FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LOWE ALPINE SYSTEMS (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Dispute concerning compensation for loss of earnings.
BACKGROUND:
2. In July, 1997 following a Company re-organisation fourteen machinists were transferred from the packing line to a fleece line. The workers were guaranteed the 'red circling' of their average earnings from the previous line until mid-November, 1997. The idea behind this system is to allow workers to build up their skill level in the new area and avail of training so as that their bonus earnings will come up to the levels earned on the work from which they were transferred. The Union claims, however, that the transfer from the pack line disadvantaged the workers and that this became apparent when 'red circling' was discontinued. The Union maintained that high earning workers previously employed on the pack line continued to lose money on the fleece line. The Union claimed that following a study conducted between July and November, 1997 workers sustained an average loss of £1,000 per worker. The Union sought compensation for the loss. The Company stated that the 'red circling' of earnings for the thirteen weeks was reasonable, but that it could not fund additional compensation.
The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 8th of December, 1998. Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 8th of February, 1999. The Court investigated the dispute on the 31st of March, 1999.
UNION'S ARGUMENTS:
3. 1. The Union has calculated the losses of the workers concerned before and after the removal of the 'red circling' mechanism (details supplied to the Court) and while the loss for each worker will obviously vary overall losses are significant. The losses to the workers who have transferred are on-going.
2. The Company has proved that its current fleece line organisation and their ability to supply a continuous flow of work is not conducive to allowing even experienced machinists achieve their earning potential. This is evidenced by the fact that upon the removal of the red circling rate machinists suffer a significant loss of pay. Because these losses were foreseen by the workers they requested that they be allowed to join the significant monetary voluntary package given to general operatives in the Pack Area. Management refused the request.
3. There were significant cost savings made in the transfer of the pack line work to Asia. The Union does not concur with the notion that a multinational company should transfer to a lower wage economy as a cheap option while avoiding its responsibilities to long service workers in terms of savings accrued.
4. The workers concerned should be compensated for their loss and they should have their 'red circled' rates restored until such time as the Company puts in place the necessary training and work flow/organisational structure to allow these experienced machinists an earnings potential previously enjoyed.
COMPANY'S ARGUMENTS:
4. 1. The need for re-organisation within the Lowe Alpine Plant was a necessity. If this re-organisation had not taken place the future viability of the entire plant would have been put at risk.
2. The Company gave those transferring from rucksack to fleece ample time to get up to speed on their new production line. All employees who transferred across were given training in the production of fleece garments.
3. The allowances given at the time of transfer were generous. The Company made every effort to protect the bonuses of those moving across.
4. When transferring from the rucksack line to the fleece line the chance to earn bonuses was not removed but replaced. As before it was in the hands of each individual to achieve theses bonuses. From a comparison of the earnings April, 1998 - March, 1999, of the first fourteen machinists transferred, to their earnings of the last three month period spent on the rucksack line, it would appear that four employees are earning as much if not more on the fleece line than they earned on the rucksack line.
5. Interchangability of labour is fundamental to the continuing progress of the Company and the security of employment. This interchangability is referred to in Clause 14 of the Company/Union agreement which requires mobility and interchangability as a condition of employment. The transfer of employees from the rucksack line to the fleece line was a case in point where the interchagnability agreed in the Company/Union agreement was required to ensure the viability of the plant.
6. The Company has honoured all aspects of Partnership 2000.
7. The protection of average wages for thirteen weeks and the application of the training allowance at the time of the initial transfer compares favourably with a subsequent offer to those transferring across which was accepted in May, 1998.
8. Lowe Alpine is a highly competitive market. To accede to this claim would further undermine the Company's ability to survive into the next century.
RECOMMENDATION:
It is clearly in the interest of both parties to identify and resolve the underlying difficulty which has led to the drop in production and consequential loss of bonus earnings in this case. The Court recommends that the parties should undertake a joint work-study exercise for this purpose.
The parties should then meet as soon as the results of the work-study are available to consider whether further action is necessary in the matter.
Signed on behalf of the Labour Court
Kevin Duffy
12th April, 1999______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.