Labour Court Database __________________________________________________________________________________ File Number: CD9028 Case Number: LCR13262 Section / Act: S67 Parties: GARRETT IRELAND LIMITED - and - NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION |
Claim by the Union for the introduction of a free sick pay scheme.
Recommendation:
5. The Court has fully examined the submissions oral and written
made by the parties and makes the following recommendations.
1. Item 5(iii) Amount of Benefit
That the scheme as introduced should reflect paragraph 30
of the Employers Guide to PAYE. "Payments to an employee
absent due to illness - Pay, wages etc. paid to an
employee when absent from work owing to illness are pay
for P.A.Y.E. purposes.
Where there is an arrangement between employer and
employee (e.g. where the employer continues to pay full
wages during the period of illness) that the employee will
pay over to the employer the social benefits paid in
respect of the period of absence from work the pay for
P.A.Y.E./P.R.S.I. purposes is the excess of net pay over
the amount paid over."
Accordingly calcuations of net pay should be made to take
account of the above.
2. Item 6(iii)
That the clause be amended to read as follows "Benefit
will not be paid if following investigation by the sick
pay committee it is found that the absence is due to
injury resulting from the failure of the employee to
observe the safety practices of the Company, or to use
prescribed safety equipment when this equipment is
available, or the injury resulted from horseplay, fighting
or gross negligence.
3. Item 7 - Abuse of Scheme
That the wording of the Union be accepted.
The Court also recommends that the scheme as proposed by the
Company subject to the above amendments should be implemented but
that the Company contribution to the scheme be increased to
#10,000.
Further it is the view of the Court that the scheme should be
introduced on a trial basis and be reviewed after a period of
three years.
Division: MrMcGrath Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD9028 RECOMMENDATION NO. LCR13262
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 67, INDUSTRIAL RELATIONS ACT, 1946
PARTIES: GARRETT IRELAND LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
SUBJECT:
1. Claim by the Union for the introduction of a free sick pay
scheme.
BACKGROUND:
2. The claim concerns approximately 200 workers who are employed
at the Company's Waterford plant manufacturing components for the
automobile and aerospace industry. The Union's claim for the
introduction of a sick pay scheme was made during negotiations in
respect of a Company/Union Agreement on pay and conditions of
employment in October, 1987. The Company agreed to introduce a
sick pay scheme and in August, 1988 produced draft proposals for
such a scheme (details supplied to the Court). The proposals,
which were revised in January and July, 1989, provided for the
funding of the scheme by the workers concerned of 1% of basic pay.
The Union rejected the Company's proposals on the basis that it
was seeking the introduction of a sick pay scheme at no cost to
the workers concerned. The Union claims that the Company had
given such a commitment and was now reneging on its promise.
Management rejected this claim. As the issue could not be
resolved in local level discussions it was referred to the
Conciliation Service of the Labour Court on the 24th June, 1989.
Conciliation conferences were held on the 14th July and 24th
November, 1989 but no agreement was reached. The dispute was
referred to the Labour Court on the 9th January, 1990. A Court
hearing was held on the 9th May, 1990 and the Court issued the
following recommendation by letter on 6th June, 1990:-
"The Court having considered the oral and written submissions
of the parties takes the view that a greater effort to
negotiate a sick pay scheme could have been made. The Court
considers the parties should seek a resolution of the issue
in further discussions without any pre conditions being laid
down on either side as to whether the scheme should be
formulated on a free or contributory basis. Failing
agreement the Court is prepared to make a recommendation in
the light of the submissions made and any further submissions
the parties may wish to make."
The parties subsequently entered into discussions in relation to
the draft sick pay scheme and a number of changes were made to the
original draft. A final draft sick pay scheme was produced in
November, 1990 (details supplied to the Court). The parties
failed to reach agreement on the following 3 items in the final
draft:-
Item 5(III)
Payment from the sick pay scheme will be calculated as
follows:-
net pay
less disability benefit
less pay related benefit (where applicable)
less tax rebate
Item 6(III)
Benefit will not be paid for injury resulting from the failure
of the employee to observe the safety practices of the
Company, or to use prescribed safety equipment when this
equipment is available, nor will benefit be paid if injury
resulted from horseplay, fighting or gross negligence.
Item 7
Abuses of the scheme will be dealt with under the disciplinary
procedures, (see Appendix 1) this will include dismissal for
fraudulence.
If, in the opinion of Management, or the Sickness Benefit
Sub-Committee, there is reasonable evidence to indicate that a
person benefiting from the scheme is not complying with the
Doctor's instructions, benefit will terminate immediately.
In relation to Item 5(iii) the Union claims that any tax rebate
should not be deducted from net basic pay. In relation to Item
6(iii) the Union claims the word "will" should be substituted by
the word "may." In relation to Item 7 the Union claims the
deletion of the words in the first paragraph after the word
"procedures." The Company rejects these claims. No agreement was
reached at local level discussions on the three issues or on the
issue of funding the sick pay scheme. The Union requested the
Court to issue a recommendation on the dispute as indicated in the
Court's letter of 6th June, 1990. The Court held a further
hearing in Waterford on 10th April, 1991.
