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: Ms Owens Employer Member: Mr McHenry Worker Member: Mr Rorke |
1. Rehearing arising from LCR15235.
BACKGROUND:
2. On the 10th of July, 1996 the Labour Court issued LCR15235 concerning a dispute between the parties over the implementation of the Programme for Competitiveness and Work (PCW). The Court recommended that:-
"the proposals of the 2nd of 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 accordingly as Company finances may permit from then on."
In a letter of clarification of the 7th of August, 1996 the Court confirmed that while it recommended that the proposals of the 2nd February should be accepted and that the Union should, following the financial results of 1996, have the right to seek agreement to recover the equivalent of the unpaid amounts of the PCW according as the Company finances may permit from then on. The parties accepted the recommendation on this basis and its terms were implemented accordingly.
In April, 1997 the parties met to discuss the issue of retrospection under the PCW. The Union sought some form of phasing arrangement concerning the outstanding amounts. The Company indicated that it was not in a position to countenance payment under current or foreseeable circumstances. It sought agreement from the Union that the matter would be foregone especially in the context of the Company's willingness to implement year 1 of Partnership 2000.
As agreement could not be reached the matter was referred to the Labour Court by the Union on the 22nd of May, 1997 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place in Letterkenny on the 3rd of September, 1997.
UNION'S ARGUMENTS:
3. 1. The rate of pay of the workers concerned are out of line with workers in similar employment. The Union's acceptance of LCR15235 represents a considerable compromise by the workers, resulting as it did in the loss of increases due under the PCW of 2% for 12 months in year 1 and 2.5% for six months in year 2. It is unfair to expect the workers to accept a further reduction in the modest pay increases granted under the PCW.
2. The Union is concerned that the Company has given its word to the workers that LCR15235 would be implemented in full. The Union is merely seeking to secure payment "according as Company finances may permit" and is willing to enter into discussion on this basis.
3. The credibility of the Company with its workforce is at issue. If it refuses to implement part of an agreed Labour Court Recommendation then it must realise that it will be difficult for the workers to accept its word in the future.
COMPANY'S ARGUMENTS:
4. 1. Under LCR15235 the Union had the right to review the progress of the Company in the context of the 1996 results. This was supposed to happen not earlier than the 1st of June, 1997. While the Union had the right to pursue the matter, this did not compel the Company to agree arrangements whereby at all times the matter was to be subject to the state of Company's finances.
2. The Court will be aware of the Company's strenuous efforts to move into the UK market. In doing so the Company remains concerned at the volatility of the Construction sector in the UK. Due to competitiveness and market forces, the Company has had to implement a 7% reduction in the sales price which was an inevitable result following the Company's Parent Organisation having to compensate its UK sales Company for higher prices paid to Dia Norm Teo than market conditions would realistically support. The current focus of the business is to seek to reduce cost and to build market share while at the same time fighting the competitive threat emulating from Poland (where the Company has a sister plant). Currently the Company has a 12% market share in the UK. In comparison to Poland wage levels are 90% higher in Ireland, while logistics tend to favour the Irish operation for supply to the UK market. The Company remains determined to drive down production costs to combat the threat which is currently evident from the Polish plants which would be further exacerbated by concession of the Union's claim.
3. The Company respectfully submits that it has fully implemented the terms of LCR15235 at a total annual cost of some £62,084. In addition the Company has already implemented the first phase of Partnership 2000 at an additional full year cost of £28,000. Given all of these facts when read in conjunction with the continuing commercial difficulties facing the Company it is unreasonable to expect that the Company should commit to payment of retrospection money claimed which would only serve to undermine shareholder confidence.
4. The Company is disappointed that this issue again raised its head given the nature of LCR15235. Consideration of the issue of retrospection under PCW Year 3 was at all times in the context of the Company's finances. The Company respectfully submits that it is time to move on to address the future needs of the business and to ensure its long term survival.
RECOMMENDATION:
The Court has considered the submissions from both parties in regard to their implementation of LCR15235.
The Court finds in favour of the Union following the Company's confirmation that, in its view, they had complied with LCR15235.
Clearly, that recommendation did not place a time limit on the period over which it applied and the Court now recommends that when the accounts for the financial year 1997 are available, the parties should meet again to seek to agree arrangements as to when the equivalent of the unpaid amounts of the PCW might in the future be paid, taking into account the clear view of the Court that this is when Company finances permit.
Signed on behalf of the Labour Court
Evelyn Owens
1st October, 1997______________________
F.B./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.