FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LUFTHANSA SHANNON TURBINE TECHNOLOGIES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. 1. Performance Related Pay. 2. Three cycle shift premium.
BACKGROUND:
2. The Company is involved in the repair of aircraft turbine components. It currently employs one hundred and sixty eight workers.
There are two issues before the Court.
(i) The removal of the Performance Related Pay (PRP) system
In 2002, due to financial difficulties the Company made a decision to suspend its PRP scheme. The Union on behalf of its members agreed to a one year freeze on the scheme. The Company proposed to introduce a revised PRP and Bonus scheme.
The Union is seeking the re-introduction of the original scheme.
(ii) An appropriate premium for a 3 cycle shift.
In November, 2002, there was a requirement for employees to work additional hours. As a temporary measure, the Company agreed to apply overtime rates for the additional hours. The Company then approached the Union with a view to agreeing an appropriate rate for the introduction of a 3 cycle shift. The Union states that a 35% shift premium should apply. The Company made an offer to apply a 22% shift premium.
Local discussions could not resolve the issues. The dispute 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 8th of August, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 10th of December, 2003.
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UNION'S ARGUMENTS:
3.The removal of the PRP system.
1. Following the Company's plea of inability to pay, the Union agreed to a one year freeze on the PRP system. It was understod that the system would be re-introduced in January, 2003.
2. The Company removed this condition of employment without agreement.
3. The original PRP system should be re-introduced.
An appropriate premium for a 3 cycle shift.
1. The 3 cycle shift is an unsocial shift and causes much disruption to family life.
2. The cost to the employer is minimal in the overall context as only one section is being asked to work this shift.
3. A 35% premium for a 3 cycle shift is reasonable and is the norm in the Shannon area.
COMPANY'S ARGUMENTS:
4The removal of the PRP system.
1. The re-introduction of the original PRP system is unrealistic.
2. The Company suffered financial losses during 2002 and 2003 to date. These losses would have been considerably greater had the PRP freeze not been in place in 2002 and 2003.
3. The offer to introduce a revised PRP and Bonus scheme from the 1st of January, 2004 is reasonable in the light of the financial and trading difficulties experienced by the Company.
An appropriate premium for a 3 cycle shift.
1. A premium of 20% - 25% for a 3 cycle shift appears to be the norm in the Shannon area.
2. The claim cannot be conceded as it would place the Company at a disadvantage in its efforts to compete for new business.
3. The offer to apply a 22% shift premium for a 3 cycle shift is reasonable.
RECOMMENDATION:
The Court has given careful consideration to the oral and written submissions of the parties. The Court accepts the Company's contention that due to its deteriorating financial circumstances continuation of the Performance Related Pay (PRP) increases at existing levels is unsustainable. The Court is of the view that the best way forward to resolve this dispute is for the proposals presented by the Company on 26th March, 2003, to form the basis of further discussions between the parties.
With regard to the Company's proposal to introduce a new scale for PRP with reduced rates of increase, as the workers have a greater expectation than that proposed, the Court is of the view that the parties should enter into discussions with a view to reaching a mutually acceptable new PRP scheme. The Court recommends that these discussions should be completed no later than the end of March, 2004.
To address the non-payment of PRP in 2003, the Court recommends that a once off lump sum of 3% of annual salary should be paid.
The Court recommends the payment of 25% shift premium for the three-cycle shift system when introduced.
Signed on behalf of the Labour Court
Caroline Jenkinson
7th January, 2004______________________
GBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Gerardine Buckley, Court Secretary.