FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MERCK SHARP & DOHME (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr. Somers |
1. Rejection of LRC proposal dated 22nd of April 2003 in relation to rewards for productivity improvements.
BACKGROUND:
2. The Company manufactures pharmaceuticals at its plant near Clonmel. It employes a workforce of 449. The Company concluded a productivity agreement with the TEEU in 2001 for the group of craftsmen. SIPTU who represent manufacturing operatives, lodged a catch up claim for an increase of 11% on basic pay on behalf of 162 workers on foot of a traditional relativity that they hold with the craft group. The Labour Court investigated and rejected SIPTU's pay claim in Labour Court Recommendation LCR 17122 dated 16th April 2002.
The parties commenced discussions in October 2002. A settlement formula was agreed on 30th January 2003 and balloted on. The workers overwhelmingly rejected the proposals.
The dispute could not be resolved at local level and was the subject of a number of conciliation conferences under the auspices of the Labour Relations Commission. As agreement was not reached the dispute was referred to the Labour Court on the 10th July, 2003 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 9th September, 2003.
UNION'S ARGUMENTS:
3.1 The claim for 11% was submitted in April 2001 arising from a 15% pay increase conceded to craftsmen. After a number of conciliation conference in 2002 and 2003, a proposal put forward by the Labour Relations Commission on the basis that both sides would recommend it for acceptance, was rejected by the workers as follows:
- Workers employed in the Laboratory would only gain a lump sum for the added responsibility for carrying out duties as a chemist.
- Promotional opportunities would be affected.
- At negotiations, the Union's position was that any increase or monetary concessions would have to be on the basis that it would be reflected on shift pay, pensions, overtime etc.
- The Company refused to entertain this avenue of settling the dispute.
COMPANY'S ARGUMENTS:
4.1 The Company has made exhaustive efforts to resolve this dispute.
2. It cannot alter base rate relativities between the Union and other unionised employees . This would set off a spiral of wage claims damaging to the Company's viability.
3. The offer of 5.76% on payments relating to the standard 12 hour shift system, lump sum payments and inclusion of warehouse operators on the 6 day shift system , in return for productivity improvements sought, is fair and reasonable.
4. The Company cannot include any increases in the productivity agreement which would impact on its Pension Scheme costs. In August 2003 the Company worldwide issued a communication to all employees indicating the need for permanent cost reduction measures in order to maintain its profitability.
5. The Company cannot sustain any further cost increasing measures above those already committed to.
RECOMMENDATION:
It appears clear to the Court that in reality the dispute now before it follows on directly from the Union's claim for an unconditional pay increase which was investigated by the Court and rejected in Recommendation LCR17122. Such a claim is clearly precluded by clause 1.5 of the pay agreement associated with Sustaining Progress. The continued pursuance of a cost increasing pay claim, above the terms provided for in Sustaining Progress, constitutes a breach of that agreement and cannot be entertained by the Court.
In the Court's view the Union's aspirations can only be addressed in the manner agreed between the negotiators at conciliation. Whilst the recommended proposals which emanated from conciliation were rejected, the Court is firmly of the view that they represent a reasonable and realistic response to the Union's claim.
Having carefully considered the submissions of the parties the Court cannot see any basis upon which it could recommend further improvements in the package set out in the IRO's letter of 22nd April, 2003. In the circumstances the Court recommends that those proposals be reconsidered by the Union and accepted.
Signed on behalf of the Labour Court
Kevin Duffy
15th September, 2003______________________
JB/Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.