FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ANGLO IRISH BEEF PROCESSORS (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. (1) 3% under Clause 3 of the Programme for Economic and Social Progress (PESP);
(2) Sick-pay scheme;
(3) Pension scheme.
BACKGROUND:
2. The Company is involved in the slaughtering and processing of beef, throughout its 9 plants, for the domestic and export markets. The first issue in dispute, the claim for the 3% increase under Clause 3 of the PESP, was before the Court in November, 1992. In Labour Court Recommendation No. LCR13880, the Court found that the Company was in no position to concede the 3% and recommended that the Unions should not pursue the claim "until the future of the Company is more firmly assured". The Unions contend, now, that the Company has returned to profitability and the 3% should be paid retrospectively. The Company's position is that, due to various problems in the industry, it is not in a position to pay the 3% increase. Regarding the sick-pay and pension schemes, which the Unions are seeking in line with the national agreements, the Company's position is that it is not out of line with the rest of the industry in not having either and, accordingly, the Unions' claim cannot be conceded.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission at which agreement was not reached. It was referred to the Labour Court, on the 1st of March, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
The Court carried out its investigation on the 25th of May, 1999.
UNIONS' ARGUMENTS:
Clause 3 - of the PESP:
3. 1. Since the previous Court hearing the Company has continued to make profits while most of the workforce are on a 2/3 day week. Their pay is minimal and while the 3% would make some difference to them it would represent only a very small cost to the Company. As one of the largest employers in the industry, the Company can well afford to pay this increase and it should do so retrospectively, as the workers have been out of pocket for the best part of 8 years.
Sick-pay scheme:
2. Any worker who is unfortunate to be ill is entitled to the comfort of knowing that he/she and his/her family will not go short. When taken in tandem with Social Welfare payments, the actual expense to the Company regarding sick-pay is minimal. Most reputable employers who had no sick-pay scheme have provided for a sick-pay scheme under Partnership 2000 or one of its predecessors.
Pension scheme:
3. All the workers in the Company's plants should be covered by a scheme similar to the scheme in operation in the Company's Rathkeale plant (details supplied to the Court). This could be achieved by extending membership of the scheme to all employees or by establishing separate similar schemes at each site. Pensions are no longer a fringe benefit and are an essential prerequisite to any employment contract.
COMPANY'S ARGUMENTS:
Clause 3 of the PESP:
4. 1. When the matter was previously before the Court the Company's argument that it was not in a position to consider any cost increasing claims until its future was firmly assured was accepted. This condition has not been met. There is still no scope for cost increases in the Company's operations. It is self-evident that the Company's position does not fulfil the exceptional criteria required under the terms of Clause 3 as evidenced by the current state of both the Company's markets and the industry in general.
Sick-pay scheme:
2. The Company is not in a position to concede the introduction of a sick-pay scheme as this will inevitably lead to an increase in costs. In 1998, absenteeism levels reached 50%. To date, in 1999, the average absenteeism level is 12% with variances of between 6% and 28% in any one week. This is an unacceptable high level of absenteeism and one which would only increase with the introduction of a sick-pay scheme as sought by the Unions. A further consideration is the prevalence of short-time working at the Company's plant. This situation complicates the matter inordinately and would, in effect, produce an unmanageable scenario.
Pension scheme
3. Similar economic arguments apply in respect of the claim for the introduction of a pension scheme as apply to the other elements of the claim. The Company is not out of line with other operators in the industry and cannot make any concessions in this regard.
4. In common with all the other players in the beef industry, the Company is facing a volatile and uncertain period in the short to medium term. The position is clearly outlined in the McKinsey report on the beef sector. Unlike some other beef processors, the Company relies solely on this sector for its business and does not have the comfort of a diversified product range to cushion the impacts of falling prices in this particular market. Its operating margin in 1998 of just 1.8% is very low and could be eliminated very easily if current trends continue.
RECOMMENDATION:
On the three issues before it the Court finds as follows:-
1.Clause 3 of the PESP
The Court is satisfied that the Company's profit position has improved since the Court, in 1992, found that the Company "as matters presently stand" was not in a position to concede the 3% claimed. The Company failed to supply the Court with financial figures to support its arguments. However, it did inform the Court of the profit figure for last year.
While recognising that the industry is going through changing trends and that it is in an extremely competitive business, the Court, based on the information before it, and taking into account the full extent of LCR13880, recommends that the parties enter into discussions to agree on changes that would allow payment of the 3% on a quid pro quo basis.
2.Sick-pay scheme
The Company has highlighted high absenteeism concerns, difficulties in designing a scheme given the work patterns of employees and, in particular, the cost factor involved when rejecting the Unions' claim.
The Court is of the view that the employees should have some cover for certified sick-leave.
The Court would be concerned that the current level of sickness absence, as outlined, would deteriorate if a scheme was introduced. The Court recommends that the Company enter into discussions to agree a sick-pay scheme and that the Unions, in return, agree procedures to address the Company's concerns in relation to absenteeism. Any agreed scheme to be subject to review after two years.
3.Pension Scheme
The Court recommends that the Company enter into discussions with the Unions on introducing a pension scheme. Options to minimise the cost to the Company to be explored and agreed by the Unions.
Signed on behalf of the Labour Court
Finbarr Flood
25th June, 1999______________________
M.K./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.