Labour Court Database __________________________________________________________________________________ File Number: CD89701 Case Number: LCR12695 Section / Act: S67 Parties: CANTRELL AND COCHRANE (DUBLIN) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union for the retention of the terms and conditions of employment presently enjoyed by eight workers.
Recommendation:
5. The Court notes that following the issue of the Court's
letter of 18th October, the parties met both locally and under the
Chairmanship of an Industrial Relations Officer to continue
negotiations on the matters in dispute. Failing agreement the
dispute was referred back to the Court for recommendation.
Having considered all the submissions made and the details of
negotiations the Court notes:-
(a) The Company's proposal for case rate as set out in letter of
21st November, 1989.
(b) There are three other options available to the employees
concerned.
(c) The Company are prepared to negotiate a level of compensation
based on the difference between the proposed case rate (per
letter of 21/11/89) and the 1988 earnings if the proposals at
(a) above are accepted.
Taking all aspects of the case into account the Court recommends
that the employees accept either of the proposals at A and B
above. In the event of any of the employees accepting the
proposals at (A) the parties negotiate compensation as at (C).
Division: Ms Owens Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD89701 RECOMMENDATION NO. LCR12695
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CANTRELL AND COCHRANE (DUBLIN) LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union for the retention of the terms and
conditions of employment presently enjoyed by eight workers.
BACKGROUND:
2. The Company is involved in the manufacture, sales and
distribution of soft drinks for both the licensed and grocery
trades and employs a total of 226 employees. The present claim
concerns 8 workers in the local delivery section. In 1984 the
Company introduced a rationalisation plan and with union agreement
implemented a productivity scheme in a number of areas including
transport. This led to an agreed crewing level in the transport
section, increased productivity, and substantially increased
earnings for the workers concerned. In recent years the Company
has been faced with rising costs and increased competition and
consequently embarked on a major programme involving reduced
manning, and a re-organisation in working practices. It intimated
to the Unions that it wished to eliminate the transport section
and substitute the local delivery fleet by independent
contractors. The Company maintains that its objective was to
achieve a delivery cost of 30 pence per case which it claims is
the cost achieved by its main competitors. Following discussions
between the parties which included a validation of the costs
outlined in the Company's proposals, by the ICTU, agreement was
reached on a redundancy package and 18 workers accepted the
severance terms. However, the 8 workers here concerned remained
and wished to retain their jobs and conditions of employment as
heretofore. Following further discussions the Company offered the
following terms to the workers concerned:-
1. Owner/Driver.
2. Relocation indoors with compensation.
3. Retention in a cost effective delivery.
4. Severance.
(Full details supplied to the Court).
The proposals were rejected by the Union which argues they would
reduce the workers' wages by 25%. The Union also claims that in
agreeing to the 18 redundancies already achieved it had
contributed substantially to the cost effectiveness desired by the
Company. The Unions' offered a comprehensive agreement with
amended conditions, and ways of revising the productivity scheme
with the proviso that 1988 average earnings be maintained. This
was rejected by the Company. Further discussions failed to
resolve the dispute which was then referred to the conciliation
service of the Labour Court. Conciliation conferences were held
on the 2nd August, and 31st August, 1989 but no agreement was
reached. The dispute was referred to the Labour Court for
investigation and recommendation on the 6th October, 1989. A
Court hearing was held on the 10th October, 1989. In a letter
dated 18/12/89 the Court requested that the parties engage in
further discussions in an effort to reach agreement. These
discussions and further conciliation conferences held on the 3rd
and 21st November, 1989 were unsuccessful and the dispute was
referred back to the Court. A second Court hearing was held on
the 5th January, 1990.
UNIONS ARGUMENTS:
3. 1. The Company's insistence on a delivery cost of 37 pence
per case is tantamount to insisting that the workers concerned
compete penny for penny with outside hauliers. This is an
impossible goal. The workers have no control over the
activities of outside contractors. The Company's proposal
would have the effect of reducing workers' earnings by
approximately 25% and would require a 50% increase in
workload. It must be stressed that the Unions' objective is
to protect the jobs of the remaining 8 workers. The Union
has contributed significantly to cost savings in the Company
by agreeing to the elimination of 18 jobs. The remaining
workers should not be expected to accept a 25% reduction in
earnings. It must be stressed that a wage reduced by 25%
would be the maximum amount of earnings available and in
reality would be less on a week to week basis. It is
unreasonable and grossly unfair for the Company to expect the
workers concerned to compete for their wages against the
prices achieved by outside contractors.
