FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PROGRESSIVE GENETICS LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Claim for implementation of Clause 3 of the Programme for Economic and Social Progress and Clause 2(iii) of the Programme for Competitiveness and Work.
BACKGROUND:
2. The dispute concerns a claim by the Union for the application of increases in pay arising from Clause 3 of the PESP and Clause 2(iii) of the PCW, to its members in the Company, in line with their marker grades within the Civil Service. The claimants were formerly public servants employed in the Dublin District Milk Board (DDMB) until they moved to Progressive Genetics on the privatisation of the Board, in 1995.
The Union's position is that the employees moved to the new Company on the basis that their terms and conditions of employment would be no less favourable than those of their colleagues in the Department of Agriculture. The Department has concluded a deal with its staff under the restructuring clause of the PCW and, given the co-operation already shown by the employees of Progressive Genetics, the Union argues that their claim should be conceded by the Company.
The Company has rejected the claim on the grounds that it did not exist during the period of the PESP and that the terms and conditions referred to in the tender document at the time Progressive Genetics was set up referred only to terms and conditions at that time. The Company also claims that it would be in no position, financially, to meet the claim.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 11th of July, 1997, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 1st of September, 1997.
UNION'S ARGUMENTS:
3. 1. Under the privatisation agreement, staff were guaranteed that their pay rates would not diminish as a result of privatisation. They were guaranteed a return to their Civil Service employment and status in the event of compulsory redundancy.
2. The pay linkages of the staff to their member grades were confirmed and it was guaranteed that those would be the appropriate rates in future pension calculations (details supplied to Court).
3. The PESP and PCW contain clauses for increases in pay. It is due to delays in the negotiation of those clauses that the staff concerned have not received the increases.
4. Since privatisation, a number of staff have been made redundant. In accordance with agreements, some of those staff are now on the payroll of the Department of Agriculture. It is unreasonable that those remaining in the Company should receive lower pay than their displaced colleagues.
5. The staff in question are very hard-working and have made considerable concessions to the Company to enable it to turn its finances around. They deserve either their proper pay rates linked to their marker grades or an appraisal of staff numbers whereby agreement can be sought on a return to the Department.
COMPANY'S ARGUMENTS:
4. 1. The Company, as a private sector employer, came into existence in April, 1995. As a private sector employer it cannot be liable to claims allowed under the PESP when, as an employer, the organisation was not in existence during the lifetime of the PESP.
The claim lodged by the Union is, therefore, illogical. It is presented as a claim under national level agreement which had expired, and is being presented to an employer which was not in existence during the currency of that agreement.
2. The Company is not a public service body or employer. It is a private sector employer. The terms of the PCW, Clause 2 relate only to public service bodies.
3. The Union was fully aware of and intimately involved in the negotiations that led up to the sale of the business and the subsequent change in status of the employer from being the DDMB to Progressive Genetics. At no stage in these negotiations did the Union present, or indicate that it had an aspiration to make, a claim for an additional 3%. Rather, the only liability, agreed between SIPTU and the Department of Agriculture in Clause 31 of the tender document, requires that levels of pay and conditions of service will be no less favourable for individual employees after the sale than those enjoyed immediately prior to the completion of the sale.
4. Having bought the business in a declining market, the Company has honoured all its commitments under the tender document. Within the administration area, the employer inherited, and has maintained, relatively high pay rates despite the need to restructure (details supplied).
5. The competitive position of the Company has already been seriously undermined by a number of factors, i.e., a general decline in first insemination demand, and the removal of the Company's monopoly position due to the recent Supreme Court judgement on licensing within the business (details supplied). At a time when the Company is paying its staff rates considerably in excess of its competitors, it cannot accept a further 3% increase in costs.
RECOMMENDATION:
Having considered all of the information before it, the Court is satisfied that the new Company did not commit to the ongoing maintenance of pay and conditions of employees transferring to the new Company. The Court is satisfied that the intent of the agreement was that their terms and conditions would be no less favourable than those which applied immediately prior to their transfer.
In relation to the claim under the pay agreements, the Court recommends that this be reviewed in April, 1998, when the effect of the recent Supreme Court decision on licensing, and the financial performance of the Company, will be clearer.
Signed on behalf of the Labour Court
Finbarr Flood
17th of October, 1997______________________
M.K./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.