FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CADBURY IRELAND LIMITED - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Dispute concerning Vision 2000 and restoration of a differential.
BACKGROUND:
2. In 1997 the Company introduced its Vision 2000 plan which provided for cost-reductions and improved efficiencies by developing new work methods. The plan included a capital investment programme, training and development and new product development. The Company completed an agreement with the Crafts Group in June, 1998 and with the Trades Helper Group in November, 1998. The benefits arising from the Craft agreement were significant changes in work practices, cross group flexibility, a reduction in craft numbers, increased output. The Trades Helper Group which operated mainly as a support for the Craft Group was eliminated.
On-going discussions took place with the production Group of Unions culminating in a set of proposals being put by the Company, in September, 1998.
These were rejected following a ballot of the workforce. The dispute was referred to the Labour Relations Commission and numerous conciliation conferences were held in late 1998. While agreement was reached at conciliation on a significant number of issues, agreement could not be reached on the Unions' claim for a pay increase of £45 per week for Grade G Production Operative (the highest grade) and pro-rata for the other grades; one extra days holiday doubling of shift and grade guarantees and exit payments. Subsequently the Unions indicated that they sought the full restoration of the pay differential with the craft rate. The dispute was referred to the Labour Court by the Labour Relations Commission on the 3rd of February, 1999. A Court hearing was held on the 5th of February, 1999.
PAY DIFFERENTIAL
UNIONS' ARGUMENTS:
3. 1. The agreed pay differential of a production Grade G rate is 83.3% of the day craftworker's rate or the day craftworker's rate is 120% of the production Grade G day rate.
2. When the Company announced its proposals in 1997 on its rationalisation plan "Vision 2000" management stated that it would be negotiated with production, craft and trade helpers unions and would not be implemented for any one group until agreement was reached with all groups.
3. In June, 1998 the Company entered into an agreement with the craft unions on Vision 2000 which resulted in the day craft rate being increased to £29,000. The production Grade G is £15,906, a difference of £13,094 per annum.
4. The agreed differential was between the various unions and the Company in order to ensure pay stability and fair treatment on pay between the groups. The June agreement is in breach of this provision. Neither the Company not the Craft Group have the right to change or amend the differential without the agreement of the Production Group.
5. As a result of the Company/Craft Union agreement a shortfall of £8,251 exists between craft and production operative rates (because 83.3% of £29,000 gives a rate of £24, 157 not £15,906). It should be restored retrospectively to the date of the agreement.
COMPANY'S ARGUMENTS:
4. 1. As far as the Company is concerned the differential has not been disturbed - the basic craft rate is £18,995.94 and Grade G production is £15,829.33 which represents a 120% differential.
2. The average earnings of a craftsperson is no greater than before acceptance of Vision 2000 discounting the pay increases of Partnership 2000 + ½%.
3. In terms of maintaining the differential, the Company has to-date implemented the same increases for craft and production from the same dates and will implement the final 3% increase at the end of January, 1999 in the context of reaching an overall agreement with production as it did in the Craft Group.
4. The introduction of the new craft payment structure did not represent an additional cost to the Company, unlike the Company's proposals to the production group which carries additional costs immediately
CLAIM FOR £45 PER WEEK
UNIONS' ARGUMENTS:
5. 1. The Company seeks savings of £3 to £4 million from the production group. In these circumstances it is appropriate to meet in full the Unions' claim for a £45 per week increase in G Grade rates. The Unions' claim would cost £2.2 million. This is surely justified in the context of the savings which will be made by the Company. Production workers will be providing increased flexibility, improved efficiencies, task sharing, team work, flexibility, new duties, self motivation staff reductions. The increase should be backdated to the 8th of June, 1998.
COMPANY'S ARGUMENTS:
6. 1. Given the Company's uncompetitiveness in relation to other production units within the group and within the market place generally and against the plans set out in Vision 2000 it could not consider a claim of this magnitude - £2.2 million additional cost per annum on 14.7% increase on grades exclusive of Partnership 2000. Concession would have serious consequences for the future of the manufacturing operation in Ireland.
2. The Company seeks to address the claim by proposing to change the grading structure from a current five grade structure to a two grade structure. This is the only way which the requirements of Vision 2000 can be met and address the Unions' expectation of improved rates of pay.
3. The bringing forward of the last two phases of Partnership 2000 and the additional 5% was given to the craft group in the context of an overall comprehensive agreement. The Company will concede this to the production group in the same context.
ONE EXTRA DAY'S HOLIDAY
UNIONS' ARGUMENTS:
7. 1. The Company should concede the one day's additional annual leave.
