Labour Court Database __________________________________________________________________________________ File Number: CD89794 Case Number: LCR12709 Section / Act: S67 Parties: AVONMORE FOODS PLC - and - SERVICES INDUSTRIAL PROFESSIONAL AND TECHNICAL UNION |
Dispute concerning the proposed introduction by the Company of new incentive and contract based payment arrangements for drivers involved in bulk feed distribution.
Recommendation:
5. The Court having considered the submissions of the parties
and the issues raised by them in their oral presentations finds as
follows:-
1. Contractual Arrangements.
The Court considers that the Company should be permitted to
offer contracts to the employees on a voluntary basis should
they so desire, thus enabling employees to assess if the
Company proposals are beneficial to them and if they should
be accepted.
2. Incentive Scheme.
It is the view of the Court that there has been insufficient
negotiations in relation to the specific elements of the
incentive scheme to allow for a recommendation being made
which is likely to be of assistance to the parties. The
Court, noting the views of the Union representatives that
they were prepared to negotiate on the elements of the
incentive scheme, considers that the parties should
immediately enter meaningful negotiations on the incentive
scheme, these negotiations to be completed within a period of
three months from the date of this recommendation.
Any issues remaining unresolved to be referred to the Court
for a recommendation.
The Court shall make available the services of an Industrial
Relations Officer should this be desired by the parties.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Devine
Text of Document__________________________________________________________________
CD89794 RECOMMENDATION NO. LCR12709
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AVONMORE FOODS PLC
AND
SERVICES INDUSTRIAL PROFESSIONAL AND TECHNICAL UNION
SUBJECT:
1. Dispute concerning the proposed introduction by the Company of
new incentive and contract based payment arrangements for drivers
involved in bulk feed distribution.
BACKGROUND:
2. Avonmore Foods P.L.C. has its head office at Patrick Street,
Kilkenny and is involved in the manufacture and distribution of
food products. The Company is divided into four divisions which
operate separately. This dispute concerns the trading division
which is responsible for the manufacture and distribution of
animal feeds, fertilisers, seed, grain, agricultural hardware etc.
The Company has a fleet of fourteen trucks delivering bulk animal
feed for the trading division and employs fourteen drivers as
permanent employees (seven are employed on bulk feed full time and
seven are employed on a seasonal basis). The Company claims that
this existing delivery system is inefficient and uncompetitive and
is seeking to introduce a system of distribution based on
incentive and contractual payments (see appendix one). This
system would involve the use of two types of driver operating side
by side i.e. the employment of contract drivers on earnings
related to kilometres and tonnage and the employment of the
Company's own drivers on an incentive payments system. The Union
has rejected the introduction of contract drivers and proposes an
incentive system based on basic pay plus allowances. No agreement
was reached at local level and the matter was referred on 28th
August, 1989 to the conciliation services of the Labour Court.
Conciliation conferences were held on the 6th October, 1989 and
18th October, 1989 but no agreement was reached and the matter was
referred on 26th October, 1989 to the Labour Court. A full
hearing of the Labour Court was held on 22nd November, 1989 at
which the matter was referred back by the Labour Court for further
discussion at conciliation level. A further conciliation
conference was held on 8th December, 1989 at which no agreement
was reached and the matter was referred back to a full hearing of
the Labour Court on 13th December, 1989. The hearing took place
on 5th January, 1990. A recommendation was issued to the parties
by letter on 16th January, 1990.
UNIONS ARGUMENTS:
3. 1. The Union is opposed to the introduction of contract
drivers and has a mandate from its members to oppose contracts
being introduced. The Union is prepared to negotiate an
alternative method of payment to the one that exists at
present.
2. The Union is opposed to any new payment system that
excludes a basic rate of pay as the main element. The
principle of a basic rate is long established and a very
fundamental one. The Union has put forward the following
system of earnings:-
(a) a basic rate of #170 (current rate) be paid for a
five day, forty hour week, Monday to Friday, plus
50p Per ton for each tonne delivered and 6.5p for
each kilometre driven,
(b) Saturday premium time to be remunerated on the
basis of time plus a half. The tonnage and
kilometre rates increased to #1. and 12p
respectively",
(c) subsistence allowances and service pay to continue
as at present,
(d) existing holiday to be maintained,
(e) the use of private haulage contractors be
eliminated so as to maximise the use of company own
transport.
The above proposal is unanimously supported by the drivers and
will provide the necessary incentive for them to complete
their work in five days and thus avoid the need to work
weekends.
3. The Company's proposals will change work conditions and
practices which were mutually arrived at after considerable
discussions. These new proposals include the eradication of
basic pay, contract working and a compulsory delivery system
based on results. The Union has rejected the Company's
proposals because it views them as regressive steps rather
than an enhancement of earnings potential.
3. 4. The Union rejects the Company claim that the new payments
system would give a substantial increase in earnings potential
to the drivers. The Company's proposals are highly over
optimistic and are therefore almost impossible to achieve.
The drivers feel they cannot work any harder than at present
so the possibility of achieving the targets as set out by the
Company seems remote. The drivers are being asked to work
harder for less reward.
5. Progress in discussions have been slow. Irrespective of
what the Union puts for ward on incentive payments the Company
still demanded contract working arrangements. This is a
position that the Union cannot countenance. The Union is
however prepared to enter into discussions on an incentive
payment scheme.
