FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AVONMORE FOODS PLC - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Dispute concerning the transfer of the Company's transport operation.
BACKGROUND:
2. Following a review of its transport operation the Company advised the Union in November, 1995 that it had decided to transfer the transport section of its operation to an independent operator (Tank freight). The Company maintained that its action was essential in order to remain competitive. The Company took the decision because it claimed that milk collection costs are seriously out of line with competitors, there is poor utilisation of vehicles at certain times, changes in work practices are too slow, there is insufficient flexibility in the routing and use of vehicles, and the necessity for a single transport fleet (at present heavy haulage operate separately). The Company proposed that staff would transfer to Tankfreight with the full protection of the Transfer of Undertakings legislation. Pension and service rights would be carried forward to Tankfreight. The Company also offered a limited number of voluntary redundancies to workers not wishing to transfer.
The proposal was rejected by the Union. The dispute was referred to the Labour Relations Commission and 3 conciliation conferences were held between the 6th December 1995 and 4th April, 1996. Agreement was not possible and the dispute was referred to the Labour Court on the 8th May, 1996. A Court hearing was held on the 27th May, 1996.
UNION'S ARGUMENTS:
3. 1. The Company decision was taken despite the absence of any agreement from the Union. In 1993 agreement was reached between the parties on major changes in the heavy haulage and farm delivery operatios. At that time the Company gave no indication of any problems relating to transport.
2. The Company's decision cannot be justified on the grounds of competitiveness as its cost structure compares very favourably with similar companies in the industry.
3. The transport operation is an essential core element of the Company's business, without transport there is no operation, no business.
4. The Company has not put forward any good argument for the transfer of its transport operation. Most of the drivers concerned have long service, and see
in that, a serious investment in job security in the Company.
5. Management, in its dogmatic approach, has treated workers with contempt. The major factor in the drivers' refusal to accept the proposed transfer from Avonmore to Tankfreight is their conviction that there are no long-term guarantees of job security, or their conditions of employment. Management can give no absolute guarantee that redundancies will not occur.
6. The Union has given significant co-operation to the Company in the past and co-operated with rationalisation plans which included redundancies. It is always willing to negotiate on the overall operation of transport. These negotiations would not exclude a measure of voluntary redundancies and related re-organisation. However, the Union cannot accept the imposition of the proposed transfer.
COMPANY'S ARGUMENTS:
4. 1. The Company's transport costs within the Agri Trading Division amount to £8.7m. this is the biggest single cost, excluding raw materials, within the Division. It is essential that this part of the business is managed in the most cost-effective way. It can only be done by transferring it to a specialist transport Company, Trankfreight.
2. Because of the difficulties experienced in the management of the transport business the Company has been in discussions with Tankfreight for some time. A firm proposal was received in July, 1995 and the Union was consulted and all matters explained. The Company offered to take workers to see how Tankfreight's business was managed. The offer was refused. The Union's industrial engineer was appointed to examine both the Company and Tankfreight position and complete a report. He found no difficulties in the plan outlined.
3. The transport activity is not a core business. It should be sold to a specialist transport Company (Tankfreight). The current rates offered by Tankfreight will give the Agri Trading Division savings of £1 million off its transport Bill on an annual basis.
4. Drivers will have secure employment in Tankfreight in return for good performance. They will also have an improved pension scheme and shorter working hours spread evenly throughout the year. They will become part of an International Transport Company with the security and benefits that derive from that.
5. The Company has offered a limited number of voluntary redundancies on attractive terms to workers not wishing to transfer (Details supplied to the Court).
6. Workers transferring will be covered by the Transfer of Employee Regulations and Tankfreight also has a comprehensive agreement with SIPTU. There will be secure employment with high earning potential.
7. It is essential that the sale of the Company's transport business to Tankfreight is implemented with immediate effect. The delay in making the transfer is costing the Company very substantial amounts of money.
RECOMMENDATION:
Having considered the written and oral submissions made by the parties, the Court is of the view that no real discussions have taken place on this issue because of the stance taken by both sides.
The Court recommends that the parties enter into meaningful negotiations immediately on the Company proposal, with a view to reaching a mutually acceptable position. These discussions should cover all aspects of the operation including the perceived deficiencies in the present system.
These negotiations to be completed within 6 weeks of the date of issue of this recommendation.
Signed on behalf of the Labour Court
Finbarr Flood
14th June, 1996______________________
T.O'D./U.S.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.