Labour Court Database __________________________________________________________________________________ File Number: CD95397 Case Number: LCR14953 Section / Act: S26(1) Parties: J. LYONS AND CO. (IRELAND) LTD. (THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Compensation for Rationalisation.
Recommendation:
The Court does not find that significant savings have been made by
the Company, taking into account the redistribution of bonus and
commission payments and the cost to the Company of funding the
early retirements, and, therefore, rejects the Union's claim.
However, the Court would recommend that proposals of a similar
nature in future should be discussed in a formal way with the
Unions prior to implementation, taking into account the
individual's rights in such circumstances.
Division: Mr Flood Mr McHenry Mr Rorke
Text of Document__________________________________________________________________
CD95397 RECOMMENDATION NO. LCR14953
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
J. LYONS AND CO. (IRELAND) LTD.
(Represented by the Irish Business and Employers' Confederation)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
Compensation for Rationalisation.
BACKGROUND:
The Company packs a large range of products, principally teas
and coffees, which are distributed to retail outlets
throughout Ireland. Following the retirement, in Summer,
1994, on grounds of ill health, of four van salesmen, the
Company redistributed their routes among ten of the remaining
37 salesmen. The Union claims that the Company has made
significant savings as a result of the elimination of the
four positions and that a share of those savings should be
distributed among the workers in the area. The Company
claims that ten drivers have benefited from the re-
distribution of the routes and the other drivers have not
been affected at all by the elimination of the four
positions.
The dispute was the subject of a conciliation conference
under the auspices of the Labour Relations Commission, at
which agreement was not reached. The dispute was referred to
the Labour Court on the 4th of July, 1995, in accordance with
Section 26(1) of the Industrial Relations Act, 1990. The
Court investigated the dispute on the 9th of October, 1995.
UNION'S ARGUMENTS:
1. The Company effectively implemented redundancy on the cheap.
The workers who retired were long-serving employees and
benefited only by the early retirement option in their
Pension Plan.
2. The Company made considerable savings, i.e., some #100,000
per annum. These savings should be shared on a negotiated
and agreed basis with the van sales employees.
3. Where de-manning occurs and additional work is undertaken, it
is not unusual for workers to seek compensation. The
Company's argument that increased earnings are picked up in
commission, only relates to a certain number of workers. The
opportunity to seek promotion is reduced for all relief van
salespersons, as are opportunities to seek re-deployment in
other areas.
4. The Company's arguments that the overall number of employees
in the section has increased over the past 5 years, fails to
clarify that the higher earning van sales positions are
declining and only lower-earning relief positions have
increased. The Company's further reference to large numbers
of part-time merchandisers is difficult to gauge, as the
Company has refused to share any information on who these
people are, where they work and how much they earn. It is
doubtful that these are fairly paid jobs.
5. In spite of some slippage in the Company's market share, it
remains the clear market leader and is highly profitable.
COMPANY'S ARGUMENTS:
1. Only ten van salesmen were affected by the redistribution of
the four regular routes vacated by the early retirement of
the ill employees. As their sales increase, their
commission/bonus earnings will also increase.
2. The remainder of the van sales force has not been affected by
the changes in any way and the question of "compensation"
does not arise.
3. This claim is cost-increasing and so is debarred under the
terms of the Programme for Competitiveness and Work.
4. This redistribution of routes may be regarded as falling
under the heading of "normal ongoing change", in response to
a changing market-place. For the company to concede this
claim would be to concede the principle that it is correct to
pay for changes in work organisation or methods resulting
from changes in the markets in which the company operates,
regardless of the impact on the company's competitiveness.
5. The early retirement of four van salesmen was not sought or
encouraged. Medical advice and evidence was presented which
left the Company with no alternative but to accept the fact
and the additional costs of #185,000 associated with it.
6. The Company is one of the last businesses in the country to
operate a van sales force on a national basis. Many other
companies have opted for distribution contractors as an
alternative to this method of distribution, due to cost
factors alone.
7. Should this claim for compensation succeed then any future
redistribution of routes, for whatever reason, may result in
another similar claim from employees not affected by the
change, further increasing costs and eventually rendering
this method of distribution and the jobs associated with it
commercially unviable.
RECOMMENDATION:
The Court does not find that significant savings have been made by
the Company, taking into account the redistribution of bonus and
commission payments and the cost to the Company of funding the
early retirements, and, therefore, rejects the Union's claim.
However, the Court would recommend that proposals of a similar
nature in future should be discussed in a formal way with the
Unions prior to implementation, taking into account the
individual's rights in such circumstances.
~
Signed on behalf of the Labour Court
1st November, 1995 Finbarr Flood
M.K./A.K. ____________________________________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.