FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AER RIANTA - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Mr. Somers |
1. Payment of 10.8% productivity payment
BACKGROUND:
2. The Union submitted a claim for payment of 10.8% to members (50) of the Inflight Catering Sections of Aer Rianta at Shannon Airport. The Union states that productivity agreements and payments have been negotiated in virtually every other section of the Company in Dublin, Cork and Shannon, including inflight managers.
Management rejected the Union's claim and stated that the current payroll level was unsustainable.
As there was no agreement between the parties, the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 25th March, 2003, but agreement was not reached. The dispute was referred to the Labour Court on the 27th March, 2003, in accordance with Section 26 (1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 28th May, 2003.
UNION'S ARGUMENTS:
3. 1. The inflight catering business must now be profitable given the high increase in productivity achieved and the increase in non scheduled flights and new scheduled services introduced into Shannon Airport.
2. The staff in the flight kitchens should be compensated for the productivity and flexibility changes introduced over the past two years.
3. The staff concerned have serviced flights on overtime and on their days off to provide a top class service which has been acknowledged by the customers who use Shannon Airport.
4 Productivity agreements and payments have been negotiated in every other section of Aer Rianta in Dublin, Cork and Shannon, including inflight managers.
COMPANY'S ARGUMENTS:
4. 1. Trends within the inflight services sector indicate that airlines will continue to review and reduce the costs of providing onboard services.
2. Inflight catering has become loss making in recent years, with operating margins coming under pressure due to an increased emphasis within the sector on consolidations, development of purchasing alliances, outsourcing and service cost reductions.
3. In February, 2002, a radical review of the inflight operations was undertaken in an attempt to bring the business to a minimum break even position within twelve months of full implementation of a restructuring programme and to generate commercial returns within the following twelve months. However, the proposals were rejected by the staff.
4. The reducing industry margins, growing caterer consolidations and the probable transfer of existing long haul contracts to Dublin based kitchens, indicate that the Company has no option but to draw up proposals to exit from the business.
RECOMMENDATION:
At the hearing the company indicated its intention to exit the catering business and intended to draw up proposals to that effect. Subsequent to the hearing management indicated that both parties had agreed to enter into discussions over the coming month to review the current performance of the business, quantify in detail the potential threats and to discuss in an open and transparent manner the short term future of the business. It is hoped that this joint review will be completed by mid July.
In light of this development, given the urgency of the situation and the serious nature of the business the Court recommends that these discussions should be entered into by both parties without delay.
Signed on behalf of the Labour Court
Caroline Jenkinson
26th June, 2003______________________
BG/LWDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.