Labour Court Database __________________________________________________________________________________ File Number: CD89526 Case Number: LCR12619 Section / Act: S67 Parties: IRISH SUGAR P.L.C. - and - NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION;ELECTRICAL TRADE UNION;AMALGAMATED ENGINEERING UNION |
Claims concerning: (a) Compensation for loss of earnings and pensionable entitlement for a worker. (b) Re-instatement of a worker without reduction in sick pay entitlements and salary scale. (c) Subsistence and mileage rates for craft workers at Tuam Engineering Works.
Recommendation:
12. Having considered the submissions from the parties with
regard to the three claims the Court recommends as follows:
Claim 1: The Court is satisfied that the Company are
interpreting the Pension Scheme 1984 in a literal
and correct manner. Therefore, the Court cannot
recommend concession of the Union's claim.
However, the Court would urge the Company to take
cognisance of the severe effects of the cessation
of shift on the pension entitlement of the claimant
and do everything possible to restore this
entitlement. The Court does not recommend
compensation for loss of shift pay.
Claim 2: The Court is satisfied that as the claimant was not
made redundant he should have been re-employed at
his previous point on the incremental scale and
proceeded up the scale in the usual manner. The
Court considers that as the lay-off was for more
than 3 continuous months, service for the purpose
of sick pay was broken and therefore does not
recommend concession of the claim for payment of
Sick pay for the periods in question.
Claim 3: The Court does not recommend concession of the
claim.
Division: Ms Owens Mr Shiel Mr Walsh
Text of Document__________________________________________________________________
CD89526 RECOMMENDATION NO. LCR12619
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: IRISH SUGAR P.L.C.
and
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
ELECTRICAL TRADE UNION
AMALGAMATED ENGINEERING UNION
SUBJECT:
1. Claims concerning:
(a) Compensation for loss of earnings and pensionable
entitlement for a worker.
(b) Re-instatement of a worker without reduction in sick
pay entitlements and salary scale.
(c) Subsistence and mileage rates for craft workers at Tuam
Engineering Works.
GENERAL BACKGROUND:
2. The parties concerned could not reach agreement at local level
on a number of issues and the matters were referred to the
conciliation service of the Labour Court initially in October,
1988. Conciliation conferences were held in November, 1988,
January, 1989 and July, 1989 at which settlement was not reached
on the above claims and on 25th July, 1989 the matters in dispute
were referred to a full hearing of the Labour Court. The hearing
took place on 17th October, 1989.
Claim (a) - Compensation for loss of earnings and pensionable
entitlement for a worker
BACKGROUND:
3. The worker concerned was on continuous shift work at the Erin
Foods packaging plant in Thurles for 26 years until the 4th
January, 1988 when he was moved by the Company to day work. From
commencement of employment with the Company in 1961 the worker
contributed to a Gratuity Society until 1984 at the rate of 2.50% of
income based on basic hours of work. In 1984 the funds of the
Gratuity Society were transferred to the Manual Workers Pension
Scheme (1984) which was an improvement on the previous scheme and
was, like the Gratuity Society, funded by contributions from the
workers and the Company. From 1984 the worker contributed to the
new scheme at the rate of 3% of shift earnings until he was moved
to day work in January, 1988 when he commenced payment of
contributions based on day work earnings to date. Under the 1984
scheme a day workers pensionable earnings are based on the total
amount of wages paid to the worker during the year excluding
travelling or subsistence allowances, commission, overtime and
bonus and temporary allowances. For shift workers pensionable
earning include hours worked (excluding overtime) when on shift
plus a premium of 20% added to shift hours worked (excluding
overtime). Long term shift workers over sixty years of age who
have ceased working shift after reaching sixty years of age also
qualify for the premium of 20% provided that they worked shift for
at least twenty five campaigns or worked shift for 80% of their
years with the Company. The worker was born in 1932 and is just
over fifty seven years of age. As the worker ceased working shift
in 1988 and had not then reached sixty years of age he does not
now qualify under the 1984 scheme for a pension based on shift
work earnings. The Union is claiming compensation in respect of
the worker's loss of earnings and reduction in pension rate
entitlement due to his removal from shift work after twenty six
years. The Company claims that under the terms of the 1984 scheme
the worker is not entitled to a pension rate calculated on the
basis of shift work earnings and rejects the Union's claim for
compensation for losses of earnings and pension rate.
UNIONS' ARGUMENTS:
4. 1. The worker was taken off shift as a cost cutting exercise.
It would have been quite easy for the Company to put the
worker on day shift which would have preserved his shift
premium until he reaches sixty years of age.
2. The worker was suddenly removed from shift work causing a
loss of 20% in earnings which he had enjoyed over twenty five
years. He suffered a 20% drop in pensionable pay although he
had contributed at shift premium to the pension fund during
this period. The worker should receive compensation for loss
of shift earnings and a guarantee of shift pension
entitlements.
COMPANY'S ARGUMENTS:
5. 1. Due to a downturn in business in 1988 shift work was
reduced by the Company at the Thurles factory. Consequently
the worker was changed from shift work to day work.
Production is now based on a day work operation and there is
no shift work available at present for the worker concerned.
The Company has no way of knowing at this time whether the
worker concerned would be likely to return to shift work for
all or any period between now and his retirement date.
2. The 1984 scheme was the subject of detailed negotiations
over four years and covered a broad range of probable
circumstances which prevail amongst the membership. The
matter of loss of earnings and its effect on pension
entitlements was provided for in specific arrangements only
for those over sixty years of age who meet the relevant
criteria. The worker concerned does not qualify under the
1984 scheme.
