Labour Court Database __________________________________________________________________________________ File Number: CD89733 Case Number: LCR12693 Section / Act: S67 Parties: BENSON ENGINEERING LIMITED KILLARNEY - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Dispute concerning the proposed restructuring of the Company.
Recommendation:
5. The Court, has considered the additional submissions made at
the 2nd hearing of this dispute and has taken into account the
proposals for settlement recommended in the document of the 30th
November, 1989 drawn up by the Industrial Relations Officer.
The Court is of the view that the proposals contained in that
document represent generally a fair basis for settling the dispute
particularly as it includes a proposal for review of the situation
at the end of 3 months.
However, in the circumstances, the Court consider that one aspect
of the proposal might be improved and recommends accordingly that
Para 3 of that document be amended by the alteration of Clause
3(b) as follows.
Compensation for reduction in basic rate
#56.18 x 32 = #1797.76.
The rest of the document to remain unaltered.
The Court recommends that the Union accept the above revised
proposals.
Division: Ms Owens Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD89733 RECOMMENDATION NO. LCR12693
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BENSON ENGINEERING LIMITED KILLARNEY
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute concerning the proposed restructuring of the Company.
BACKGROUND:
2. The Company which is engaged in light engineering produces
precision turned parts and employs six workers (two supervisors,
two setters, a final inspection operator and a general operator).
As part of a major restructuring programme the parties have had
discussions on rates of pay, proposed short-time working and
redundancies. No agreement was reached at local level and the
dispute was referred to the conciliation service of the Labour
Court. Conciliation conferences were held in September and
October, 1989 and as no agreement was reached the matter was
referred to the Labour Court on the 20th October, 1989. A Court
hearing was held in Killarney on the 2nd November, 1989. In a
letter dated the 7th November, the Court requested that the
parties engage in further discussions on the various issues
related to the proposed re-structuring e.g. possible redundancies,
loss of earnings, and short-time working, and indicated that the
services of the conciliation service could be utilised in these
discussions. As the result of a further conciliation conference
held on the 29th November, 1989, settlement proposals emerged (on
the 30th November, 1989) which were put to both parties (see
appendix attached). The proposals were acceptable to the Company
but were rejected by the Union, and the dispute was referred back
to the Court on the 30th November, 1989. A second Court hearing
was held on the 19th December, 1989.
UNION'S ARGUMENTS:
3. 1. The proposals of the 30th November, 1989 in relation to
part (1) wage rates for setters, final inspection, and general
operative were acceptable to the Union. However, the proposal
dealing with the supervisors had been rejected following a
ballot of the workforce. From the supervisors' point of view,
this is understandable, having due regard to the drastic
cutbacks in gross pay that they would have to endure should
they decide to stay in the job and the resultant major drop in
their standard of living. Also, by modern standards, the
level of redundancy compensation is very low, if they choose
to sever their connections with the Company, and opt for the
redundancy package.
2. In relation to these two people, the Union believes that
if a satisfactory formula could be found, this would have the
effect of resolving the problem. If this is not possible, and
the Union is faced with a situation where the package as
presented at conciliation is accepted or rejected, the
remainder of the staff, in solidarity with the membership of
the supervisory group, will then reject the package. For that
reason, the Union believes that the fairest way out, would be
either, to offer the position as stated (part 1 of settlement
proposals) plus the supervisors, but the present wage rate of
the supervisors be maintained and the difference between the
setters and the supervisors, be red-circled and personalised,
at that level for ever more. This would not be an unusual
situation, and is in fact common practice in areas such as
this.
3. The Union has put forward a set of proposals which were
rejected by the Company (details supplied to the Court). The
workers themselves have put some effort into finding a
solution. The Union believes that of the three proposals,
suggested by them, solution number three, would be the one
that should indeed find greater acceptability. Having said
that, it is not easy, in modern times, to accept a cut in
wages. Whilst a buy-out might seem generous, taking it in the
context of, two workers, who have in the recent past,
undertaken very serious mortgage commitments, they can ill
afford to lose any income per week. As previously stated,
this would reflect very badly on their overall standard of
living.
4. On the other hand, should they choose the option under
redundancy; the Union believes that the three-and-a-half
weeks' per year of service, in the formula used by the
Company, is not good enough. Because it believes that like
any other good redundancy package, negotiated in the local
area, gross earnings, excluding overtime, should have been
used when calculating the redundancy. In the proposals of the
30th November, 1989, the package is based on the basic rate.
The shift allowance, which has been part of their income for
years past, has been excluded. Four-and-a-half weeks' is now
the norm in this area. The Union has put a lot of effort into
trying to resolve this dispute, and believes that the
red-circling proposal put forward, is one that should be
seriously considered. The Company should look again at the
Union's proposals as a basis for settling the dispute.
