Labour Court Database __________________________________________________________________________________ File Number: CD93680 Case Number: LCR14424 Section / Act: S20(2) Parties: WATERFORD CRYSTAL LIMITED - and - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION |
Dispute arising from the interpretation of LCR13911.
Recommendation:
13. Having considered the submissions of the parties and the oral
arguments and counter-arguments made at the hearing, the Court
recommends as follows in respect of the Wedge-Cutting Section.
A. 25% CAP ON EARNINGS:-
The major proportion of items (70% per the Union, 86% per the
Company) have been converted to measured values under the new
B.S.I. system and the Court does not consider it appropriate that
there should be any deviation from these values either in
perception or implementation. The Court considers that the
present method of application of the CAP retains the integrity of
these values and therefore the Court does not recommend the change
sought by the Union.
B. EXCLUSION OF NON-CONVERTED ITEMS:-
Under LCR13911, the weekly losses for each of the first three
years are calculated on the difference between the old values
(i.e. 1992 values) and the values allotted to converted items
under the new scheme together with an old value reduced by 15% on
unconverted items. Each years' losses are capped at 25%.
Losses which will be incurred in 1996 will be calculated in
exactly the same way. It is on the losses above 25% for this year
(1996) that the question of a compensatory payment may arise. As
the losses will derive from the total work done in the year, there
are not, in the Court's view, grounds for excluding a part of the
work (i.e. unconverted items) from the calculation. Accordingly,
the Court does not recommend concession of the Union claim.
C. OPERATIVE DATE OF APPLICATION OF 25% CAP ON EARNINGS.
The Court considers that the Union's claim is reasonable and that
the period for implementation of the three year cap on losses
should commence on 1/1/94. The subsequent review of losses at the
end of 1996 as provided for in LCR13911 will accordingly be
postponed until the end of 1997.
D. IMPLEMENTATION OF LEAD-IN BENEFITS FOR A FULL TEN WEEKS
(a) The Court considers that the fundamental purpose of the
lead-in payments was to protect the wedge-cutters
against any anomalies in the new B.S.I system. It was
not a training period because there was no change in
production methods.
Despite the fact that the lead-in payments are system
related, the Court feels that the change has some
inherent impact on the individuals involved.
Accordingly, and having particular regard to the
severity of short-time working in the wedge-cutting
section, the Court recommends that each wedge-cutter
should have the protection of the lead-in allowance for
at least six worked weeks. The allowance should be
based on weeks 1 to 6 as povided for in LCR13911
(Section 9, Page 9).
E. FULL ALLOWANCE IRRESPECTIVE OF OUTPUT
(b) The lead-in allowances were designed to protect the
earnings of the wedge-cutters during the initial weeks
of the change-over to the B.S.I. system. It was not
intended that the allowances would enhance earnings to a
level above that achievable at 125 B.S.I. performance.
Accordingly the Court does not recommend concession of
the Union claim.
Division: Mr Heffernan Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD93680 RECOMMENDATION NO. LCR14424
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(2)
INDUSTRIAL RELATIONS ACT, 1969
PARTIES: WATERFORD CRYSTAL LIMITED
and
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute arising from the interpretation of LCR13911.
BACKGROUND:
2. 1. The dispute involves the Wedge Cutters Section in
Waterford Crystal and concerns the implementation of the
Company/Union Cost Improvement Agreement dated 4th January,
1993 and as provided for in LCR 13911.
2. The Company introduced a new British Standard Institute
(B.S.I.) based performance system in the Wedge Cutting Section
on 15th November, 1993. A number of issues of concern were
raised by the Union and were the subject of local discussions
with the Company. Agreement could not be reached and in line
with LCR13911 these issues were referred by the Union to the
Labour Court for final adjudication on 24th November, 1993. A
hearing of the Court was held on 10th March, 1994.
(A) THE APPLICATION OF THE 25% CAP ON EARNINGS OF PRODUCTION
ITEMS WITHIN THE NEW B.S.I. SCHEME
3. Under the cost improvement agreement a maximum pay
reduction of 25% per week was agreed. The Company calculates
an individual wedge cutter's earnings on a weekly basis under
the newly introduced system and also calculates his earnings
under the old system which operated prior to the 1993
Agreement. Where the difference between the two calculations
is greater than 25% the cutter's earnings are equalised to
what they would have been under the old system less 25%. The
Union are seeking the application of a maximum piece rate
reduction of 25% per individual item under the introduction of
the new B.S.I. based pay system, for the purpose of applying
the 25% cap on pay reductions under LCR13911.
(B) THE EXCLUSION OF ALL ITEMS NOT CONVERTED TO THE NEW B.S.I.
SYSTEM WHEN CALCULATING THE LOSS OF EARNINGS ABOVE THE 25%
4. When the new system was introduced in the Wedge Cutting area
the Company had studied and converted 70% of all the items
processed. This figure, according to the Company, stands at
86% from February, 1994. All non-converted piece rate items
have been adjusted by 15% in the interim in accordance with
the 1993 Agreement. These interim converted piece rates are
included for the purpose of calculating the weekly difference
between the new system and the old system. These
non-converted items are being included in current calculations
for applying the 25% cap. This, the Union maintain, will
distort the actual loss above the 25% at the end of the three
year period recommended in LCR13911. The reason, they say,
for this is that non-converted items which are eventually
converted could carry a loss above 25%. The Union therefore,
are seeking the exclusion of these non-converted items.
