Labour Court Database __________________________________________________________________________________ File Number: CD89257 Case Number: LCR12595 Section / Act: S67 Parties: AER LINGUS - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim by the Union for the retention of existing pay structures and conditions of employment on behalf of 25 clerical workers.
Recommendation:
5. The Court has given careful consideration to all aspects
raised by the Union and the Company in their written and oral
submissions. The Court considers a great deal was left to be
desired in the manner in which the Company dealt with the issue in
Shannon and is of the view that the approach adopted was not
conducive to the development of good industrial relations in that
station.
The Court notes that the agreement was implemented in Dublin and
Cork in 1987 and with the exception of Shannon has general
application in the rest of the Company since that date.
In the prevailing circumstances it is the view of the Court that
the agreement as applied elsewhere in the Company should be
accepted in Shannon.
The Court so recommends.
Division: MrMcGrath Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD89257 RECOMMENDATION NO. LCR12595
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AER LINGUS
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim by the Union for the retention of existing pay
structures and conditions of employment on behalf of 25 clerical
workers.
BACKGROUND:
2. In 1987 the Company and another union (F.W.U.I.) representing
the majority of clerical staff at Dublin and Cork airports reached
agreement on new rates of pay and conditions of employment for new
entrants which were less favourable than those applying to
existing permanent staff (details supplied to the Court). The
Union concerned in this claim was not a party to these discussions
as they were not invited to participate by the Company. At
subsequent local discussions at Shannon on the Company's proposals
which included a lower starting salary, reduction in rostered duty
allowances, and up to six months mandatory lay off in the first 5
years of employment, the Union rejected the proposals. In 1988
the Company recruited 25 new staff at Shannon under the disputed
conditions. The Union claims that it was not consulted about the
new appointments, and that the new conditions and rates of pay
were forced on the clerical staff at Shannon. The Company
rejected the claim and stated that the new rates and conditions
are necessary in order to compete with other airlines and for
economic survival. They also state that the matter had been
agreed with the majority Union representing clerical staff in
Dublin and Cork airports. Local discussions failed to resolve the
issue and the dispute was referred to the conciliation service of
the Labour Court on the 31st January, 1989. A conciliation
conference was held on the 4th April, 1989 but no agreement was
reached. The dispute was referred to the Labour Court for
investigation and recommendation on the 13th April, 1989. A Court
hearing was held in Limerick on the 26th September, 1989 (the
earliest date suitable to both parties).
UNION'S ARGUMENTS:
3. 1. The Union has rejected the new rates and conditions
whether they applied to clerical, blue collar or maintenance
staff. The rates are a cynical effort by the Company to
exploit young people and take advantage of high unemployment.
The new scales are in direct contravention of the spirit of
the Programme for National Recovery. As part of the Programme
trade unions accepted pay constraint in return for commitments
in other areas i.e. tax relief, job creation. Nowhere in the
Programme is it stated, implied or agreed that workers can be
made redundant and be replaced in reduced numbers by other
workers who are exploited in terms of wages and conditions.
2. The Company claims that it will create additional jobs.
However this is contrary to a statement it made in 1987 that
the aim was towards further reducing staff numbers rather than
increasing them. The Company's profits (details of the
Finance report for 1989 supplied to the Court) clearly show
that there is no need to engage staff on such poor conditions.
There has been a steady growth in Company profits since 1984.
The Company argue that the new rates and conditions are needed
to compete with other airlines. However the Company has
carried more passengers and states that it welcomes
competition and can meet and outsell it. The rates and
conditions of the new competitor airlines are superior to
those now being introduced. All new staff recruited by the
Company in the U.K. are placed on the same rates of pay and
conditions as existing staff.
3. The Company's action will lead to a discontented workforce
and industrial unrest which will manifest itself in the next
five years. Staff morale cannot survive situations where
fellow workers who are doing the same job are being paid
differently. In time the Company will bring pressure on the
workers on higher rates to leave on redundancy. The new rates
of pay now in operation deny the recipients the opportunity of
a basic human living standard, and because of the cost of
accommodation, clothes medical fees, travel etc. the workers
concerned are facing a financial dilemma.
4. It has been acknowledged at a very senior level within the
Company that the new rates and conditions have been a major
mistake and that there is a possibility of promoting
substantial numbers of the new workers, eliminating 4-5 points
at the bottom of the pay scale, revision of roster payments
etc. The Company's new starting rate of pay is one of the
lowest on record and includes a thirty point salary scale
(unheard of in other employments). The shift pay for rostered
duties has been substantially reduced whereas it should be the
same for all workers new or old. The Company's proposal
regarding unpaid leave means a 2.50 year lay-off in a 5 year
period. This is unheard of in any other employment and is
complete exploitation of workers. The lay-off is totally
unnecessary. It should be noted that when the new staff were
laid off for six months, the Company in many instances
recalled permanent workers to cover on an overtime basis and
utilised staff from other departments. Proper planning by the
Company could result in less overtime working, decent rates of
pay and more worthwhile jobs as a result. New staff should
not have less holidays or be paid less for working Bank
Holidays. On the contrary their conditions should be equal to
those obtaining for the rest of the Company's staff.