COMPANY'S ARGUMENTS:
4. 1. The Company has tried extremely hard to work a settlement
on a reasonable basis with the Union, of how its business
should be re-structured. The Company has deferred the
implementation of short-time working, with the consequence
that they build up completely unnecessary levels of stock, by
the continuation of two cycle shift working, in an effort to
facilitate the Union and its members, in finding a solution.
To date the Company's efforts have been frustrated, and
eventually, following rejection of the proposals, despite the
fact that it had been agreed at the end of the conciliation
conference that they would be recommended for acceptance, the
Company was then forced to place two workers (one setter, one
supervisor) on a week on week off. This came into operation
on the 11th December, 1989. The present level of activity at
the plant is sufficient to sustain day work only.
2. The position with the Company's major supplier has further
deteriorated, and there are no orders on the books from this
major supplier for the months of January, February and March,
1990. The situation beyond that date is unknown. In addition
another customer of the Company has encountered significant
trading difficulties and the Company has no orders to supply
them. Demand from this customer will be zero for the
foreseeable future.
3. It is absolutely imperative that the matter of
re-structuring of the Company go ahead immediately. The
uncertainty which has been created by the difficulties in
resolving this issue over such a protracted period has
frustrated the Company's efforts to generate new business.
The Company is willing to agree the proposals which emerged on
the 30th November, 1989 to settle the dispute. The Company
understands that both sides were recommending the proposals
for acceptance. Management cannot understand how the
proposals were rejected, in view of the fact the four of the
six workers involved are being granted an increase in pay, and
one of the two remaining workers (supervisors) agreed at the
conciliation conference to the proposals which were being
recommended for acceptance. The Company is seeking an
immediate resolution on the basis put forward, as a result of
the conciliation conference, on the 30th November, 1989.
RECOMMENDATION:
5. The Court, has considered the additional submissions made at
the 2nd hearing of this dispute and has taken into account the
proposals for settlement recommended in the document of the 30th
November, 1989 drawn up by the Industrial Relations Officer.
The Court is of the view that the proposals contained in that
document represent generally a fair basis for settling the dispute
particularly as it includes a proposal for review of the situation
at the end of 3 months.
However, in the circumstances, the Court consider that one aspect
of the proposal might be improved and recommends accordingly that
Para 3 of that document be amended by the alteration of Clause
3(b) as follows.
Compensation for reduction in basic rate
#56.18 x 32 = #1797.76.
The rest of the document to remain unaltered.
The Court recommends that the Union accept the above revised
proposals.
~
Signed on behalf of the Labour Court,
Evelyn Owens
___5th___January,__1990. ___________________
T. O'D. / M. F. Deputy Chairman
APPENDIX I
NOVEMBER 30TH, 1989
Settlement proposals being recommended to both parties to resolve
the restructuring programme in Benson Engineering, based on day
working only, hours of work, 08.00 a.m. to 4.30 p.m., lunch break
thirty minutes:-
(1) WAGES RATES - effective w/c Monday, December 04, 1989
(include 2nd Phase of Programme for National Recovery).
(a) Setters - #180.00 per week
(b) Final Inspection - #160.00 per week
(c) General Operative - #144.00 per week
(2) TRIAL PERIOD OF THREE MONTHS - Short-time WORKING.
(i) (a) Four Setters rotating on three weeks on, one
week off OR
(b) Four Setters and General Operative rotating
on four weeks on, one week off.
(This would entail a Setter performing all the
general operative duties on his week off).
(ii) At the end of the trial, the overall working
operation to be reviewed in the context of
extending the period, return to full-time working,
and/or possible redundancy of one Setter, and
39-hour week under PNR where appropriate.
(3) Compensation for loss of shift premium and reduction in
basic rate for two supervisors, if they accept positions as
setters, under 1 (a) above.
(a) Compensation for loss of shift premium:
4 weeks at 100% + 4 weeks at 50% on #47.24 = #0,283.44
(b) Compensation for reduction in basic:
rate, #56.18 x 26 = #1,460.68
_____________
TOTAL....... = #1,744.12
Payment to be in four equal monthly payments, commencing
on date of acceptance.
OR OPTION under Redundancy immediately.
CONTINUED......./6
APPENDIX I
continuation/five
RE: Settlement proposals / BENSON ENGINEERING LIMITED
(i) 3.50 weeks per year of service on basic rate of
#236.18 = #236.18 x 28 = #6,613.04
(inclusive of Statutory Entitlement).
(ii) If opting for redundancy at end of three months
trial period, basic rate of #180 x 28 = #5,040.00.
NOTE: For the purpose of calculating the Supervisors'
entitlements, both Supervisors are deemed to be on
the same (higher) rate, and service.