2. The Company, from the commencement of negotiations, has
not changed from its position which is the total elimination
of the transport section and it is relentlessly pursuing the 8
workers concerned for their jobs. The Union has been misled
by Management into thinking that the relinquishing of 18 jobs
would contribute to the maintenance of the 8 remaining
positions. The workers have indicated a willingness to accept
an increased workload provided their earnings are not reduced
to the extent that the Company requires. The Union would ask
the Court to recognise the very great extent to which the
Unions' have tried to facilitate the Company's aspirations
while protecting the workers interests. The 8 named workers
should be retained in the transport section with a guaranteed
maintenance of the 1988 individual average earnings.
COMPANY'S ARGUMENTS:
4. 1. The Company has entered into the rationalisation programme
with a view to protecting and developing its business. While
imports are a fact of economic life the Company is
particularly vulnerable to importation of franchise products,
and must do everything possible to minimise the level of
imports. The differential between the Company's own cost per
case and that available in the market place constitutes a
serious profit incentive for importers of the Company's
franchise products from the U.K. It is Management's strategy
to reduce the incentive to import by eliminating the
differential in distribution costs, thereby protecting
manufacturing jobs. It is critical therefore to match the
distribution costs available to those who currently import
these products, and unless the Company can achieve this it is
undermining all efforts to remain viable. Distribution costs
were double the cost of available transport prices from
reputable third party contractors (i.e. 63p versus 30p per
case). Furthermore the ongoing level of restrictive practices
and poor customer service aggravated an already serious
position.
2. The Company in a letter to the Union dated 21st November,
1989 offered to retain the 8 employees at a cost per case of
37p for city deliveries or 53p per case for country
deliveries. This compares to available contractors cost of
28p - 30p per case. The impact of this concession on costs
would be very considerable and would still amount to a major
profit incentive to importers to enter the market. For total
city deliveries this would add additional, unnecessary costs
of #48,300 per annum. For total country costs it would add
#111,090 per annum.
3. Many other firms in the fast moving consumer goods market
have also had to reduce their cost of delivery. Most have
chosen to do so by eliminating their own delivery service and
changing to contractors. However with the revised working
conditions detailed in the letter of November, 21st 1989, this
Company is prepared to retain the remaining 8 people but only
in the context of a cost efficient operation. Should
individual employees be unwilling to meet these essential
conditions the Company is prepared to:-
(a) Retain them in alternative indoor employment with
compensation for loss of earnings.
(b) Offer them contractor terms at preferential rates.
(c) Offer them those severance sums negotiated when employees
left in June, 1989. The sum of #5,576 for orderly
withdrawal would also apply.
Delivery costs need to be brought into line immediately and
the remaining 8 workers should accept the revised position put
forward by the Company or failing that to chose from one of
the other options set out above.
RECOMMENDATION:
5. The Court notes that following the issue of the Court's
letter of 18th October, the parties met both locally and under the
Chairmanship of an Industrial Relations Officer to continue
negotiations on the matters in dispute. Failing agreement the
dispute was referred back to the Court for recommendation.
Having considered all the submissions made and the details of
negotiations the Court notes:-
(a) The Company's proposal for case rate as set out in letter of
21st November, 1989.
(b) There are three other options available to the employees
concerned.
(c) The Company are prepared to negotiate a level of compensation
based on the difference between the proposed case rate (per
letter of 21/11/89) and the 1988 earnings if the proposals at
(a) above are accepted.
Taking all aspects of the case into account the Court recommends
that the employees accept either of the proposals at A and B
above. In the event of any of the employees accepting the
proposals at (A) the parties negotiate compensation as at (C).
~
Signed on behalf of the Labour Court,
Evelyn Owens
___________________
10th January, 1990.
T. O'D. / M. F. Deputy Chairman.