Labour Court Database __________________________________________________________________________________ File Number: CD89528 Case Number: LCR12577 Section / Act: S67 Parties: SHAMROCK FOODS LIMITED/WEETABIX LIMITED - and - IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION |
Dispute concerning (a) the 28th wage round and (b) the cessation of joint negotiations between both companies and the Union due to the impending sale of Shamrock Foods Limited by its parent Company Whitworth Holdings Limited.
Recommendation:
14. The Court having considered the submissions of the parties
recommends the following for acceptance by the Company and the
Union.
1. The application from July, 1st 1988 of the increases in
accordance with the Programme for National Recovery.
2. The application of a further salary point on the salary
scale as and from 1st July, 1989 of point 15 at #19,500.
(This amount to be inclusive of the 29th Pay round
increases).
3. A once off lump sum payment of #1500 for employees opting
to go on P.A.Y.E. Pro rata reduction in this amount for
anyone leaving either Company within 2 years.
4. #150 to be paid to all employees in lieu of expenses
increases for 12 months from June 1st 1988.
5. Expenses from July 1st, 1989 till end of June, 1991 to be
as follows:-
Lunch Allowance - #5.50
Overnight Allowance _ #4.50
Care of Company
Property Allowance - #5.15
6. Messrs. Nairn and Duffy to receive a double increment on
their next due review date.
7. Transfer of pension funds from Weetabix to Shamrock Foods
Limited where applicable. The transfer to be ratified by
an independent actuary.
8. Both Companies to confirm to the Union existing bonus
arrangements.
In respect of the claim for two weeks pay per year of service in
return for terminating the relationship with Weetabix the Court
does not recommend concession of this claim.
With the cessation of joint negotiations the Court recommends
in the interests of stable relations that the Companies enter
separate agreements with I.D.A.T.U.
Division: MrMcGrath Mr Collins Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD89528 RECOMMENDATION NO. LCR12577
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: SHAMROCK FOODS LIMITED/WEETABIX LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION
SUBJECT:
1. Dispute concerning (a) the 28th wage round and (b) the
cessation of joint negotiations between both companies and the
Union due to the impending sale of Shamrock Foods Limited by its
parent Company Whitworth Holdings Limited.
BACKGROUND:
1. Shamrock Foods Limited is a wholly owned subsidiary of
Whitworth Holdings Limited in the U.K. The Company which employs
60 workers, is engaged in the food packaging and distribution
business.
3. Weetabix Limited in Ireland has a sales and marketing office
and employs a total of 6 people - 2 managers, a secretary and 3
sales representatives. The parent Company is located in Burton
Latimer employing approximately 1500 people and is engaged in the
manufacture of breakfast cereals.
4. Prior to 1980 the Weetabix sales team in Ireland, in addition
to selling Weetabix products, were also responsible for selling
the range of products produced by Shamrock Foods Limited on an
agency basis.
5. In 1980 it was decided to set up separate sales teams for both
companies. An agreement was reached between the companies and the
Union which then represented the sales staff whereby 3 sales
representatives would transfer to Shamrock Foods Limited. This
followed a Rights Commissioner's hearing which recommended that
the senior staff would have the right to chose which Company they
worked with. The agreement also provided that for the future
joint negotiations between the companies and the Union would take
place. In 1985 the workers concerned joined I.D.A.T.U. and since
1986 a similar agreement has been in operation.
5. The 27th pay round expired on the 30th June, 1988. The Union
submitted a claim on the 28th pay round in June, 1988. The Union
sought an increase in salary and allowances. The companies
responded by offering the terms of the Programme for National
Recovery (P.N.R.). No concessions were offered on allowances and
no agreement was reached. Further proposals were then put by the
Union. These proposals were rejected by the Companies and the
matter was referred to the conciliation service of the Labour
Court.
6. However in May, 1989 a decision was taken to sell Shamrock
Foods Limited by its owners Whitworth Holdings Limited. As a
result of the proposed sale the traditional links between the
companies and the Union will no longer be maintained.
7. As a result of these developments both companies met the Union
on 14th June, 1989. Following lengthy negotiations the companies
put forward a list of proposals on the 28th Pay Round and other
issues, as follows:
(i) The application from 1st July, 1988 for a 12 month
period to existing rates - 3 % on the first #6,200 of
earnings and 2% on balance in accordance with the
P.N.R. (currently a 14 point scale exists ranging from
#10,468 to #17,850).
(ii) Allowances as follows from 1st July, 1989 to 30th June,
1991.
Current Allowances
Lunch Allowance #5.50 #4.78
Overnight Allowance #4.50 #3.75
Care of Company
Property allowance #5.15 4.43.
(iii) A once off payment of #50 to each sales representative
in lieu of any expense adjustment from 1988 to 1989.
(iv) In recognition of loss of joint negotiations, the
application of a further salary point on the salary
scale as and from 1st July, 1989 of point 15 at
#18,925.
(v) Messrs. Duffy and Nairn of Shamrock Foods Limited would
receive a double increment on their next review date.
(vi) The transfer of pension for Messrs Manners, Curtain and
Groves to Shamrock Foods Limited scheme would take
place and would be ratified by an independent actuary
to ensure no loss of rights making good any shortfall,
none of which was envisaged.
