FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GROVE TURKEYS - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Hearing Arising From LCR14564
BACKGROUND:
2. The Company is based in Smithboro, Co. Monaghan and is involved in the farming and processing of turkeys.
In February, 1993, the Union applied for Phase 2 of the Programme for Economic and Social Progress (PESP). The Company pleaded an inability to pay and the issue was referred to the Labour Relations Commission. A piece-rate system was proposed and was to be introduced at various stages of the production process. The workers rejected the system unless all phases of the PESP were paid. The Company again claimed an inability to pay and the dispute was referred to the Labour Court. Recommendation No. LCR14564 was issued in October, 1994, as follows:-
"1. All employees agree to the implementation of the piece-rate system.
2. The Kill Line and the Packing area to go into piece-rate system from the date of acceptance of this Recommendation for a trial period of six months.
3. The operation of the new system to be reviewed monthly. A joint monitoring committee to be established to oversee the operation of the new system and to rectify expeditiously any problems which may arise.
4. For the period of the trial period, the employees on piece-rate to be guaranteed a basic rate of pay equivalent to the current rate increased by the terms of Phase 2 of the PESP, provided that current levels of production are at least maintained.
5. Those employees not working under the new system to be paid the increase under Phase 2 of the PESP, and to work the piece-rate system when it is put into effect in their production areas.
6. On acceptance of this recommendation, the Company to pay to the employees a lump sum in respect of full retrospective of Phase 2 of PESP.
7. At the end of the six months trial period, the parties to review in all its aspects the operation of the system. This review to take into account any retrospection outstanding under the terms of the PESP."
The Union claims that the workers have lost out financially as a result of the piece-rate system and is seeking a return to basic pay. The Company maintains that wages have increased under the system.
The Union referred the dispute back to the Labour Court for a further hearing on 9th February, 1996. A Labour Court hearing took place on 14th April, 1996.
UNION'S ARGUMENTS:
3. 1. The following national agreement payments were due to be paid to the workers:-
Phase 2 PESP 3% in February, 1993
Phase 3 PESP 3.75% in February, 1994
Phase 1 PCW 2.0% in February, 1995
Phase 2 PCW 2.5% in February, 1996
(PCW is Programme for Competitiveness and Work).
Including Clause 3 of PESP at 3%, an increase of 14.25% would need to be paid under the piece-rate system to equal the national agreement payments. The majority of the workers did not receive these increases.
2. The Union agreed to extend the trial period to acertain if the system was working as the Company had promised. Even taking the different starting times for various section into consideration, it was clear that the system had not delivered the required pay increases, except for one section.
COMPANY'S ARGUMENTS:
4. 1. There is an over supply of product which has resulted in a continued decrease in prices over the last number of years. The Company's business is extremely sensitive to market prices and the sterling exchange rate. Sterling has gone from trading at 92 pence in 1992 to 103 pence in 1995 against the Irish Punt. The collapse of the frozen turkey trade and a fire in the Smithboro plant in 1992 have also contributed to major costs for the Company.
2. Following LCR14564 in 1994, the Company introduced the piece-rate system (details supplied to the Court). The system has exceeded what would have been paid under the national agreements by an average of 12.55% across the various sections. Whilst it is true that the killing department has become out of line compared with other departments, the Company intends to achieve balanced piece-rates across all departments in future.
RECOMMENDATION:
The Court has considered all of the views expressed by the parties in their oral and written submissions.
The Court notes that the Company have based their manning levels and targets on measurements calculated at non-incentive level (i.e. normal working or 75 B.S.I.). Accordingly, the payments under the scheme should at minimum equate to the hourly rate of pay inclusive of increases under the National Agreements.
From the details provided to the Court, it is clear that all sections are achieving earnings in excess of the rate of pay calculated in accordance with the above.
As previously recommended by the Court, any difficulties with the scheme should be identified expeditiously and rectified. The Court's previous recommendation, that a joint monitoring committee be established for this purpose, should be implemented.
Changes to the rates as a consequence of the further phases of the PCW should be negotiated by the parties.
The Court recommends that the scheme should be continued in its present form, subject to the above conditions.
Signed on behalf of the Labour Court
Tom McGrath
24th May, 1996______________________
C.O'N/D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.