3. Pension schemes must be viewed in their entirety and the
objective must be to cover a broad range of probable
circumstances fairly. The Company consider that the 1984
scheme strikes a correct and reasonable balance for the
workers concerned.
Claim (b) - Re-instatement of a worker without reduction in sick
pay entitlements and salary scale
BACKGROUND:
6. The worker concerned commenced work as a permanent craftsman
at the Carlow Sugar factory. The Company proposed to make him
redundant on 22nd February, 1985 but the worker did not accept it
and was laid off having reached point six of a ten point salary
scale for permanent craftsmen. He was re-employed on 1st April,
1985 at point one of the scale. On 20th September, 1985 he was
again offered redundancy but again did not accept as he preferred
to take a chance of being recalled rather than compulsory
redundancy terms. He was re-employed on 3rd March, 1986 at point
one of the scale after a break in service of twenty three weeks.
The Union claims that the worker should be re-instated on the
point of scale he was on before the lay-off and that he had not
broken his entitlement to benefit under the Company service and
sick pay rules. The Company claims that the worker was not a
permanently employed craftsman in the normal manner and was
consequently re-employed at the appropriate rate for a temporary
craftsman (point one of the scale). Also as he did not work for
the Company in a twenty three week period from 20th September,
1985 to 3rd March, 1986 the Company claims that he broke his
continuous permanent service for eligibility under the Company
service and sick pay rules as his absence exceeded three months.
UNIONS' ARGUMENTS:
7. 1. Under the Redundancy Acts a worker on lay off remains an
employee of the Company unless he opts for redundancy. In
this case the worker did not opt for redundancy and was laid
off for less than 26 weeks. He did not therefore break his
service and remained an employee of the Company.
2. As the worker did not break his service he should be
re-instated to the point of the salary scale and to the sick
pay scheme without loss.
COMPANY'S ARGUMENTS:
8. 1. Permanent craftsmen are those who have attained one year's
continuous unbroken employment in the Company and who remain
in the continuous employment of the Company attending work in
a normal regular manner. In this case the worker was not
permanently at work and was not a permanently employed
craftsman in the normal manner. The Company acted fairly in
re-employing the worker under the conditions appropriate to a
temporary craftsman.
2. Under the terms of the sick pay scheme a temporary lay-off
of more than three months constitutes a break of service. As
the worker was laid off for twenty three weeks he broke his
service for the purposes of the scheme.
Claim (c) - Subsistence and mileage rates for craft workers at
Tuam Engineering works
BACKGROUND:
9. The Company set up Tuam Engineering Works in 1978 to cater for
the medium to heavy engineering needs of the parent Company and to
compete for outside work. From time to time outside contracts
specify erection work which requires workers to travel from the
works to the erection site. The Company provides a works car for
general use and hires vans or cars as appropriate. When workers
are asked to use their own cars from time to time they receive a
mileage allowance and, where appropriate, the relevant subsistence
allowances. The rates of subsistence of craft and general workers
is not equivalent to the rates for other staff including foremen
and administrative and clerical staff. The Union claims that the
Company operates a discriminatory policy against its members (i.e.
craft workers) in relation to the rate of travelling allowances
and claims parity with their fellow workers. The Company rejected
the claim and states that the travel rates were negotiated with
the representatives of the varying groups within the Company as a
total package.
UNIONS' ARGUMENTS:
10. 1. The Company operates a discriminatory policy in that it
applies one standard to hourly paid workers who travel and
another standard to clerical employees. There is no
justification for this discrimination against manual workers
and craftsmen.
2. The Union requires the establishment of proper subsistance
and mileage allowances on a parity basis with foremen and
other workers who are required to work away from base.
COMPANY'S ARGUMENTS:
11. 1. The subsistence and mileage allowances for craft and
general workers was negotiated separately with the relevant
appropriate unions as part of a total package of wages scales,
sick pay scheme, pension scheme etc. There are reasons for
differences in subsistence and mileage allowances for
craftworkers and other workers in the Company and these
differences must be accepted as part of the total package.
2. The Company considers that the subsistence and mileage
rates for craftworkers are very fair and when combined with
the other benefits in the package is way ahead of other
competitors in the industry.
3. Any increase in allowances, or other costs, would make
Tuam Engineering Works more uncompetitive in erection work
resulting in a loss of contracts and jobs.
RECOMMENDATION:
12. Having considered the submissions from the parties with
regard to the three claims the Court recommends as follows:
Claim 1: The Court is satisfied that the Company are
interpreting the Pension Scheme 1984 in a literal
and correct manner. Therefore, the Court cannot
recommend concession of the Union's claim.
However, the Court would urge the Company to take
cognisance of the severe effects of the cessation
of shift on the pension entitlement of the claimant
and do everything possible to restore this
entitlement. The Court does not recommend
compensation for loss of shift pay.
Claim 2: The Court is satisfied that as the claimant was not
made redundant he should have been re-employed at
his previous point on the incremental scale and
proceeded up the scale in the usual manner. The
Court considers that as the lay-off was for more
than 3 continuous months, service for the purpose
of sick pay was broken and therefore does not
recommend concession of the claim for payment of
Sick pay for the periods in question.
Claim 3: The Court does not recommend concession of the
claim.
~
Signed on behalf of the Labour Court
Evelyn Owens
_________________________
3rd November, 1989. Deputy Chairman
A.S./J.C.