FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DUBARRY SHOES LIMITED - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Loss of earnings.
BACKGROUND:
2. The Company is located in Ballinasloe, Co. Galway and employs approximately 200 workers, most of whom are Union members. In 1995, an agreement between the parties was reached on a new pay structure. This had the effect of maintaining the pay rates of current workers and paying new-contract workers £50 per week less. During negotiations on the agreement, the Union expressed fears that during slack times, the Company might lay off current employees and retain new-contract workers because of the lower pay rates. Because of this, an appendix was added to the agreement , Clause B of which states:
"In the event of short-time or over-time, current employees will have first choice of the work available over new contract employees. We do not envisage either overtime or short-time creating a no-work situation thereby affecting people's earning potential,"
It is the above clause which is the main issue in dispute. The Union claims that since 1996, employees working in the dual/duo rails of the factory have been affected by frequent short-time, resulting in between 40 - 60 weeks' loss each. The Company claims that a combination of staff turnover and increased absenteeism in the sewing/closing department failed to produce enough product to keep the duo rail department occupied, and resulted in short-time.
Management tried to solve the problem in the closing department by extra recruitment and training. This was not very successful and a second solution was to sub-contract the work out overseas. The Company claims that this has been more successful and has largely resolved the short-time issue.
The Union's case, however, is that current employees in the duo rails were on short-time whilst new-contract employees were employed in the closing room.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place on the 18th of December, 1998. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 28th of January, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 22nd of April, 1999, in Galway, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The appendix to the agreement clearly states that current employees will have first choice of work available over new-contract employees. This has not happened.
2. The Company's claim that the agreement was to be read on a departmental basis is not true. There is no mention of this in the agreement.
3. The Company argues that training would be required to re-deploy the current employees to other positions. These workers have long experience in the trade and could be easily trained. Other workers are frequently trained and re-deployed when it suits the Company.
4. There is a serious long-term effect on the workers' pensions as their contributions have almost halved.
COMPANY'S ARGUMENTS:
4. 1. Short-time work is common practice in the shoe industry. Short-time in the Company has reduced by 50% since 1995. The Company had to introduce the agreement in 1995 as it was paying the workforce far in excess of what was the norm in the footwear industry.
2. The Union's interpretation of Clause B would have meant new-contract workers in the closing room being sent home because there was not enough work for current employees in the duo rails. This would have led to reduced productivity and even more short-time.
3. The Company interpreted Clause B as relating to situations on a departmental basis i.e. current employees would have first choice of work available in each separate department, not in the Company overall. The word "overall" was added to Clause C of the agreement in the event of redundancies. It does not apply to Clause B.
RECOMMENDATION:
The Union’s claim for compensation is based on an alleged breach by the Company of an agreement relating to the selection of workers for short-time working, concluded in 1995.
Having examined the wording of the agreement in question as a whole, the Court finds that the intention of the parties as to its meaning is unclear. In these circumstances, the Court can only interpret the agreement by looking at the background circumstances in which it was negotiated, and the purpose for which the disputed clause was inserted.
In that regard, the position is as follows:
1. Prior to 1995, employees were placed on short-time working if there was a diminution in demand for the job in which they were engaged (i.e. selection for lay-off was on the basis of the job in which the employee was engaged).
2. When the Company introduced lower paid new contract employees, the Union expressed concern that during periods of slack trading, new contract employees would be retained on full-time working in preference to old contract employees on higher rates of pay.
3. The Clause in the agreement now in dispute was inserted to address that concern.
The interpretation now contended for by the Union would, in the Court’s view, go much further than is necessary to provide the safeguards which the Union originally sought, and impact unfairly on new contract employees whose jobs were unaffected by the conditions necessitating short-time. Moreover, such an arrangement would lead to significant operational problems within the factory, and would have the potential to create division and disharmony within the workforce as a whole.
For that reason, the Court does not recommend concession of the Union’s claim.
The Court notes that the likely incidents of short-time working has now diminished, and that the agreement in question is due to expire at the end of this year. The Court recommends that in negotiating a replacement agreement, the parties should have regard for the following:
1. The need to make clear and unambiguous provision for selection in the event of short-time, having regard to the original intention to provide protection for old contract employees,
2. The effect which recurring incidents of short-time working will have on the pension entitlements of those affected.
Signed on behalf of the Labour Court
Kevin Duffy
17th May, 1999.______________________
CON/BCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.