5. The Company is currently in dispute with cabin crews in
connection with the Dublin/London route and the maintenance
section of the Company's operations has rejected the concept
of lower rates of pay etc. for new workers. These new rates
of pay and conditions of employment would not be in existence
but for the greed of Banks and others such as the Company
concerned in this claim who have sought to increase their
profits at the expense of workers' wages and conditions of
employment.
COMPANY'S ARGUMENTS:
4. 1. While the I.T.G.W.U. represents 112 clerical staff at
Shannon the F.W.U.I. represents 1,169 clerical workers in
Dublin and Cork. Because of this representation matters
covering clerical pay and conditions have always been
negotiated with the majority union. Frequently the Union
concerned has been involved, however agreements negotiated
with the F.W.U.I. have been applied across the board to all
Irish based clerical staff. The Company's proposals on new
rates of pay and conditions were accepted by the majority
union in 1987 and implemented in April, 1988. Despite
repeated attempts the Company was unable to persuade the Union
concerned to accept the new rates and conditions on behalf of
their minority workers at Shannon.
2. The new proposals recognised service and brought about
improvements related to service for existing staff and new
entrants and on the other hand reduced basic pay, shift
allowances and holiday entitlements for new entrants for a
period of time. Unlike two tier structures all staff achieve
the same pay and conditions in time. The Company has grown
and recruited substantial numbers of new staff but because of
a new regulatory environment which has increased competition
certain imperatives became necessary. Costs have to be
drastically reduced in the air transport division, quality
improvement in the airline's services are essential, funds
have to be generated for fleet renewal, the contribution from
ancillary activities has to be increased.
3. The Company's programmes were put into effect and in
general had staff support and co-operation and enable the
Company to plan its European fleet replacement. This together
with the Atlantic fleet replacement will cost 200 million
dollars. The Company must replace ageing aircraft, and has
less control over air fares, and no control over airport
charges and costs. The only major cost the Company can and
must control is staff costs and an expanding airline needs
more staff. The Company is involved in a fares battle with
competitors and is trying to renew its fleet of aircraft while
facing much increased competition. It needs reduced unit
costs, higher standards of service, low fares and total
workforce commitment. An expanding air transport business is
dependent on decreasing costs. The choice is an expanding
airline with continuing improvements in costs, including staff
costs, or stagnation and contraction in air transport.
4. The Company is facing severe competition on its most
important route (London) and must either out-perform or accept
a major contraction of the airline. The Company's response to
the competition is increased staffing, additional catering and
improved service which is costing over #6 million per annum.
Pay scales which include old productivity, relativity and
league table monies relate to the past and have lost their
meaning with the passage of time. The Company designed all of
its new proposals through radical grade restructuring so that
in the course of time the new entrant achieves all existing
benefits. This unique structure was evolved through
consultation and negotiations with trade union officials, to a
point where they felt able to recommend it to their members.
The new pay rates and conditions of employment were also
negotiated in the knowledge of competitor rates and general
earnings in industry.
5. Harmony in the workforce and a common commitment of all
groups to the airline are essential. All staff want fleet
replacement and expansion but this is only possible with the
acceptance of radical changes in costs and thinking.
Traditional arguments and philosophies have to be set aside.
The Company explained (in local negotiations with the Union at
Shannon) all its proposals as they related to existing staff
and new recruits and was agreeable to discuss local issues
affected by the proposals. The Company always maintained
however that the central issues i.e. new pay and conditions
were non negotiable and were the same for staff at Dublin and
Cork. To do otherwise would have been contrary to all
tradition and practice and indeed would have led to the
dismantling of the agreement with the majority union.
6. There is no possibility of ever concluding any set of
negotiations if each station decided to go its own way. The
result of such a practice would be utterly frustrating to all
sides. In the case of the operatives in Shannon the Union in
Shannon (I.T.G.W.U.) followed the traditional approach by
participating with the F.W.U.I. in Dublin and Cork and then
balloting on the outcome of the talks. As a result there is
agreement between the Company and the Union in Shannon
regarding new rates of pay for operatives. This makes it
difficult to accept the Union's rejection on a matter of
principle, of the new rates of pay and conditions for clerks.
The Company has also reached agreement with pilots, cabin
crew, operatives and clerks in Dublin and Cork and in
1987/1988 has recruited approximately 1100 permanent new staff
throughout the airline. The Company is not aware of any State
or semi-State organisation carrying on such a creation of new
employment on such a gigantic scale.
7. The Company is asking the Court to recognise the benefits
brought about by these agreements to all staff including staff
joining the airline, and also the expansion made possible by
these agreements which have allowed the Company to employ a
substantial number of permanent new staff and an estimated 400
more permanent staff in 1989/90.
RECOMMENDATION:
5. The Court has given careful consideration to all aspects
raised by the Union and the Company in their written and oral
submissions. The Court considers a great deal was left to be
desired in the manner in which the Company dealt with the issue in
Shannon and is of the view that the approach adopted was not
conducive to the development of good industrial relations in that
station.
The Court notes that the agreement was implemented in Dublin and
Cork in 1987 and with the exception of Shannon has general
application in the rest of the Company since that date.
In the prevailing circumstances it is the view of the Court that
the agreement as applied elsewhere in the Company should be
accepted in Shannon.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
_____________________
23rd October, 1989 Deputy Chairman.
T.O'D/J.C.