FULL RECOMMENDATION
) INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DIA NORM TEORANTA (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Programme for Competitiveness and Work (PCW).
BACKGROUND:
2. The Company is one of seven European subsidiaries of a Finnish company, which manufactures radiators for the export market. In 1994 the Company announced its inability to pay wage increases in accordance with the terms of the Programme for Competitiveness and Work (PCW), due to financial difficulties. Local negotiations took place and the Company sought a pay freeze and changes in work practices. The Company then paid an increase of 2% on basic pay on 1December, 1994, without retrospection to the due date of 1December, 1993. Conciliation conferences took place on 28 April, 1995, 21 June, 1995, 23 October, 1995 and 16 January, 1996 under the auspices of the Labour Relations Commission. Following the conciliation conference of 23rd October, 1995 the parties agreed to recommend the following package for acceptance:-
(i) Monthly Bonus:
The existing arrangements would remain unaltered. However the Company reserved the right to negotiate changes in light of attendance levels and commercial circumstances.
(ii) Sick Pay:
As an alternative to reducing the duration of benefit, the Company reserved the right to debar persons who were deemed to be abusing the scheme.
(iii) Shift Changeover/Continuous Production:
Revised arrangements were agreed to apply across the board, replacing the existing agreement.
(iv) Union Meetings:
On-site union meetings during production hours concerning Company business to be confined to not more than 4 per annum, the Company to pay for half hour per meeting.
(v) PCW Implementation:
In return for agreement on the above, the Company proposed the following terms:
Original Due DatesCompany Proposal
PCW Yr 1 2% due 1/12/93 (Paid 1/12/94) No retrospection
PCW Yr 2 2.5% due 1/12/94 To be paid 1/12/95, with 6 months retrospection
PCW Yr 3 Phase 1 2.5% due 1/12/95 To be paid 1/6/96, no retrospection
PCW Yr 3 Phase 2 1% due 1/5/96 To be paid 1/12/96, no retrospection
The anniversary date of the PCW to be 1/6/97 (originally 1/12/96).
The workers rejected the proposals by secret ballot and, following a further conciliation conference on 16th January, 1996, agreement was reached on shift changeover and items (i), (ii), and (iii) were omitted from revised proposals. Retrospection under the third year of the PCW was to be reviewed not earlier than 1/6/97, subject to the commercial and trading circumstances of the Company, and the original anniversary date of 1/12/96 was to be restored. The above terms, dated 2nd February, 1996, were recommended for acceptance by the Union, but were again rejected by the workers. The Company then reverted to its former position of 23rd October, 1995, with the exception of shift changeover.
It was agreed to refer the dispute to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990 on 4th April, 1996. A Labour Court hearing took place on 14th June, 1996, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The workers rejected the Company's proposals as both employers and employees have already balloted on, and accepted, the terms of the PCW. This is the minimum increase due to workers and any amendment to the increase, or to the date of implementation, is unacceptable.
2. Staff have made many concessions including a pay freeze for one year, shift agreements and short time working. Pay rates are below those of comparable companies, while production and market share have increased, with the Company installing a third production line in July, 1996.
3. The workers have received only Phase 1 of the PCW, without retrospection. The Company should now pay:
(i) retrospection due under 1st phase of the PCW from 1/12/93,
(ii) 2nd phase of the PCW due 1/12/94 with retrospection,
(iii) 3rd phase of the PCW due 1/12/95 with retrospection,
(iv) 4th phase of the PCW due 1/5/96.
COMPANY'S ARGUMENTS:
4. 1. The Company has incurred operating losses since 1994. The parent company's agreement to waive repayment of a substantial loan, and the transferral of its UK production order to Ireland, has ensured full-time working for 1996. However, it is imperative that production costs are reduced, and sales increased, to secure the future of the Company.
2. The Company's proposal on 23rd October, 1995 to implement 6 months retrospection in respect of Year 2 of the PCW can no longer apply, as the commercial and economic position of the Company has failed to improve as had been expected.
3. Agreement has been reached on the issue of shift changeover/continuous production, and the issue of Union meetings is not a contentious one. However, the monthly bonus should be more directly linked to attendance, with a deduction of one week's bonus, instead of one day's bonus, for absences. Lates should also be reckonable for deductions. Absenteeism for 1995 was 6% and, with the exception of work-related accidents, benefit should be reduced from 4 to 2 weeks.
RECOMMENDATION:
The Court has considered carefully the written and oral submissions presented by both parties to this dispute, and has taken into account the present difficulties of the Company, and the need to re-establish a successful business operation.
The Court recommends that the proposals of 2nd February, 1996, which were agreed for recommendation by the Union, should be accepted. However, the Union should have the right to review the progress of the Company once the critical results of 1996 have passed, and to seek to agree arrangements with the Company to recover the equivalent of the unpaid amounts of the PCW according as Company finances may permit from then on.
Signed on behalf of the Labour Court
Evelyn Owens
10th July, 1996______________________
D.G./S.G.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.