Labour Court Database __________________________________________________________________________________ File Number: CD94276 Case Number: LCR14482 Section / Act: S26(1) Parties: SOUTHBOROUGH INTERNATIONAL - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the application of a Company/Union agreement to:- (1) the selection of workers for a new division in the Company and (2) the retention of these workers in a lay-off situation.
Recommendation:
The Court has fully considered all of the issues raised by the
parties in their oral and written submissions.
It is clear to the Court that the Company did not anticipate that
the increased demand on low volume products at the time of setting
up the Project operation would interfere with the manning
arrangements and necessitate, at such an early stage, recruitment
from the high volume area.
The Court is satisfied that a fundamental principle governing
the operation of the new unit, i.e., that a substantial proportion
of the employees in it be consistent and stable, was set out and
agreed prior to the unit commencing operation, and that the
implication from this agreement was that, in certain
circumstances, the traditional adherence to the principle of last
in first out, could not apply.
Whilst the Company/Union agreement sought to recognise this and to
put in place arrangements to ensure staff in low volume had
employments security protection, no such safeguard was put in
place in respect of high volume staff.
It appears that lay-off's are more likely to arise in this section
in the future.
The Court considers the Company/Union agreement should put in
place adequate safeguards in respect of all of the staff and
accordingly the parties should address in a meaningful way the
deficiencies which exist.
In all the circumstances the Court recommends that the
arrangements currently in place be accepted, but that the Company
and the Unions examine the agreement and seek arrangements which
will address the above issues and provide appropriate safeguards
for long service staff in High Volume, Low Volume and Projects
Departments.
Division: MrMcGrath Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94276 RECOMMENDATION NO. LCR14482
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
SOUTHBOROUGH INTERNATIONAL
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the application of a Company/Union
agreement to:-
(1) the selection of workers for a new division in the
Company and
(2) the retention of these workers in a lay-off situation.
BACKGROUND:
2. 1. The Company is a sub-contract manufacturer of sheet
metal components and assemblies for the electronics
industry. It employs 109 production workers in three
divisions: the high volume division, the low volume
division, and a project under contract to an outside
Company which is supplied with a range of products. The
project division became operational at the start of
1994.
2. The high volume division was set up in September, 1992
and under agreement with the Union, rates of pay are
considerably lower than those obtaining in the low
volume division. The work is non-complex and
repetitive. The agreement allows for some transfer of
workers from the high volume division to positions in
the low volume division, subject to skills and
suitability.
3. The low volume division was set up in 1976 and it
produces higher value products which require greater
skill levels. In January 1994, the Company set up a
major project to manufacture products for another
Company. The Company secured the contract that it
would manufacture the products at a competitive price in
a dedicated work cell which would employ the full range
of modern manufacturing methods.
4. An agreement was reached with the Union on the new
project. As part of the agreement, the movement of
workers into and out of the project was to be
restricted. A limited amount of movement between
divisions was to be allowed after cross training
(details supplied) had begun in July, 1994.
5. A dispute followed the Company's announcement that it
intended to proceed with seventeen lay-offs from the
high volume division. The Union had no difficulty with
the selection or lay-off procedures which applied. The
Union claimed that four workers, from the high volume
division, due to be laid off had the same skills as four
more junior workers who were recruited to the new
project from the high volume division. The Union
claimed that the four more junior workers should be laid
off or at the very least the more senior workers should
be included immediately in the cross-training programme.
6. The dispute was referred to the Labour Relations
Commission and conciliation conferences were held on 5th
and 9th May, 1994. The Company agreed to reduce the
number of lay-offs to fourteen and undertook to address
the position of a junior painter. No further progress
could be made and the dispute was referred to the Labour
Court on 11th May, 1994, under Section 26(1) of the
Industrial Relations Act 1990.
UNION'S ARGUMENTS:
3. 1. In a "skills even" situation, the workers with the
longest service should have been appointed to the
project. Initially the Company did not envisage
recruiting from the high volume division for some time.
It is the Company which has created the present
situation and it must resolve it in order to protect the
integrity of other agreements.
2. The position in which the high volume workers find
themselves is neither fair nor equitable. This is
further complicated by the fact that the lay-offs could
be more long term than usual.
3. The Company's operations have traditionally featured
peaks and valleys which result in periodic lay-offs or
short time. In a skills even situation, lay-offs or
short time have been dealt with by seniority. The
agreement which the Company sought for the project did
not seek to cater for the recruitment of high volume
workers. The Company unilaterally decided to recruit
high volume workers and it must resolve the difficulties
which it has created.
COMPANY'S ARGUMENTS:
4. 1. The Company has the right to recruit to the project as
it sees fit. The Company recruited personnel having
regard to seniority, skills and suitability. It sought
to achieve a balance without reducing the efficiency of
the rest of the business. It is not feasible to move
workers in or out of the project without affecting the
success of the operation. It is imperative that the
customer's demands for stability are met.
2. The Company needs to establish and maintain the right
team of people operating modern manufacturing
techniques. The Union was made fully aware that for the
first six to eight months, the team selected would have
to remain essentially stable.
3. The Company could not afford to remove too many skilled
workers from the low volume area thereby risking
disruption to this area. It was essential to get the
right mix of workers from both the high and low volume
areas which would also create opportunities for the
workers within the other two divisions.
RECOMMENDATION:
The Court has fully considered all of the issues raised by the
parties in their oral and written submissions.
It is clear to the Court that the Company did not anticipate that
the increased demand on low volume products at the time of setting
up the Project operation would interfere with the manning
arrangements and necessitate, at such an early stage, recruitment
from the high volume area.
The Court is satisfied that a fundamental principle governing
the operation of the new unit, i.e., that a substantial proportion
of the employees in it be consistent and stable, was set out and
agreed prior to the unit commencing operation, and that the
implication from this agreement was that, in certain
circumstances, the traditional adherence to the principle of last
in first out, could not apply.
Whilst the Company/Union agreement sought to recognise this and to
put in place arrangements to ensure staff in low volume had
employments security protection, no such safeguard was put in
place in respect of high volume staff.
It appears that lay-off's are more likely to arise in this section
in the future.
The Court considers the Company/Union agreement should put in
place adequate safeguards in respect of all of the staff and
accordingly the parties should address in a meaningful way the
deficiencies which exist.
In all the circumstances the Court recommends that the
arrangements currently in place be accepted, but that the Company
and the Unions examine the agreement and seek arrangements which
will address the above issues and provide appropriate safeguards
for long service staff in High Volume, Low Volume and Projects
Departments.
~
Signed on behalf of the Labour Court
24th June, 1994 Tom McGrath
J.F./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.