Labour Court Database __________________________________________________________________________________ File Number: CD93349 Case Number: LCR14191 Section / Act: S26(1) Parties: FUJITSU MIRCOELECTRONICS IRELAND LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Interpretation of Agreement (ii) Clause 3 of Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
(ISSUE I)
6. The Court recommends as appropriate the following agreement
reached by the parties at the hearing concerning clause 8.5(iv)
and clause 9.3 of the House Agreement:-
Clause 8.5 (iv):
That the requirement of a 2/3 majority vote be replaced by a
simple majority vote.
Clause 9.3:
That clause 9.3 as proposed by Management remain unaltered.
(ISSUE II)
7. Having considered the submissions of the parties and taken
note of the cumulative losses incurred by the Company over the
past three years, the Court accepts that exceptional
circumstances, as envisaged in the P.E.S.P. in relation to the
application of Clause 3 of that agreement, do not exist in the
Company despite increased production and productivty. The Union
acknowledges that the Company is not in a position to make
additional payments now but argues in the context of Clause 3 of
PESP that the increased productivity of the work force should be
accepted by the Company as a basis for additional payments in the
future, if and when the Company is in a healthy financial
position.
Taking account of the performance of the Company in recent times,
it seems to the Court that had there not been increased
productivity, it is questionable whether the company could have
continued at its present level of trading and employment. Clause
3 was not intended to be a means of compensating for past
productivity and therefore the Court considers that it would be
inappropriate, in the circumstances of the Company, to use current
productivity to establish a claim into the future under that
clause.
In the circumstances, the Court does not recommend concession of
the Union claim.
Division: Mr Heffernan Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD93349 RECOMMENDATION NO. LCR14191
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1)
INDUSTRIAL RELATIONS ACT, 1990
PARTIES: FUJITSU MIRCOELECTRONICS IRELAND LIMITED
(Represented by the Irish Business and Employers Confederation)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Interpretation of Agreement (ii) Clause 3 of Programme for
Economic and Social Progress (P.E.S.P.).
BACKGROUND:
2. The Company is a wholly owned subsidiary of the Fujitsu Group,
Japan, and employs 200 people. It is engaged in the assembly of
integrated circuits for export to the computer and
telecommunications industry. The 46 workers concerned are
employed in technical, supervisory and clerical grades.
The dispute before the Court concerns two issues:-
(i) Interpretation of Agreement
and
(ii) Clause 3 of P.E.S.P.
3. The dispute was referred to the Labour Relations Commission.
A conciliation conference was held on 12th March, 1993, but no
agreement could be reached and the matter was referred to the
Labour Court on 3rd June, 1993. The Labour Court hearing took
place on 25th August, 1993.
INTERPRETATION OF AGREEMENT
The workers concerned are covered by a procedures agreement. A
review of the agreement took place in January, 1992. Agreement
was reached on all items with the exception of:-
(i) Clause 8.5(iv) which specifies that industrial action
may only take place if a two-thirds majority vote in
favour.
(ii) Clause 9.3 which specifies that where a disagreement
exists the instructions of the management will be
carried out under protest.
At the Court hearing on 25th August, 1993, agreement was reached
between the parties on the above issues.
CLAUSE 3 P.E.S.P.
In early 1992 the Union submitted a claim for 3% under the terms
of Clause 3 of P.E.S.P. During the period 1992/1993 discussions
took place in relation to changes in work practices which included
the introduction of 3 and 4 cycle shift work. In return the Union
sought payment of the 3% under the terms of Clause 3 of P.E.S.P.
The Company rejected the claim.
UNION'S ARGUMENTS:
4. 1. The following changes in work practices introduced in
the period 1992/1993 justify the payment of 3% under Clause 3
of P.E.S.P.:
(A) 3 shift to 4 shift (continuous working),
(B) 2 shift to 3 shift (24 hours cover),
(C) 8 hour shift to 12 hour shift,
(D) A range of new technology,
(E) Extension of shift supervisor responsibility.
These changes have resulted in substantial savings to the Company.
(2) The Company has claimed inability to pay although it has
extended 1% of this payment to the majority of workers in the
plant. The workers concerned are willing to defer payment for
now but want agreement in principle that any quid-pro-quo
envisaged by this clause has already been conceded.
COMPANY'S ARGUMENTS:
5. 1. Salary increases in the preceding 6 years have amounted
to an overall increase of 62.2%. When compared to the
Consumer Price Index increase over the same period of 19.1% it
is clear that there has been a substantial gain to the workers
concerned.
2. In 1993 phase 3 of P.E.S.P. was paid and approximately
1% will be granted by promotion still to proceed. Its average
of 4.7% is well ahead of inflation of 1.9%. The Union
acknowledges that the P.E.S.P. increases have exceeded
inflation.
3. The year ending 31st March, 1993 was the 3rd successive
year the Company has recorded a loss. The loss of almost #1.5
million brought the total loss for the 3 years to
approximately #5 million. Concession of the claim is
unjustified under the circumstances.
4. It is acknowledged that the workers have co-operated
with significant extension of shift working hours. Such
co-operation is covered by existing agreements, is already
well compensated for and was essential for the future
viability of the plant.
5. The Company's labour costs are already excessive
relative to other Fujitsu semi-conductor companies overseas
and sub-contractors for Fujitsu. Failure to control these
excessive costs will lose business and jobs. The Union has
linked recent changes in working hours to its salary
expectations. Without these changes the security of the plant
would have been in jeopardy.
6. The Company is not "an exceptional Company" as envisaged
by Clause 3 of P.E.S.P. and consequently negotiations under
Clause 3 are inappropriate.
RECOMMENDATION:
(ISSUE I)
6. The Court recommends as appropriate the following agreement
reached by the parties at the hearing concerning clause 8.5(iv)
and clause 9.3 of the House Agreement:-
Clause 8.5 (iv):
That the requirement of a 2/3 majority vote be replaced by a
simple majority vote.
Clause 9.3:
That clause 9.3 as proposed by Management remain unaltered.
(ISSUE II)
7. Having considered the submissions of the parties and taken
note of the cumulative losses incurred by the Company over the
past three years, the Court accepts that exceptional
circumstances, as envisaged in the P.E.S.P. in relation to the
application of Clause 3 of that agreement, do not exist in the
Company despite increased production and productivty. The Union
acknowledges that the Company is not in a position to make
additional payments now but argues in the context of Clause 3 of
PESP that the increased productivity of the work force should be
accepted by the Company as a basis for additional payments in the
future, if and when the Company is in a healthy financial
position.
Taking account of the performance of the Company in recent times,
it seems to the Court that had there not been increased
productivity, it is questionable whether the company could have
continued at its present level of trading and employment. Clause
3 was not intended to be a means of compensating for past
productivity and therefore the Court considers that it would be
inappropriate, in the circumstances of the Company, to use current
productivity to establish a claim into the future under that
clause.
In the circumstances, the Court does not recommend concession of
the Union claim.
~
Signed on behalf of the Labour Court
Kevin Heffernan
14th September, 1993 ----------------
F.B./U.S. Chairman
NOTE:
ENQUIRIES CONCERNING THIS RECOMMENDATION SHOULD BE ADDRESSED TO
MR FRAN BRENNAN, COURT SECRETARY.