Labour Court Database __________________________________________________________________________________ File Number: CD89178 Case Number: LCR12424 Section / Act: S67 Parties: TURNEX LTD - and - IRISH TRANSPORT AND GENERAL WORKERS UNION |
(A) The rate of pay of one worker. (B) The introduction of a pension scheme. (C) An improvement in the company's sick pay scheme
Recommendation:
Rate of Pay of a Worker:
9. Having regard to the short service of the worker involved and
to the absence of any agreement as to how temporary service should
be regarded on permanent appointment, the Court is of the view
that it would be appropriate for the company to apply the same
terms to the claimant as it would to any newly recruited
checker/packer. Custom and practice over many years has been to
place such new recruits on the Grade 2 scale and the Court
recommends that this scale be applied to the claimant for the time
he spent on the packing/checking operation after his trial period.
Pension Scheme and Sick Pay:
The Court notes that the introduction of a Pension Scheme has been
a matter of contention between the parties for many years and
while the Company has always expressed sympathy for the claim it
has invariably pleaded financial constraints as justification for
postponing implementation. Following a Court recommendation in
June, 1987 that steps be taken to establish a scheme, negotiations
took place which resulted in agreement between the parties on all
but the question of back-service. The Company now wishes to
introduce a restricted scheme with effect from January, 1990 and
pleads financial constraints as its reason.
The Court has considered the submissions of the parties and the
additional arguments advanced at the hearing and is of the view
that the additional cost of implementing the scheme originally
proposed and agreed over and above the cost of the latest proposal
of the company, is not such as would seriously damage the finances
of the business. Accordingly the Court recommends that the scheme
originally proposed including funding of half (.50) of back-service
by the Company be introduced without further delay. The Court
also recommends that the parties negotiate the introduction of the
balance (.50) of back-service into the scheme by 1st June, 1991.
On the question of sick-pay, the Court recommends that the Union
accepts the Company's offer.
Division: CHAIRMAN Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD89178 RECOMMENDATION NO. LCR12424
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: TURNEX LTD
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION
SUBJECT:
1. (A) The rate of pay of one worker.
(B) The introduction of a pension scheme.
(C) An improvement in the company's sick pay scheme
BACKGROUND:
2. 1. The company is engaged in the manufacture of turned
metal components for the hydraulics, automotive and mining
industries. Its customers are in the United Kingdom,
Scandinavia and Germany.
Rate of pay of one Worker:
2. The worker concerned with this claim was a temporary
employee in the company for a period of seven months. During
that time he was graded as a grade II for six months and was
moved up to grade III for one month. The worker then
successfully competed for a checker post - grade III level.
Following a trial period, the company offered him grade I
level with a move up to grade II after six months and a grade
III level after a further six months. The union claimed that
the worker should have retained his grade III level but this
claim was rejected by the company.
The introduction of a Pension Scheme:
3. In Labour Court Recommendation No. 11262 the Court
recommended the negotiation of a Pension Scheme. A scheme has
now been agreed with the exception of back service. The
Company will fund half of service to date but the union is
seeking full funding for up to ten years service. The company
are not prepared to agree to this because of cost but the
union insist on full funding up to ten years as they have been
continuously working to introduce a pension scheme into the
company since it was established ten years ago.
Improvement in the company's Sick pay Scheme:
4. Under the same Labour Court Recommendation (No. 11262) the
Court recommended an improvement in the Sick Pay Scheme
operated by the company. The current scheme is based on fixed
payments ranging from:-
#4 daily in the 1st week.
#3 daily in the 2nd week.
#2 daily in the 3rd to 6th week.
Following negotiations the company agreed to revise the scheme as
follows:-
#10 daily in the 1st week.
#1.50 daily in the 2nd week.
#1 daily in the 3rd to 6th week.
The contribution would increase from thirty to forty pence per
day.
The union is seeking a more standard type scheme that would allow
for twelve weeks full pay less Social Welfare. The company state
that they ascertained by means of a survey that dis-satisfaction
with the current scheme related to week one. Amendments are
designed to improve on this section.
5. The three claims were the subject of a conciliation conference
on 20th October, 1988. No agreements were reached and the union
requested a Labour Court hearing in late November, 1988. The
company agreed in December 1988 and the Court investigated the
three claims in Waterford on 10th May, 1989.
UNION'S ARGUMENTS:
3. 1. Rate of pay for one worker:
The worker suffered a loss of earnings of approximately #100
because of the manner in which the grading structure was
applied to him when he transferred job.
2. There is a company/union agreement providing that there
will be no reduction in grade when a worker is transferred
from one job to another.
3. The company claim that as the worker requested a move to
the packing job he was not entitled to maintain his grade. It
is the union's view that the worker should have been the
automatic candidate for the vacancy and it should not have
been necessary for them to seek the post on his behalf.
4. The Introduction of a Pension Scheme:
While the Union would have liked to improve on a number of
other aspects of the Pension Scheme proposed by the company,
it would be prepared to accept the proposed terms, provided
all service with the company is considered as pensionable.
The omission of prior service would have an extremely serious
negative impact on the benefits of the scheme particularly in
the case of older employees with relatively long service. All
company service should reckon for pension purposes as:-
(A) The union/company agreement signed in July, 1978,
provided in clause 31
"Retirement
As normal it is expected that the retirement age
would by 65 years."
(B) In all negotiations with the company on terms and
conditions of employment the union claimed that a
Pension Scheme should be introduced. It was argued
to the company that the longer the introduction of
a scheme was delayed the more expensive it would be
later because of funding for back service. To
allow the company to discount back service would be
to reward it for its failure over the years to
provide a fundamental condition for its employees.
It is a normal provision of pension schemes that
all service with the employer is counted.
