FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EXAMINER PUBLICATIONS CORK LIMITED. - AND - GROUP OF UNIONS DIVISION : Chairman: Ms Jenkinson Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Review of pay agreement.
BACKGROUND:
2. The dispute concerns a review of Clause 6 of a pay agreement which was renewed on the 1st of January, 1998. The agreement was outside the terms of the then National Agreement, and provided for a 2% pay increase per annum on the senior rate (known as the 'U' rate) which would be applied as a cash sum to all rates below the senior basic rate. There was also a profit sharing bonus to be divided among the staff.
The Unions are pursuing their claim under the following: Clause 6(1) of the agreement provides for a situation where inflation exceeds the rate anticipated at the time of the 1998 agreement (i.e. 3.25% or more in years 3 and 4 (2000/2001). Clause 6(2) recognises an entitlement to seek additional payments where the subsequent value of the follow-on National Agreement to Partnership 2000 (in this case the Programme for Prosperity and Fairness (PPF) is substantially out of line with the 1998 agreement. The Unions believe that their claim is justified on both counts. They are seeking retrospective payment of 2% to April, 2001, and payment of a 1% lump sum on the 1st of April, 2002 (as per the PPF Review Agreement). The Company rejects the claim. Both parties supplied sets of financial figures to the Court.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 6th of November, 2001, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 16th of January, 2002, in Cork.
UNIONS' ARGUMENTS:
3. 1. The 1998 agreement is substantially out of line with what the workers would have achieved if the PPF had been applied for years 2000 - 2002. The basic increase under the agreement is 6% for the 3 years. Under the PPF, it would be 15% (plus 2% extra in 2001). This means an actual shortfall of € 7,499.54 for the 3 years.
2 Even if profit share payments are included, there is a shortfall of € 3,918.88. Another disadvantage is that profit share payments are not and have not been consolidated year on year. Profit share payments are also non-pensionable.
COMPANY'S ARGUMENTS:
4. 1. Payments to the worker are not substantially out of line. Figures supplied to the Court show that the workers received more in cash terms than if they had been paid under the National Agreements (P2000 and the PPF).
2. When profit sharing is taken into consideration, the percentage increase is raised further. The lower paid employees have benefited significantly under the terms of the agreement, something that the Unions sought when negotiations were ongoing in 1998.
RECOMMENDATION:
The parties entered into an agreement in October, 1998, for a period of five years which allowed for pay increases of 2% each year for five years plus the introduction of a profit related payment system. It is accepted by the parties that the principles which formed the basis for entering such an agreement, as distinct from the application of national wage agreements, were as follows:-
- To make the Company financially secure
- To improve profitability
- To protect employment
- To share benefits of profitability with the employees through profit-sharing
- To improve the relative position of lower-paid employees
Based on the information supplied at the hearing, the Court is of the view that these principles have been met.
This agreement allowed for a review to take place at the latter part of the third year in order to ensure that the value of the pay provisions were not substantially out of line with the follow on agreement to Partnership 2000.
The Court's interpretation of the agreement is that if the Company did not do well, and profit related payments were low or non-existent, thereby resulting in the "value of the pay provisions being substantially out of line with the value of the agreement", then there was a fall-back position. Having examined the figures over the period in review, the Court is not satisfied that the value of the pay provisions is substantially out of line on the basis of the payments made so far in this agreement. Therefore, the Court does not recommend concession of the claim as presented.
The Court sees a weakness in the agreement in that the non-consolidated elements of pay (i.e. the value of the profit related payments) are not reckonable for pension purposes. The Court is of the view that this should be considered in the context of any follow-on agreement when this agreement expires.
Signed on behalf of the Labour Court
Caroline Jenkinson
7th February, 2002______________________
CO'N/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.