Labour Court Database __________________________________________________________________________________ File Number: CD92212 Case Number: LCR13952 Section / Act: S26(1) Parties: AUGHINISH ALUMINA LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning grading and flexibility.
Recommendation:
5. The Court has, over the months since the first of the two
hearings it has held into this case, sought much additional
information from both sides to enable it to deal with the dispute
in the context of the Industrial Relations issues raised by the
parties involved.
The issue stems from the agreed decision in 1989 that an open
review of the grading structure would commence which could lead to
revised work practices from which the Company could generate
savings.
These savings were to be shared between the participants in the
form of improved pay structures and from the outset it was clearly
agreed that the improved pay was to be entirely self funding.
As the exercise progressed and savings/changes in work practises
were identified, discussions between the Company progressed not on
a general basis, but separately with each of the three main groups
involved i.e. the Electrical Technicians, the Fitters Group and
finally, the General Operatives who have expressed their
dissatisfaction in this dispute.
The Court is satisfied that the basis on which the agreement to
review the grading structure was made in 1989 has been adhered to
and is satisfied that the savings which are or will be generated
are or will be distributed to each group in the manner originally
set out.
The General Operatives have contended that "they have been offered
less than half of what the others have been offered".
From its analysis of the payments being made to each group in
respect of Grading/Flexibility the Court does not find grounds for
this contention.
The Court recognises other payments are being made to the other
groups but the Court understands and accepts any such payments
will only be made on the achievement of specifically laid down
criteria and qualifications.
Having examined the savings as submitted by the Union on behalf of
its members and considered the figures submitted by the Company,
the Court is satisfied that the adjustments made by the Company to
increase the proportion of the savings to be distributed to the
General Operatives is reasonable and should be accepted by them.
Finally, the Court recommends as follows:
(1) That the claim for loss of overtime should not be
considered at this time, but be deferred for a period of
12 months when any losses incurred can be calculated. At
such time the Company would be exptected to compensate
those losses on a basis to be negotiated.
(2) That the members accept the proposals for sharing of the
savings as put forward by the Company as representing a
fair and equitable distribution.
(3) That the Company agree to make a lead-in payment to each
General Operative of #400 on acceptance and
implementation of the revised system of working with a
further payment of #200 after a period of six months.
Division: MrMcGrath Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD92212 RECOMMENDATION NO. LCR13952
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: AUGHINISH ALUMINA LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning grading and flexibility.
BACKGROUND:
2. The dispute concerns approximately 220 workers who are members
of S.I.P.T.U.. The Company has been involved in discussions on a
grading and flexibility scheme with three different groups of
workers since 1989. The groups are divided as follows:
Electrical/Instrument Technicians - Grade 5 - represented
by T.E.E.U..
Fitters - Grade 5 - represented by T.E.E.U. and A.E.E.U..
General/Process Operators - Grades 1-4 - represented by
S.I.P.T.U..
During 1991 the Company reached agreement with the T.E.E.U. on
behalf of the electrical/instrument technicians. The agreement
provided for a pay increase of #50 per week in two phases plus a
lump sum of #1,000. A similar agreement was negotiated with the
fitters providing for an increase of #25 p.w. with a mechanism for
achieving #50 p.w. The Company offered the general process
workers an increase of #20. The Union rejected the offer. The
issue was referred to the Labour Relations Commission in November,
1991. Conciliation conferences were held in December, 1991 and
March, 1992 but no agreement was reached. The dispute was
referred to the Labour Court by the Labour Relations Commission on
the 3rd April, 1992. The Court investigated the dispute in
Limerick on the 10th June, 1992. Subsequent to the hearing
comprehensive additional information was received from both the
Company and the Union which was considered by the Court. A second
Court hearing was held in Limerick on the 18th November, 1992.
UNION'S ARGUMENTS:
3. 1. In July, 1989 craftsmen sought a change in the grading
structure. It was agreed that each union would do its own
study to decide if the project was feasible, what savings were
possible, and how these savings could be achieved. S.I.P.T.U.
stated that if the contribution of its members was equal to
that of the other Unions' members, then savings should be
shared equally. The Company was agreeable. On completion of
the studies the parties submitted their reports. The Company
then dealt separately with the various unions. It offered
electricians and fitters a wage increase of #50 plus a lump
sum of #1,000. It offered general/process workers an increase
of #20. This is a blatant injustice to the workers concerned.