(C) THE OPERATIVE DATE OF THE APPLICATION OF THE 25% CAP ON
EARNINGS
5. The Company's interpretation of LCR13911 is that the guarantee
is for a specific three year period, 1993, 1994, and 1995,
expiring on 31st December, 1995 with a full year's buy-out
payable in 1996 in respect of any ongoing loss based on the
average weekly loss in excess of 25%. The Union maintain that
as the Company did not implement the new B.S.I. performance
system until 15th November, 1993, the three year period for
calculating the loss above the 25% cap should now apply from
the end of the ten weeks lead-in period on the new system i.e.
week ending 28th January, 1994.
(D) THE FULL BENEFIT OF THE TEN WEEKS' LEAD-IN PERIOD ON THE NEW
SYSTEM TO APPLY TO CUTTERS ON SHORT-TIME AND SICK LEAVE.
6. The 1993 Cost Improvement Agreement provides for a ten week
lead-in period for the new B.S.I. system. The Company
position is that it is the new piece rate system or the
particular incentive bonus scheme which is on trial, not the
individual employee, for the first ten weeks. The individual
cutter has his earnings protected by way of lead-in allowances
during the first ten week period of the system trial. The
Union maintain that when wedge cutters are absent due to
short-time working or illness the Company is reducing the
lead-in period by the amount of time a cutter is absent.
(E) THE BENEFIT OF THE FULL ALLOWANCE DURING THE LEAD-IN PERIOD
7. The Union maintain that the Company is reducing the allowances
payable during the lead-in period if the cutters achieve a
higher performance than 100 B.S.I. This means that cutters
receive no allowance during the lead-in period if they are
high performers. The Company position is that the allowances
were defined in the Agreement and were meant to protect
workers earnings against faults in the system and not to give
them a benefit. High performers, they maintain, do not need
protection.
ISSUE (A): THE APPLICATION OF THE 25% CAP ON EARNINGS OF
PRODUCTION ITEMS WITHIN THE NEW B.S.I. SCHEME
UNION'S ARGUMENTS:
3. 1. The old system allowed cutters to calculate what
earnings they had achieved on a daily basis. The new system
only allows cutters to plan their production and determine
their earnings weekly.
2. The Company are not applying the 25% cap on loss of
earnings on an item by item basis. The glass is distributed
to the cutters on an item by item basis and the cutter does
not know what the actual reduction on each item is until his
total production is calculated at the end of the week. This
does not allow the cutter to plan his production or calculate
what his actual earnings are on a daily basis as was possible
under the old piece rate system.
3. Workers in other sections can calculate their
performance achievement on an hourly basis.
COMPANY'S ARGUMENTS:
4. 1. To establish a new piece rate based system on a partial
removal of anomalies, which may have been present under the
old system, to a limit of 25% as suggested by the Union, would
not be in accordance with the practices and principles of
industrial engineering.
2. In order to calculate each individual wedge cutter's
actual loss, both on an ongoing week on week basis and for the
purposes of the calculation at the end of the three year
period of protection, it is imperative that the correct
standards, as established through method study and work
measurement programmes, are in place.
ISSUE (B): THE EXCLUSION OF ALL ITEMS NOT CONVERTED TO THE NEW
B.S.I. SYSTEM WHEN CALCULATING THE LOSS OF EARNINGS
ABOVE THE 25% CAP
UNION'S ARGUMENTS:
5. 1. Non-converted items which are eventually converted could
carry a loss above 25%. The loss above 25% will not be taken
into account for calculating the overall loss and will
therefore be inaccurate.
COMPANY'S ARGUMENTS:
6. 1. There is no established or agreed minimum cover level
governing the introduction of a new piece rate
system/incentive bonus scheme.
2. Presently 86% of all items processed are converted. The
reason for the balance not being converted is due to their
small quantities and the fact that they are not regular
cutting programme items.
3. All non-converted piece rate items have been adjusted by
15% under the interim pay agreement in accordance with the
Agreement and are included for the purpose of calculating the
week on week difference between the new and the old system.
ISSUE (C): THE OPERATIVE DATE OF THE APPLICATION OF THE 25%
UNION'S ARGUMENTS:
7. 1. As the Company did not implement the new B.S.I.
performance system until 15th November, 1993, the three year
period for calculating the loss above the 25% cap should now
apply from the end of the ten weeks lead-in period on the new
system, i.e. week ending 28th January, 1994.
2. This extension does not represent a gain for the wedge
cutters as this section has experienced the highest proportion
of short-time working and over the longest period of any
section within the industry.
COMPANY'S ARGUMENTS:
8. 1. The Company's interpretation is that the guarantee was
for a specific three year period, 1993, 1994 and 1995,
expiring on 31st December, 1995.
