FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LM ERICSSON LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Grading.
BACKGROUND:
2. The dispute relates to upgrade/promotions of about 300 workers, which have been suppressed by the Company (part of the Ericsson Group) due to ongoing financial difficulties. Under a review system members of the Marine Port General Workers Division (SIPTU) are governed by a promotional grading system in operation for a number of years. It reflects the Company's ethos of being a competence based organisation. Historically, an increase in salary has been given to reflect the workers performance and competence development. In 2002 all promotion payments were deferred for one year. Workers were appointed to the next grade but did not receive the salary increase until one year later with no retrospective payment. Due to a pay freeze in 2003 the Company were not in a position to pay the full percentage amount payable. The Company have proposed that workers on the lowest grade (assistant engineer) receive 66% of the normal increase due for promotions, all others employees receive 60% for promotions. While the Company have acknowledged the upgrade they have not been in a position to appoint workers due to the cost implications.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached the dispute was referred to the Labour Court on the 5th February, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 14th April, 2004.
UNION'S ARGUMENTS:
3.1 The workers have fully co-operated with the Company over the previous 2 years with regard to downsizing and further agreeing to the deferred cost parameters for the first 12 months.
2. The Irish operation has increased its profitability throughout the financial period for 2003.
3. The workers are looking at considerable loss of earnings and their rights per agreement to upgrades and promotions within the existing agreed structure.
COMPANY'S ARGUMENTS:
4.1 Having suffered 10 successive quarterly losses, the Company are facing a major challenge to survive. All Ericsson Companies have to find ways to continue to cut costs or fact closure.
2. Additional costs will add to the overall cost base, increase rates and decrease the Company's ability to compete with other Ericsson Companies in lower cost countries. The Company will lose assignments as a result of any increased costs.
3. Higher costs will impact on the overall employment level within the Company and a redundancy cycle will begin again. Which could result in the decision to close parts of the business in their entirety and move the activity elsewhere.
RECOMMENDATION:
It is clear that an agreement was concluded in April 2002 by which the Company committed to paying the increases now in dispute one year after they became due. Whilst the economic and commercial circumstances of the Company worldwide have deteriorated in the interim, the Company remains bound by that agreement as a matter of good industrial relations practice.
Taking account of all relevant factors the Court recommends that the Company should acknowledge the validity of the agreement in question and commit to its ultimate implementation. The Union, for its part, should agree to accept the proposal already put forward by the Company in respect of part payment of the amount due. The parties should then meet to agree a timeframe for the payment of the residual amounts, including phasing arrangements if necessary. In any event the full increases due should be implemented before the end of 2004.
Signed on behalf of the Labour Court
Kevin Duffy
20th April, 2004______________________
JBChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.