FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BITECH ENGINEERING (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr Somers |
1. Bonus reductions.
BACKGROUND:
2. The Company is an electrical appliance manufacturing company and is part of the Glen Dimplex Group. It employs 530 people, of whom 470 are hourly paid and are members of Services Industrial Professional Technical Union (SIPTU).
The issue in dispute concerns changes to the bonus scheme, which were agreed in 1992 under Clause 3 of P.E.S.P. The workers were paid a basic rate of pay plus a bonus based on their productivity. The bonus scheme was a variable payment based on work performance against Standard Minute Values (SMVs). The Company agreed to pay the 3% local bargaining increase in return for a 4% reduction in SMVs for all General Factory Operatives and a 2% reduction in SMVs for all Light Assembly Operatives. The Union claims that the 4% and 2% claw-back on the bonus should have been limited to the jobs and product lines in existence in the company at that time and should not apply to subsequent jobs and products. The Company states that the agreement was concluded in good faith by both sides and was intended to be an on-going agreement.
The issue was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 19th of April, 1999. As agreement was not possible, the dispute was referred to the Labour Court on the 7th of May, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute in Dundalk on the 29th of August, 2001, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The 4% and 2% claw-back on the 1992 bonus was done on the jobs and product lines in the company at the time. It was to take account of the Company’s view that a number of the existing lines were loosely timed. This was particularly the case on long established lines, yet the claw-back was agreed on all lines in the plant.
2. There was no agreement to apply the claw-back to new jobs and product lines, yet since 1992 it has been applied to an extensive range of new lines. Since then the Company has also re-timed a number of jobs to take account of changes, yet continues to apply the claw-back. This practice should now stop and all affected measured values should be re-calculated, and compensation paid to the employees.
3. The Company has achieved its original goal of re-timing jobs so as to provide maximum efficiencies and production. It is unacceptable that it can continue to apply the claw-back. In 1999/2000 the Company gave a commitment to review the current bonus scheme, but this review has not yet taken place.
COMPANY'S ARGUMENTS:
4. 1. The Union’s claim is opportunistic in nature. In 1992 the parties entered into an agreement in good faith under the aegis of Clause 3 of PESP. The Union voted in favour of the agreement, which had no recourse for review. Clearly the Union did not have a problem with the agreement as no issue was raised for five years.
2. The Company has not altered or interfered with the calculation of SMVs. The same procedure for calculation has always applied. The targets were adjusted in order to increase efficiencies.
3. The Union does not appear to have an issue with the pay component of the agreement. The pay increases awarded at the time have been incorporated into basic pay and have attracted cumulative increases by way of subsequent national agreements. If the Union considered that the productivity element of the agreement had a one-year lifespan, it didn’t associate this with the pay element. In addition, the Company would not make an on-going payment for a once-off concession.
RECOMMENDATION:
Having considered the submissions of the parties the Court is not satisfied that the agreement reached under clause 3 of PESP in 1992 can be interpreted in the manner contended for by the Union.
The Court notes that in the return to work agreement of March, 2000 the Company undertook to discuss the introduction of a new bonus scheme with the Union. It is also noted that those discussions have not yet taken place.
The Court recommends that the discussions envisaged by the agreement should now take place and should be concluded within a period of six months from the date of acceptance of this recommendation. The issue now before the Court should be considered in those discussions.
Signed on behalf of the Labour Court
Kevin Duffy
19th September, 2001______________________
D.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.