FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : HENRY DENNY & SONS LIMITED - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Dispute concerning the implementation of Phase 1 of Partnership 2000 and the Company's cost-reduction plan.
BACKGROUND:
2. The company is part of the Kerry Group and is involved in the slaughter and primary processing of pig meat at its plant in Tralee. In November, 1996 and January, 1997, following discussions which were held under the auspices of the Labour Relations Commission, the Company implemented the 39 hour week and paid workers the final phase of the Programme for Competitiveness and Work (PCW). In return the parties would engage in meaningful negotiations on the Company's cost-cutting plans. These negotiations were not successful. Subsequently, the Union submitted a claim for payment of Phase 1 of Partnership 2000 and sought that the negotiations on the Company's plan be held separately. Management rejected the claim, stating that pay restraint was essential until agreement was reached in relation to changes in work practices, conditions of employment and wages. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 4th of November, 1997. Agreement was not possible and the dispute was referred to the Labour Court by the Labour Relations Commission on the 17th of December, 1997. A Court hearing was held in Tralee, on the 18th February, 1998.
UNION'S ARGUMENTS:
3. 1. The Company's insistence on the introduction of a piece-rate or partially geared payment system means a reduced basic rate of pay and a higher scale for bonus payments. This is unacceptable to the workers.
2. The Union proposed that an examination be undertaken of pay structures, bonus schemes and general working conditions in the bacon industry. It also proposed a review of best practices in this Company with the help of the Company's and Union's industrial engineering departments. The Company rejected the proposal, yet it seeks to introduce a system in Tralee which is different to that prevailing in the bacon industry countrywide.
3. The Union cannot agree to lower conditions for workers at the Tralee plant. It would have serious repercussions for the industry nationwide. The issue of cost reductions has to be further discussed through conciliation
4. The First Phase of Partnership 2000 was due to maintenance workers with effect from the 1st of February, 1997 and to all other grades with effect from the 1st of March, 1997. The Company is profitable and can afford to pay the increases due. All other companies within the Kerry Group have honoured the basic terms of Partnership 2000.
5. The Company is deliberately trying to reduce pay rates at Tralee, having transferred approximately 100 jobs to a sister plant in Wicklow and paying approximately £50 per week less to workers there.
6. The workers concerned have given full co-operation to the Company in agreeing to the introduction of new methods and production lines at the plant (details supplied to the Court). Productivity has increased by 33% with a negative effect on workers' earnings. Productivity efficiency is at an all time high. The workers are entitled to receive the increase due under Partnership 2000 without further delay.
COMPANY'S ARGUMENTS:
4. 1. The Tralee plant has not maintained competitiveness over the years nor has if kept pace with changes in the industry both indigenous and overseas. The Union has maintained an intransigence to change and an unwillingness to assist both the Company and third party facilities, to develop the business into a viable and meaningful operation.
2. The Union has been single-minded in securing pay increases. It has, over many years, however rejected any necessary changes to labour overheads, work practices and payment systems. This has resulted in the Tralee plant being uncompetitive.
3. The Union has threatened industrial action in pursuit of its claim for payment of Partnership 2000 thus eroding any progress and goodwill achieved to date.
4. It is essential for the Company to restructure its payment system in order to compete in the market place. Foreign competitors, now supplying into Ireland in increasing quantities, operate with piece-rate payment systems. The Kerry Group has successfully implemented this system at other sites to the great advantage of both companies and workers. Its introduction would greatly increase competitiveness. The Company has outlined three options currently available to restructure the payment system (details supplied to the Court). However, it is willing to discuss all possible options.
5. There is an urgent need for an effective cost-restructuring programme at the Tralee plant in order to return to competitiveness. The commitments made by the Union in the context of the PCW have not been delivered or upheld to date. It is essential that agreement be reached on the Company's restructuring plan and that pay restraints be observed until such agreement is effective.
RECOMMENDATION:
Two issues were referred to the Court, namely the Company's proposals on rationalisation and the Unions claim for implementation of the pay terms of Partnership 2000.
Over a prolonged period the Company has been seeking agreement on measures which it considers necessary to maintain competitiveness and thus protect employment at its Tralee plant. Notwithstanding previous commitments on the part of the Union to engage in an intensive negotiation process from which the required cost reductions would be achieved, no progress whatever was made towards meeting that objective.
There is now, in the Courts view, a critical need for the parties to address these issues of viability and employment protection, with much greater urgency and commitment than has been demonstrated todate. The Court believes that the parties should immediately enter an intensive process to identify and implement a range of cost reduction measures which will secure the long term competitiveness of the plant and the employment of the workers concerned. Both wage and non-wage costs should be examined having full regard to the challenges posed by domestic and international competition.
This process may extend up to but not beyond the 31st of May, 1998. The parties should seek the assistance of the Labour Relations Commission in providing an Industrial Relations Officer (or other agreed facilitator to be funded by the Company) to work with the parties over that period. At the end of the process the IRO (or other agreed facilitator) should report to the Court on the progress of the negotiations and on any issues outstanding.
The Court will then determine (a) wither it should convene a further hearing and (b) whether it should issue any definitive recommendation.
With regard to Partnership 2000, the terms of that agreement should be implemented from the due dates.
Signed on behalf of the Labour Court
Kevin Duffy
25th March, 1998______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.