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. Re-hearing arising from Labour Court Recommendation No:17175.
BACKGROUND:
2. This is a re-hearing arising from Labour Court Recommendation No: 17175 which was held on the 11th June, 2002. In LCR 17175, the Court recommended as follows:-
"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."
The Union is seeking a pay increase for its members as follows, (a) 4.6% increase in basis pay, (b) 4.4% to be paid by way of ongoing stipend, (c) Ex-gratia goodwill lump sum in lieu of retrospection.
Management claims that any pay increase for the workers concerned must be offset against cost savings in return. The Company made an offer as follows: (1) 2% increase in basis rate for operating personnel. (2) A goodwill lump sum payment of €500 per person for those covered at (1) above. In return, management is seeking to control overtime, but not to eliminate it.
The Company's offer was rejected by the Union.
As agreement was not possible between the parties the dispute was referred back to the Court under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 18th of February, 2003.
UNION'S ARGUMENTS:
3. 1. The workers have, over a period of time, embraced changes to their job descriptions which when combined would offset some of the cost involved.
2. The Company in making its offer has made no serious attempt to resolve the issues in dispute.
3. The established warehouse staff continue to enjoy the benefits of the stipend arrangement which maintains their positions.
4. The workers are being asked by the Company to give up 25% of earnings in return for a 2% increase.
5. The workers concerned have contributed significantly to the development of the Company and are entitled to be treated no less favourably than their colleagues in the warehouse.
COMPANY'S ARGUMENTS:
3. 1. The Company has embraced negotiations over the last number of months by making a number of offers which have been rejected.
2. The Company continues to operate in a very precarious financial situation. It would need cost offsetting measures to meet the cost of any pay increase.
3. While much overtime was necessary in the past, production requirements have decreased substantially. The same overtime requirements are no longer required.
4. Management must have the right to decide what overtime is required to operate its business.
RECOMMENDATION:
The Court issued Labour Court Recommendation No: 17175, which recommended that both parties should negotiate viable increases on the basis of agreement on suitable offsetting measures. As this has not been achieved within the time frame laid down by the Court, at the request of the parties, the Court now issues a definitive recommendation on the claim.
The Court is clear that the mistake made by the Company as referred to in Labour Court Recommendation No: 17175 is no grounds for recommending an increase in the production operators' pay and furthermore, the Court accepts that there is no agreed differential for production operators over the warehouse operators.
The Court notes that the Union accepts the principle of cost neutral increases and that the intention of Labour Court Recommendation No: 17175 was that negotiations should be on such a basis. The Court has great difficulty with the fact that such cost offsetting measures were not identified as part of these negotiations.
The Court also accepts the premise that the company has the right to manage overtime as it sees fit. The Court recommends that the established end-of-week overtime working practice should be the subject of negotiations between the parties, if the company wishes to discontinue it in its present form.
Having carefully considered all aspects of this long running dispute, the Court recommends that cost-offsetting measures (which can include an identifiable loss of weekend overtime earnings) to the value of 4.6% should be identified in return for an increase in pay of 4.6%. The Court also recommends an increase in the goodwill payment offered by the company. This payment should be increased to €800 to each person involved in this claim payable on acceptance of a final agreement on this matter. The Court recommends that this recommendation should be accepted by both parties in full and final settlement of the dispute.
Signed on behalf of the Labour Court
Caroline Jenkinson
4th March, 2003______________________
LW/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.