COMPANY'S ARGUMENTS:
4. 1. The trading division of the Company is lagging behind the
other divisions and is producing low profit margins. The
Company has a traditional delivery system based on Company
ownership of the transport fleet and payment of drivers by the
amount of time spent doing the job. This system is
inefficient and outdated and puts the Company at a
disadvantage in relation to its competitors who have already
introduced contractual and incentive systems.
2. The Company proposes to introduce a new delivery system
which will provide optimum efficiency and cost effectiveness.
This system can only be successful in its proposed format
because any dilution or distortion of the incentive will make
delivery costs more expensive.
The benefits of the Company offer on contract and incentive
are as follows:-
1. All drivers can earn more money in less time.
2. Significantly higher minimum earnings guaranteed.
3. Payment structure will ensure fairness.
4. The incentive is evenly spread over the week to
encourage work to be completed in the shortest time
permissible.
5. Expected earnings of #19,177 (an increase of 11.3% on
previous average earnings).
6. The Company is prepared to complete an investment of
#2m. to ensure this system works and also to increase
sales.
7. Compulsory redundancies will not follow as a result
of this proposal.
8. Drivers will not have to depend on overtime to
maintain their existing pay levels.
4. 3. The Company does not accept the Union's proposals for a
scheme based on basic pay as this would be costlier than the
Company's proposals and would not provide the necessary
incentive for the most efficient use of delivery trucks.
4. Due to lack of progress, mainly due to blocking tactics by
the Union, the Company's right to manage transport in the most
efficient manner is being eroded. The Company has committed
considerable resources and time to preparing and refining its
proposals which will ensure maximum efficiency in the
distribution system which is a major factor in increasing
sales and competitiveness.
RECOMMENDATION:
5. The Court having considered the submissions of the parties
and the issues raised by them in their oral presentations finds as
follows:-
1. Contractual Arrangements.
The Court considers that the Company should be permitted to
offer contracts to the employees on a voluntary basis should
they so desire, thus enabling employees to assess if the
Company proposals are beneficial to them and if they should
be accepted.
2. Incentive Scheme.
It is the view of the Court that there has been insufficient
negotiations in relation to the specific elements of the
incentive scheme to allow for a recommendation being made
which is likely to be of assistance to the parties. The
Court, noting the views of the Union representatives that
they were prepared to negotiate on the elements of the
incentive scheme, considers that the parties should
immediately enter meaningful negotiations on the incentive
scheme, these negotiations to be completed within a period of
three months from the date of this recommendation.
Any issues remaining unresolved to be referred to the Court
for a recommendation.
The Court shall make available the services of an Industrial
Relations Officer should this be desired by the parties.
The Court so recommends.
~
Signed on behalf of the Labour Court,
Tom McGrath
___6th__February,___1990. ___________________
A. S. / M. F. Deputy Chairman
APPENDIX I
COMPANY OFFER
CONTRACTUAL
TERMS
11,000 tonnes at a rate per tonne.
The Company will make a severance payment to equal 50% of the
existing redundancy package.
SEVERANCE CONTRACT
50% - 11,000
60% - 8,800
70% - 6,600
80% - 4,400
90% - 2,200
Assistance with vehicle purchase and business management will be
provided.
The above terms will remain while feed sales and production do not
drop below the average of the previous three years.
The contracts will be reviewed on an annual basis.
1. BASIS OF PAYMENT.
#1 per tonne )
) 14 - 18t. Truck.
12p per km. )
75p per tonne )
) 22 - 24t Truck.
12p per km. )
9,500 tonnes
75,000 kms.
APPENDIX I
INCENTIVE PAYMENT SYSTEM
1. EARNINGS.
Expected Earnings #18,500 p.a.
Plus Holiday Pay # 677 p.a.
_______________
TOTAL #19,177 p.a.
_______________
Guaranteed minimum Earnings for full
time bulk feed drivers #14,500 p.a.
Subject to the terms and conditions of the Incentive Scheme
being operated, Feed sales and production not dropping below
the average of the previous three years. The above will
apply.
EXISTING SYSTEM.
Average earnings #17,227 (Basic + O.T)
Guaranteed earnings # 8,797 (Basic)
2. CONDITIONS OF INCENTIVE PAYMENT SYSTEM.
(i) Service Pay - in addition to above earnings.
(ii) Holidays - one week during peak period.
remainder during off-peak period.
rate = Driver Grade 6 #169.17 no change.
Also, Sickness + Breakdown = Driver Grade 6.
(iii) Lunch/Tea Allowances - At appropriate rates.
- Lunch Allowance for minimum
- 4 hours worked.
- Tea Allowance for minimum 8.5
- hours worked.
- These Allowances are included
- in the above earnings.
(iv) Work Days/Work Hours:
- Peak Period (November - April)
Monday to Friday plus Saturdays - except 4.
Six Sundays - if necessary.
One Public Holiday - if necessary.
APPENDIX I
INCENTIVE PAYMENT SYSTEM
Work Days/Work Hours:
- Off Peak Period (May to October).
Monday to Friday plus every second Saturday.
Two Sundays - if necessary.
One Public Holiday - if necessary.
The Company will co-ordinate and schedule orders,
production and delivery to maximum feed sales to
customers.
4. Review - October, 1990.