FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : HEYCO - WERK IRELAND LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. (1) Rates Of Pay ( 2) Sick Pay Scheme (3) Service Pay.
BACKGROUND:
2. Heyco-Werk Ireland Limited was established in Ballina in 1973 by the Heyco Group under the name of Shamrock Forge & Tool Company Limited to manufacture hand tools, tool kits and plastic components for the automotive industry. Approximately 70% of turnover is with the parent plant of which 80% is for the automotive industry. The remaining 30% of turnover is with the automotive industry in Britain. It employs 55 people.
The dispute concerns the Union's claim for:-
1. Rates of Pay
2. Sick Pay Scheme
3. Service Pay
Local level discussions failed to resolve the issues and the dispute was referred to the Labour Relations Commission. As agreement could not be reached , the dispute was referred to the Labour Court on the 11th of April, 2000 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 27th of June, 2000. Following the Court hearing both parties submitted additional information to the Court.
RATES OF PAY
The Union is seeking an increase in the rates of pay of £20 to £25 per week on behalf of approximately 35 workers. In 1999, discussions took place at which the Union claimed that the rates D, E and F were not agreed with the Union and argued that the rates A & B were out of line with workers in similar employment in provincial towns. The Company rejects the claim. Its position is that agreement was reached with the Union in 1994 in relation to rates D, E and F and since the claim was lodged it has consolidated these rates to take account of the minimum wage legislation.
UNION'S ARGUMENTS:
3. 1. It is the Union's contention that while rates of pay were discussed in 1994, no agreement emanated from the discussions, no ballot took place and no formal correspondence exists from either SIPTU or the Company confirming an agreement was reached.
2. The Union is seeking £25 per week on rates A and B and £20 per week on rates D, E and F. It believes that the claim is modest, equitable and fair when compared to Heyco-Werk's competitors as outlined in the Union's submission.
COMPANY'S ARGUMENTS:
4. 1. The hand tool and automotive tool kit markets are now global and the Company is in direct competition with low wage economies, including Eastern Europe, India and mainland China. Furthermore, european automotive manufacturers are currently establishing bases in those economies and moving towards sourcing directly with local suppliers. Productivity has been in decline in recent years and the trend continues.
2. The Company is satisfied that agreement was reached with SIPTU regarding rates of pay at the time it introduced a new production line in 1994.
3. The Company rejects the Union's claim that its rates of pay are out of line with workers in similar employment. None of the companies cited by the Union are in direct competition with Heyco-Werk Ireland Limited.
SICK PAY SCHEME
The current sick pay scheme was negotiated in 1983 and provides for 4 week's full pay
and 4 week's half pay in any given year. The Union is seeking an improvement in the
scheme to provide for 12 week's full pay. Management's position is that the scheme is
not out of line with workers in similar industry.
UNION'S ARGUMENTS:
5. 1. The purpose of a sick pay scheme is to alleviate hardship in cases of genuine absences from work through illness or injury. Given that the Company has been in operation for over 25 years and some of the workers have over 20 years service, the Union's claim of 12 week's full pay is equitable.
2. Absenteeism in the Company is relatively low and has never been raised by management as a problem. The costs incurred by the Company in meeting the Union's claim would not be excessive, given that the Company would be "topping up" social welfare payments.
COMPANY'S ARGUMENTS:
6. 1. Trade Unions are not precluded by Clause 6 of Partnership 2000 from making claims for the introduction of pension or sick pay schemes where none exist or for making claims for an improvement in such schemes which are substantially out of line with appropriate standards in comparable employments. The Company is not in breach of this clause of the agreement as the sick pay scheme in operation is well in line with those in similar type industry.
SERVICE PAY
The Union's claim for a 32% increase is made on the basis that service pay was introduced in 1989 and has not been updated since. The Company has offered to increase the service pay in line with annual increases under the Programme for Prosperity and Fairness using the rate in December, 1999 as a benchmark figure.
UNION'S ARGUMENTS:
7. 1. The Union is seeking an increase of 32% in service pay on the basis that no improvement has been made since it was negotiated in 1989 and that any future increases awarded under National Wage Agreements be applied to service pay.
COMPANY'S ARGUMENTS:
8. 1. The Company has offered to increase the service pay in line with annual increases under the Programme for Prosperity and Fairness using the rate in December, 1999 as a benchmark figure.
2. The Company operates in a climate that is highly competitive with rapidly diminishing margins. In the circumstances the Court is asked to recommend that the Company's position is fair and reasonable.
RECOMMENDATION:
The Court has given consideration to the submissions of both parties. The following is the recommendation of the Court on the three claims presented:-
Increase in rates of pay:
The company makes the argument that cost increasing pay claims are contrary to the terms of Partnership 2000 and the Programme for Prosperity & Fairness. On this basis the Court does not recommend an increase in pay.
It is unclear to the Court that there was ever an agreement between the parties on pay rates D, E and F. The Court recommends that the parties should at this stage enter into negotiations and formalise a rate for the function.
Sick Pay Scheme:
The Court is aware of the provision in Clause 4 of Partnership 2000, which precludes improvements in sick pay schemes where such schemes are not out of line with comparable employments. The Court is of the view that in this case the scheme is only marginally "out of line with comparable employments". On balance the Court recommends that the scheme should be improved to provide better benefits on a service related basis. The parties should discuss the introduction of such an improved scheme.
Service Pay:
The Court recommends acceptance of the Company's offer to improve the service pay scheme, i.e. to increase service pay in line with the terms of the Programme for Prosperity & Fairness; 5.5% form 1st July 2000, 5.5% from 1st July 2001 and 4% from 1st July 2002.
Signed on behalf of the Labour Court
Caroline Jenkinson
30 August, 2000______________________
FB/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.