Labour Court Database __________________________________________________________________________________ File Number: CD9427 Case Number: LCR14358 Section / Act: S26(1) Parties: BRITTAS PLASTICS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Method of payment of Clause 3 of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
The Court is satisfied that the terms of Clause 3 of P.E.S.P. were
adhered to in this case and that through the local bargaining
process improvements have been achieved to fund the 3% payment.
However, these improvements are calculated on a monthly basis,
while the employees are paid weekly. The Court is of the view
that it would be desirable to relate the payment to the
improvements on a weekly basis if possible and that the input of
the employees be sought to achieve this without extra cost. If
that can be achieved, payment of the 3% should then be made on a
weekly basis. However, if that is not feasible then the present
method of calculation should be retained, but the lump sum so
calculated should be broken into equal parts and paid on a weekly
basis. To avoid confusion later, this payment should if possible
be shown as a separate item each week on the pay slip.
The Court so recommends.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD9427 RECOMMENDATION NO. LCR14358
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
BRITTAS PLASTICS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Method of payment of Clause 3 of the Programme for Economic
and Social Progress (P.E.S.P.).
BACKGROUND:
2. The Company is a subsidiary of the Clondalkin Group Plc. and
is located in Saggart, County Dublin. It employs 24 workers and
is involved in the manufacture of heavy duty polythene sacks. Its
principal markets are the peat, fertiliser, coal and milk powder
industries in Ireland.
The Union is in dispute with the Company over the method of
payment of the 3% under the terms of Clause 3 of P.E.S.P.. In
June, 1993, agreement was reached between the parties as follows:-
"That if during a trial period of three months, waste was
reduced to a target of 3.5% or below, that the Company would
pay the 3% under the terms of Clause 3 of P.E.S.P.. It was
further agreed that in the event of the three months trial
being successful the payment would be back-dated to 1st June,
1993."
The 3.5% target was achieved and payment of the 3% back-dated to
1st June, 1993 was made.
On 12th October, 1993, management informed the workers concerned
that in future payment of the 3% would be paid monthly in arrears,
subject to the waste targets being successfully achieved the
previous month. The Company's position was that it needed a
physical stock take which only occurred at the end of each
calendar month, to enable it to accurately calculate the waste
levels reached. The Company's position was unacceptable to the
Union.
The matter was referred to the Labour Relations Commission. A
conciliation conference was held on 7th December, 1993 but no
agreement was reached and the matter was referred to the Labour
Court on 14th January, 1994, for investigation and recommendation
under Section 26(1) of the Industrial Relations Act, 1990. A
Court hearing took place on 3rd February, 1994.
UNION'S ARGUMENTS:
3. 1. The spirit of the discussions on Clause 3 was in the
context of a weekly payment.
2. It was the Union's understanding that the agreement
provided for the implementation of Clause 3 with
retrospection in the event of the trial period being a
success.
3. At no time during the discussions did management propose
a monthly payment, or payment in arrears.
4. The reduction of waste levels to 3.5% and below has
resulted in substantial savings to the Company.
5. The Company has acknowledged the on-going co-operation
of the workers in the past.
COMPANY'S ARGUMENTS:
4. 1. While the Company is willing to respond positively to
the full Union claim, there is no way in which a 3% increase
in earnings could be guaranteed independent of the required
waste level targets being achieved.
2. A depressed competitive market will not allow for the
cost of the 3% claim to be passed on to customers.
3. The Company has to make the savings required, by
reducing waste levels on a monthly basis, in order to pay the
3% increase.
4. The consolidation of the increase into basic pay cannot
be accepted by management and would not be approved by the
Board in the light of the current market circumstances.
5. While the payment of the 3% increase in earnings is
dependent on waste levels being reduced on a monthly basis,
there are safeguards in the system:
(a) If, for any reason the monthly target is missed, the
Company has agreed to allow an average calculation to be
done on a six monthly basis. Thus any missed months can
be made up and payment may be given, based on the
monthly average calculation at the end of the review.
This situation actually arose in December 1993.
(b) Furthermore, should the six monthly review itself fail
to create a monthly average, of below 3.5% then, the
Company will allow a further annual review process.
6. The Company is fair and reasonable in implementing a
method for the payment of Clause 3 of P.E.S.P. in a manner
that is safe, secure and rewards both parties on performance.
RECOMMENDATION:
The Court is satisfied that the terms of Clause 3 of P.E.S.P. were
adhered to in this case and that through the local bargaining
process improvements have been achieved to fund the 3% payment.
However, these improvements are calculated on a monthly basis,
while the employees are paid weekly. The Court is of the view
that it would be desirable to relate the payment to the
improvements on a weekly basis if possible and that the input of
the employees be sought to achieve this without extra cost. If
that can be achieved, payment of the 3% should then be made on a
weekly basis. However, if that is not feasible then the present
method of calculation should be retained, but the lump sum so
calculated should be broken into equal parts and paid on a weekly
basis. To avoid confusion later, this payment should if possible
be shown as a separate item each week on the pay slip.
The Court so recommends.
~
Signed on behalf of the Labour Court
4th March, 1994 Evelyn Owens
F.B./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.