FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DUBLIN DRUG COMPANY LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - AND - MANUFACTURING SCIENCE FINANCE DIVISION : Chairman: Employer Member: Worker Member: |
1. Dispute concerning the Company proposals on cost cuts.
BACKGROUND:
2. The Company is involved in the delivery of pharmaceutical products nationwide and employs 80 workers including 18 part timers. The dispute concerns 44 workers employed in the Warehouse, Transport and Clerical/Admin areas. In 1995 the Company proposed a plan which involved a wide range of cost-cutting measures including reductions in workers' wages and changes in conditions of employment. The Company maintained that the changes were essential in order that it remain competitive. The Union rejected the plan, specifically in relation to reduction in the earnings of workers. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 22nd March 1996. Agreement was not possible and the dispute was referred to the Labour Court by the Labour Relations Commission on the 16th April 1996. A Court hearing was held on the 8th May 1996.
UNION'S ARGUMENTS:
3. 1. The Company has experienced increased sales and has generated a gross profit to year ending 31st December 1995. Workers have received only the basic increases provided for under National Wage Agreements.
2. The Company has increased staff numbers by recruiting a number of part time workers. It has granted significant salary increases to executives.
3. The Company's labour costs, in terms of average wage costs as a percentage of turnover, are in line with competitors.
4. The Company could effect substantial cost savings in areas such as sponsorship, discounts, shares, inter-company loans, dividends, without reducing workers' earnings. The recruitment of part time workers should not have been implemented if the Company was anxious to reduce costs.
5. The wage rates of the workforce are not out of line with comparators in the industry, and the only increases received were due under National Wage Agreements. They cannot accept the significant wage cuts proposed by the Company.
COMPANY'S ARGUMENTS:
4. 1. The Company has experienced a substantial reduction in profits due to severe competition in the market place. It is essential that the Company rationalise its business to remain competitive and retain market share.
2. The Company reduced management salaries by 10% in January 1996.
3. In all negotiations the Company has been totally honest and has given the Union's financial expert an opportunity to examine its accounts. There are no other options to the Company's plan, and those proposed by the Union have been responded to by the Company. They are not viable.
4. The Company is committed to resolving the situation without job losses. However the Union's blanket refusal to negotiate the proposed changes could threaten the Company's long term viability.
5. The pharmaceutical industry faces significant difficulties which have been recognised by the Court, when dealing with a similar claim (LCR 15102 refers).
6. The loss of take-home pay which workers would experience is small. The Company has paid the final phase of the P.C.W. which already mitigates the planned loss.
7. The Company has always been pro-active in its approach to the work force. It has operated a non-contributory pension scheme for 15 years, and is the only Company in the industry to do so. This is the first instance where workers are asked to accept changes.
RECOMMENDATION:
The Court has given careful consideration to the proposals put forward by the Company and Union in this dispute. The Court has considered the imperative of achieving cost savings put forward by the Company and the counter proposals from the Union.
In the circumstances of the case, and accepting that some changes must be made to stop the Company's downward trend, the Court is of the view that the following revised proposals are fair, in that they allow the Company cost savings whilst reducing the impact on the employees' earnings.
The Court recommends as follows on the various aspects of the Company's proposals.
Company-wide proposals
1.Payment to be made for a maximum of 5 days uncertified sick leave in any one year.
2. Clothing allowance to be abolished.
3. Complimentary foodstuffs in the canteen to be eliminated.
Saturday Opening -
The Company proposals should be accepted.
Warehouse -
The Company's proposals should be accepted subject to the Company paying compensation of a sum equal to 12 months shift/bonus pay. In allocating future overtime care should be taken that the allocation is fair and some recognition given as to how it impacts on the individual employee's earnings.
Drivers -
The Court does not recommend a reduction in the basic rate of pay. The proposal to reduce the lunch allowance should be accepted as should the reduction in the accident-free driving scheme.
Administration/Office Staff -
As with the staff in the Warehouse the administrative staff should be compensated for 1 year's loss incurred by the reduction by 1/2 hour of the working day. The proposals at B and C under this heading should be accepted.
Finally, the Court recommends that the Company prepare a basis of sharing future profit growth with its employees, as proposed, so that the employees may benefit directly from the improved results of their efforts.
Signed on behalf of the Labour Court
Evelyn Owens
22nd May, 1996______________________
T.O'D./S.G.
Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.