Labour Court Database __________________________________________________________________________________ File Number: CD90192 Case Number: LCR12878 Section / Act: S67 Parties: ORMAC LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the implementation of a 39 hour week.
Recommendation:
5. The general difficulties of the clothing industry are well
known and the particular problem of tight margins in the Company
is not disputed. Accordingly it is the Court's view that the
parties should negotiate how best to minimise the cost impact of
the 39 hour week through increased productivity on the lines set
out by the Company. The Court recognises the time constraints on
the parties because of the imminent introduction of the reduced
working week and recommends that if agreement is not achieved by
the end of July, 1990, the matter should be referred back to the
Court for a definitive recommendation. The Court draws to the
attention of both parties the full content of Clause 6 of the
Framework Agreement on Working Hours which places responsibility
on them to determine this issue at local level.
The Court further recommends that the 39 hour week be implemented
by a reduction of one hour's working time on each Friday.
Division: CHAIRMAN Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD90192 RECOMMENDATION NO. LCR12878
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ORMAC LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the implementation of a 39 hour week.
BACKGROUND:
2. The Company employs 35 people at its factory in Kells and is
engaged in the manufacture of clothing. Under the terms of
Employment Regulation Order S.I. No. 325 of 1989 (Shirtmaking
Joint Labour Committee), the Company is obliged to reduce working
hours from 40 to 39 with effect from the 1st June, 1990, with
negotiations on specific details to take place at local level
before that date. At a meeting on the 29th January, 1990, the
Company proposed the following:-
(a) to implement the 39 hour week on the 1st June by
finishing at 5 p.m. instead of 5.15 p.m., Monday to
Thursday,
(b) a pro-rata increase in productivity in order to meet the
criteria of cost and competitiveness as laid down in the
Framework Agreement on Hours of Work (details supplied to
the Court).
The Union rejected this and sought an hour off on Friday
afternoons with no increase in productivity. Following the
failure of local discussions the Company referred the matter to
the conciliation service of the Labour Court on the 5th March. A
conciliation conference on the 6th April failed to resolve the
dispute and the matter was referred to the Labour Court on the
18th April. A Court hearing was held on the 15th May, 1990.
COMPANY'S ARGUMENTS:
3. 1. The present working hours are distributed 8.5 hours Monday
to Thursday and 6 hours on Friday. It would seem more
sensible and in the interest of productivity, to take the
reduction on the longer days. Many operatives have achieved
their output targets by 5 p.m. and there is relatively little
work done in the 15 minutes between 5 p.m. and 5.15 p.m. This
is the least productive period in the working week.
2. The manager commutes daily from Dublin to Kells. While on
some evenings he does not leave the factory until finishing
time, most evenings he has to leave at around 4.45 p.m. or 5
p.m. before the factory finishes. The proposed arrangement to
finish at 5 p.m. instead of 5.15 p.m. would enable him to be
in attendance for a greater percentage of the working week.
3. The Company's understanding is that the reduced working
hours have to be introduced with the minimum increase in cost.
The effect of reducing the working hours from 40 to 39 hours
without a productivity increase, would be to increase unit
cost by 2.5%. The fall in output would result in increases in
direct and indirect costs.
4. Under Shirtmaking Employment Regulation Orders over the
past three years, wage increases have amounted to 12.6%
against a national average of approximately 8.5%. The Company
has not been able to recover this level of increases in
selling prices, and there is no possibility of being able to
recover a further 2.5% increase resulting from the reduction
in working hours.
5. The only way the Company can minimise the effects of these
increases is to improve productivity and this is what it has
proposed with the revised earnings table. This proposal seeks
an increase in productivity pro-rata to the reduction in
working hours and would confine increases in costs to about
1.0% (details of revised earnings table were supplied to the
Court).
6. This proposal will not automatically mean a drop in
earnings for operatives. All operatives have the scope to
increase their output by the amount required and, provided
they do so, they will suffer no drop in earnings. Management
envisages no great difficulties with this and as already
mentioned many of the staff presently achieve their output
targets in 39 hours.
UNION'S ARGUMENTS:
4. 1. A straight hour off on Fridays would better suit the
workers concerned. The Company's reason for wishing to spread
the hour over the week is not sufficient to justify the
inconvenience caused to the claimants. Most of them live in
rural areas and depend on lifts supplied by persons who are
working in the Kells area to get home. Most already have to
wait 15 minutes for lifts but will have a thirty minute wait
under the Company's proposal.
2. The main objective of the Programme for National Recovery
was the reduction of the hour while incurring no loss to
employees. The Company's proposal, as presently constituted,
is tantamount to clawing back the bonus scheme. This scheme
was the subject of a work study by the Advisory Service of
I.C.T.U. in September, 1985. The present targets and levels
of output represent optimum productivity and no spare capacity
exists. To accept the Company's proposal would lead to a loss
of bonus and therefore the earning capacity of the workers
concerned.
3. The I.C.T.U. guidelines on the reduction in working hours
state that the reduction should not lead to any loss of
earnings on the part of the workers concerned. In this
context pay means all the elements which go into making up a
worker's weekly wages (excluding overtime) including bonus
payments, piece-work earnings, shift premium etc.
4. The Company's proposal is in breach of the fundamental
spirit of the P.N.R. Clause 6 of the Framework Agreement on
Hours of Work states that "the application of a reduction in
hours provided for under this Agreement shall not result in
any loss (or gain) in weekly pay."
RECOMMENDATION:
5. The general difficulties of the clothing industry are well
known and the particular problem of tight margins in the Company
is not disputed. Accordingly it is the Court's view that the
parties should negotiate how best to minimise the cost impact of
the 39 hour week through increased productivity on the lines set
out by the Company. The Court recognises the time constraints on
the parties because of the imminent introduction of the reduced
working week and recommends that if agreement is not achieved by
the end of July, 1990, the matter should be referred back to the
Court for a definitive recommendation. The Court draws to the
attention of both parties the full content of Clause 6 of the
Framework Agreement on Working Hours which places responsibility
on them to determine this issue at local level.
The Court further recommends that the 39 hour week be implemented
by a reduction of one hour's working time on each Friday.
~
Signed on behalf of the Labour Court
Kevin Heffernan
________________________
28th May, 1990. Chairman
D.H./J.C.