FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FMC INTERNATIONAL, RINGASKIDDY, CORK (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Pay claim.
BACKGROUND:
2. The Company was established in 1977 to manufacture and supply microcrystalline cellulose as an ingredient for the food and pharmaceutical industry. The Company operates a continuous 24 hours per day, 7 days per week process.
The dispute concerns the Company's proposed expansion plan which would involve major investment in re-equipping the plant and would take place in 2 phases. The full capital investment will need to be £22 million (€27.93 million) but the current investment will be $5 million. There are 27/29 workers involved. The Union claims that the Company is seeking the following - electronic packaging, semi-automation within the packing area, "swipe" cards, continuous operations and staff warehouse management system (SAP). The main result would be a potential increase from 180 drums per day to 720 drums per day. The Company has offered a 5% pay increase above the Programme for Prosperity and Fairness (PPF). The Union is seeking a 15% increase, and maintained at the Labour Court hearing that this was only for Phase 1 of the operation.
A number of meetings took place between the parties before 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.
UNION'S ARGUMENTS:
3. 1. The Company's proposals will change long-established work practices, and will result in significant savings for the Company.
2. The workers concerned have fallen substantially behind their counterparts in the chemical industry (approximately 8%) and, as such, the Company's offer in unacceptable.
3. The Company has admitted that there would be a loss of overtime (40%) if the proposals are implemented.
4. The Company's offer of 5% is self-financing in that the increased output will more than compensate for the pay increase.
5. The workers do not believe that the new machinery will make the job any better/easier and, in fact, believe that the work will be more demanding.
COMPANY'S ARGUMENTS:
4. 1. The Company is facing increasingly aggressive competition from other producers in the U.S., Germany and Taiwan. As a result, it has become more difficult to maintain pricing and margins, and the Company has to increase volume growth to maintain profitability.
2. The Company is investing $5 million in the project and it cannot afford more than the 5% that is on offer. It has applied the terms of the Programme for Prosperity and Fairness (PPF).
3. The effect of the Union seeking more than the 5% on offer could lead to difficulties in the decision making for the balance of the capital investment.
RECOMMENDATION:
The Court has taken account of the oral and written submissions of the parties, and has carried out a workplace inspection which both parties accept was thorough and comprehensive.
The Company has outlined for the Court the necessity for investment to increase volume, so as to enable economies of scale to be achieved through lower unit costs in order to ensure the continued viability of the Company. This process is planned to take place over a staggered period as funding becomes available from the Company's head office. This will result in major expansion for the Company. This plan was communicated to employees in June, 2000. In response, the Union indicated to the Court that the resultant changes will entail a fundamental alteration to the employees' conditions of employment and, therefore, while it is not opposed to the changes in principle, it submitted a claim for increases over and above the terms of the PPF.
In relation to the issue of a potential loss in overtime earnings, the Court recommends that the situation should be examined after a period of twelve months following the commencement of the new operation. This review should be for the purposes of ascertaining a loss of overtime earnings compared to the previous two years. In the event of such losses being confirmed, the Court recommends that the parties should agree a formula for compensation the loss.
The Court recommends that the Company's offer, as detailed in Appendix 2 of the Company's submission, should be amended as follows:
- increase of 6% from 1st February 2002, (this amended offer from the Court includes the 3% which the Company offered from January 2003).
-4% due under PPF Phase 3 from June 2002.
This offer should be accepted in full and final settlement of this claim.
The Court notes the Company's position in relation to its commitment to negotiate with the process operators on cost offsetting measures, similar to those negotiated with the craftsmen.
Signed on behalf of the Labour Court
Caroline Jenkinson
28th February, 2002______________________
CO'N/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.