FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KILDARE CHILLING COMPANY (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Non payment of Sustaining Progress Part 2- cost off setting measures.
BACKGROUND:
2. Kildare Chilling is a privately owned meat process company based in Kildare town and employs approximately 260 workers. The issue in dispute concerns the Union's claim for the payment of Part 2 of Sustaining Progress (SP). The Company is seeking cost offsetting measures in return for the payment of the increase. The Company paid Part 1 of SP following the issue of LCR 17916 in July, 2004. The Union will not concede any measures in advance of full payment of Part 2 of SP. The dispute was referred to the Labour Relations Commission. A conciliation conference was held in September, 2005 following which an assessor was appointed to provide a report under Section 1.10 (iii) of SP (cost off setting measures). Subsequently a further conciliation conference was held in February, 2006 but agreement was not reached. The dispute was referred to the Labour Court on the 24th February, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 5th May, 2006.
UNION'S ARGUMENTS:
3. 1.The Company insist on cost offsetting measures which would significantly worsen the terms and conditions of workers. The Union is not prepared to accept a diminution in these terms and conditions of employment.
2. The key premise underpinning the SP agreement from the Union's perspective is that the agreed increments will be paid on time and from the due date (Clause 1.4 SP). Clauses 1.10 (ii) and 1.10 (iii) are the exceptions and cannot be used by some employers to subvert the spirit and intent of the agreement.
3. As no audited accounts have been produced and as the Assessor's report clearly indicates the impossibility at arriving at a conclusion which demands significant cost offsetting measures and a worsening of terms and conditions of workers the Union is seeking the payment of the full terms of SP with appropriate retrospection from the due date.
4. The Union is prepared to enter discussions with the Company following full payment of Part 2 of SP from the due date.
COMPANY'S ARGUMENTS:
4. 1. The Company has lost a large amount of money over the past number of years which is quantified in the Assessor's report. These losses are continuing into 2006. The situation cannot continue and some contribution in the form of cost off setting measures is required. The cost of payment of Part 2 of SP will cost €450,000 and will be ongoing.
2. The Company is willing to pay the terms of SP but is seeking what it considers, reasonable cost offsetting measures i.e. the elimination of three breaks, adjustments in entry terms for new employees, and updating of contribution to costs in canteen and medical cover. The Union has refused to even consider any partial or minor cost offsetting measures. The Company, having paid Part1 of SP received absolutely nothing from the Union, now finds itself in an even worse financial position. The cost offsetting measures are not harsh and will only potentially save the Company €55,000 which represents 12.5% of the actual cost of paying SP.
RECOMMENDATION:
The dispute was referred to the Court pursuant to Clause 1.10(iii) of the pay agreement associated with Sustaining Progress. A similar dispute was investigated by the Court in July, 2004 following which the Court issued Recommendation LCR 17916. It would appear that there are no material changes in the factual background against which that recommendation was issued and the present dispute.
In April, 2004 the LRC appointed an assessor to investigate the Company's claim of inability to pay the first part of Sustaining Progress without the benefit of cost-offsetting measures . The assessor reported that because the Company declined to provide him with its audited accounts he was unable to conclude that the requirement for cost-offsetting measures had been made out.
In Recommendation 17916 the Court recommended that the increases be paid in full. In making that recommendation the Court noted the stated willingness of the Union to engage with the Company in relation to the items of change which the Company was claiming.
The current dispute involves a similar plea by the Company in respect of the second part of Sustaining Progress an assessor was appointed by the LRC pursuant to Clause 1.10 of Sustaining Progress. The Company again declined to furnish the assessor with its audited accounts. Because of this the assessor again reported that he was unable to conclude that the Company's plea was made out.
Clause 1.10 of Sustaining Progress makes it clear that in the case of a plea of inability to pay the prescribed increases (whether under Clause 1.10 (ii) or Clause 1.10(iii) of the Agreement it is for the employer to satisfy the Court that the plea has been made out. In this case the assessor has not been satisfied that the plea is sustainable and apart from assertions concerning its economic and commercial circumstances, the Court has not been provided with any supporting documentation in relation to the Company's finances and accounts. In these circumstances the Court could not uphold the Company's plea of inability to meet the terms of the Agreement without the benefit of cost-offsetting measures.
The Court, therefore, recommends that the Company pay the terms of Sustaining Progress in full and from the due dates. The Court further recommends that when the due increases are paid the parties should engage in negotiations, with a view to reaching agreement, on change items sought by the employer in so far as they constitute normal on-going change or are necessary to improve competitiveness and secure employment.
Signed on behalf of the Labour Court
Kevin Duffy
15th May, 2006______________________
TODChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.