Labour Court Database __________________________________________________________________________________ File Number: CD95633 Case Number: LCR15045 Section / Act: S26(1) Parties: CADBURY IRELAND LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION |
Dispute arising from a claim for (i) a lump sum payment to all production employees equivalent to the total amount paid to transport employees following the contracting out of the transport operation, (ii) a severance payment of £3,000 for all production employees who retire early from the Company.
Recommendation:
The Court has fully considered all of the views expressed by the
parties in their oral and written submissions.
The Court finds that the negotiations which covered the closure of
the transport section were not part of ongoing change provided for
under the existing Union/Company Agreements.
Further, the Court also finds that the settlement arrangements in
that case were appropriate to the particular pay-structure of the
workers concerned.
In all the circumstances, the Court does not find grounds have
been adduced to warrant concession of the Unions' claims.
Division: Mr McGrath Mr Pierce Mr Walsh
Text of Document__________________________________________________________________
CD95633 RECOMMENDATION NO. LCR15045
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
CADBURY IRELAND LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute arising from a claim for
(i) a lump sum payment to all production employees
equivalent to the total amount paid to transport
employees following the contracting out of the
transport operation,
(ii) a severance payment of £3,000 for all production
employees who retire early from the Company.
BACKGROUND:
2. In 1992, the Company launched a new product, "Time Out",
creating 200 new jobs. In mid-1994, it was decided to invest
in a second Time Out plant. In order to address problems in
the distribution area, the Company's transport/distribution
operation was contracted out. 30 transport and 25 dispatch
workers were transferred to the production area at the end of
July, 1995. Claims were subsequently lodged on behalf of the
transport workers for compensation and a severance payment
for those who had difficulty adjusting to factory work.
Following conciliation conferences under the auspices of the
Labour Relations Commission, a formula was agreed whereby
compensation would be paid to the transport staff and a
severance payment of £3,000 would be made to those who would
have difficulty meeting the transition to the factory.
The present claims, on behalf of approximately 900 production
workers are for a share in a lump sum estimated at £500,000
and for a severance payment of £3,000 each for those who wish
to take early retirement. The claims were rejected by the
Company, and were the subject of two conciliation conferences
at which agreement was not reached. The dispute was referred
to the Labour Court, on the 7th of November, 1995, in
accordance with Section 26(1) of the Industrial Relations
Act, 1990. The Court investigated the dispute on the 29th of
November, 1995.
UNION'S ARGUMENTS:
3. 1. The workers on whose behalf the claims are made were not
party to the negotiations or settlement agreed between
the Company and the transport group. Accordingly, they
were neither included nor excluded from the terms of
that agreement when it was made. On that basis, they
are entitled to make these claims.
2. In resisting the claim, the Company has relied on the
argument that the contracting out of the
Transport/Dispatch operations is covered by the
agreement relating to ongoing change (details supplied
to the Court). This is a well-established and agreed
procedure for the introduction of change and is common
to all groups on site. The Company also contends that
the transport settlement arose due to specific and
special circumstances and does not interfere with
existing agreements.
In accepting these Company arguments, it is also
accepted that "no additional special payments will be
made to individuals involved in the changes as it is
intended that all employees should benefit from the
productivity in the form of higher rates of pay and
better conditions of employment" (paragraph 2 of
agreement on changes).
Therefore, all employees should benefit, not just those
who took the £3,000 retirement payment or those who
received the lump sums, because the Company will save at
least £1 million per annum on labour costs alone as a
result of contracting out the Transport/Dispatch
operations. To extend the drivers' settlement to all
employees would not interfere with existing agreements.
On the contrary, it would reinforce the integrity of
existing agreements.
3. Concession of the claims would not create any precedent,
but would be upholding existing agreements. There could
be no consequential claims as the Unions are only
claiming an appropriate share of what should be
available to all employees.
COMPANY'S ARGUMENTS:
4. COMPENSATION CLAIM
1. The Company rejects the Union's claim that the payments
made to transport employees were payments for change.
The payments which the Unions are claiming against were
made in accordance with Clause 1(b) of the Labour
Relations Commission Proposal. This Proposal was a
response to the Transport Unions' claims for loss of
earnings. The basis on which the payments were made is
clearly stated in the terms of this clause and cannot be
perceived as a payment for change.
2. The Company fully accepts that the whole basis of the
Agreement on Change is that all employees should share
the benefits of change regardless of whether they
have been directly involved in the change. This has
ensured consistency, fairness and has maintained
relativities.
3. All employees, in accordance with this Agreement, have
benefited through the payment of high rates of pay and a
wide range of benefits. These are on record in the
House Agreement. This Agreement has been critical to
enabling the Company to adapt to the ever-increasing
competitive challenge and changing market demands. Hence
the Company's concern that it was clearly written into
the Labour Relations Commission Proposal that all
existing agreements would not affected by the Proposal.
This claim, in seeking compensation for a particular
section of employees, is contrary to the Agreement on
Change and, accordingly, would seriously damage the
Agreement, if conceded. Apart from the immediate
knock-on claims (details supplied) it would also give
rise to knock-on claims in the future and undermine the
Agreement on Change. Any erosion of the Company's
ability to respond to changing demands, as required,
will jeopardise its ability to protect employment and
create further jobs.
£3,000 SEVERANCE PAYMENT
1. The Company cannot accept the Union's claim for the
following reasons:-
(i) The Company rejects the Unions' allegation that the
severance payments made to the transport group were
a new payment and not paid under the terms of the
Labour Relations Commission Proposal (details
supplied).
- The Company was opposed to the payment of
severance to the Transport group and only
agreed to the Unions' request for such payment
as part of the Labour Relations Commission
Proposal.
- The amended Proposal of 15th May, 1995 left it
open for the Company to discuss further the
option of severance but it was under the
auspices and covered by the general terms of
the overall Proposal (details supplied).
- the Company acknowledges that it held the
subsequent discussions with the individuals
but the discussions were held on the basis of
the criteria set out in the Proposal and on
the understanding that the Unions could be
involved if any problems occurred. The terms
paid were exactly as outlined in the Labour
Relations Commission Proposal. With the
exception of extending the criteria to two
more junior employees the criteria were fully
met. The severance payments made were,
therefore, clearly made in accordance with
this Proposal and were not a new payment as
claimed.
2. The Company was opposed to paying severance in the case
of the Transport group because a real redundancy
situation did not exist, and, especially, against the
background of the Company's efforts to invest, thereby
generating new jobs.
3. There is no redundancy situation in the factory. The
special circumstances on which the Unions based their
claim in relation to the Transport group did not apply
to the production employees who retired. The
circumstances of their leaving were the normal
circumstances of employees choosing to leave early.
There is no basis for payment of severance in these
circumstances and the Company would have major concerns
about the consequences of such a move. It would create
an extremely dangerous precedent and would be counter-
productive to the critical investment programme
currently being undertaken.
RECOMMENDATION:
The Court has fully considered all of the views expressed by the
parties in their oral and written submissions.
The Court finds that the negotiations which covered the closure of
the transport section were not part of ongoing change provided for
under the existing Union/Company Agreements.
Further, the Court also finds that the settlement arrangements in
that case were appropriate to the particular pay-structure of the
workers concerned.
In all the circumstances, the Court does not find grounds have
been adduced to warrant concession of the Unions' claims.
~
Signed on behalf of the Labour Court
21st December, 1995 Tom McGrath
M.K./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.