2. The Union's industrial engineer has analysed the Company's
figures and has shown Management's failure to include all
savings as a result of rationalisation. These include
reduction in overtime, taking work from fitters and
electricians, staff reductions and extra flexibility. The
Company ignored these factors despite giving a commitment to
the Union that all savings would be included in the eventual
disbursement. The flexibility and reduction in manning levels
accepted by the workers concerned will mean huge savings for
the Company on an ongoing basis. Despite the Company's
commitment to have joint talks with all the Unions, Management
then dealt separately with the craft unions.
3. The Company has attempted to use present market trends to
justify their actions. The present downward trends in the
alumina market are temporary and all experts predict
resurgence in world markets. The savings generated will make
the Company viable and very competitive, yet the workers
concerned, who are making a major contribution, are being
offered less than half the wage increase given to craftsmen.
COMPANY'S ARGUMENTS:
4. 1. Following discussions with the various unions Management
agreed to an open review of the grading structure but
emphasised that any changes would have to be self financing.
The Company and Unions agreed revised working practices and
reduced manning levels throughout the plant. Management
proposed sharing the benefits of reduced manning on a 50-50
basis. The offer was rejected and each group processed their
claims separately at the Labour Relations Commission The
Company reached an agreement with the electrical/instrument
craftsmen whereby benefits were shared on a 70:30 basis.
Fitters claimed the same settlement terms. Management
rejected their claim. Using the same 70:30 formula the
Company valued grading flexibility for fitters at #25 p.w.
Agreement was reached on an increase of #25 p.w. with some
(but not all) fitters progressing to #50. Consequently strict
parity between craftsmen no longer applies.
2. The Union's claim for the same increase as craftsmen
grossly exceeded the benefits arising from grading/flexibility
and was clearly cost increasing in nature. The Company has
taken overtime into account but wishes to deal separately with
this issue by way of lump sum compensation, if necessary,
through reference to a third party. The taking on of extra
work and reduction in manning levels applied to all groups of
workers including craftsmen. The Company accepts that the
general/process workers will also have their members reduced.
3. The workers concerned are very well paid. Their rates
of pay are extremely generous in the context of the region and
rank among the highest in the alumina industry worldwide. The
Company cannot afford cost increasing wage claims as it would
seriously impact on the Company's competitiveness. The
Company is offering an 80% share of the benefits of both
rationalisation and grading/flexibility to the workers
concerned. This offer is generous and its rejection would
leave Management with no option but to reduce costs through
straight rationalisation. That option would not yield pay
increases for the workers concerned. The Company has neither
the resources nor the mandate to grant any further pay
increases.
RECOMMENDATION;
5. The Court has, over the months since the first of the two
hearings it has held into this case, sought much additional
information from both sides to enable it to deal with the dispute
in the context of the Industrial Relations issues raised by the
parties involved.
The issue stems from the agreed decision in 1989 that an open
review of the grading structure would commence which could lead to
revised work practices from which the Company could generate
savings.
These savings were to be shared between the participants in the
form of improved pay structures and from the outset it was clearly
agreed that the improved pay was to be entirely self funding.
As the exercise progressed and savings/changes in work practises
were identified, discussions between the Company progressed not on
a general basis, but separately with each of the three main groups
involved i.e. the Electrical Technicians, the Fitters Group and
finally, the General Operatives who have expressed their
dissatisfaction in this dispute.
The Court is satisfied that the basis on which the agreement to
review the grading structure was made in 1989 has been adhered to
and is satisfied that the savings which are or will be generated
are or will be distributed to each group in the manner originally
set out.
The General Operatives have contended that "they have been offered
less than half of what the others have been offered".
From its analysis of the payments being made to each group in
respect of Grading/Flexibility the Court does not find grounds for
this contention.
The Court recognises other payments are being made to the other
groups but the Court understands and accepts any such payments
will only be made on the achievement of specifically laid down
criteria and qualifications.
Having examined the savings as submitted by the Union on behalf of
its members and considered the figures submitted by the Company,
the Court is satisfied that the adjustments made by the Company to
increase the proportion of the savings to be distributed to the
General Operatives is reasonable and should be accepted by them.
Finally, the Court recommends as follows:
(1) That the claim for loss of overtime should not be
considered at this time, but be deferred for a period of
12 months when any losses incurred can be calculated. At
such time the Company would be exptected to compensate
those losses on a basis to be negotiated.
(2) That the members accept the proposals for sharing of the
savings as put forward by the Company as representing a
fair and equitable distribution.
(3) That the Company agree to make a lead-in payment to each
General Operative of #400 on acceptance and
implementation of the revised system of working with a
further payment of #200 after a period of six months.
~
Signed on behalf of the Labour Court
Tom McGrath
________________________
12th February, 1992. Deputy Chairman
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.