(vii) Continuation of procedural agreement and negotiations
procedure with acknowledgement that as and from the 1st
July, 1989 these would be independently held.
(viii) The Companies would provide a loan arrangement for
those employees having to transfer to the P.A.Y.E.
system (details supplied to the Court).
8. As agreement was not reached on all of the above issues the
matter was referred to the conciliation service of the Labour
Court. A conciliation conference was held on the 27th June, 1989.
At the conciliation conference two employees indicated that they
would be interested in voluntary redundancy. A voluntary
severance package was negotiated which the Union agreed to
recommend for acceptance along with the following proposals:
(i), (ii), (v), (vi) and (vii) as outlined in paragraph 7
above. Item (iii) was revised to provide for a once off
payment of #150. Item (iv) - maximum point on salary scale to
be increased to #19,500. Item (viii) - a once off payment of
#1500 for people opting to go on P.A.Y.E. instead of the loan
arrangement. Pro rata reduction in this amount for anyone
leaving the Company within 2 years.
The redundancy offer was rejected by the workers concerned and the
other proposals fell through as they had all been part of a
package.
9. As part of the redundancy package Weetabix Limited offered to
pay 2 weeks pay per year of service towards the lump sum payment
to the two workers who expressed an interest in accepting the
redundancy package as a gesture of goodwill in recognition of
their service prior to 1980. These two workers are no longer
interested in accepting redundancy and will be employed by
Shamrock Foods after the sale of that Company.
10. There is a difference of opinion as to which of the companies
actually employed these three workers. The companies
representative maintains that the 1980 agreement provided for the
permanent transfer of employment of 3 sales representatives from
Weetabix Limited to Shamrock Foods Limited. They have continued
to be paid from England by Weetabix Limited as a matter of
convenience (they are not P.A.Y.E. workers and each one is
responsible for his own tax and social welfare contributions). In
all other respects they are answerable to Shamrock Foods Limited
management. The Union contends that the workers concerned are
employees of Weetabix Limited and were only transferred to
Shamrock Foods Limited. The Union is seeking that the payment
offered by Weetabix be extended to all 3 workers who transferred
to Shamrock Foods Limited as a severance payment from Weetabix
Limited. The Company rejected this claim.
11. Both parties agreed to refer the issue to the Labour Court for
investigation and recommendation. A Court hearing was held on 4th
September, 1989.
UNION'S ARGUMENTS:
12. 1. The workers concerned are not now interested in accepting
redundancy. However as their jobs cannot be guaranteed as a
result of the proposed sale of Shamrock Foods Limited the
question of redundancy may arise in the future when Weetabix
Limited are no longer on the scene. As the workers have long
service with Weetabix Limited, they should receive two weeks
pay for every year of service with Weetabix Limited in
recognition of this service.
2. The Union agreed to recommend acceptance of the Companies
proposals subject to the issue of the redundancy question
being resolved.
COMPANY'S ARGUMENTS:
13. 1. The matter of pay has now been outstanding for over 12
months. The companies put forward proposals in line with the
Programme for National Recovery which has been accepted by all
the other categories in Shamrock Foods Limited. Indeed the
P.N.R. has been widely accepted throughout the country and the
Labour Court itself has publicly supported it.
2. All of the other proposals put forward by the companies on
the 14th June, 1989 related to a package agreement being
sought on cessation of joint negotiations. These proposals
represent a substantial ongoing cost to the companies and
additional improvements for the employees involved.
3. Joint negotiations are no longer an option that the
parties can pursue. Very shortly all links between the two
companies will be severed save for a commitment by Weetabix to
continue distribution of its products through Shamrock Foods
Limited for the next 12 months only.
RECOMMENDATION:
14. The Court having considered the submissions of the parties
recommends the following for acceptance by the Company and the
Union.
1. The application from July, 1st 1988 of the increases in
accordance with the Programme for National Recovery.
2. The application of a further salary point on the salary
scale as and from 1st July, 1989 of point 15 at #19,500.
(This amount to be inclusive of the 29th Pay round
increases).
3. A once off lump sum payment of #1500 for employees opting
to go on P.A.Y.E. Pro rata reduction in this amount for
anyone leaving either Company within 2 years.
4. #150 to be paid to all employees in lieu of expenses
increases for 12 months from June 1st 1988.
5. Expenses from July 1st, 1989 till end of June, 1991 to be
as follows:-
Lunch Allowance - #5.50
Overnight Allowance _ #4.50
Care of Company
Property Allowance - #5.15
6. Messrs. Nairn and Duffy to receive a double increment on
their next due review date.
7. Transfer of pension funds from Weetabix to Shamrock Foods
Limited where applicable. The transfer to be ratified by
an independent actuary.
8. Both Companies to confirm to the Union existing bonus
arrangements.
In respect of the claim for two weeks pay per year of service in
return for terminating the relationship with Weetabix the Court
does not recommend concession of this claim.
With the cessation of joint negotiations the Court recommends
in the interests of stable relations that the Companies enter
separate agreements with I.D.A.T.U.
~
Signed on behalf of the Labour Court
Tom McGrath
_________________________
29th September, 1989 Deputy Chairman.
M.D./J.C.