Labour Court Database __________________________________________________________________________________ File Number: CD95187 Case Number: LCR14714 Section / Act: S26(1) Parties: SHANNONSIDE CO-OP LIMITED (IBEC) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Organisational changes within the Company.
Recommendation:
The Court has fully considered all of the issues raised by the
parties in their oral and written submissions.
The Company is currently faced with severe constraints. It is
clear to the Court and, as noted, accepted by both parties that it
is necessary that the present operation of the plant is
fundamentally changed with a view to raising efficiency.
Change, of itself, however, will not secure the future of the
Company or the employment of the workers unless both parties are
prepared to co-operate in its implementation. The Court would
refer the parties to Clause 7 of the Programme for Competitiveness
and Work in this regard.
With a view to achieving this co-operation, effecting the
necessary changes, securing the future of the Company and the
employment of the workers, the Court makes the following
recommendations:-
(1) That the eleven redundancies should be on a voluntary basis
subject only to the retention of necessary skills, and
failing the required numbers being achieved should be in
accordance with the terms of the 1993 agreement, i.e., on a
last-in-first-out basis.
(2) The parties should immediately have negotiations, if
necessary, under the auspices of the Labour Relations
Commission and agree:
(a) The severance terms to be paid to the employees being
made redundant,
(b) Interchangeability/Flexibility,
(c) Manning levels, Output etc.,
(d) Structural changes and other related matters.
It is necessary that these negotiations be completed and
implemented as soon as possible. Accordingly, the Court
recommends the parties seek to reach agreement within two weeks of
the date of this recommendation. In the event that there are
issues outstanding at that date the Court will consider these with
a view to making a definitive recommendation. In the interim, and
pending the outcome of the negotiations, the Court recommends that
the current flexibilities in working being afforded to the Company
be continued.
Division: Mr McGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD95187 RECOMMENDATION NO. LCR14714
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
SHANNONSIDE CO-OP LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Organisational changes within the Company.
BACKGROUND:
2. Shannonside Milk Products Co-op is owned by North Connaught
Farmers Co-op (45%), Kiltoghert Co-op (27.5%) and Mid-West
Farmers Co-op (27.5%). The Shannonside Co-op is based in
Ballaghaderreen, Co. Roscommon and is responsible for
processing the skim-milk into powder products. The Company
employs 69 people at the plant.
The Company proposed a rationalisation plan which would
involve 11 workers being made redundant and would also
involve substantial changes in work practices at the Company.
No progress on the proposed rationalisation plan could be
reached between the parties. The dispute was referred to the
Labour Relations Commission and a conciliation conference was
held on 27th January, 1995 and 28th February, 1995. As no
agreement was possible the dispute was referred to the Labour
Court on 14th March, 1995 in accordance with Section 26(1) of
the Industrial Relations Act, 1990. The Court investigated
the dispute on the 16th March, 1995.
UNION'S ARGUMENTS:
3. 1. The Company wrote to the Union on the 19th January, 1995
indicating that it planned to make 34 workers redundant
as a result of a 30% drop in milk supply to the Company.
The Union sought to have the remaining work shared out
with all of the employees and therefore avoid any lay-
offs. A formula was agreed following a conciliation
conference that work would rotate between all employees
until the Company produced its rationalisation plan.
2. The Company produced its plan on the 17th February, 1995
and it was presented to the Union for consideration. A
number of items in the plan were not acceptable to the
Union. These included (1) the nomination of the workers
who will be declared redundant was not acceptable to the
workforce, nor to the Union; (2) those remaining with
the Company will be required to take on different duties
from time to time as the need arises. The Union cannot
agree to this as it is a complete change in the
conditions of employment of our members. No discussions
took place with the Union, as to the job holders who
will be expected to carry out the various tasks, and
also what remuneration will be paid if they consent to
the major changes as sought by the Company. The Company
is proposing a new disciplinary procedure which again is
a further change in the conditions of employment for our
members. The Company refused to negotiate on the
proposal.
3. The Union's proposal to achieve an acceptable solution
to the dispute is as follows:
1. to set aside the list of those selected for
redundancy to allow time for negotiations;
2. to agree a compensation package and offer it as a
voluntary package to the total workforce;
3. some workers may not wish to remain with the
Company under the proposed new working arrangements
which will result in major changes in conditions of
employment for them. The Company should take
account of this situation in deciding policy.
COMPANY'S ARGUMENTS:
4. 1. The Company, in common with the dairy industry in
Ireland and Europe, has experienced a significant drop
in the volume of milk for processing since 1985. The
volume of milk for processing has decreased from 67
million gallons in 1985 to 52 million gallons up to
1993. This represents a reduction of 22% in the volume
of milk for processing. A further 5% quota reduction
will also come into operation over the next 5 years as a
result of changes in C.A.P. and G.A.T.T. One of our
main suppliers of milk - Mid-West Farmers Co-op decided
to transfer its milk to another processing company.
This has reduced the throughput of the plant by 30%.
The Company has submitted a survival plan to the Union
which will reduce costs and also provide for fundamental
changes in work practices at the plant.
2. The Company identified savings of #1 million (excluding
labour) which will result from the survival plan. The
savings on labour costs amount to #0.5 million which
will bring the Company into line with our competitors.
The key requirements for survival are:-
(a) a reduction in the cost base;
(b) a reduction in employee numbers;
(c) a significant change in work practices, acceptance
of ongoing change with no demarcation;
(d) development of the concept of team work;
(e) recognition of the customers' requirements and the
need for ongoing change to meet these requirements;
(f) ongoing training;
(g) selection of the best team;
(h) ensuring the transfer of employees without
hindrance wherever they may be required.
The Company is opposed to a voluntary scheme of
redundancy and also to the concept of "last in - first
out".
RECOMMENDATION:
The Court has fully considered all of the issues raised by the
parties in their oral and written submissions.
The Company is currently faced with severe constraints. It is
clear to the Court and, as noted, accepted by both parties that it
is necessary that the present operation of the plant is
fundamentally changed with a view to raising efficiency.
Change, of itself, however, will not secure the future of the
Company or the employment of the workers unless both parties are
prepared to co-operate in its implementation. The Court would
refer the parties to Clause 7 of the Programme for Competitiveness
and Work in this regard.
With a view to achieving this co-operation, effecting the
necessary changes, securing the future of the Company and the
employment of the workers, the Court makes the following
recommendations:-
(1) That the eleven redundancies should be on a voluntary basis
subject only to the retention of necessary skills, and
failing the required numbers being achieved should be in
accordance with the terms of the 1993 agreement, i.e., on a
last-in-first-out basis.
(2) The parties should immediately have negotiations, if
necessary, under the auspices of the Labour Relations
Commission and agree:
(a) The severance terms to be paid to the employees being
made redundant,
(b) Interchangeability/Flexibility,
(c) Manning levels, Output etc.,
(d) Structural changes and other related matters.
It is necessary that these negotiations be completed and
implemented as soon as possible. Accordingly, the Court
recommends the parties seek to reach agreement within two weeks of
the date of this recommendation. In the event that there are
issues outstanding at that date the Court will consider these with
a view to making a definitive recommendation. In the interim, and
pending the outcome of the negotiations, the Court recommends that
the current flexibilities in working being afforded to the Company
be continued.
~
Signed on behalf of the Labour Court
3rd April, 1995 Tom McGrath
L.W./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Larry Wisely, Court Secretary.