FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ERIN FOODS - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr McHenry Worker Member: Mr Rorke |
1. Interpretation of agreement.
BACKGROUND:
2. The dispute before the Court concerns the interpretation of an agreement reached between the parties on the 11th of April, 1997, with the assistance of the Labour Relations Commission.
In early 1997, a major dispute developed in Greencore in respect of the rates of pay of workers employed by Irish Sugar and Erin Foods, At that time it was considered that Erin Foods was in a vulnerable situation and in order to protect its position, the Union agreed to make a separate agreement for Erin Foods.
Item 3 of the agreement provided for local talks to finalise details for implementation of the "Improvement Programme" and for an increase of 20 pence per hour effective from the date of acceptance of the agreement.
Implementation began in May, 1997. In early 1998, as Phase 1 of the "Improvement Programme" was nearing completion, local discussions took place at which the Company outlined the urgency of completing phase 1 and moving on to phase 2. The Union claimed further payment on the basis that phase 2 is not covered under the 1997 agreement.
The dispute was the subject of a conciliation conference held under the auspices of the Labour Relations Commission. As agreement could not be reached, the dispute was referred to the Labour Court on the 13th of May, 1998 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place in Thurles on the 22nd of September, 1990. The first date suitable to both parties.
UNION'S ARGUMENTS:
3. 1. It was always the Union's understanding that the 20 pence per hour increase was for a return to work and phase 1 of the "Improvement Programme".
2. As part of the agreement the workers agreed to a divergence in pay rates between Erin Foods rates and Irish Sugar. This divergence in pay rates leaves the workers concerned between 60 pence and £1 per hour less than their colleagues in Irish Sugar.
3. The workers have already made a substantial contribution to the Company under the agreement. Implementation of phase 2 of the "Improvement Programme" can only proceed if further increases are forthcoming.
4. The Union considers that the Company's proposal in relation to a self financing productivity deal may help to resolve the problems in respect of phase 2 and phase 3 of the Improvement Programme. In this regard the Union has suggested that the Irish Productivity Centre assist the parties.
COMPANY'S ARGUMENTS:
4. 1. The Company operates in a most competitive sector of the retail food market and depends for its existence on its ability to :-
(a) compete with two major multinationals in the home market and
(b) compete with major manufacturers in the United Kingdom and Continental Europe for a share of the "own label" business of huge
supermarket chains in Britain and Ireland.
2. The "Improvement Programme" was put in place in order to secure the business, build it for the future, streamline the operation and reduce unit cost. The proposals detailed in the letter of the 11th April, 1997 are clear and unambiguous. The parties to the agreement were fully aware that the increase of 20p per hour in the basic rate of pay, together with the £500,000 provided for early retirement and voluntary redundancies, was the limit to which Erin Foods could go in the context of the "Improvement Programme".
3. In the context of the completion of the "Improvement Programme", Greencore Group agreed to provide capital investment of £2.1m - the highest single figure committed to Erin Foods. It would not have entered into this investment if it did not believe it had an agreement on the total programme.
4. The failure to complete the "Improvement Programme" has already worsened the Company's competitive position and business continues to be lost. The continued preoccupation with defending the status quo and the deliberate frustration of any moves to make the changes which are absolutely essential if the business is to compete in an ever-changing market will put jobs at risk.
5. Following completion of the "Improvement Programme", the Company has agreed to enter discussions on a self-financing productivity agreement.
6. Management entered into the agreement of 11th April, 1997 in good faith. It has committed the financial investment as part of that agreement. Without the completion of the "Improvement Programme" unit costs will remain too high with consequent risks to employment.
RECOMMENDATION:
The Court is asked for an interpretation of an agreement reached between the parties in meetings which were chaired by an official of the Labour Relations Commission. It seems extraordinary to the Court that the parties have not formally sought his clarification on what was intended by the agreement, given that he was totally involved at the time.
Having considered the written and oral submissions by the parties, the Court recommends that the Chairman, be asked for his interpretation of the part of the agreement in dispute and that his clarification be accepted by the parties.
Signed on behalf of the Labour Court
Finbarr Flood
20th October, 1998______________________
F.B./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.