Labour Court Database __________________________________________________________________________________ File Number: CD90221 Case Number: LCR12877 Section / Act: S67 Parties: ORRWEAR LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the introduction of a 39 hour week.
Recommendation:
5. The Court having considered the submissions of the parties and
bearing in mind the terms of the Programme for National Recovery
and the Employment Regulation Order recommends the reduction in
the working week should be implemented in accordance with the
provisions of the Employment Regulation Order on the basis
proposed i.e. 15 minutes reduction per day Monday to Thursday.
In the interests of ensuring the competitiveness of the Company
the Court further recommends the bonus issue be the subject of
further negotiations in an endeavour to reach an agreement
acceptable to both parties.
Division: MrMcGrath Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD90221 RECOMMENDATION NO. LCR12877
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ORRWEAR LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the introduction of a 39 hour week.
BACKGROUND:
2. The Company manufactures protective and casual clothing mainly
for the home market. There are approximately 45 workers involved
in this claim. The Company which is a party to the Shirtmaking
Joint Labour Committee is committed to reduce the working week by
one hour in accordance with Employment Regulation Order S.I. No.
325, 1989 as from 1st June, 1990. The Company wishes to introduce
the one hour's reduction through a 5.15 p.m. finish instead of
5.30 p.m., Monday to Thursday. Management is seeking a pro-rata
increase in productivity to minimise the effect of the reduction.
The Company in a letter to the Union dated 28th February, 1990,
tabled productivity proposals (details supplied to the Court)
whereby standards would be tightened in order to fund the 2.50%
which Management states would be the cost of reducing the working
week. The Company claims that some workers would benefit under
the new scheme, but the Union rejected the proposals on the
grounds that a majority of the workers concerned would suffer a
loss in wages. Local discussions and a conciliation conference
held on the 24th April, 1990 failed to resolve the dispute which
was referred to the Labour Court on the 2nd May, 1990. A Court
hearing was held on the 17th May, 1990.
UNION'S ARGUMENTS:
3. 1. The Company's proposals provide for a readjustment of the
Bonus Scheme which would mean a loss in earnings for the vast
majority of the workers concerned, with an increase for a very
small number of workers in the higher earning bracket.
2. The workers concerned are among the lowest paid in the
clothing industry. Their rates of pay are complemented by a
very tight work studied bonus scheme. Any tightening up of
the bonus scheme would have the effect of reducing the low
earnings of the workers concerned. This is totally
unacceptable to the Union as the present bonus scheme is among
the lowest yielding in the industry.
3. The Union has accepted the Company's method of reducing
the working week i.e. a 15 minute early finish Monday to
Thursday, but cannot accept a reduction in already very low
wages. The Union contends that the costs involved are minimal
as are the implications for competitiveness. The Company
already enjoys a competitive advantage over all of its
competitors who are paying much higher rates of pay.
COMPANY'S ARGUMENTS:
4. 1. Under clause 7 of the Programme for National Recovery
Framework Agreement on Working Hours it is stated that
"any developments in this (i.e. reduction in working
hours) would have to have regard to the costs
involved......".
The Union has failed to negotiate specific details of the
Framework Agreement particularly with regard to the costs
involved, and the Framework Agreement on hours of work which
has to be negotiated under the terms of E.R.O. S.I. No. 325,
1989 also emphasises the point in relation to cost.
Furthermore the November meeting of the Shirtmaking J.L.C.
confirmed that all elements referred to in Clause 4 of the
Framework Agreement (i.e. cost and productivity elements)
should be included in negotiations.
2. The Company understands that the reduced working hours
have to be introduced with the minimum increase in cost. The
effect of reducing working hours from 40 to 39 without a
productivity increase, would be to increase unit cost by 2.5%.
The fall in output would result in increases in overhead,
direct and indirect costs. The only way that the Company can
minimise these increases is to improve productivity, and this
is what is proposed with the revised earnings table. This
proposal seeks to increase productivity pro-rata to the
reduction in working hours up to 100% payment index, and above
that level the hourly rate has been increased. The Company
estimates this would confine increases in cost to about 1%.
3. The Company's proposals will not automatically mean a drop
in earnings for operatives. All workers have the scope to
increase their output by the amount required, and provided
that they do so, they will suffer no drop in earnings. The
Company envisages no great difficulties with this. Workers
who perform above 100% will receive a higher hourly rate.
Operatives who perform above 107% will earn more in 39 hours
than previously in 40 hours for the same effort.
RECOMMENDATION:
5. The Court having considered the submissions of the parties and
bearing in mind the terms of the Programme for National Recovery
and the Employment Regulation Order recommends the reduction in
the working week should be implemented in accordance with the
provisions of the Employment Regulation Order on the basis
proposed i.e. 15 minutes reduction per day Monday to Thursday.
In the interests of ensuring the competitiveness of the Company
the Court further recommends the bonus issue be the subject of
further negotiations in an endeavour to reach an agreement
acceptable to both parties.
~
Signed on behalf of the Labour Court
Tom McGrath
_____________________
28th May, 1990. Deputy Chairman
T.O'D/J.C.