FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MUSGRAVE CASH AND CARRY LIMITED (LIMERICK) (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 O'Neill |
1. Buyout of the Company's productivity scheme.
BACKGROUND:
2. Musgrave Cash and Carry Limited is a wholesale company which originated as a family grocery business in 1876. At present, it has six branches nationwide, employing a staff of approximately 500. The Limerick branch was established in 1868 and employs 58 .
A productivity-based bonus scheme has applied in the Company's Limerick branch since 1989. The Company agreed to the scheme on the basis of union agreement on flexibility and interchangability. Earnings from the scheme have averaged �170 per employee per annum, paid quarterly. The workers are unhappy with the scheme mainly on the grounds that the earnings from the scheme were not commensurate with the concessions made by them. They argue that it was their understanding from the start that the payout from the scheme should be nearer to the optimum target of �300 than has been the case. They cited, in particular, the 1996 payout which amounted to �65.
The Union gave notice to the Company in a letter dated the 17th of July that it would be withdrawing from the scheme with effect from the 1st of September which would also mean withdrawal from the agreement on flexibility and interchangability. The Union extended this deadline to the 7th of September to facilitate local negotiations which centred on a buyout of the productivity agreement. The Union claimed a figure of �600 net and the Company offered �350 gross, which the Union rejected.
The workers concerned withdrew their co-operation on the agreement on the morning of the 8th of September. They resumed normal working on the basis of an early conciliation conference taking place. A conciliation conference took place on the 10th of September, 1997, under the auspices of the Labour Relations Commission. The Company made an offer of �400 gross which was rejected by the Union. Agreement was not reached and the dispute was referred to the Labour Court, on the 11th of September, 1997, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 25th of September, 1997.
COMPANY'S ARGUMENTS:
3. 1. The actions of the workers are in breach of Article 14 of the Company/Union Agreement which states that if a matter of dispute is unresolved following discussions between the Company and the Union,
"...it shall be referred to the Conciliation Service of the Labour Court or a Rights Commissioner for further discussion, whichever is more appropriate. Failing a solution, the matter shall be brought to a full Labour Court investigation.No strike, official or unofficial, lock-out or any form of industrial action shall be embarked upon by either party while a matter of dispute is being processed through the above procedure" .
The Union's actions throughout this dispute have shown a blatant disregard for an agreement into which both sides have entered.
2. The Company is operating in a sector which is characterised by competition which is aggressive in nature. The Company requires full flexibility and co-operation from its employees, in order to maintain a viable operation in Limerick. The industrial action which took place on Monday, September the 8th, and which has been on-going since the 11th of September, has imposed significant costs on the Company and has necessitated extensive overtime being worked on an inefficient and uneconomical basis. Good customer relations in an operation such as this is of paramount importance and cannot be underestimated. The Union's behaviour since industrial action commenced has had a serious negative impact on the public perception of the Company as a customer friendly establishment.
3. The Union's actions since the commencement of this dispute are entirely at odds with this definition of partnership under Partnership 2000. While the Company was at all times prepared to discuss the matter fully with its employees, the Union chose to reject the concept of partnership and instead reverted to a confrontational approach. Such behaviour does nothing to secure the competitiveness of the enterprise and seriously threatens its future viability and prosperity.
4. Of all its branches nationwide, the Limerick operation is the only one in which the Company has experienced a lack of both flexibility and co-operation from employees. Over the past nine years, the Limerick branch has been the least efficient and productive of all the Company's branches on seven occasions.
5. Half of employees involved in the current dispute joined the Company subsequent to the introduction of the productivity bonus scheme in 1989. Many of these employees have signed contracts which include flexibility as a condition of employment.
6. The Company has, at all times, been willing to discuss matters in relation to the productivity scheme and has no difficulty with the Union's industrial engineer carrying out an examination of it.
7. The Company provides terms and conditions of employment which are far in excess of these offered by other employers in the wholesale sector. The Company has just received an award from the Irish Association of Pension Funds for the best national pension scheme. The scheme is non-contributory and is provided for all permanent full time and part time employees. In addition, the Company has a profit-sharing scheme for its staff.
8. In view of recent developments, the Company put forward a proposal to buy out the existing scheme. An offer of �400 (gross) has been made in this respect. Since the scheme was introduced in 1989, the Company has paid an average of �113 per annum to each employee in the scheme. The buy-out proposal of �400 (gross) represents over three and a half times this average annual payment which is far in excess of the level of compensation which is typically awarded in such situations.
UNION'S ARGUMENTS:
4. 1. The Company was aware since 1992 that there was a problem with the productivity scheme but chose to ignore it until 1997. When a report by the Irish Productivity Centre on the scheme was issued, both the Company and the Union in the Cork Branch rejected it but the Company neglected to inform the Union or its members in Limerick of any such report.
2. The Company, subsequently, brought in Price Waterhouse who advised that a buyout would be the best option for the Company. The Company made an offer of �350 gross at local level and increased this to �400 gross, at conciliation.
The workers have not asked the Company for extra money as they just sought to pull out of the scheme altogether. When the Company offered a buy-out, the workers indicated that they were willing to consider any reasonable offer.
3. Between �900 and �1,200 gross is not too much to ask as a once-off payment, bearing in mind the level of flexibility and co-operation expected of the workers and the fact that other companies are paying substantial bonuses on a yearly basis for the flexibility equivalent to that being given by the workers in this Company.
RECOMMENDATION:
The Court must express its grave concern at the continuation of industrial action while this dispute was in course of referral to it.
The action is also contrary to the Company/Union Agreement and the current Partnership 2000 Agreement.
The Court recommends that the productivity scheme in question continue for the time being. The Company has agreed that it be examined by an industrial engineer of the Union, and this examination should take place over the period between the issue of this Recommendation and Christmas and take into account the effects of absenteeism on its operation.
The Court further recommends that the industrial action cease immediately, even prior to any ballot which may be required.
Signed on behalf of the Labour Court
Evelyn Owens
23rd of October, 1997______________________
M.K./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.