd May and the matter was referred to the
Labour Court for investigation and recommendation. A Court
hearing was held on the 21st June, 1989.
Claim (a) - 2.5% increase in basic and shift rates for evening
shift employees following the introduction of a 39 hour week for
forty hour employees.
BACKGROUND:
3. The workers concerned work a 29.15 hour week and since 1976
have enjoyed the same hourly rate as forty hour workers. However,
this link was effectively broken by the draft proposals put to the
general meeting. Clause 2(iii) of the draft proposals states that
overtime for the full-time workers will be calculated on the new
39 hour rate while Clause 2(iv) states that as the terms of the
PNR provide that the shorter working week would apply to 40 hour
employees only, the reduction in the working week does not
therefore apply to part-time employees and that the method of
calculating their hourly rate for all elements of pay will remain
unchanged. (A further part of the proposals was that the evening
shift would work an extra 15 minutes per week with an earlier
finish on Friday). Following the rejection of the proposals the
Unions have sought an adjustment of 2.5% in the rates for the
29.15 hour group (they estimate the one hour reduction in the week
for the 40 hour group is the equivalent of an extra 2.5% in pay
for them). The Company rejected the claim.
UNIONS' ARGUMENTS:
4. 1. It has been the Company's view that the claim is not
permissible under the PNR as the workers concerned work less
than 40 hours. This is rejected by the Unions. Clause 2(1)
of the ICTU'S working Hours Draft Framework Agreement states
that the agreement applies to employees whose normal working
week is at or above 40 hours and only such employees shall
benefit from it. However, a special minute clause has been
recorded in relation to Clause 2(i) which states that:-
"where claims in respect of part-time workers who have
a formal agreed pay relationship with full-time
workers are submitted by trade unions, they may be
dealt with on their merits, in accordance with
established procedures at firm level".
A similar minute has also been recorded in the guidelines
published by the FUE.
2. The FUE's original position during the negotiations for
a reduction in the working week was that the hourly rate for
all employees working less than 40 hours should remain
unchanged. That position was rejected and was specifically
excluded from the final document.
3. There can be no doubt that for many years a formal pay
relationship has existed between full-time (40 hours) and
part-time (29.15 hours) staff. This is a matter of record and
cannot be disputed by the Company.
4. During discussions between the social partners involved
in the PNR, workers accepted lower pay increases on the basis
that they would get a reduction in working time or its
equivalent. It was never intended that part-time workers with
formal pay relationships with full-time colleagues would in
any way be disadvantaged.
5. In view of the well-established recognised link for pay
purposes between part-time and full-time workers in the
Company, and, in view of the provisions laid down in the Draft
Framework for Reduction in Working Hours, the Court is
respectfully requested to recommend in favour of the rates of
pay for the evening shift workers being adjusted to
re-establish the link with their full-time colleagues.
COMPANY'S ARGUMENTS:
5. 1. Employees working under 40 hours do not have any
entitlement to benefit from the introduction of the shorter
working week under the terms of the Programme for National
Recovery. The terms clearly provide that the only group with
entitlement to benefit are employees working 40 hours or more.
2. The terms of the final Agreement reached with the
Unions, on the introduction of the shorter working week, were
based on the priorities set by the Unions in relation to their
claims. The final agreement respresented the maximum position
the Company could go to, in terms of costs, to meet the
Unions' claims whilst taking account of the needs of the
business. This position was accepted by the Unions and this
acceptance was written into the final settlement terms of the
Agreement. Against this background and taking into account
Clause 4 of the Framework Agreement (regarding the Criteria
for Negotiations), the Company does not believe that it should
now be asked to take on an additional on-going cost of 2.5%.
5. 3. The Company was forced to take on significantly higher
costs and risks than were set out in its original proposal in
order to introduce the shorter working week in a manner which
was acceptable to the Unions. Apart from the cost of
introducing the 39 hour week without loss of basic weekly pay,
it necessitated the Company taking on additional ongoing costs
in the Dublin factory of over #0.16m per year and taking on
the risk of losing a further #.35m contribution per year as a
result of the reduction in running time. In addition, the
lump sum payment will result in the labour costs for this year
running at #.3m.
4. The Unions' main priority for the evening shift group
was to eliminate the requirement for them to work additional
hours. This claim was fully met by the Company. The cost of
meeting this claim is an ongoing cost of #113,000 per year to
provide overtime for the nightshift and the risk of loss of
contribution as a result of the reduction in running time. A
major part of the total costs incurred was therefore allocated
to meeting their main priority.
5. The Company has already received a claim from clerical
staff for a pro-rata increase following the introduction of
the shorter working week. Clerical staff work a 36.25 hour
week. Whilst the clerical group are not a part-time group and
therefore not covered under the "Minute" to Clause 2.1 of the
Framework Agreement, they have a differential with the 40-hour
production group. Concession of this claim would be seen to
set a precedent for any group holding differentials.
6. The present claim for a 2.5% additional increase derives
from the Company's implementation of the terms of the
Framework Agreement on the shorter working week i.e. to
introduce the 39 hour week without loss of basic weekly pay,
and not from any action taken by the Company to increase rates
of pay for full time employees only.
