FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CIE GROUP OF COMPANIES - AND - ICTU GROUP OF UNIONS NATIONAL BUS AND RAIL UNION DIVISION : Chairman: Ms Owens Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. Payment of increases due under Phase 3 of the Programme for Competitiveness and Work.
BACKGROUND:
2. The Transport (Re-organisation of Coras Iompair Eireann) Act, 1986 provided for the division of Coras Iompair Eireann into a Holding Company with three subsidiary Companies. Each company has autonomy to carry out their functions with the exception of central functions which the Holding Company provides as a service to the individual companies. The services include computer, legal, pensions etc..
At a meeting with the Unions on 7th November, 1996, the Chairman of C.I.E. confirmed that the Board had endorsed the view of the chief executives of the three operating Companies that payment of the 3rd Phase increase under the PCW could only be considered in the context of the viability plans which each company had prepared. The timeframe set-out for the completion of negotiations in relation to the viability plans was 31st March, 1997. On the basis that the negotiations were completed by that date the payments outstanding under the PCW would be paid retrospectively at that time. The Holding Company would also be subject to the same timeframe.
The 3rd Phase of the PCW falls due on 1st October, 1996 for manual grades and supervisory staff employed by the 4 Companies. It falls due on 1st December, 1996 for clerical, catering and executive staff and 1st January, 1997 for part-time school bus drivers.
The Unions rejected the Board's proposals and the matter was referred to the Labour Relations Commission. A conciliation conference took place on 12th November, 1996. As agreement could not be reached the dispute was referred to the Labour Court on 14th November, 1996 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 29th November, 1996.
UNION ARGUMENTS:
3. 1. The contribution made by the workers through productivity agreements has considerably improved the financial position of C.I.E. in recent years.
2. The P.C.W. is designed to strengthen employment and improve the competitiveness of industry. The Unions are committed to the terms of the agreement.
3. The workers reject the Companies proposal to link the PCW with the viability plans. The Unions are not prepared to enter into negotiations on the viability plans until the terms of the PCW are paid.
4. The workers are aware of the financial difficulties the Companies are experiencing with increased costs and competition. The Unions are prepared to assist in efforts aimed at maintaining the viability of the Companies and are willing to negotiate agreements which would improve the financial position.
5. The Companies should honour the agreement they entered into with the Unions three years ago. Failure to do so could affect the morale of the workforce.
COMPANY ARGUMENTS:
4. 1. The Companies are not refusing to pay the 3rd Phase of the PCW, but are requesting a deferment while negotiations take place on the viability plans. Given the scale of the Companies accumulated losses, it is essential that the viability plans with savings of £40m be agreed by 31st March, 1997.
2. The offer made on 7th November, 1996 is a fair compromise in endeavouring to meet the staffs' aspirations for payment of the increase while also meeting the necessary cost cuts which would enable the Companies to operate within the parameters set.
3. Payment of the 3rd Phase of the PCW must be viewed in the context of Clause 3 which states that "due regard being had to the economic and commercial circumstances of the particular firm, employment or industry".
4. The state's support can no longer be relied upon to prevent liquidation because the E.U. precludes such support.
5. Increased commercial pressure will arise in the context of the state's conformity with E.U. policy when state subvention will be substituted by public service contracts. This change in the role of the State means that the Companies will be obliged to seek contracts for the provision of passenger services on a strictly commercial basis.
6. Because of the competitive nature of the business increased revenue by means of a general fare revision is not an option. The appropriate circumstances must be created in order to make the payment possible. Acceptance of the cost reduction measures, the implementation and implication of which are negotiable, would create the appropriate circumstances.
RECOMMENDATION:
The Court has considered carefully the written and oral submissions of the C.I.E. Group of Companies and Trade Unions involved in this dispute.
The Court's approach to the case is to deal with all four Companies as one. While acknowledging that the financial problems are different in each Company, this problem, up to now, has been dealt with in such a manner.
At the outset, the Court, as it made clear at the hearings, wishes to confirm that it finds it totally unacceptable that the Unions should have departed from agreed grievance negotiation procedures by balloting on strike action before this dispute had been heard by the Labour Court. This is also in contravention of the PCW Agreement signed by all Congress Unions and makes the position of the Court very invidious. The Court, however, notes that all Unions involved have advised that they would seek to arrange deferral of any such actions prior to voting on the Labour Court recommendation.
The Court notes that the decision of the Companies to defer payment of the third phase of the PCW, prior to securing agreement on a viability plan with the Unions, was not discussed in advance with the Unions affected, as would be expected in such circumstances.
The Court acknowledges that Clause 3 of the PCW does require the parties to take into consideration the economic and commercial circumstances of the particular company. However, to make payment of the PCW conditional on agreement to a major viability plan would not, in the view of the Court, be in keeping with the spirit of that Clause.
The Court accepts that each of the operating Companies faces very serious difficulties which must be addressed urgently in order to try to secure the future of each operation. The difficulties will be greatly accelerated by the new deregulatory rules agreed through the EU. It is essential in these circumstances that the parties agree the cost reductions which will allow the Companies to secure the capital investments and efficiencies needed. The Court notes that all Unions have declared themselves aware of the need to negotiate, and to be ready for such talks, once the PCW issue is resolved.
In all the circumstances, and in order to create a climate in which all parties can work together to secure the future of the businesses, the Court recommends that the Companies and Unions agree as follows:-
1. The Company agree to pay Phase 3 of the PCW from the due dates. The Court expects that payment (with retrospection where applicable) would be made in January 1997.
2. In view of the Unions’ stated agreement to enter into serious negotiations on the viability plan, the parties agree to meet immediately on acceptance of this Recommendation and agree an urgent timetable for negotiations which will take on board the Company deadline of March 31st, 1997. They should agree to apply the necessary resources to achieve this.
3. Taking into account the complexity of the issues, the Court is further of the view and, accordingly, considers that it would be appropriate for the parties to avail of the services of a conciliator(s)/ facilitator(s) to assist in reaching agreement.
4. Finally, any areas of disagreement remaining at the end of the negotiations may be referred to the Court for a further recommendation.
5. In accordance with normal practice the Court expects that the Unions involved would put the above proposals to a ballot of their members.
Signed on behalf of the Labour Court
Evelyn Owens
10th December, 1996______________________
F.B./U.S.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.