FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : SOUTH EAST CATTLE BREEDING SOCIETY LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Sustaining Progress
BACKGROUND:
2. The dispute concerns a claim by the Union for the implementation of increases under the Programme for Sustaining Progress on behalf of approximately 20 sales and clerical staff employed by the South Eastern Cattle Breeding Society (SECBC). The Company has pleaded inability to pay. This position has been upheld by the appointed independent assessor who stated that:
- "1. The Company operates in a declining market, with relatively little scope to expand market share. This is especially evident with the decline of the small farm owners who make up a large percentage of customer base.
2. With the present cost base of the Company, it will be very difficult for the Company to achieve an operating profit, and therefore all increases in costs will have to be paid from financial reserves, threatening further and future viability and survival of the Company.
UNION'S ARGUMENTS:
3.1 Salaries at present are not far above the minimum wage. The workers have not had an increase for almost three years. The result of the loss of these increases will have a cumulative loss to their gross wage of 12.5% by October, 2005.
2. Staff are not in a position to continue working without receiving their National Wage Agreements, which is only a means of keeping up with inflation. The position also impacts on their pension rights and any redundancy situation that may occur in the future.
3. Staff loyalty down through the years is without question. Staff have demonstrated huge flexibility down through the years and have always made themselves available when required.
COMPANY'S ARGUMENTS:
4.1 Based on the information supplied to the assessor and subsequently verified, the Company has valid grounds to its claim of inability to pay under the terms of Sustaining Progress.
2. Any endorsement of the Union's claim will have significant effects on the future of SECBS. The Company cannot absorb any further costs at this time.
3. The Society has the responsibility of ensuring that the Company can continue to operate as a viable entity in the future. Concession of this claim will significantly impact the Society's ability to safeguard these matters.
4. Concession of this claim would affect the Company's ability to provide ongoing employment and would place the Society in an unacceptable situation vis-a-vis its ability to fund the increase.
RECOMMENDATION:
This dispute concerns a plea by the Society of inability to pay the terms of Sustaining Progress 1.
Clause 1.8 of the agreement provides that an employer may plead inability to pay the terms of the agreement where this would lead to serious loss of competitiveness and employment. Clause 1.10 sets out the procedure to be followed where such a plea is made and Clause 1.10(ii) deals with situations where an employer claims inability to meet the terms of the agreement in full.
The agreement provides that the onus is on the employer to substantiate the plea. The procedures prescribed by the agreement involve an examination of the economic, commercial and employment circumstances of the employer by an Independent Assessor appointed by the LRC.
Having examined the financial information supplied by the Company, the Assessor concluded: -
"Based on the information supplied to the assessor and subsequently verified, the company has valid grounds for its claim of inability to pay under the terms of Sustaining Progress".
As the dispute remained unresolved following the Assessors report, it was referred to the Court pursuant to Section 20(2) of the Industrial Relations Act, 1969. The Court is confined to determining whether the employer can or cannot pay the terms at all.
The Union expressed some difficulties with the financial information disclosed to the assessor in accordance with Clause 1.10(ii); consequently, in order to examine the details, the Court sought such information from the Society.
The Court notes the Society is involved in a new business initiative, which it hopes, will improve the financial situation but that this will have little impact for approximately 2 years.
The Court has considered the submissions made by both sides and has considered all of the financial and related information with which it was provided. The Report of the Assessor has also been fully considered and given serious weight. The Court is satisfied that the Society is experiencing significant financial and competitive pressures and is therefore, satisfied that the employer has demonstrated that it cannot pay the terms of Sustaining Progress 1.
The Court recommends that the Society should keep the Union informed of the progress of its new business initiative, on a regular basis. The Court also recommends that the parties should meet to re-assess the situation in November 2005.
The Court so decides.
Signed on behalf of the Labour Court
Caroline Jenkinson
4th July, 2005______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.