FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ALBATROS FERTILISERS LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Mr Walsh |
1. Dispute concerning the use of fixed-term contracts.
BACKGROUND:
2. The Company which is located in New Ross, Co. Wexford, is engaged in the manufacture of fertiliser and employs a workforce of approximately 35, of whom 6 are permanent/ hourly-paid. The workforce is supplemented each year by 12-14 workers on fixed-term (temporary) employment contracts. The latter are laid off for periods ranging from 3 to 6 months each year. The Union claims that the use of temporary contracts is excessive and is seeking permanent status for the workers concerned, with a provision for lay-off, in line with the seasonal nature of the business. The Union is particularly concerned with the concept of fixed-term contracts whereby there is no possibility of workers building up residual rights and access to usual benefits, e.g., redundancy entitlements, etc. It is also concerned with what it sees as the arbitrary nature of how workers are selected for recall each year.
The Company's position is that its business is seasonal and most workers are employed in accordance with the requirements of the business. The Company states that there is no possibility of increasing the number of permanent people on its books. It argues that the workers are well paid, earning an average of up to £15,000, per annum. It pointed out that most of the 1996 seasonal workers received substantial redundancy payments in 1988, on foot of a major rationalisation of the Company which brought about a change of ownership. Generally, according to the Company, workers are recalled each year depending on Company requirements and on a skill-matching basis. The Company indicated that it was firmly against changing the system currently in operation.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission, following which agreement was not reached. The dispute was referred to the Labour Court, on the 9th of August, 1996, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation, in Waterford, on the 3rd of December, 1996.
UNION'S ARGUMENTS:
3. 1. In employment generally, there has been a large increase in the number of casual and temporary contracts. Sometimes casual or temporary employment may be necessary in order to cope with rush orders or unexpected sudden demand for products or services or to cover for illness or scheduled leave. However, it cannot be justified if it is deliberately used as a long-term policy to keep a portion (or most) of a workforce feeling insecure and to stop them accruing statutory and other employment rights.
2. In this particular Company, the Union represents a considerable number of workers who have more than 9 years' service. However, from a legal viewpoint, their service only goes back a few months to the beginning of the current season.
3. Some statutory rights can be secured, for example, if a worker is let go and then returns within 26 weeks, the service is regarded as continuous under the provisions of the Redundancy Payments Acts, 1967 - 1991. However, the Company seems to be aware of this position as, when workers have built up continuous service for some time, it appears that they are laid off for a period in excess of 26 weeks.
4. There would be no operational difficulty for the Company if the workers were taken on on the basis of a normal contract of employment and then placed on temporary lay-off on a seasonal basis. A procedure could be agreed for selection for lay-off and recall. Many industries use this system very successfully.
5. A system which wholly or partly prevents workers from accruing rights is unreasonable and should not be supported. The Union is cognisant of the fact that there would be the requirement for some temporary or fixed-term contracts to provide relief cover, etc.
COMPANY'S ARGUMENTS:
4. 1. The present system of temporary contracts has been in operation since 1987. It has run smoothly, to the general satisfaction of all parties. Most of the people who are offered temporary contracts received substantial redundancy payments in 1987.
2. Following interview and medical examination, potential temporary employees are offered a contract which states, inter alia, that the contract is temporary, that it is on a week-to-week basis, that its purpose is to cover the Company's peak season and that, on its termination, there is no right of recall. On conclusion of the contract, all employees receive letters of termination. The Company has no difficulty filling these positions, which yield earnings of between £12,000 - £23,000 (year to end April, 1996).
3. The Company uses the temporary contracts because the work involved is temporary.
4. Although the Company is involved in a very competitive business and is currently facing severe difficulties, the earnings of the temporary employees are very high.
5. With the exception of sick-pay and pensions, the conditions of employment for temporary employees are the same as apply to permanent employees.
6. The system works satisfactorily and there is no groundswell of opinion on either side that it should it changed.
RECOMMENDATION:
The Court, having considered the written and oral submissions of the parties, accepts that the current arrangement in relation to permanent and temporary personnel was part of the rationalisation agreement reached in 1987, in order to ensure the ongoing operation of the Company.
The Court does not find that there are sufficient grounds for changing this arrangement.
Signed on behalf of the Labour Court
Finbarr Flood
16th December, 1996______________________
M.K./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.