FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ELEMENT SIX (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION AMALGAMATED ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Rate of pay for best practice/annualised hours of agreement.
BACKGROUND:
2. The Company is involved in the production of industrial diamonds and was formerly known as De Beer Industrial Diamonds. The dispute concerns the Company's proposed Engineering Restructuring Programme which concerns best practice and annualised hours. The Unions are prepared to accept the programme but are seeking a pensionable salary of €55,000 per annum for its implementation. Management's offer was a pensionable salary (basic plus bonus) of €45,000, non-pensionable allowances of €5,404, and the 'BHAG' bonus of €4,596, also non-pensionable, i.e. €45,000 pensionable and €10,000 non-pensionable. The Unions rejected the offer due to the non-pensionable element of salary and, following further discussions, the Company withdrew its offer.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 27th November, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 31st March, 2004, in Limerick.
UNIONS' ARGUMENTS:
3. 1. The Unions have accepted in full the Company's proposals on best practice.
2. The changes by the Company are major and will give the Company the competitive edge it needs going forward.
3. The Unions' claim are not excessive. Other companies in the area which are seeking similar agreements are paying in excess of what the Unions are claiming.
COMPANY'S ARGUMENTS:
4. 1. The Unions' claim for a pensionable, consolidate rate is €55,000 per annum is unrealistic. The Company operates in a very difficult trading environment, forcing it to implement a number of restructuring programmes.
2. The extent of the deficit in the Company's pension plan is €59.7 million. Consolidation of all existing allowances to salary as the Unions are seeking would need an input of €6.29 million into the pension plan.
3. Concession of the claim would have serious knock-on implications for production operators in receipt of shift premium and travel allowance.
4. The Company is seeking to have nine craftsmen work a compressed working week for which the Company is prepared to pay a non pensionable allowance.
RECOMMENDATION:
This claim arose as part of the parties' negotiations on the implementation of the restructuring of the maintenance department. These negotiations made progress on the contracting of a Facilities Manager, upskilling of craftsmen and the provision of maintenance cover outside normal working hours. The Unions gave a commitment to accept the Company's draft Engineering Restructuring Programme, without any changes in return for a basic salary of €55,000 for each craftsman. Management's offer to meet this gross salary was conditional on the rate being inclusive of consolidation of bonuses and allowances, which would not be pensionable. The Union agreed to the consolidation but not to the non-pensionable elements.
The Company highlighted the major deficit it is facing on the funding of its pension scheme and for that reason it submitted to the Court that it could not meet the Unions' demands and consequently withdrew its offer.
The Court is of the view that it is reasonable of the Unions to aspire in time to have the proposed higher salary of basic plus allowances and bonuses consolidated for pension purposes. Therefore, the Court recommends that a review of the situation should take place, five years from the date of this recommendation, with a view to having the Unions' aspiration met to the maximum possible.
The Court notes that one element of the proposed consolidated salary relates to the BHAG bonus, which was a transformation bonus and is not guaranteed into the future. However, the Company indicated to the Court that it is likely to be replaced by a new scheme. Therefore, the Court recommends that the salary of €55,000 comprising of all components should be guaranteed going forward.
Accordingly, the Court recommends that the draft Engineering Restructuring Programme should be resubmitted to the Unions with the Court's recommendations, and the package should be accepted by both parties in settlement of this dispute.
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.