(C) An employee contribution of 5% would be generally
recognised as being an amount sufficient to fund
for back service given an adequate contribution
from the employer.
5. An improvement in the Company's sick pay scheme:
The Labour Court in a Recommendation No. 11262 recommended
that the existing Sick Pay Scheme should be improved and that
negotiations should take place at the end of the 27th Pay
Agreement i.e. end of February, 1988. Negotiations did take
place and the company proposed changes which provided for an
increase in the first week and a reduction in the following
five weeks, details as follows:-
Current Scheme Proposed Scheme
Week 1 - #20 per week - #50 per week
Week 2 - #15 per week - #7.50 per week.
Weeks 3-6 - #10 per week - #5 per week.
The Union are seeking a level of benefit in keeping with the
general level of sick pay provisions and have proposed a
scheme as detailed in their original claim:-
Proposed Scheme
Scope
Absences of one or two days will not qualify for benefit.
Absences of three days or more will be treated as follows:
First absence - will be covered in full.
Second absence - the first day of the absence
will not attract any benefit.
Third absence - the first two days of the
absence will not attract any
benefit.
Fourth and subsequent absence - the first three
days of the absence will not attract any benefit.
Benefit
Benefit shall consist of full pay (defined as the
personal rate of the employee including shift
premia but excluding bonus) less Social Welfare
Benefit payments (Disability Benefit and Pay
Related Benefit).
Benefit shall be payable for a maximum of twelve
weeks in any benefit year.
Certification
To qualify for benefit a medical certificate must
be submitted to the Company at the commencement of
the period of illness.
It shall be a condition of payment of benefit that
Social Welfare benefit be claimed and the Social
Welfare cheque submitted to the Company within two
days.
The Company will have the right to refer for
medical opinion to a doctor of its choice any
member whose absences are deemed to be excessive.
6. 1. COMPANY'S ARGUMENTS:
Rate of pay for one worker:
In 1988 the worker was employed by the company in a temporary
capacity at grade 2 level, the rate appropriate to the job he
was to do. He progressed in this job and was moved to grade 3
after 4 months, as per the provisions of the company's grading
structure. Subsequently a permanent position as a
checker/sorter/packer became available and the worker
successfully applied for it. The grading scheme for that
position provides as follows:
At appointment - grade I
After 6 months max. - grade II
After 12 months max - grade III
This scaling is not an artificial cost measure but relates to
the development by the employee of proficiency at the job.
The structure is supported by the recommendation of an
Equality officer of the Labour Court ref: EP14/1985.
2. Previous company experience has shown that not every
person has an aptitude for the job of checking, thus the
worker would have to go through a trial period. During that
time he would retain his grade III but on formal appointment
to the position he would go to grade I and then progress
through the scheme as normal. The company's approach to this
was governed by a number of factors:-
(A) An appointment from outside would have been made
at grade I level.
(B) It was in keeping with the provisions of the
grading scheme.
(C) It was in keeping with previous company practice.
(D) If the company had appointed the worker at grade
III level immediately, it would have been a clear
case of discrimination against female employees
who have to start at grade I level and progress
through the grades.
3. The worker was fully advised of these matters before the
commencement of the trial period and it was the company's
understanding that he acknowledged and accepted the company's
approach.
4. There are precedents within the company for such a change in
grading on appointment/transfer to another job.
7. The introduction of a pension scheme:
The company is in a weak financial situation. In recent years
it has been in a breakeven of marginal loss/profit situation.
Management have been advised by the parent company that it
cannot continue to prop up the Irish operation. The company
has put the view forward that all available resources should
be concentrated on retrieving its position. Accordingly, the
company's position on the Pension Scheme is that it should be
deferred until January 1990 at which point it would introduce
a scheme but it would not provide the level of benefit
contained in previous proposals.
8. Improvement in the Company's Sick Pay Scheme:
The company is prepared to implement its revised proposals on
this scheme with immediate effect as it:-
- embodies substantial improvements to the old scheme
- provides a level of benefit very close to full
take-home pay when at work
- is structured so that available funds are
concentrated on providing cover for short illnesses
- this is at the request of employees.
RECOMMENDATION:
Rate of Pay of a Worker:
9. Having regard to the short service of the worker involved and
to the absence of any agreement as to how temporary service should
be regarded on permanent appointment, the Court is of the view
that it would be appropriate for the company to apply the same
terms to the claimant as it would to any newly recruited
checker/packer. Custom and practice over many years has been to
place such new recruits on the Grade 2 scale and the Court
recommends that this scale be applied to the claimant for the time
he spent on the packing/checking operation after his trial period.
Pension Scheme and Sick Pay:
The Court notes that the introduction of a Pension Scheme has been
a matter of contention between the parties for many years and
while the Company has always expressed sympathy for the claim it
has invariably pleaded financial constraints as justification for
postponing implementation. Following a Court recommendation in
June, 1987 that steps be taken to establish a scheme, negotiations
took place which resulted in agreement between the parties on all
but the question of back-service. The Company now wishes to
introduce a restricted scheme with effect from January, 1990 and
pleads financial constraints as its reason.
The Court has considered the submissions of the parties and the
additional arguments advanced at the hearing and is of the view
that the additional cost of implementing the scheme originally
proposed and agreed over and above the cost of the latest proposal
of the company, is not such as would seriously damage the finances
of the business. Accordingly the Court recommends that the scheme
originally proposed including funding of half (.50) of back-service
by the Company be introduced without further delay. The Court
also recommends that the parties negotiate the introduction of the
balance (.50) of back-service into the scheme by 1st June, 1991.
On the question of sick-pay, the Court recommends that the Union
accepts the Company's offer.
~
Signed on behalf of the Labour Court
Kevin Heffernan
26th May, 1989 ---------------
A.McG/U.S. Chairman