Labour Court Database __________________________________________________________________________________ File Number: CD89463 Case Number: LCR12572 Section / Act: S67 Parties: CORK GAS COMPANY - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim by the Union that the use of outside contractors should be governed by an existing agreement.
Recommendation:
6. The Court having considered the submissions of the parties
recommends that the Company be permitted to use contractors
subject to prior consultation with the Union and on the clear
understanding that the employees of the Gas Company will be fully
utilised and the use of contractors shall not result in a
reduction in employment in the Company.
Division: MrMcGrath Mr Brennan Mr Devine
Text of Document__________________________________________________________________
CD89463 RECOMMENDATION NO. LCR12572
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CORK GAS COMPANY
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim by the Union that the use of outside contractors should
be governed by an existing agreement.
BACKGROUND:
2. In dealing with the matter of the employment of outside
contractors Labour Court (L.C.R. 9686) in 1985 recommended that
"the use of contractors by Cork Gas Company should be subject to
prior consultation and agreement." This was accepted by the
parties. The "re-organisation work agreement" of February, 1986
between the Company and the Union confirmed and expanded on the
Courts' recommendation in this matter. Agreements on the use of
contractors in the interim period have been entered into in the
context of the Labour Court's recommendation. The most recent
agreement was reached in January, 1988 and was to operate to 30th
June, 1989. The Company now see the element of the agreement
dealing with outside contractors as being overly restrictive and
that it would hinder an expansion phase into which it is now
entering. It proposes that it have an ongoing unrestricted
contractor facility. In making this proposal it guarantees
employment for its workforce. The Union oppose the proposal on
the grounds that if implemented, it would eventually lead to the
loss of the workers employment. Agreement could not be reached on
the issue at local level, and on 25th May, 1989 the matter was
referred to the conciliation service of the Labour Court. A
conciliation conference took place on 8th June, 1989. Agreement
was not reached, and on 21st June, 1989 the matter was referred to
the Labour Court for investigation and recommendation. A Court
hearing took place in Cork on 29th August, 1989.
UNION'S ARGUMENTS:
3. 1. The Company is seeking a "carte blanche" agreement which
would allow it to employ outside contractors without any input
from the Union. This would allow non-Company personnel to do
the full range of work, from repairing leaks to energising
appliances. There can no plausible guarantee in such a
situation that there will remain any work for the Union's
members. It is not possible to have a committed co-operative
and productive workforce if their jobs are not secure.
2. A number of small contractors will soon be in a position
to carry out the entire range of work of the Company on a more
cost competitive basis. They will be able to do this because
of a degree of specialisation not possible under present
structures in the Cork Gas Company. This has already occurred
in Britain, and is beginning to happen in Dublin. As
installation work peaks, those contractors who have not
already turned to installation work will do so. Regular work
on leaks with the exception of major emergencies will
similarly be done by contractors. If the Company is prepared
to contract out its service work, there will not be sufficient
business in installations and leak repairs to justify its
present workforce level. Service work provides the only
long term future for fitters in the industry. The Company
must structure itself so that this work may be done by its own
employees.
3. The Company has contended that it must cut overtime costs.
A significant proportion of the overtime costs incurred arose
because of the need to do urgent work for reasons of access
and/or safety. Current overtime costs are running at #240,000
per annum for its own workers, and #500,000 per annum for
outside contractors. Allowing for increased payments to
contractors and the fact that there will still be overtime, it
is a matter of speculation as to how significant the savings
will be.
4. The Company have also listed the necessity to deal with
peak demands, and to have a quicker and more flexible response
to the customers. These matters are already covered by the
two customer service department agreements. Peak demands are
not a major factor in distribution work, as this is largely a
planned repair/renewal programme. Whatever changes it may be
necessary to effect can be done without giving the Company a
completely free hand on the use of outside contractors.
5. The Company, according to itself, is now in an
expansionary phase. There is no longer a fight for survival,
with the necessity for outside help in order to achieve it.
Current trading losses have been brought about by the
deliberate strategy of buying into the energy market. This
has lead to a large increase in Gas Sales. There has not so
far been a corresponding increase in income, because of the
various promotional schemes which the Company have engaged
upon. An example is the 50-50 cashback scheme which will not
see a return for 3 years.
6. The Company is prepared to view as an investment its
various sales promotions, but is not prepared to invest in the
workforce which brought it to its currently favourable
position. The Company is not now in the position of
unavoidable debt which justified the use of contractors
heretofore. What is required now are policies, management,
and work practices which will secure the jobs of the workers
into the future.
7. The Union regards the Company's proposals as an advance
proposal for redundancy, and regards them as being both
unreasonable and unnecessary. The Union is prepared to
negotiate a compromise under the aegis of L.C.R. 9686.
COMPANY'S ARGUMENTS:
5. 1. From the years 1985 to 1988 the Company went through a
consolidation phase involving major remedial and renewal work
on its gas distribution network, as well as dealing with all
the problems associated with conversion to natural gas.
Agreements were entered into with the Union at this time which
were restrictive in many respects. The Company is now in an
expansionary phase. To attempt to undertake such expansionary
work using overtime would not be cost effective and would be
unsustainable given the Company's continuing adverse financial
situation.
2. The Company must continue with its mains and services
renewal programme, as part of its commitment to safety. Its
marketing strategies for attracting new business must also be
allowed to proceed unhindered. The Company must operate as a
competitive commercial entity. Failure to do so will
seriously restrict its ability to obtain a position of
viability within a reasonable period of time, and could
seriously jeopardise existing employment levels.
3. The right to employ contractors is not an issue. This is
a fundamental right vested in management and this principle
has been upheld in numerous Labour Court recommendations
(details supplied to the Court). There is in existence an
agreement whereby the use of outside contractors is by prior
consultation and agreement with the Unions. This was never
intended to give the Union a veto on the use of contractors,
nor as an instrument with which to negotiate on their
conditional use. In the light of the Company's needs from
1989 onwards, the necessity to have unrestricted use of
contractors is paramount. The Court is asked to so recommend.
RECOMMENDATION:
6. The Court having considered the submissions of the parties
recommends that the Company be permitted to use contractors
subject to prior consultation with the Union and on the clear
understanding that the employees of the Gas Company will be fully
utilised and the use of contractors shall not result in a
reduction in employment in the Company.
~
Signed on behalf of the Labour Court
Tom McGrath
__________________________
22nd September, 1989. Deputy Chairman
P.F./J.C.