LCR16217

FULL RECOMMENDATION CD/99/130 RECOMMENDATIONNO.LCR16217 (CC98/1387) INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ICELAND FROZEN FOODS (REPRESENTED BY MASON, HAYES & CURRAN) - AND - MANDATE DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill

SUBJECT:
1. Pay.



BACKGROUND:

2. Iceland Frozen Foods commenced trading in Ireland in 1996 and currently has eight stores in operation. It employs approximately 260 people.

In June, 1998, the Company granted the Union recognition rights for workers employed in its store in Ballyfermot and the parties have been negotiating a procedural agreement since that time. Subsequently, recognition was extended to include workers in the Company's other stores.

During negotiations the Union sought the introduction of a pay scale based on service and experience to replace the existing structure which provides for a general rate, skilled rate and a rate for workers under the age of 18 years of age. In the context that it would not increase its overall pay expenditure the Company put forward a 6 point pay scale but agreement could not be reached on the issue of assimilation.

The matter was the subject of a conciliation conference held under the auspices of the Labour Relations Commission at which certain outstanding matters were agreed in relation to the procedural agreement. As agreement could not be reached on the pay issue the matter was referred to the Labour Court on the 19th of March, 1999, under Section 26 (1) of the Industrial Relations Act, 1990.

A Labour Court hearing took place on the 14th of June, 1999, the earliest date suitable to the parties. At the hearing it was the Company's understanding that the rates of pay were agreed and that the only issue outstanding was the question of assimilating staff onto the new pay scales. The Union's position is that no agreement was reached on pay scales or on assimilation and claims that pay should be in line with that which is paid by other grocery outlets in the Dublin area.


UNION'S ARGUMENTS:

1. It was always the Union's position that as a result of on-going negotiation with other relevant employers within the trade that the following changes would occur:-

i. Increased rates of pay, to take account of developments such as the national minimum wage.

ii. Annual progression for all staff , to take account of recent European Court judgments, which found against practices which discriminate against part-time workers.

iii. Immediate progression from the point to which the worker has been assimilated.

iv. Reduced number of points on the pay scale.

2. Since 1998, significant improvements have occurred regarding pay within the sector. Based on recent pay agreements within the trade, the Union is seeking the following 5 point pay scale.

Progression to be made on an annualised basis regardless of hours worked.

3. It is unacceptable for the Company to propose less favourable conditions for its employees than those enjoyed by other workers in similar employment.

COMPANY'S ARGUMENTS:

1. The Company is prepared to implement the 6 point pay plan (details supplied to the Court) on the basis that current employees on level 3 would move to level 5 in April, 2001, when their length of service catches up with their rate of pay. If the 6 point pay plan had been in existence at the time of recruitment, these employees would have commenced at level 1 and would not reach level 5 until April, 2001. Employees have been fortunate in being paid a higher salary since they joined the Company than the 6 point plan would have allowed for. The pay increase in April 1998 was 6%.

2. Newly recruited employees will commence on level 1 of the plan unless they have relevant experience with a major multiple retailer, in which case they may be recruited on levels 1-4.

3. Existing staff would be eligible to progress up the scale on the anniversary of joining the Company, annually in the case of full-timers, and biannually in the case of those in part-time contracts (or on completion of 1,950 hours if this is earlier than 2 years).

4. The rates of pay will be reviewed with effect from April of each year and increased in line with Partnership 2000 and thereafter with any national wage agreement in force.

5. The proposed plan is the fairest way of ensuring that any differences existing between current staff and new recruits can be ironed out over time. The Union's proposal is not a fair way of assimilating staff with varying lengths of service onto the 6 point plan.

6. It has been the Company's position all along that it is prepared to move to a 6 point plan only in the context of not having an increase in overall costs. The Union's proposal would result in an additional cost to the Company in excess of £200,000 over the next two years. The Company is not making a profit despite its efforts to establish a strong customer base. Whilst its sales performance is good, the operating costs are high. However, the Company's rates of pay for its employees are above average, compared to other retail industries. Accordingly, the Company submit that the 6 point pay plan as outlined, is the fairest and most cost effective method of implementing a pay scale.


RECOMMENDATION:

There appears to be some misunderstanding in this case as to the outcome of conciliation. It is the employer's understanding that the rates of pay were agreed and that only the question of assimilating existing staff onto the new scales remains at issue. The Union's position is that no agreement was reached on pay scales or on assimilation.

The Union claims that pay should be in line with that paid by other grocery outlets in the Dublin area. Originally, the rates prescribed by the Joint Industrial Council for the Dublin Grocery Trade were claimed and discussed at conciliation. The Union now say that in view of subsequent developments within the grocery distributive trade those rates no longer reflect the reality of what is being paid by the Company's competitors in Dublin.

In the Court's view the pay of those associated with this claim should be in line with that paid in analogous employments within the distributive trade in the Dublin area. This should be determined by reference to the generality of rates, including the JIC rates, the other conditions of employment applicable to staff in question and the economic circumstances of the Company. On the question of assimilation, this matter should be resolved between the parties as part of an overall agreement on pay. In addressing this point regard should be had to the need to avoid anomalies in scale progression between present and future employees.

Having regard to the apparent uncertainty as to the outcome of the last conciliation conference, the Court does not consider it appropriate to issue a definitive recommendation on the issues in dispute at this time. Rather, it recommends that the parties return to conciliation and make a further attempt to reach final agreement having regard to the views of the Court as set out above. Should the parties fail to reach agreement by the end of July, 1999, outstanding matters may be referred back to the Court for final recommendation.



Signed on behalf of the Labour Court



Kevin Duffy
28th June, 1999.______________________
FB/BCDeputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.