2. To extend the period of protection for a period of three
years from the introduction of the new system would further
impact on the savings to the Company, given that the cutters
will have had the benefit of the anomalies in the old system
for a longer period than had the system been introduced on
18th January, 1993.
ISSUE (D): THE FULL BENEFIT OF THE TEN WEEKS LEAD-IN PERIOD ON THE
NEW SYSTEM TO APPLY TO CUTTERS ON SHORT-TIME AND SICK
LEAVE
UNION'S ARGUMENTS:
9. 1. When wedge cutters are absent due to short-time working
or illness, the Company are reducing the lead-in period by the
amount of time a cutter is absent. This means a cutter cannot
avail of the full benefit of the lead-in period and puts him
at a distinct disadvantage to other workers who are lucky
enough not to be on short time working or out sick.
2. The position of the Company is in conflict with that
which applies when cutters are transferred to do repair work
in the semi-skilled section. In this case cutters and
semi-skilled workers are allowed the full benefit of the
lead-in period.
COMPANY'S ARGUMENTS:
10. 1. It is the new piece rate system or the particular
incentive bonus scheme which is on trail, not the individual
employee, for the first ten weeks.
2. Cutters are carrying out the same operation under the
new system as they were prior to its introduction. There is
therefore, no requirement for an individually tailored lead-in
or training allowance to protect the employee's earnings
during the learning period.
3. The Company has since 1989, when B.S.I. based incentive
bonus schemes were introduced to the non-craft areas and since
1990 and 1993 in the craft areas, applied the lead-in period
on the system and not on an individual employee basis.
ISSUE (E): THE BENEFIT OF THE FULL ALLOWANCE DURING THE LEAD-IN
PERIOD
UNION'S ARGUMENTS:
11. 1. The Company are reducing the allowance payable during
the lead-in period if the cutters achieve a higher performance
than 100 B.S.I. If a cutter's actual performance is 110
B.S.I. then he is only paid an allowance of 10% or a paid
performance of 120 B.S.I. This reduction could mean that
cutters receive no allowance during the lead-in period if they
are high performers.
COMPANY'S ARGUMENTS:
12. 1. The lead-in period is to protect workers' earnings
against faults in the system. If an individual is achieving
125 B.S.I. performance he does not need protection.
RECOMMENDATION:
13. Having considered the submissions of the parties and the oral
arguments and counter-arguments made at the hearing, the Court
recommends as follows in respect of the Wedge-Cutting Section.
A. 25% CAP ON EARNINGS:-
The major proportion of items (70% per the Union, 86% per the
Company) have been converted to measured values under the new
B.S.I. system and the Court does not consider it appropriate that
there should be any deviation from these values either in
perception or implementation. The Court considers that the
present method of application of the CAP retains the integrity of
these values and therefore the Court does not recommend the change
sought by the Union.
B. EXCLUSION OF NON-CONVERTED ITEMS:-
Under LCR13911, the weekly losses for each of the first three
years are calculated on the difference between the old values
(i.e. 1992 values) and the values allotted to converted items
under the new scheme together with an old value reduced by 15% on
unconverted items. Each years' losses are capped at 25%.
Losses which will be incurred in 1996 will be calculated in
exactly the same way. It is on the losses above 25% for this year
(1996) that the question of a compensatory payment may arise. As
the losses will derive from the total work done in the year, there
are not, in the Court's view, grounds for excluding a part of the
work (i.e. unconverted items) from the calculation. Accordingly,
the Court does not recommend concession of the Union claim.
C. OPERATIVE DATE OF APPLICATION OF 25% CAP ON EARNINGS.
The Court considers that the Union's claim is reasonable and that
the period for implementation of the three year cap on losses
should commence on 1/1/94. The subsequent review of losses at the
end of 1996 as provided for in LCR13911 will accordingly be
postponed until the end of 1997.
D. IMPLEMENTATION OF LEAD-IN BENEFITS FOR A FULL TEN WEEKS
(a) The Court considers that the fundamental purpose of the
lead-in payments was to protect the wedge-cutters
against any anomalies in the new B.S.I system. It was
not a training period because there was no change in
production methods.
Despite the fact that the lead-in payments are system
related, the Court feels that the change has some
inherent impact on the individuals involved.
Accordingly, and having particular regard to the
severity of short-time working in the wedge-cutting
section, the Court recommends that each wedge-cutter
should have the protection of the lead-in allowance for
at least six worked weeks. The allowance should be
based on weeks 1 to 6 as povided for in LCR13911
(Section 9, Page 9).
E. FULL ALLOWANCE IRRESPECTIVE OF OUTPUT
(b) The lead-in allowances were designed to protect the
earnings of the wedge-cutters during the initial weeks
of the change-over to the B.S.I. system. It was not
intended that the allowances would enhance earnings to a
level above that achievable at 125 B.S.I. performance.
Accordingly the Court does not recommend concession of
the Union claim.
~
Signed on behalf of the Labour Court
29th April, 1994 Kevin Heffernan
P. O'C/U.S. ---------------
Chairman
NOTE:
Enquiries concernings this Recommendation should be addressed to
Mr Paul O'Connor, Court Secretary.