FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FULFLEX INTERNATIONAL LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. (1) 1988 Productivity Agreement. (2) Pension Scheme.
BACKGROUND:
2. The first issue in dispute relates to the interpretation of the 1988 Productivity Agreement regarding the production output levels in the calender area. The Company states that an 8.5% productivity payment was paid in 1988 to achieve a target output of 150 tons of calendered product in a five day week without overtime. The Union contends that the agreement provided for machine speeds which would give an output of three or four shells per hour. In early 1998 the Company informed the Union that it wished to increase processing speeds from three to four shells per hour up to five shells per hour in some instances. It would, however, remain within the agreed target of 150 tons. The Union stated that it was not willing to accept change being imposed on its members but would engage in discussions on a new 1999 business plan. The issue was the subject of a conciliation conference at the Labour Relations Commission on the 10th of February, 1999, at which agreement was not possible.
The second issue in dispute concerns the Union's claim for a 3% indexation of the Company's pension scheme. It is a defined benefit scheme which provides two thirds of pensionable salary and is integrated with social welfare. It provides a death in service benefit of four-times salary and, following the implementation of Labour Court Recommendation LCR15875 in 1998, it includes spouses' pension benefit. LCR15875 also recommended that "the parties meet to explore whether a scheme to include index linked pensions even to an agreed minimum level, can be financed by the parties, in the future."
Agreement could not be reached at local level discussions or at a conciliation conference under the auspices of the Labour Relations Commission on the 23rd of June, 1998. The pension scheme was one of four issues investigated by the Labour Court on the 15th of December, 1998. Following receipt of Labour Court Recommendation LCR16060 the Company proposed the introduction of a Supplementary Pension Plan instead of indexation. The Union rejected the proposal.
A further conciliation conference was held on the 10th of February, 1999, under the auspices of the Labour Relations Commission. As agreement was not possible the dispute was referred to the Labour Court on the 28th of April, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute in Limerick on the 12th of May, 1999.
UNION'S ARGUMENTS:
1988 Productivity Agreement:
3. 1. The 1988 Productivity Agreement clearly specifies processing rates of three or four shells per hour. The Company, therefore, has not got a right to increase these specific and clear work standards from four to five shells per hour.
2. If members are expected to implement changes which lead to significant gains for the Company, they should be entitled to share in this gain by way of Gainshare or Productivity bonus.
3. The workers will not be dictated to by management but are available to discuss any 1999 business plan. The Company would be expected to engage and involve the members fully and advise them of the specific implications of the plan.
Pension Scheme:
4. The Union's expert pensions advisor fully evaluated the Company's proposal of a Supplementary Plan and advised the Union that the proposal fell far short of indexation or of being an equitable solution to this dispute.
5. The Company is a highly profitable company which can well afford the indexation of members' pension schemes. The Company has no problem with providing a more equitable scheme for its members of staff who enjoy a free pension plan.
COMPANY'S ARGUMENTS:
1988 Productivity Agreement:
4. 1. The 1988 Agreement provides for a total plant output of 150 tons per week from the calender. The Company is not seeking to increase the output but to increase calender speeds. New automated shell handling equipment will more than offset any increased workloads.
2. Under the 1988 Agreement the Company may make changes to achieve the specified targets. The Agreement states "The Company may have to alter calender speeds" and "An increase ... which does not increase the workload of employees will not be a basis for a future productivity claim". The Company has already paid an 8.5% productivity payment to the claimants.
3. The Company is facing severe international price competition, and with the distinct possibility of losing its key customer, as has happened to Fulflex' sister company in the USA, the Company must critically restore its efficiency levels without further cost increases. Wages and benefits are already commensurate with the very best in the Mid-West region and are much higher than those of both competitors and sister companies in the Fulflex Group.
Pension Scheme:
4. Having taken professional advice the Company has offered to introduce a separate Supplementary Plan. The funds accumulated could be applied to any of a range of possible benefits, including indexation, as desired by the member on retirement, subject to the rules and trust deed. The Company would contribute up to a maximum of 1% where the member contributes 2% of pensionable salary.
5. The introduction of the spouses' pension and the offer to introduce and contribute to the Supplementary Plan meets all legitimate commitments as regards pension improvements under the Partnership 2000 programme. The Company cannot afford to further increase its already high cost base as it could result in the transfer of production activities within the Group.
RECOMMENDATION:
1988 Productivity Agreement
The Court has given serious consideration to the written and oral submissions of both parties. The Court is satisfied that the Company has the right to expect increased processing speeds in the calendar section so as to achieve an output of 150 tons, in accordance with their Productivity Agreement of 1988. As part of that agreement an 8.5% productivity payment was paid and continues to be paid. The Court is satisfied that the 1988 agreement covers this situation and it is not necessary to re-negotiate this agreement. The Court is also satisfied that additional payments are not warranted for this increased output.
To allay the fears of workers, when the new speeds are established, if workers believe that the workload has increased, a facility should be offered to a trade union appointed industrial engineer to assess the situation. There is a need to verify the times involved in the new speeds using the new automated shells, in a production environment as distinct from a trial. A monitoring group should be set up internally to look at the increased production on all sections. This should be carried out as a matter of urgency.
Pension Scheme
The Court notes the Union's acceptance of the Company's proposal with regard to the supplementary pension scheme, subject to the Company's offer being increased to a company contribution of 2% to the scheme. The Court recommends acceptance of the offer on the supplementary scheme subject to a total contribution of 3% being paid into the scheme on behalf of members, to be financed equally by the parties (employer contribution 1.5%; employee contribution 1.5%).
Signed on behalf of the Labour Court
Caroline Jenkinson
22nd June, 1999______________________
D.G./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.