FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FLAKT WOODS IRELAND LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Reduction of premium rate of pay
BACKGROUND:
2. The Company took over Asea Brown Boveri building systems, which is a ventilation business, in 2002. To comply with the requirements of the Transfer of Undertakings Regulations, all terms and conditions of employment for the employees were protected.The dispute before the Court concerns two individuals who were promoted to commissioning engineers in 1980. In recognition of the highly specialised nature of their work, the rates of pay agreed for the two employees were the application of the National Joint Industrial Council ( NJIC ) rate, plus 50%. This agreement remained in place until 2003, when the Company met with the two employees and outlined the financial position and competitive pressures on the Company. The Company was seeking a reduction in the employees salary to bring them back to the rate of pay equivalent to their colleagues in engineering of NJIC rate plus 20%.
- The Union put forward a five year proposal to the Company as follows:
- (a) A 3% reduction in year one
(b) A 2% reduction in year two
(c) Static rate in year three
(d) Salary to be restored to current levels in year four, as existed in 2003
(e) Normal agreed increases to apply, i.e NJIC rate plus 50%
- The Company disagreed with the rate of plus 50% being included for year five of the proposal.
The Union withdrew their proposals on pay reduction and pay freezing and is seeking the restoration of the agreed pay structure for it's members and any reductions or pay freezing of the long standing agreement to be dismissed.
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 21st October, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 15th January, 2004, the earliest date suitable to the parties. - (a) A 3% reduction in year one
UNION'S ARGUMENTS:
3. 1. The two employees under a veiled threat of losing their livelihood, entered into unsuccessful negotiations with the Company and were unable to reach agreement.
2. Both employees have contributed to the success of the Company by assisting in retaining existing contracts and winning new contracts from competitors due to their excellent reputation.
3. It is unreasonable and unacceptable that the two employees should endure a pay cut and pay freeze and as there are approximately forty other employees in this area,they are being singled out for this treatment.
COMPANY'S ARGUMENTS:
4. 1. The Company is suffering a loss for each project the two employees are assigned to. The rate of pay of each job is defined according to the NJIC rates with a particular margin built in and the two individuals rate of pay is in excess of this.
2. The NJIC rates are the accepted standard in this very competitive industry and to retain business, the Company has to absorb the loss or lose their clients to a competitor. To continue to operate every project involving the two individuals at a loss is unsustainable.
3. The Company was willing to accept the Union's proposal for pay reductions but the proposal for year five was unreasonable and unworkable.
RECOMMENDATION:
The Court has considered the submissions of both sides. The Company is seeking to reduce the pay of two employees who for historical reasons have been on a higher rate of pay than other employees in the Company. The reasons being put forward by the Company for this reduction in pay is due to their current financial situation and the difficulties experienced when tendering for work when the costs of these two employees is taken into consideration. The Court notes the Union's current position whereby it will not contemplate any reduction in earnings for the two employees. However, the Court notes the progress made between the parties in January 2003 when the Union put forward a five year proposal, which entailed reducing the rate of pay, foregoing annual increases for a period of five years and returning to existing levels after five years.
Having given careful consideration to the position of both sides the Court recommends that the Union's proposal dated 11th April 2003, (appendix 12 of the Union's submission to the Court) should form the basis of a settlement between the parties. The Court recommends the substitution of Points 6 and 7 of the proposal with the following:-
- At the end of year three the parties should review the situation, taking account of all relevant matters pertaining at the time and negotiate on a settlement for years four and five.
Signed on behalf of the Labour Court
Caroline Jenkinson
27th January 2004______________________
JO'CDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jo O'Connor, Court Secretary.