FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BAUSCH & LOMB IRELAND (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. Dispute concerning selection for lay-offs.
BACKGROUND:
2. The Company manufactures contact lens and employs 1,350 workers in Waterford. Due to a downturn in demand for its product the Company has been forced to cut production in its Process I Department. This reduction in output has necessitated the cessation of weekend working in this process, which has resulted in placing temporary workers on lay-off. The Union objects to the Company's stance in refusing to apply seniority in the current selection process and to transfer workers from the Process I Department to jobs in other departments on the weekend shifts which are filled by less senior workers. The Company maintains that it is within its rights in accordance with the Company/Union agreement to place workers on lay-off and that seniority applies strictly in the case of permanent workers. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 16th of March, 1999.
Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 22nd of March, 1999. A Court hearing was held on the 22nd of April, 1999.
UNION'S ARGUMENTS:
3. 1. A number of meetings took place in the run up to the lay-off between the Union and representatives of the Company. Throughout these meetings the issue of selection for lay-off was discussed. It was the Union's view that where skills were equal between temporary employees, then seniority would be used as the deciding factor. This was not a new concept. In late February, the Company agreed that this method of selection would be used and that any of the temporary employees in Process I who had the same skills as less senior temporary employees in another process would be transferred. The actual affects of this agreement would mean that senior temporary staff skilled in cosmetic inspection and APL operation would be transferred to the RPIII area, displacing less senior temporary employees.
2. Subsequently, the Company held communication sessions with the workforce and the issue of transfers between departments was raised from the floor. The Company responded that under no circumstances would any temporary employees be transferred from Process I to RPIII. The Company also stated that the June, 1996 agreement gave then the right to do this. This was completely at odds with what the Company had previously agreed with the Union, and led to confusion among workers due to be laid off.
3. The lay-offs have now taken place, and not only did the Company refuse to transfer senior suitable workers to other areas, but also retained less senior temporary workers within the same area. The workers concerned are equally suitable for these jobs and in negotiations which led to the 1996 agreement the Company confirmed to the Union in writing that it intended to apply seniority where seniority was equal. There would not be a cost to the Company which initially agreed to do this and then changed its mind.
4. The Union had reached an agreement with the Company one month prior to the lay-offs. Any options or alternatives put forward by the Union were all in line with the June, 1996 agreement relating to the laying off of temporary workers. Prior to, during and after the negotiations of the 1996 agreement the Company's position was that where such levels/process training were equal, then seniority will apply.
COMPANY'S ARGUMENTS:
4. 1. Bausch and Lomb was, in the mid-1980s, the largest producer of contact lenses, controlling 52% of the then market. In the intervening few years the level of competition has dramatically increased. At present with 15% of the market, the Company is placed only third largest in the market. In that time the business has transformed from a relatively low volume, high margin one, to a high volume low margin business. The Company has also, in that fiercely competitive climate, found forecasting demand for its products difficult. For this reason its trend, in recent years, is to employ higher numbers of temporary staff than the Company had hitherto. The external market is one level of competition for the Company as a corporation. In Waterford it also faces internal competition for production of the Company's products.
2. When, 4-5 years ago, the Company was losing one of its key products on the basis of uncompetitiveness on unit cost, it entered into discussion with the Union internally on the issues of flexibility, interchangeability and seniority. Rigidity was causing the Company to incur unnecessary cost in the movement of and retraining of workers. Fortunately in the case of that product, the Company together with its workers, turned the costs around and thus retained the product. It now employs 400 workers in that area.
3. The experience at the time highlighted where adherence to 'seniority' created serious cost issues, through training costs and low productivity. As such it showed that the Company was less able to respond to these market fluctuations. Subsequently, the 1996 agreement strengthened the seniority position of permanent workers, where previously there could have been exceptions to the strict seniority rule. In return for this the Union agreed to a two year service "window" within which lay-offs of temporary staff occurring due to business downturn would be effected on the basis of suitability, as determined by the Company. Point 5 on page 3 of the document is the relevant point and is clear and unambiguous. The Company employs the suitability criterion in order to absolutely minimise disruption and cost. The competition it faces is so fierce that anything short of this would compromise the future of products as manufactured on site; with even more serious affects on jobs.
4. The workers laid off are placed on a "recall list" and recalled as soon as vacancies occur. The Company always recalled the employees whom it has laid off and their service with the Company is uninterrupted where the period of lay-off is less than 6 months. Management believe that this recall commitment is fairly unique and are not vindictively selecting employees for lay-off, but do so on the basis of lay-off by department/area, in accordance with the agreement. The recall provision confirms the Company's commitment to the workers concerned.
5. The Company is a highly labour intensive industry and must seek as much competitive advantage as possible from this fact. The flexibility agreed in the agreement is just such leverage. The recent past experience where seniority was the criterion deciding lay-offs was disastrous in cost and human terms and led to domino effect displacement, and deviation from the current agreement will have very serious repercussions.
RECOMMENDATION:
While the written agreement of June, 1996, would seem to support the Management stance on temporary employees, the Union is adamant that there was a verbal agreement that "all things being equal, seniority would be a factor in the selection for lay-offs".
There is a clear conflict of evidence on how the agreement was supposed to apply.
Management's stance on this issue appears to be influenced by the operational and financial problems experienced in the past as a result of seniority being the criterion for selection for lay-offs.
The difficulties in this case were exacerbated by Management changing its original position on the lay-off selection.
Having considered all aspects of this case the Court recommends that the Company agree "subject to all things being equal" that seniority will be a factor in selection of temporary employees for lay-off in future, subject to the Union agreeing the necessary restrictions to address the Company's financial and operational concerns.
Discussions on this to be completed within weeks of issue of this recommendation.
Signed on behalf of the Labour Court
Finbarr Flood
3rd June, 1999______________________
T.O'D./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.