Labour Court Database __________________________________________________________________________________ File Number: CD93460 Case Number: LCR14192 Section / Act: S26(1) Parties: ACCO LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning a claim for the payment of a 3% pay increase under the terms of Clause 3 of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
5. The thrust of the final paragraph of Clause 3 of the P.E.S.P.
is to make clear that where proposals for improvements in pay on
conditions of employment are made the employer is entitled to seek
to have these offset to some degree at least by employee
contribution. Equally Clause 5 clearly indicated that the authors
of the programme did not rule out the possibility that a cost
increasing element could arise.
In the case before the Court it is noted that the Company's
proposals if implemented would yield in excess of the cost of
implementation of the Clause albeit following a lead in time.
To seek to resovle the issue and to enable the Company to maintain
competitiveness the Court recommends:
(1) That the employees accept the Industrial Relations
Officer's proposals with the modification to Clause 1 as
proposed in paragraph 2 below.
(2) That the parties agree that the current work standards be
examined; that the Company's industrial engineers
undertake the necessary studies and that changes as a
consequence be the subject of discussion between the
Company and the Union with a view to agreement being
reached on the implementation of such changes.
(3) That on acceptance of the above recommendation the
Company implement the pay provisions of Clause 3 of the
P.E.S.P..
The Court so recommends.
Division: Ms Owens Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD93460 RECOMMENDATION NO. LCR14192
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: ACCO LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning a claim for the payment of a 3% pay
increase under the terms of Clause 3 of the Programme for Economic
and Social Progress (P.E.S.P.).
BACKGROUND:
2. 1. The Company's Irish operation was established in 1981 to
produce injection moulded and extruded products for its
worldwide market. It employs 131 workers.
2. The Union sought implementation of the 3% increase under
the terms of Clause 3 of the P.E.S.P. in January, 1992.
Towards the end of 1991, the Company sought 15 redundancies.
In the negotiations which took place, the Union sought payment
of the 3% increase in exchange for an agreement on redundancy.
The Company insisted that the 3% increase under Clause 3 of
the P.E.S.P. must be separately negotiated. Following
conciliation by the Labour Relations Commission, 20 workers
left the Company voluntarily.
3. By letter dated 10th July, 1992, the Company proposed the
following in exchange for payment of the 3% increase sought by
the Union.
1. "Optimum cycle times will be the accepted standard in
all production operation, appropriate manning levels
to be agreed.
2. Total flexibility with regard to labour allocation.
A vital part of this will be to integrate the packing
cells into the moulding shop.
3. The "Working Under Protest" rule to be confirmed.
4. Clause 28 of the Site Agreement to be re-instated.
5. The DB1 20 minute "cleaning up time" to be reduced to
5 minutes.
6. The payment of wages by non cash methods to be
accepted.
7. Rates of pay to be consolidated.
8. Review of operation of various "continuous running"
agreements".
4. The Union rejected the Company's proposals and its claim
was referred to the Labour Relations Commission. Various
conciliation conferences were held. The Company sought
implementation of its full list of proposals in exchange for
the 3% increase. The Union claims that the 3% increase is
warranted without concession of the Company's proposals
because of the substantial co-operation given in agreeing to
the redundancies and the changes in work practices arising
therefrom.
5. The Industrial Relations Officer by letter dated 8th
October, 1990 made proposals (details supplied) to both sides
for the resolution of the dispute. The proposals were
rejected by the Union. Further local discussions took place
but no resolution was possible. The claim was referred to the
Labour Court on 4th August, 1993 under Section 26(1) of the
Industrial Relations Act, 1990. A Labour Court investigation
took place on 20th August, 1993.
UNION'S ARGUMENTS:
3. 1. The workers have already rejected by an overwhelming
majority the proposals of the Company and the Industrial
Relations Officer. The workers have given considerable
productivity benefits to the Company as part of its
rationalisation plan. This has been acknowledged by the
Company and should be sufficient to concede the 3% increase.
The redundancy proposals sought 15 redundancies but 20 workers
actually left the Company. As a result the Company has made
considerable savings above the figure it had planned for. The
remaining workers have been effected by a change in working
arrangements.
2. The Company has yet to credit the workers for increases in
productivity in a tangible way. It is seeking savings of over
6% in order to pay the 3% increase sought. The terms of
Clause 3 of the P.E.S.P. speak of a reasonable quid pro quo in
exchange for the 3% increase in pay. The Union has already
given the reasonable quid pro quo required. It is not
prepared to accede to the Company's excessive demands in
exchange for a small increase of 3%. The Union's stance is in
line with Labour Court Recommendations on similar claims.
COMPANY'S ARGUMENTS:
4. 1. Clause 3 of the P.E.S.P. provides for "the taking into
account of the implications for competitiveness, the need for
flexibility and change and the contribution made by employees
to such change". The Clause refers to the fact that it
applies in "exceptional" cases. The Company has recently had
to make workers redundant and therefore it cannot be regarded
as exceptional in the terms of Clause 3. Its costs are out of
line with its sister companies and similar operations in
Ireland (details supplied). The Company has high wage rates
and low productivity and these issues must be addressed in
order to secure its long-term future.
2. The Company's business has declined since 1990 and the 3%
increases sought by the Union can only be paid in return for
the introduction of the changes sought. It will be impossible
for the Company to compete with its competitors if its unit
costs rise again. The Company can only negotiate on a pay
increase if it receives a quid pro quo. The Company's
competitive position must be protected if it is to continue to
reward its workers highly.
RECOMMENDATION:
5. The thrust of the final paragraph of Clause 3 of the P.E.S.P.
is to make clear that where proposals for improvements in pay on
conditions of employment are made the employer is entitled to seek
to have these offset to some degree at least by employee
contribution. Equally Clause 5 clearly indicated that the authors
of the programme did not rule out the possibility that a cost
increasing element could arise.
In the case before the Court it is noted that the Company's
proposals if implemented would yield in excess of the cost of
implementation of the Clause albeit following a lead in time.
To seek to resovle the issue and to enable the Company to maintain
competitiveness the Court recommends:
(1) That the employees accept the Industrial Relations
Officer's proposals with the modification to Clause 1 as
proposed in paragraph 2 below.
(2) That the parties agree that the current work standards be
examined; that the Company's industrial engineers
undertake the necessary studies and that changes as a
consequence be the subject of discussion between the
Company and the Union with a view to agreement being
reached on the implementation of such changes.
(3) That on acceptance of the above recommendation the
Company implement the pay provisions of Clause 3 of the
P.E.S.P..
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
______________________
20th September, 1993. Deputy Chairman.
J.F./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.