FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FARAH (EXPORTS) IRELAND LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Ms Ni Mhurchu |
1. 1. Arrears of Programme for Competitiveness and Work (PCW) and Programme for Economic and Social Progress (PESP).
2. Operator Convenience (OPC) and Company Convenience (CC).
3. Repair of rejects.
BACKGROUND:
2. Farah (Exports) Ireland is a multi-national clothing Company which has operated in the West of Ireland since 1981. The Company manufactures men's slacks, mostly for export to the U.K. At its peak, the Company operated three plants at Galway, Ballyhaunis and Kiltimagh and employed approximately 300 people. The Company operates a piece-work bonus system.
Because of trading difficulties, the Company closed its plant in Ballyhaunis. Employees were given the option of either transferring to the factory in Kiltimagh or taking redundancy.
The Company encountered a further major set-back on the 5th January, 1997 when the factory in Galway was extensively damaged by fire. It resulted in the loss of seventy jobs. As a result of the fire all employees were subsequently laid-off and re-employed under new terms and conditions of employment.
P.E.S.P. & P.C.W.:
The Union submitted a claim for retrospection under the P.E.S.P. and P.C.W. It claims that rates of pay have fallen behind because of non-payment of the P.C.W. and part of the P.E.S.P.
The Company claims inability to pay any retrospection due to continued losses since 1991. Despite its losses, the Company claims that it has increased pay as follows; 1991 - 4%; 1994 - 3%; 1995 - 2.5%; 1997 - 2.5%. It claims that inability to pay cannot continue to be claimed by the Union as a debt owed. The Company will pay the Tailoring JLC rates, inclusive of the first Phase of Partnership 2000 from the due date.
The Union also objects to the manner in which the Company changed the bonus system for its members in January, 1996 without any consultation. The Company suspended payment of the Operator Convenience (OPC) bonus system in favour of the Company Convenience (CC) system.
Following the amalgamation of the Ballyhaunis and Kiltimagh plants management wished to revert to the old bonus system OPC/CC which would have had the effect of reducing members' bonus payments. The Union rejected this proposal.
The Company claims that the employees were being paid a piece-work bonus for reject work and that regardless of the job, an employee, engaged in bonus earnings, was fully protected by the Company Convenience System. This situation could not continue. The Company indicated its intention to revert to the arrangements which were in operation up to the end of 1995. The Union objected to this proposal.
REPAIR OF REJECTS:
The Union claims that the system operated in Kiltimagh involved a team of workers dealing with all rejects allowing other workers to concentrate on production. However, following the amalgamation with Ballyhaunis management changed the system, which resulted in individuals repairing their own rejects. It resulted in the loss of bonus for the individuals concerned. No agreement was reached with the Union for this change.
The Company claims that it could not have workers earning a bonus for reject work which had then to be repaired by someone else who earned a bonus for the same work.
As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. Conciliation conferences were held on the 5th December, 1996, 9th January, 1997 and 19th February, 1997 in addition to several local meetings but no agreement was reached. The dispute was referred to the Labour Court on the 3rd March, 1997 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 20th June, 1997.
CLAIM 1:
ARREARS OF P.C.W. AND P.E.S.P.
UNION'S ARGUMENTS:
3. 1. The Union is seeking retrospection payment due under the P.C.W. and part of the P.E.S.P. Rates of pay have fallen behind because of non-payment under the above agreements. The amount due amounts to 9%. The Union claims that non-payment under P.E.S.P. and P.C.W. was a debt owed.
COMPANY'S ARGUMENTS:
4. 1. The Company has suffered serious financial losses over the past number of years and is not in a position to pay any retrospection. It will pay the first phase of Partnership 2000 from the due date when the Tailoring JLC rates are ratified.
2. The Company increased pay during 1991, 1994, 1995, and 1997 by amounts ranging from 2.5% to 4%. In addition, it is prepared to pay £20,000 to be divided among the employees in lieu of retrospection and for agreement on the other outstanding issues.
CLAIM 2:
OPERATOR CONVENIENCE (OPC) AND COMPANY CONVENIENCE (CC)
UNION'S ARGUMENTS:
5. 1. The Company changed the bonus system OPC in January, 1996 without consultation and substituted these payments for CC rates. Following the amalgamation of the Ballyhaunis and Kiltimagh plants the Company reverted to the old system of paying the bonus (OPC/CC) which had the effect of suppressing the bonus earnings of the workers.
COMPANY'S ARGUMENTS:
6. 1. The Company must become more competitive and get its costs into line with that of its competitors.
2. The terms and conditions of employment for a return to work following the fire at the Galway plant were set out in the letter of 5th February, 1997 to the Union. The terms provided for the immediate implementation of OPC/CC rates as existed prior to January, 1996.
CLAIM 3:
REPAIR OF REJECTS
UNION'S ARGUMENTS:
7. 1. The Union wants the practice of repairing rejects which operated at Kiltimagh prior to the amalgamation with Ballyhaunis to operate again.
2. The operation of the new system has resulted in a loss of earnings for the workers.
3. The workers are presently operating the new system under protest pending a Labour Court recommendation on the matter.
COMPANY'S ARGUMENTS:
8. 1. It is essential that workers carry out their own repairs. The employees were taken back following lay-off as a result of the fire in the Galway plant, on the basis that the operators would do their own repairs.
2. The Company cannot be expected to pay operators a bonus for reject work which then has to be repaired by someone else who also earns a bonus for the same work.
RECOMMENDATION:
The Court considered the written and oral submissions made by the parties on the issues in dispute:
1.Operator Convenience and Company Convenience
There is a major difference between the parties on the background to the movement to Company Convenience rates in this plant, the Union claiming it was introduced from January 1996 by the then management, the Company claiming it crept in over a period of time.
2.Reworking of Rejects
The arrangement of a team of workers dealing with rejects has, it was accepted by both sides, been in operation since the Plant commenced operations but is now perceived by the Company as being uneconomic and out of line with other Companies.
3.Arrears of P.C.W./P.E.S.P.
There are also major differences between the parties on the quantification of any money that might be due to or lost by the Employees due to the non payment of P.C.W./P.E.S.P. monies. The Company argue that no monies are due because of the Company's inability to pay then and now.
Having considered all of the issues involved including the ongoing trading position of the Company the Court recommends as follows:
(1) On the question of O.P.C. and C.C. and the re-working of rejects the Employees should accept the Company's proposals.
The Company in return should date the introduction and payment of its proposed system from 1 May 1997 rather than September 1996.
(2) The Court does not believe that the issues of P.C.W. and P.E.S.P. arrears should be dealt with at this time but recommends that this matter be discussed at a more appropriate time.
Signed on behalf of the Labour Court
Finbarr Flood
27th June, 1997______________________
L.W./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.