UNION'S ARGUMENTS:
3. 1. The Union's claim for a free sick pay scheme has been
consistent since first made in 1987. The Company by its
tactics has avoided its obligation to provide such a scheme
and has achieved consequent savings. The Union is prepared to
agree to a trial free sick pay scheme which could be reviewed
after one year.
2. The Union's information on the absenteeism level within
the Company is that it is in the region of 3%. The Company
states that it is in the region of 4% but has not provided any
statistics to this effect. The Union has produced a costing
of a sick pay scheme (details supplied to the Court) based on
the historical absenteeism level of the workers concerned over
the past 10-12 years i.e. 3%. The Union's calculations are
based on information supplied by the Department of Social
Welfare. The Union is seeking the introduction of a sick pay
scheme paid for by the Company and not a restricted fund paid
for by the workers themselves. Under the Company's proposals
the workers would be contributing #20,000 p.a. to the scheme
while the Company would be contributing #5,000 p.a.
3. As requested in the Court's letter of 6th June, 1990, the
parties had a series of discussions on the structure of a sick
pay scheme. Agreement was reached, with the exception of the
following 3 items, on a final draft:-
(A) Item 5(iii)
Any tax rebate should not be included in the
deduction from nett basic pay.
(B) Item 6(iii)
The word "will" should be substituted by the word
"may" which is more flexible and would permit
representations by the Union. The use of a sick pay
scheme to ensure safety standards in the workplace is
not the appropriate mechanism.
(C) Item 7
The words after procedures in the first paragraph,
should be deleted. They are not necessary and could
supplant normal disciplinary procedures. The Union
should have the facility to make representations on
any allegations of fraud and proposed dismissal for
fraudulence.
COMPANY'S ARGUMENTS:
4. 1. The Company is vigorously opposed to a non-contributory
'open-ended' scheme because of the proven difficulties in
controlling such a scheme. The Company has made reasonable
efforts to negotiate a workable and manageable scheme. It has
demonstrated flexibility on a number of aspects of the draft.
Employees must have an involvement in the scheme to ensure
that it is not abused.
2. A free sick pay scheme would run contrary to the Company's
established policy and practice in developing a package and
conditions of employment for the workforce. From discussions
both at local level and at conciliation the Company believes
that there is a strong body of opinion among the workforce who
would not be totally opposed to a contributory sick pay
scheme. The Company is prepared to be flexible on a number of
the detailed aspects of the scheme but is not prepared to
enter into a liability of unknown magnitude. The Company is
ahead of other employments in having a Company medical scheme
for workers and their families catering for a full range of
health needs. The scheme is operated on the basis of a
contribution by workers and a contribution by the Company.
3. The Company's policy in regard to the overall package of
conditions of employment is to ensure that workers get a 'fair
deal.' This is reflected in the basic weekly wage of
(craftsmen - #247.75 and production operatives - #196.08.
Overtime earning potential gives an average earnings of #320
per week. In addition, there is shift premia of 20%, 25%, 33
1/3% depending on shift worked, a Company medical scheme,
annual leave of 20 days, service leave, annual bonus and a
contributory pension.
4. The Company's position in relation to the disputed 3 items
in the final draft is as follows:-
(A) Item 5(III)
Any tax rebate received by an employee while out sick
must be taken into consideration when calculating
sick pay. This is to avoid a situation where an
individual would receive more money while out sick
than when he/she is working.
(B) Item 6(III)
The Company wish to keep the wording "Benefit will
not be paid......" to make it quite clear to all
employees that no claim of sick pay can be made if
the employee is absent due to his/her failure to
observe the safety practices of the Company.
(C) Item 7
The Company in using the words "this will include
dismissal for fraudulence", wish to emphasise to all
employees availing of the scheme that defrauding the
scheme is a dismissible offence.
RECOMMENDATION:
5. The Court has fully examined the submissions oral and written
made by the parties and makes the following recommendations.
1. Item 5(iii) Amount of Benefit
That the scheme as introduced should reflect paragraph 30
of the Employers Guide to PAYE. "Payments to an employee
absent due to illness - Pay, wages etc. paid to an
employee when absent from work owing to illness are pay
for P.A.Y.E. purposes.
Where there is an arrangement between employer and
employee (e.g. where the employer continues to pay full
wages during the period of illness) that the employee will
pay over to the employer the social benefits paid in
respect of the period of absence from work the pay for
P.A.Y.E./P.R.S.I. purposes is the excess of net pay over
the amount paid over."
Accordingly calcuations of net pay should be made to take
account of the above.
2. Item 6(iii)
That the clause be amended to read as follows "Benefit
will not be paid if following investigation by the sick
pay committee it is found that the absence is due to
injury resulting from the failure of the employee to
observe the safety practices of the Company, or to use
prescribed safety equipment when this equipment is
available, or the injury resulted from horseplay, fighting
or gross negligence.
3. Item 7 - Abuse of Scheme
That the wording of the Union be accepted.
The Court also recommends that the scheme as proposed by the
Company subject to the above amendments should be implemented but
that the Company contribution to the scheme be increased to
#10,000.
Further it is the view of the Court that the scheme should be
introduced on a trial basis and be reviewed after a period of
three years.
~
Signed on behalf of the Labour Court
Tom McGrath
_______________________
28th June, 1991. Deputy Chairman
A.S./J.C.