FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LISHEEN MINES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr. Somers |
1. Bonus payment.
BACKGROUND:
2. Lisheen Mines opened in 1999 and is located near Thurles, Co. Tipperary. It is owned and operated by the ‘Anglo-American’ multinational mining group. The workforce includes 170 underground miners and 34 mill operators.
- There are a number of groups in the mine, miners, mill operators and others. Following an agreement in September, 2000, the miners receive a bonus of 50% on basic pay while the mill operators and others receive 25%. The mill operators are now seeking an increase in the Bonus Payment Scheme. This increase is being sought on the basis of the increased production, to coincide with the objectives of the scheme. which was agreed so as to increase metal tonnage out the gate. Although tonnage through the mill has increased dramatically there has been no benefit to the mill operators in terms of bonus. The Company indicated that any significant improvement in the mill operators bonus would result in knock-on claims from the miners and the other workers who are also on the same bonus as the mill operators.
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 30th January, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 20th July, 2004.
UNION'S ARGUMENTS:
3.1 The production bonus scheme was structured and put in place in October 2000 to provide an incentive for extra production and in return pay a fair bonus to all eligible employees.
2. The aim of the bonus scheme is to link the objectives of the Company and its workforce in a way that provides an incentive to both sides to increase productivity. All miners and mill operators play their part in meeting that objective.
3. The maximum bonus for mill operators is capped at €400, whereas, with the mine there is no cap.
4. The price of zinc has risen which generates extra profit for the Company.
5. The Bonus Scheme put in place from September 2000, which gave mill workers 25% as against 50% for miners was without agreement between the Union, is totally unacceptable to the mill operators.
6. The mill operators have kept their side of the agreement, but the Company has failed to honour its part of their commitment.
COMPANY'S ARGUMENTS:
4.1 Over the past 5 years, the Company has operated in an extremely difficulty business environment.
2. It has honoured its commitment to all workers by increasing its labour cost in line with both the Programme for Prosperity and Fairness (PPF) and the Sustaining Progress (SP).
3. The mine has not made a positive return on investment to its main shareholders. Over the past three years, since achieving full production, the lower than anticipated zinc price, coupled with the unfavourable euro-dollar exchange rate, has had an extremely negative financial impact on the Company resulting in a loss-making situation from 1999 to end of 2003.
4. In September 2000, as per the Company/Union agreement, the Company negotiated and agreed a Production Bonus Scheme for its employees with the Unions. It was fully understood by all at those negotiations that there would be a differential between the mine and mill production bonus.
RECOMMENDATION:
The mine commenced operations in September 1999 and an interim bonus was put in place in June 2000 for both mine and mill operations. This bonus comprised of three elements and yielded a maximum of 15% of basic pay depending on production. For the duration of this interim period the same bonus applied to the two operations, however, when the interim period was complete, a new bonus scheme was introduced for both operations, which yielded a higher payment for miners than for mill operators. mill operators at present have the possibility of earning up to 25% of basic pay. The Union sought to increase the bonus pay in mill operators to bring it more in line with that paid to the mine operators.
Having examined the oral and written submissions of both parties, the Court accepts the Company's contention that at both national level and global level, it is the norm to have a relative difference between the earning potential of employees who work underground and those who work on the surface. The Court also concurs with the Company's view that the bonus scheme available to mill operators is not out of line with similar mill operator bonus schemes within the mining industry.
Therefore, the Court does not recommend an increase in the bonus payment available to mill operators. However, at the hearing the Company indicated a willingness to discuss the scheme within the parameters of the existing maximum payment of 25%. The Court recommends that these discussions should take place between the parties and should focus on increasing the potential pay out from the bonus.
Signed on behalf of the Labour Court
Caroline Jenkinson
26th July, 2004______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.