FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ALLIED SIGNAL - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. Dispute concerning issues related to improved efficiency.
BACKGROUND:
2. The Company is an automotive component supplier manufacturing turbine wheels in its Wheel Plant and also manufactures turbine blades for the aerospace industry in its Aerfoil plant. The dispute relates primarily to the Wheel Plant and concerns efficiency improvements which the Company claims are vital in order to ensure competitiveness, job security and the continued viability of the plant. The Company maintains that it is essential to get more productivity from the plant. A number of incentive plans were operated previously without success. The present incentive plan currently under discussion addresses what the Company considers are the key competitive areas of packed output and scrap which are the two contributors to closing the competitive gap. While awaiting the outcome of negotiations an interim plan was put in place which did not work, and as a goodwill gesture, the Wheel Plant paid out £5.50 p.w. (the average of the previous plan), irrespective of output or scrap figures. Local negotiations on the Company's incentive plan were not successful and the dispute was referred to the Labour Relations Commission. A number of conciliation conferences were held in November, December, 1998 and January, 1999. Following the final conciliation conference the main areas on which agreement could not be reached were as follows:
1. Buzzer to buzzer working/showertime
In return for a 2% increase in basic pay outside the terms of Partnership 2000 the Company requires workers to be in place of work for the start of their shift and work up to three minutes prior to the end of shift. The Company requires that showertime would only be appropriate to the three metalpur areas for 15 minutes after shift end for those workers who have done a full shift in those areas, and will be paid at the appropriate overtime rate. The Union contends that all workers have a right to take a shower during working hours.
2. Five day (Monday to Friday) work incentive plan.
The five day work incentive plan deals with targets, payment rates and timing, actual output levels and a safety net which provides for, inter alia, a payment of £5.50 in the event of minimum production required to produce a payment not being made due to reasons beyond the control of workers.
The Union insists that a minimum guaranteed payment of £5.50 p.w. be paid. The Union was agreeable to accepting the targets if the minimum payment was incorporated into the basic pay - a claim for another 2% in addition to the percentage increase on offer for buzzer to buzzer working.
Further agreement was not reached and the dispute was referred to the Labour Court by the Labour Relations Commission on the 21st of January, 1999. A Labour Court hearing was held in Waterford on the 9th of February, 1999. A letter recommendation was issued on the 23rd of February, 1999.
UNION'S ARGUMENTS:
1. The issue of basic pay needs to be addressed and the profit share scheme should be developed in a more equitable way with any future share mechanism. The Company, despite a commitment to do so has not addressed the issue of basic pay and profit share. It is essential to enhance basic pay as part of any reward structure.
2. The Company's proposal in relation to the elimination of the interim payment of £5.50 and showertime was rejected because the £5.50 interim payment plan effectively equates to 2%. The showertime was an integral part of the conditions of employment of workers and therefore, should be dealt with as a separate issue.
3. The Company offer did not reflect the contribution of the workforce and their commitment to change. They have given full co-operation to the Company with all Partnership and World Class initiatives.
4. In relation to the Wheel Plant Incentive Plan the Union contended that a "White Card" system should apply whereby employees would not be penalised for any production problems that could arise which were outside of their control, i.e. bottlenecks in the production cycle etc. The Incentive Plan as currently proposed would not deliver the appropriate rewards for workers.
5. (i) The Union seeks the 2% basic increase over and above Partnership 2000 backdated to 1st of September, 1998.
(ii) That the Company agree the following safeguards in relation to the operation of the Wheel Plant Incentive Scheme:
That no alternation of payment targets etc. takes place without prior negotiations and agreement of the Union.
That the scheme remain in place until replaced by negotiation and agreement. The Company commits to develop profit share proposal for implementation before the expiring of Partnership 2000. The 2% payment under Partnership 2000 Clause (iii) be brought forward to 1st January, 1999. Shift rate to be applied to Christmas and Summer bonus. Average bonus to be applied to holidays.
COMPANY'S ARGUMENTS:
1. The Company offered a base salary increase of 2% over and above Partnership 2000. Guarantee of a further 2% from 1st of July, 1999, on base salary with no strings attached. A new incentive plan with agreed targets giving the possibility of a further £40 per week in pay.
2. In return the Company asked that employees work from "buzzer to buzzer" and so stop the current practice of stopping work at least 15 minutes before shift end. The time was originally given for employees in dirty areas to avail themselves of a shower, and was then later extended to all employees. However, fewer than 10% of employees actually use the facility. As part of the current negotiations, at the request of the Union, the Company did concede paid shower time for those certain areas suggested by the Union. It was the Company's contention that the additional time spent by employees on the floor would greatly increase their ability to earn the payments possible under the incentive plan. Shower time is already paid for and the additional time spent on the floor would result in an additional payment under the incentive plan. The Union have asked for 2% for the removal of shower time which in effect means paying for it a third time - which the Company cannot entertain.
3. The Company also asked for a commitment to the implementation of World Class Initiatives, which also facilitates the ability to earn money under the incentive plan. Even though the incentive plan satisfies the requirements of gain sharing under Partnership 2000, the Company further offered to discuss sharing in any gains made from savings in the area of consumables (the discussion forum for this being the Joint Steering Committee).
4. The Wheel Plant has a significant competitive gap to close, up to 40% with some of its Asian competitors. The Company's current pay rates are already excellent and it compares very favourably with other companies in the area. The incentive plan gives further opportunity for enhanced earnings.
5. The Union's claim for an increase in the basic rates of 4% over and above Partnership 2000 and the introduction of the incentive plan is not an option for the Company as this would in effect increase base salaries in 1999 by 8.25%, plus the associated fringe costs.
RECOMMENDATION:
The Court considered the written and oral submissions made by the parties and is of the view that the parties have had insufficient discussion on these issues. However, the Court also understands the urgency attached to improving production and its need to focus on unit costs so that it may become more competitive.
The Court is of the view that the present difficult conditions in the Company have rapidly taken over from the concept of "What's in it for me", which has prevailed for the past seven years.
The Court recommends as follows;
- an increase of 2% in basic pay from the date of acceptance of this recommendation.
- the incentive plan devised by the company should be introduced without delay; the "interim payment" of £5.50 should remain as a fall back payment - if target figures are not met, (i.e. not in addition to the target payments).
- if, at the end of a three month period, the target figures are being met, then the issue ofbuzzer to buzzer workingshould not be pursued by the Company. However, if they are not being met, then the Union accept the requirement to workbuzzer to buzzeras part of this overall settlement.
- three months from the commencement of the new incentive scheme, the parties should meet to review the operation of the scheme. At this point if it is deemed necessary, the Court recommends, that the parties should consider seeking the assistance of a third party e.g. the Irish Productivity Centre. The issues may be referred back to the Court if the parties fail to reach an agreement.
- over and above the basic pay increase as outlined in Clause 2 (i) of Partnership 2000, the Company should pay 2% increase in basic pay in line with Clause 2 (iii) with effect from 1st July, 1999.
Signed on behalf of the Labour Court
Caroline Jenkinson
2nd March, 1999.______________________
TOD/BCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.