FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ST. FRANCIS ABBEY BREWERY T/A DIAGEO - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Carberry Worker Member: Mr O'Neill |
1. (1) 3% payment.(2) Permanent positions.
BACKGROUND:
2. The Company, based in Kilkenny, is part of the beverage business Diageo and deals with brewing and packaging beer for the Irish market. In June 2000, a business plan to cover change in working practices and numbers employed, known as 'K2' was agreed. A Work pattern allowance (WPA) was agreed which incorporated the previous shift and overtime payments. The agreement states:
"There will be a general review of changes to roles and responsibilities people have, after the project is bedded in. The Company will work with the representative bodies in the first year of the project to design a system to deal with this most fairly. A sum of 3% of payroll will be set aside for application in 2003 to those working on into the future".
The case before the Court today concerns two issues:
(a) Interpretation and application of 'a sum of 3% payroll'.
(b) Claim for two additional permanent appointments. Five of the fifty two members of the brewing and packaging production teams are filled by fixed term contracts employees. Agreement was reached to appoint three roles to permanent positions.
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 26th of January in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 30th April, 2004, the earliest date suitable to the parties.
COMPANY'S ARGUMENTS:
3.(a) Interpretation and application of 'a sum of 3% payroll'.
1. The Company's understanding of the agreement is that a lump sum would be paid to those who have demonstrated take up of the changed roles and responsibilities, however the Company has offered a 3% base pay increase for all members without any review.
2. There were two Unions involved in the negotiations and the other Union (TEEU) have accepted the agreement.
3. Work Pattern Allowance is a core term of employment and increases are applied annually. It is not based on a percentage of basic pay.
4. Any reward for changes to roles and responsibilities in all other sites or Union grouping applies to basic pay only.
(b) Claim for additional appointments.
1. It is feasible to work with lower numbers in the teams, however due to work pressures, it was agreed to defer a feasibility review during the period of the K2 agreement.
2. Permanent contracts should be addressed in the context of a future change plan.
3. Under the Company's equal opportunities policy, permanent positions are openly advertised.
UNION'S ARGUMENTS:
4.(a) Interpretation and application of 'a sum of 3% payroll'.
1. It is the Unions understanding that the 3% mentioned in the agreement was a wage increase.
2. The Union contend that the term 'paybill' covers both basic pay and Work Pattern Allowance and should be applied accordingly.
3. TEEU have accepted the 3% payment in the understanding that SIPTU are pursuing the claim for 3% on basic pay and WPA and should the claim be successful, the WPA would also be increased in their case.
(b) Claim for additional permanent appointments.
1. The employees are filling roles essential to the running of the business and the use of fixed term contracts is unfair and unjust.
2. It has been stated by the Company that the brewing and packaging areas would grind to a halt if these workers were not in place.
3. The Unions request is for the Company to appoint them and to cease using continuous fixed term contracts in this regard.
RECOMMENDATION:
The letter from the Company dated 27th March 2000 clearly indicated that what was intended was that the 3% would be calculated by reference to basic pay. However, read literally the terms used in the agreement, which was drafted after this letter, suggests that the 3% should be calculated by reference to the payroll costs of the group concerned. A literal interpretation of this agreement would also indicate that it was intended that a lump sum would be set aside for distribution having regard to the degree to which individuals changed roles.
In the course of negotiations the Company have moved to a compromise position whereby an ongoing increase of 3% would be paid on basic pay to all employees associated with the agreement.
In the Court's view a literal interpretation of the agreement cannot be adopted in respect of the basis of calculating the 3% whilst rejecting the literal interpretation of other aspects of the agreement. Having regard to all the circumstances the Court believes that the final position put forward by the Company is reasonable and should be accepted.
Temporary Posts.
It is noted that the position of the employees associated with this claim is now governed by the Protection of Employees (Fixed-Term Work) Act, 2003. The Court recommends that the requirement for the posts should be reviewed, in consultation with the Union, after the employees have completed 3 years of temporary service and if it is considered that there will be a continuing need for the post they should be made permanent. In any event, in accordance with Section 9(1) of the 2003 Act, the temporary contracts cannot then be renewed for more that one year.
Signed on behalf of the Labour Court
Kevin Duffy
27th May, 2004______________________
J O'C/MB.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.