FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : UNITED DRUG (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Mr Rorke |
1. Dispute concerning the inclusion of overtime allowance into basic pay and conditions attaching thereto.
BACKGROUND:
2. The dispute arises because of different interpretations of an agreement reached between the Employer and the Union in relation to an enhanced pay rate. In late 1997, United Drug Company took over Dublin Drug Company, and, in relation to the drivers, the Dublin Drug employees had a basic rate which was significantly higher than drivers in United Drug. The Union sought parity in this area and following numerous meetings held at local level a memorandum from Management was issued in October, 1998 (details supplied to the Court) outlining an offer which was being made to United Drug drivers recognising their difficulty vis a vis the other drivers, and which stated that
"the rate of basic pay would be increased to include the
flexibility bonus for all employees and also to include
Overtime A in the case of drivers."
Overtime A (£20.88 per week) is an allowance which drivers receive in respect of being required to work beyond their normal finish time (5.30 p.m.) up to 6.00 p.m. The allowance equates to 5 days x 30 minutes pay at time-and-a-half. The drivers receive this allowance regardless of whether they work beyond 5.30 p.m. or not. Under the system in operation at United Drug overtime at time-and-a-half only becomes payable from 6.00 p.m. Former Dublin Drug drivers are paid overtime from 5.30 p.m. The Union voted in favour of accepting the Employer's offer. The Union interprets the offer as incorporating the Overtime A into the basic, meaning that overtime payments would be payable from 5.30 p.m. The Employer stated that the intention of the offer was to increase the
basic rate but to maintain the arrangement whereby the employees were obliged to work 30 minutes beyond the normal finishing time if required. Therefore, the Employer stated overtime payment would still continue to be paid from 6.00 p.m. In response to the Union's claim that overtime would be payable from 5.30 p.m., the Employer issued two further memoranda in November, 1998 which gave its interpretation of the new arrangements. The Union has refused to recognise the legitimacy of these documents and stated that what it had agreed was the first document dated the 8th of October, 1998 which had no specific mention to the 'Overtime A' arrangements continuing. Local discussions failed to resolve the issue.
The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 27th of January, 1999. Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 8th of February, 1999. A Court hearing was held on the 3rd of August, 1999.
UNION'S ARGUMENTS:
3. 1. During all discussions both at local level and under the auspices of the Labour Relations Commission the efforts involved always emphasised moving the United Drug wage rates towards those obtaining in Dublin Drug to eliminate the difference as much as possible or completely. The hours of work were to remain unchanged. The October 8th document is the agreement negotiated and accepted by the workers concerned.
2. The Company was aware that by putting overtime allowance into the drivers' basic rates it increased the basic rate, thereby increasing the overtime rates and that the new overtime rates applied from normal finishing time of 5.30 p.m.
3. Negotiations took account only of changes in the rates. The hours of work were not to be changed. Yet the Company now states drivers are on a flat rate until 6.00 p.m. in return for the new rate they have to work a 40 hour week, however, pay slips and all other documentation confirm their working week to be 37½ hours. It is inconceivable that the Company would understand that drivers with major problems relating to wage rates would agree to work 40 hours while all other employees (including Dublin Drug drivers) would be working 37½ hours.
4. The Company was always aware that the workers concerned aspired to equality of wage rates. If the Company required something else in the document it should have been included in the October proposals, voted upon and accepted by the workers, instead of trying to change the agreement. The agreement was only a partial resolution of the wage problem, the Union has consistently informed the Company, that its aim is to totally eliminate the difference in wage rates. Even with the implementation of the October agreement there still remains a difference of £19.00 per week in wage rates. The agreement as set out in the document of October must be honoured by the Company.
COMPANY'S ARGUMENTS:
4. 1. The Union's initial claim arose as a parity one. It was rejected by the Company on the grounds of being cost-increasing. In a genuine effort to resolve difficulties, the Company put forward what it believed to be more than a reasonable alternative which was in accordance with the Union's position at several previous meetings. The Company reserved the right to withdraw the offer in the event of rejection. The Company's proposal, as it understands it, has been in operation since the initial vote and the Union has not officially indicated rejection of same. In the event of such rejection the Company continues to reserve its right to withdraw its proposals in their entirety.
2. Management does not accept that the Union could have reasonably interpreted the Company's proposal in the manner stated, given that, prior to workers' voting, a Company director met with the Union's shop stewards including the drivers' representative and clearly informed them that the inclusion of drivers Overtime A in basic pay still meant that additional drivers' overtime would not commence until after 6.00 p.m., thus ensuring that this matter was clarified and fully understood. The Company is not asking drivers to operate any differently than at the time the offer was made.
3. The effect of this offer has been of real benefit to the employees of United Drug. The inclusion of flexibility in the basic pay of all employees of United Drug - Dublin and Overtime A for drivers means increased pension contributions, sick pay (as flexibility was not included in sick pay) and the basic rate on which overtime is calculated. Inclusion of Overtime A in basic rate has already given a 10% increase and flexibility inclusive of a 13% increase in overtime earnings for drivers in Dublin. The total additional cost already incurred by the Company is significant, for no extra productivity. This is simply not sustainable in such a competitive environment. If the Union has already accepted that the principle of flexibility still applies, post its inclusion in basic pay for drivers, how can it then reasonably not accept that the same should apply to Overtime A.
RECOMMENDATION:
This dispute came before the Court by way of a request for interpretation of an agreement on the inclusion of "overtime A allowance" in basic pay.
The allowance in question was introduced in consideration of a liability on the part of drivers to work as and when required between 5.30 p.m. and 6.00 p.m. The proposal to incorporate the allowance in basic pay, in settlement of an ongoing dispute on parity, was initially formulated and put forward by the drivers themselves. In that proposal it was not made clear that a change in the conditions attaching to the payment was also sought. In consequence, this point was not addressed in the Company's formal offer of the 8th of October, 1998.
The Court considers it regrettable that the parties were apparently negotiating at cross purposes in their final attempt to resolve the parity issue. However, the Court cannot, by way of interpretation, imply a term into the agreement which the parties themselves did not include.
In these circumstances the Court cannot accept the interpretation placed on the agreement by the Union. The Court interprets the agreement as leaving unaffected the requirement for drivers to work as and when required between 5.30 p.m. and 6.00 p.m.
Signed on behalf of the Labour Court
Kevin Duffy
17th August, 1999______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.