FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SANBRA FYFFE (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AMALGAMATED ENGINEERING AND ELECTRICAL UNION TECHNICAL ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. Rates of pay, sick pay, temporary staff, pension scheme.
BACKGROUND:
2. The Company manufactures and supplies brass and pipe fittings to the domestic building market and employs approximately 101 workers. In 1993, the Company was in a loss making situation and an agreement was reached with the Unions to prevent closure. The agreement provided for a number of redundancies, new pay rates, new work practices and consolidation of bonus and basic rates of pay. The Company came under new ownership in 1998. In July, 2000, the Unions sought a review of the 1993 agreement and submitted their claims as follows:-
(i) Elimination of pay rates introduced in 1993,
(ii) An increase of 10% for long term staff on all elements of pay above the terms of the Programme for Prosperity and Fairness (PPF),
(iii) A review of the Company sick pay and pension schemes,
(iv) The introduction of a service pay structure and profit share scheme.
In January, 2001, the Company put forward the following proposals:-
(i) Adjustment of the post 1993 employees rates over 3 years bringing those rates in line with current rates of pay of workers employed before 1993,
(ii) Revised sick pay scheme structure and a review of the existing pension scheme provided that any claims would be subject to further negotiation and agreement with the Company,
(iii) Five permanent posts would be advertised,
(iv) 2% increase under revised terms of the PPF.
In return, the Company sought cooperation with change, increased productivity and flexibility.
The proposals were rejected by the Unions. The dispute was referred to the Labour Relations Commission. Conciliation conferences were held in April, and May, 2001. Following the second conciliation conference, the Company offered to reduce the phasing in of the current 1993 rate from 3 years to 1 year. The Company also offered £100 (euro 126.97) to each worker employed prior to 1993, and in receipt of payment by cash in return for changing from cash to cheque or credit transfer. The offer was rejected by the Unions. The dispute was referred to the Labour Court by the Labour Relations Commission on the 27th of September, 2001. A Court hearing was held on the 1st of November, 2001. The hearing was adjourned and the parties reverted to conciliation to have the issues in dispute clarified. A resumed Court hearing was held on the 13th of December, 2001. At the hearing, the Unions indicated that they were not pursuing the issues of service pay and profit share.
UNIONS' ARGUMENTS:
3. 1. The claimants, over the years, have accepted all the requirements of the old and new owners of the Company to ensure the continued viability of the operation, however, they have not been allowed to participate in the normal benefits which are applicable to other staff in the Company.
2. In relation to the post 1993 workers, their rates of pay should be brought up to the levels of pay enjoyed by pre-1993 employees immediately. With regard to the claim for an increase in the hourly rates for pre-1993 workers, and ultimately for all workers, the Unions are willing to achieve these improvements on a phased basis.
3. Long term staff should be entitled to the same sick pay facilities as those enjoyed by workers (including new entrants) in the administration/supervisory, management grades. The Unions are prepared to negotiate a phasing arrangement for new and short term workers up to an agreed level of benefit.
4. The pension scheme needs to be revised and improved as a matter of urgency. There is a much more beneficial pension scheme available to management and staff employees, some of whom have only joined the Company recently, while the majority of shop floor workers have long service.
5. In relation to the 5 permanent posts, these workers should be appointed on seniority of service. All temporary workers should be made permanent.
COMPANY'S ARGUMENTS:
4. 1. Trading conditions have become very difficult as the Company's manufacturing cost base is too high. The Company has little chance of reducing costs within the inflexible structures currently in existence. If it cannot get the flexibility needed, the Company will be forced to trade more with imports and manufacturing may have to be phased out.
2. The Unions' claim for a unilateral pay increase is cost increasing and thus precluded under the terms of the PPF. The Company has adhered in full to the terms of the PPF. The Company's offer is fair and reasonable, given its current trading position.
3. The Company's terms and conditions of employment are not out of line with other industries of its size with regard to rates of pay, pension scheme, and sick pay scheme.
4. Management has inherited two pension schemes, one for administrative staff, which is a defined contribution scheme, and one for works staff, which is a defined benefit scheme. The works pension plan is a major financial responsibility for management. The Company's pension advisors state that any changes to the current arrangement should be deferred.
5. The Company is not in a position to amend the sick pay offer. Since last year, the same sick pay conditions apply to works and office staff. Currently, work staff absenteeism is at 6%, administration staff absenteeism is at 1.4%.
6. The position in which the Company found itself in 1993, arose principally as a result of high labour costs. This was recognised within the agreement concluded at that time. It is not possible to consider any further increases in pay rates without running the risk of returning to a similar situation as obtained in 1993. In the past year, the Company paid the 5.5% and the 2% increases under the PPF, yet it could not implement a price rise in the present market conditions without losing customers.
RECOMMENDATION:
The Court has taken consideration of the written and oral presentations made by the parties. The Unions referred to the sense of betrayal felt by the workers following the commitments and co-operation given as part of the Survival Agreement of 1993, which resulted in the company being able to continue in operation and being sold as a viable concern in October/November 1998. The Unions are of the view that the workers should receive a 10% increase in their rates of pay to reflect the productivity given and as the current rates are out of line with the industry generally.
The Company has given information to the Court which indicate that there are serious financial difficulties now facing the company and, therefore, concession of the claim for a 10% increase is not possible.
To address the various Union claims the Company made an offer on the 8th of January, 2001, which was subsequently further enhanced by an amendment on the 5th of June, 2001. The Court is of the view that the offer is a reasonable one in the circumstances.
The Court notes that both parties have given a commitment to review the pension scheme for the claimants. The Court recommends that this should be carried out without delay.
With regard to the temporary employees claim for permanent status recognition, the Court recommends that those employees with two years' service or more should be given status as permanent employees.
The Court has examined the sick pay scheme and is of the view that in the circumstances, this is a reasonable scheme; therefore, the Court does not recommend any amendment to the scheme at this time.
Therefore, the Court recommends that the offer of the 5th of June, 2001, with regard to the pre-1993 staff should be accepted by the Union.
Signed on behalf of the Labour Court
Caroline Jenkinson
22nd January, 2002______________________
TOD/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.