Labour Court Database __________________________________________________________________________________ File Number: CD91431 Case Number: LCR13439 Section / Act: S26(1) Parties: GARRETT (IRELAND) LIMITED - and - NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION |
Dispute concerning the date of application of the first phase of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
5. The Court having considered the submissions by the parties in
this case is satisfied that the negotiations which resulted in an
increase of 6½% with effect from 1st October, 1987, the agreement
to cover a period of 15 months, did not incorporate or subsume any
part of the terms provided under the P.N.R. which were in fact
implemented by the Company with effect from 1st January, 1989.
Having regard to the terms of the P.N.R. the Court finds that the
expiry date in this instance is the 31st December, 1991.
The Court therefore does not recommend concession of the Union's
claim.
Division: Mr O'Connell Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD91431 RECOMMENDATION NO. LCR13439
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: GARRETT (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
SUBJECT:
1. Dispute concerning the date of application of the first phase
of the Programme for Economic and Social Progress (P.E.S.P.).
BACKGROUND:
2. The dispute concerns approximately 240 workers who are
employed at the Company's plant in Waterford. In September, 1987
discussions took place between the Union and the Company on a new
wage round. The previous agreement was due to expire on 31st
September, 1987. On the 20th November, 1987 the parties reached
agreement on an increase of 6.5% for a period of fifteen months
from 1st October, 1987. On the 19th November, 1987 the Programme
for National Recovery (P.N.R.) was ratified by the Social
Partners. The Company implemented the First Phase of the P.N.R.
on the 1st January, 1989, Phase Two on 1st January, 1990, and
Phase Three on 1st January, 1991. The Company claims that the
P.N.R. is due to expire on 31st December, 1991. The Union in a
letter to the Company dated 5th March, 1991 claimed that the
P.N.R. expired in Garrett (Ireland) Limited on 31st December,
1990. The Union claims that the agreement reached on the 20th
November, 1987 covered the last three months of that year, to 31st
December, 1987, and Phase One of the P.N.R. from 1st January, 1988
to 31st December, 1988. It claims that Phase Two of the P.N.R.
was due on 1st January, 1989 and Phase Three fell due on the 1st
January, 1990. Management rejected the claim. The issue was
referred to the conciliation service of the Labour Relations
Commission on the 27th March, 1991. A conciliation conference was
held on the 30th May, 1991 but no agreement was reached. The
dispute was referred to the Labour Court for investigation and
recommendation by the Labour Relations Commission on the 14th
August, 1991. A Court hearing was held in Waterford on the 24th
September, 1991.
UNION'S ARGUMENTS:
3. 1. The workers concerned should be paid the first phase of
the P.E.S.P. (4%) with effect from the 1st January, 1991. The
Company has provided no rational justification for its refusal
to pay the increase from the due date which is 1st January,
1991. Section 2 Clause 6 of the P.E.S.P. states "that pay
increases can be provided at a level nor exceeding 4% in 1991,
3% in 1992 and 3.75% in 1993". The Company has simply ignored
the dates set out in the P.E.S.P., the Company/Union agreement
and the P.N.R.
2. During negotiations which were held in 1987 the Union
submitted a list of claims to the Company in respect of wages
and conditions of employment. Discussions were held in the
context of a two-year agreement. The Company made three
offers to the Union, the final one being 10% over the two-year
period. This offer was made on 2nd October, 1987. The Union
was prepared to recommend the offer to its members for
acceptance in three phases at eight-month intervals. In the
meantime the text of the P.N.R. became available and the
Company stated that it was not in a position to conclude the
two-year agreement. The Union pointed out to Management that
there were outstanding claims outside the scope of the P.N.R.
Management used the P.N.R. to renege on offers made to the
Union in excess of the terms of the P.N.R. which the Company
could well afford to pay. Following further discussions the
Union proposed concluding an agreement covering 1987, but
management declined this offer and made a final proposal of
6½% which would include 1987 and 1988. This offer included
Phase One of the P.N.R. Phase Two expired on 31st December,
1989, and Phase Three expired on the 31st December, 1990. The
Company should therefore pay Phase One of the P.E.S.P. to its
workers with effect from 1st January, 1991.
COMPANY'S ARGUMENTS:
4. 1. The Agreement of 20th November, 1987 states "this
Agreement to run for 15 months from 1st October, 1987 to 31st
December, 1988, at the end of which period further discussions
on pay will take place between the parties, having regard to
any general National Pay Agreement or National Plan, then in
being." The P.N.R. was ratified by the Social Partners on the
19th November, 1987. The Company failed to secure agreement
with the Union on the P.N.R. and implemented the 1st Phase
from 1st January, 1989. The notice of implementation was
circulated to the workers concerned (details supplied to the
Court). There was no ambiguity as to the status of pay
agreements and the P.N.R. in the Company at that time. There
was no doubt on the part of the Union which entered a claim
for a reduction in the working week under the terms of the
P.N.R. The 39-hour week was subsequently agreed with the
Union and implemented by the Company. The Company implemented
Phase 2 of the P.N.R. with effect from 1st January, 1990 and
Phase 3 with effect from 1st January, 1991. The P.N.R. in
Garrett (Ireland) Limited is due to expire on 31st December,
1991.
2. The Union, in a letter to the Company dated 5th March,
1991, claimed that the first phase of the P.E.S.P. was due
"from December 31, 1990." The letter stated "I understand
that your Company has made an interim payment of 2.5% prior to
acceptance of the P.E.S.P." The 31st December, 1990 has no
relevance in the chronology of pay agreements in the Company
and there was no reference by the Company, or no agreement
with the Union, at any point in relation to an interim
agreement.
3. The Court has already made a recommendation in a
comparable case (L.C.R. 13182 refers). The recommendation
stated:-
"The Court is quite satisfied that the Union did not at any
time formally accept the provisions of the P.N.R. but it
is equally true that they have accepted benefits deriving
therefrom and the terms offered and accepted by them with
effect from 1st October, 1988 are undistinguishable from
the terms of the P.N.R. The designation of the various
phased increases does not have any relevance to the case.
The Court therefore recommends that the Employer's offer
and the Union accepts the terms of the final phase of the
P.N.R. with effect from 1st October, 1990 to apply for a
period of twelve months therefrom."
4. The 15 month agreement between the Company and the Union
in 1987 effectively pre-dated the P.N.R. The three phases of
the P.N.R. have been implemented. The workers concerned have
benefitted from all the provisions of the P.N.R. including the
39-hour week as claimed by the Union and agreed by the
Company. The Company asks the Court to recommend that the
P.N.R. is due to expire in Garrett (Ireland) Limited on 31st
December, 1991 to be followed by the implementation of the
P.E.S.P.
RECOMMENDATION:
5. The Court having considered the submissions by the parties in
this case is satisfied that the negotiations which resulted in an
increase of 6½% with effect from 1st October, 1987, the agreement
to cover a period of 15 months, did not incorporate or subsume any
part of the terms provided under the P.N.R. which were in fact
implemented by the Company with effect from 1st January, 1989.
Having regard to the terms of the P.N.R. the Court finds that the
expiry date in this instance is the 31st December, 1991.
The Court therefore does not recommend concession of the Union's
claim.
~
Signed on behalf of the Labour Court
John O'Connell
_______________________
11th October, 1991 Deputy Chairman.
T.O'D./J.C.