FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ARCON MINES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Hearing arising from LCR17260.
BACKGROUND:
2. On the 16th of September, 2002, the Labour Court issued LCR17260 which recommended that, due to the unpredictability of the zinc market, the issues involved - pay, annual leave, paternity leave and the employee assistance programme - should be deferred until January, 2003. If matters were not resolved by then, either party could request a definitive recommendation from the Court.
The parties did not reach agreement and the case has been referred back to the Court. The Union agreed to put its claims on hold and put forward a proposal for a stabilisation agreement on an interim basis. The Company's case is that while basic pay rates of the workers involved are from €16,480 - €28,969, the rates rise to €22,125 - €48,562 with the addition of an incentive scheme and weekend overtime. In November, 2003, the Company put forward a gain share scheme which would apply if the Company became profitable and once certain targets are met.
The Union is willing to consider a stabilisation agreement for an interim period of 12 months on the following basis:-
a) That the Company pay an initial 5% wage increase as of the 1st of January, 2004 followed by a second increase of 2.5% from the 1st of July, 2004.
b) That a payment of €1,250.00 lump sum be made to all SIPTU members in lieu of backmonies. This payment to be made upon agreement.
c) The immediate implementation, upon agreement, of the gainshare proposals as discussed at the Labour Relations Commission (LRC) on the 10th of February, 2004.
d) A commitment from Management to initiate negotiations immediately in relation to the difficulties with the Mill Bonus Scheme and fastrack to conciliation (L.R.C., Labour Court) in the event of disagreement.
The final positions between the parties is as follows:-
 | ARCON | SIPTU |
| Basic Pay | 2.5% when one GS target met for one month, backdated to beginning of that month | 2.5% increase immediately 2.5% with GS backdated to beginning of 1st months |
| Lump Sum | €600 gross split €300 on signing €300 after 3 months | €1200 gross split €600 on signing €600 after 3 months |
| Gain Share | 1 Target met - 7% 2 Targets met - 11% 3 Targets met - 17% | 1 Target met - 7% 2 Targets met - 11% 3 Targets met - 17% |
| Duration | 1 year from date of signing | 1 year from date of signing |
A Labour Court hearing took place on the 30th of March, 2004, in Portlaoise, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1.It is almost 3 years since the workers in Arcon Mines last received a pay rise.
2. The price of zinc has risen by 48% since the time of the last hearing.
3. Planning permission for the mining of the 'R' zone ( a highly rich zinc zone) was received by the Company in January, 2004. The yield in terms of zinc concentrate has increased dramatically.
4. The Union believes that its proposal is the best option as it will give the parties time to access the improved situation.
COMPANY'S ARGUMENTS:
4. 1. The Company had a total recognised loss of €17,000,000 for year ended 31st of December, 2002. The fall of the dollar against the Euro over the last few months has put a further strain on the Company's finances.
2. Workers in the Company are not badly paid. Their take home pay has increased in the last few years.
3. The Company's proposal will increase the workers' pay if it becomes profitable, whilst protecting their jobs in the event of continued loss making.
RECOMMENDATION:
Since the Court last dealt with this case in Labour Court Recommendation No 17260, an offer has been tabled by the Company, which the Union is prepared to consider with certain modifications, as a stabilisation agreement on an interim basis. The terms of this process have not been agreed between the parties and are the subject of this recommendation.
The Union put forward the idea of a stabilisation agreement to allow time for the financial situation of the mine to improve, when the issue of their substantive pay claim should be addressed, along with their claims regarding annual leave, paternity leave, and employee assistance programme.
The Company put forward an offer, which would allow a flexible mechanism to increase remuneration if the Company becomes profitable while at the same time protecting the business and the jobs. This is based around a 'gainsharing' scheme and the achievement of certain targets coupled with an increase in basic pay on achievement of the targets, and with all other incentive schemes and allowances remaining in place.
The Union is seeking higher increases in basic pay on the terms of this proposal.
Having considered the submissions of the parties, the Court recommends that the Company's proposal as outlined in its submission to the Court should be amended as follows:
Basic Pay:
In all the circumstances of this case, the Court recommends pay increases covering a sixteen-month period. Therefore, the Court recommends increases in pay of 2.5% from 1st January, 2004, 1.5% from 1st August, 2004, and 1% from 1st January, 2005 to expire on 30th April 2005.
Gain Sharing Scheme:
The proposed gainsharing scheme is to be applied from date of acceptance of this recommendation, for reaching targets as outlined by the Company.
Lump Sum:
€1000 gross to be paid in lieu of retrospection, in two equal instalments, the first at the date of acceptance of this recommendation, the second six months later.
At the Court hearing in 2002, the Union raised the issue of the failure of the mill bonus to "live up" to its stated potential and expectations. At that time it was achieving approximately 4%. The Court notes that the maximum allowable under the mill bonus (12.5% of basic) is currently achievable and that an average bonus of 11.7% was paid in 2003. At this point in time, the Court does not recommend any alteration in the terms of the mill bonus; however, the Court recommends that a review of the bonus should take place in December 2005 in the light of the industry norms and the Company's position at that time.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
19th April, 2004______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.