COMPANY'S ARGUMENTS:
8. 1. The Company is prepared to put an extra service day in after 10 years service as per the Craft Agreement. The arrangement is in line with other good employments
INCREASE IN GRADE AND SHIFT GUARANTEES
UNIONS' ARGUMENTS:
9. 1. The grade and shift band guarantees should be doubled.
COMPANY'S ARGUMENTS:
10. 1. The Company's proposal for dealing with this issue in the context of a two grade structure is as follows:-
26 weeks at Grade G
26 weeks at 97% of Grade G
26 weeks at 94% of Grade G
Shift Guarantee
- 1. Permanent change (over 26 weeks)
Service on ShiftGuarantee
Less than 13 weeks 1 week
13 weeks to 26 weeks 3 weeks
26 weeks to 52 weeks 6 weeks
One to two years 10 weeks
Two to five years 22 weeks
Five years plus 34 weeks
2. Temporary change (under 26 weeks)
Service on ShiftGuarantee
Less than 13 weeks 1 week
13 weeks to 26 weeks 2 weeks
26 weeks to 52 weeks 4 weeks
One to two years 8 weeks
Two to five years 18 weeks
Five years plus 30 weeks
UNIONS' ARGUMENTS:
11. 1. The Company should offer exit terms on the same basis as applied to trades helpers to all production workers who retire in accordance with the rules of the Company Pension Scheme.
COMPANY'S ARGUMENTS:
12. 1. The Company is prepared to allow five employees avail of the exit payment on the basis that five former trades helpers were returning to production jobs.
RECOMMENDATION:
It is clear to the Court that the initiatives proposed in Vision 2000 are vital if the competitiveness of the of the Dublin plant, and the employment which it provides, is to be maintained. Having considered the submissions of the parties it appears to the Court that the main impediment to concluding final agreement on these proposals is the dispute concerning pay differentials.
The rate agreed in respect of annualised hours working by craft workers was determined by compositing elements of their pay previously payable but separately classified under the old arrangements. In the case of production grades those separate elements remain applicable.
For that reason the composite rate for annualised hours working cannot be fairly equated with basic pay as that term was used in the agreement on pay differentials. Nonetheless the Court considers that further improvements in pay for production is warranted in return for final agreement on the Vision 2000 document.
The Court therefore recommends the unions accept the Company's final proposals subject to the following amendments;
1.Partnership 2,000
An 9.75% increase over the 39 months of the Programme.
2.Plus Payment
- £18 on Grade G from 4th January 1999.
- £16.23 on Grade D from 4th January 1999.
3.Two Grade Structure
Grade C
- Grade C should receive a plus payment of £16.23 on 4th January 1999;
- Grade C should move to grade D in 2 moves on 4th January. 1999 and
1st January. 2000;
- Receives a payment of £300 on agreement.
Grade F
- Grade F receives a plus payment of £18 on 4th January 1999.
- Moves to G in 2 equal moves on 4th January 1999 and 1st January 2000;
- Receives a payment of £300 on agreement.
Grades G
- a plus payment of £18 on 4th January, 1999.
- a payment of £1,250 (half on agreement and half in 12 months).
Grade D
- a plus payment of £16.23 on 4th January 1999.
- a payment of £1,250 (half on agreement and half in 12 months).
Grade E
- Receives a plus payment of £16.23 on 4th January 1999;
- Move to Grade D but retain Grade E payments on a personal to holder
basis;
- A payment of £1,250 (half on agreement and half 12 months later).
4.Exit Payments
On a once off basis, exit terms should be offered to 10 production
employees on the same terms as the trades’ helpers.
The payments should apply, on a first come first serve basis, to 10 employees retiring early. The time period within which employees may leave the Company will be decided by management but will be not later than 1st September 2000.
5.Shift Guarantee
2 to 5 years’ service on shift
- Greater than 26 weeks increases from 20 to 22 weeks.
- Less than 26 weeks increases from 16 to 18 weeks.
- 5 years' plus service on shift.
- Greater than 26 weeks increases from 30 to 34 weeks.
- Less than 26 weeks increases from 26 to 30 weeks.
6.Overtime Guarantees
Where an employee moves from the night shift by a requirement of the Company, the hour will be guaranteed on the same basis as shift guarantee.
7.Seniority Rules.
The Court recommends that the Unions’ final position on the changes to the seniority rule be accepted.
8.Pension Scheme.
It is recommended that any difficulties arising from the report on the Company's pension scheme be dealt with directly between the parties.
9.Harassment Procedures.
The parties should have further discussions with a view to improving the proposed harassment procedures.
The Other Elements of Vision 2000
Except as modified by this Recommendation, the final proposals at conciliation should be agreed and implemented. For the avoidance of doubt the IRO's proposals are attached to this Recommendation.
Signed on behalf of the Labour Court
Kevin Duffy
22nd March, 1999______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.