7. The Court is respectfully requested to find that as the
Company has already committed the maximum costs affordable to
addressing the priorities set by the Unions in relation to the
introduction of the shorter working week in the initial
agreement reached, this agreement should apply and the present
claim for a 2.5% additional on-going increase should not be
conceded.
Claim (b) - claim for the payment of retrospection on the shorter
working week, at the rate of one hour per week at time and a half.
BACKGROUND:
6. The Union claims that during local negotiations, the Company
agreed to pay the equivalent of the accumulated hour per week at
T+.50 back to the commencement date of the Agreement but that when
the proposals were rejected it decided that its offer on
retrospection would not carry beyond the date of rejection. The
Company claim that the lump sum payment was equal to 13 weeks
retrospection and it was not intended to extend beyond 13 weeks
even if the Agreement was rejected.
(Note: The same offer of a lump sum payment was made to other
groups on site during subsequent negotiations. These groups
rejected it on the basis that the production group had a major
advantage over them by having had the opportunity to vote on the
shorter working week last April. None of these groups have yet
voted on the shorter working week. In order to take account of
this position, the Company agreed to increase the lump sum for
these groups to 22 weeks (up to 30th June 1989) but only on the
same basis as production i.e. an acceptance than even if the
Agreement is rejected the payment will not be increased. The
production group was informed of this by the Company).
UNION'S ARGUMENTS:
7. 1. The Company's decision on retrospection is totally
unacceptable. Where an offer has been made to cover a period
of retrospection, it should cover the period until agreement
is reached irrespective of any difficulties which may be
encountered and which may delay agreement being reached.
2. The Court is respectfully requested to recommend full
retrospection for the period in question.
COMPANY'S ARGUMENTS:
8. 1. The claim on retrospection only became an issue at the
final stage of negotiations and was the last outstanding issue
between the Company and the Unions. The only basis on which
the Company agreed to make any payment was as a goodwill
gesture in order to conclude negotiations. The basis of
payment was clearly explained to the Unions and was not
disputed by them at the time.
2. The Company was faced with a similar claim from other
groups on site. Whilst the Company agreed to increase the
lump sum payment to these groups, to give them the same
opportunity to vote on the Agreement as the production group,
it still did not concede the principle of retrospection. The
agreement reached with these other groups was on the same
basis as production i.e. if the agreement was rejected at the
first general meeting, the lump sum would not be increased.
8. 3. The Company does not believe that there is any basis for
payment of retrospection. However, in trying to reach
agreement the Company made a concession on the claim, but it
could not leave itself liable to an open ended concession
because of the size of the accumulating costs involved.
RECOMMENDATION:
9. Hourly Rate of Part-time Workers:
The fundamental purpose of the Framework Agreement on Working
Hours was to reduce by one hour the working time of employees
whose standard working week was forty hours or more. It was a
specific condition of the agreement that the earnings for the
revised standard week would be the same as for the original
standard week - in other words there would be no loss or gain of
pay. From an employee point of view the application of the
agreement related to time and not to money.
The agreement was also specific that only employees who worked a
normal week of 40 hours or more would benefit from the agreement.
This position was modified by a minute to the agreement which,
without conferring an automatic entitlement to benefit, permitted
claims to be submitted on behalf of part-time employees provided
they had a formal pay-relationship with their full-time
colleagues.
It is quite clear that where an agreement says that part-time
employees will be paid the same hourly rate as their full-time
colleagues or an agreed proportion of it, it is a "formal
pay-relationship" and there is a strong case that part-time
workers should benefit. If on the other hand there is no such
explicit or definite agreement and there has simply been a tacit
arrangement in existence over time, then the question arises as to
whether a "formal pay-relationship" existed.
The agreement and the minute were concluded by the representative
organisations I.C.T.U. and F.U.E. without agreed published
reference to any particular situation, and without definition of
the critical words in the minute - "formal pay-relationship."
Accordingly the Court must consider what was the most likely
understanding between the parties or what is a reasonable
interpretation of the agreement as written and within the ambit of
the Programme for National Recovery.
Having regard to the P.N.R. background of the Framework Agreement
on Working Hours and to the specific clauses of that Agreement,
the Court is of the view that had it been the intention to permit
all or a wide-range of part-time workers to submit claims as a
result of the reduction in working hours, the terminology of the
minute would have been clearer and more direct.
Accordingly, the Court regards the language used as purposely
restrictive. In this case, the Court is satisfied that a "formal
pay relationship" was established by the 1976 agreement and was
maintained ever since. Accordingly the Court recommends
concession of the Union claim for the rate of part-time workers to
be calculated in accordance with reduced weekly hours of full-time
workers.
Retrospection:
Having considered the question of retrospection, the Court
recommends that the Production Workers be paid 22 weeks
retrospection.
~
Signed on behalf of the Labour Court
________________________
Kevin Heffernan
July, 1989 Chairman.
D.H./U.S.