FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : HONEYWELL IROPHARM (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Equality of rates between Process Operators and Warehouse Personnel.
BACKGROUND:
2. The Company produces synthetic bulk chemicals for the pharmaceutical industry at its plant in Arklow. It employs approximately eighty people. The Union submitted a claim for the restoration of a 4.6% differential from June, 2000, on behalf of Production Operators. It claims that there was always this differential between Operators and the Warehouse staff. The Union claims that in June, 2000, the Company increased the pay rate of a non-union Warehouse employee above that of the Production Operator.
Management rejected the Union's claim. It states that to concede the claim would lead to knock-on claims from other employees.
As no agreement was possible between the parties, the dispute was referred to the Labour Relations Commission. Conciliation conferences were held on the 22nd of November, 2001, and on the 15th of February, 2002, but no agreement was reached. The dispute was referred to the Labour Court on the 17th of April, 2002, under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 11th of June, 2002. The Court decided to have a further hearing which was held on the 29th August, 2002.
UNION'S ARGUMENTS:
3. 1. Management has broken an agreement in relation to pay relativity between Operators and Warehouse personnel.
2. The agreed and historic pay relationship has a 4.6% pay differential between the two grades with the Operator grade being the highest.
3. The Operator grade is one of higher skill justifying the higher rate of pay.
4. The Union is seeking the restoration of the 4.6% pay differential between Operators and Warehouse personnel.
COMPANY'S ARGUMENTS:
4. 1. The claim is cost increasing and as such is debarred under the terms of the Programme for Prosperity and Fairness.
2. Concession of the claim would lead to knock-on claims from other workers. This would result in higher payroll costs and make the Company uncompetitive.
3. The Warehouse employees, (2) who are not Union members, were prepared to accept a reduction in their salary to restore the differential, but this was rejected by the Union.
4. The Company has honoured all national wage agreements, including the Programme for Prosperity and Fairness, without seeking any concessions in return.5. The cost of restoring the pay differential through pay increases, is unfair and unsustainable from a competitive viewpoint, and ultimately could threaten the Company's survival.
RECOMMENDATION:
The Court has taken into account the written and oral submissions of the parties to this dispute, as well as the background and the present situation.
Firstly, the Court considers that the Company made a serious error in 1999 when it assented to equate the salary of the warehouseman with that of a process worker who had been transferred to the warehouse 9 years earlier on his previous chargehand rate on a red-circled basis. This problem was compounded by failure to discuss that decision with other workers at the time.
Secondly, the Union claims the existence of an agreed higher differential for process operators over warehouse operators. However, no evidence of such agreement could be produced, and the figures presented to the Court show a wide-ranging differential over a number of years, including an adverse differential in one year. On balance, it appears to the Court that the pay of the two groups was fixed on a completely ad hoc basis from year to year in the previous privately run business.
The Company, under new ownership, sought to gain acceptance of the reality of the situation by agreeing a 4.6% higher differential for process operators from mid 2001, and establishing a new correspondingly lower basic rate for the warehouse. It has avoided taking away the extra earnings of the non red-circled warehouseman by paying him a 'stipend' to maintain his existing total annual pay, on a personal-to-holder basis.
The Union's claim now is for a 4.6% increase over the effective chargehand rate, in effect a 9% increase in total for the process operators. The Company emphasizes that such a claim would have a potentially destructive effect on the business, now seeking to rebuild a credible future as part of an international US group. The claim itself is based on the serious mistake made by the Company in respect of one individual in the past, and not on any argument for an increased rate for the job.
In considering the best way forward in this situation for all concerned, the Court is taking into account the willingness of both sides to negotiate improvements in rates, albeit noting the Company's need to ensure that these are offset by cost reductions.
The Court recommends that the Union accept that it is probably in the best interest of all concerned to acknowledge that the Company made an error in the past. The new top management wishes to take whatever measures it can to regain the trust and confidence of its workforce in rebuilding a future for all. On this basis both parties should continue efforts to negotiate viable increases for those concerned, with suitable offsetting measures. Such negotiations should be completed by mid-November 2002. In the event of failure to agree proposals such issues may be referred back to the Court.
If considered necessary to avoid future ill-feeling, the Company should explore the possibility of reaching an adjustment in the remaining warehouse operator's overall pay rate. However, the Union and its members should acknowledge that the individual himself is not responsible in any way for the original faulty decision.
Signed on behalf of the Labour Court
Caroline Jenkinson
13th September, 2002______________________
LW/LWDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.