FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TYCO HEALTHCARE 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. Somers |
1. Parity claim.
BACKGROUND:
2. Tyco International Limited is a diversified manufacturing and service company, which operates in more than 100 countries with 250,000 employees. It currently employs 2,800 people at its 11 plants in Ireland. At the end of 2000, the Company acquired Mallinckrodt, which has 25 plants and 10,000 employees world wide. The acquisition included a Mallinckrodt plant in Athlone.
The dispute before the Court concerns a parity claim by the Union, on behalf of its members employed in Tyco, Tullamore, for the same rates of pay as those enjoyed by employees in Athlone. The Athlone rates of pay are approximately 8% higher. Both groups of workers received pay increases between 1999 and 2001 as a result of Labour Court recommendations (LCR16360 and LCR16732). The current claim was the subject of local discussions and of a conciliation conference under the auspices of the Labour Relations Commission on the 30th of August, 2001. The Company rejected the claim and the Union requested referral to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The claim was referred on the 5th of September, 2001 and the Labour Court investigated the issue in Tullamore on the 29th of January, 2002, the earliest suitable date.
UNION'S ARGUMENTS:
3. 1. The Company is a global company with significant financial resources, yet its pay rates are in the lower quartile of pay locally and they fare little better nationally. A March, 1997 survey confirmed this.
2. The Company is unable to provide any coherent reason or justification for the 8% differential between the Athlone and Tullamore pay rates. It extols the virtues of teamwork in its in-house magazine, yet it pays an 8% differential to employees in Athlone, who work only 20 miles from their colleagues in Tullamore.
3. The two plants have a similarity of process and an integrated management structure. However, the pay differential puts the Union in an unsustainable position, whereby two of its members who live in Moate (which is half way between the two plants) earn different rates of pay by virtue of which plant they report to.
4. The claimants have contributed in no small way to the ongoing profitability of the Corporation. However, they feel undervalued and are disenchanted with their low levels of basic pay.
COMPANY'S ARGUMENTS:
4. 1. The claim is a cost increasing claim and is, therefore, in breach of the terms of the PPF. The Company has already agreed to pay increases at both plants following Labour Court recommendations. Concession of this claim would seriously jeopardise job security at Tullamore and would place the Company at risk in the future.
2. The Company is finding it extremely difficult to attract and keep jobs in Ireland. The Tullamore plant has failed to attract any new assembly projects to Ireland in the last four years (except for a project which was moved from Athlone) and has recently lost a project because of the present wage claim.
3. There are considerable differences in the efficiency levels between the Tullamore and Athlone plants. Efficiency levels are higher in Athlone. However, wage costs in the Athlone plant are too high for the type of products produced, but under the Transfer of Undertakings Regulations the Company is precluded from reducing wage rates. The Company has had to cut forty administrative/indirect jobs in Athlone in the past twelve months and some Tullamore managers have had to “double up” in Athlone to reduce the wage bill.
4. This claim ignores the fact that the Tullamore employees already received bigger increases than the Athlone employees. If the claim is successful, the Athlone employees may then serve a claim under the guise of ‘maintaining differentials’. In addition, further claims may be received from employees in the Company’s ten other plants in Ireland.
RECOMMENDATION:
The Court has given consideration to this claim for parity of pay between the Tullamore plant and the Athlone plant. The Court is of the view that the rates between both plants should be more aligned and in doing so the Court recommends that account should be taken of the efficiency differences between the two plants and the need to realign the rates.
Therefore, the Court recommends that negotiations should commence between the Company and the Union on bridging that gap and levelling out the payments available at similar efficiencies.
Signed on behalf of the Labour Court
Caroline Jenkinson
15th February, 2002______________________
D.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.