FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 S2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001, AS AMENDED BY THE INDUSTRIAL RELATIONS(MISCELLANEOUS PROVISIONS) ACT, 2004 PARTIES : FOURNIER LABORATORIES LTD (REPRESENTED BY RONAN DALY JERMYN, SOLICITORS) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr Nash |
1. Referral from The Labour Relations Commission under The Industrial Relations (Amendment) Act, 2001, as amended by The Industrial Relations (Miscellaneous Provisions) Act, 2004.
BACKGROUND:
2. The case before the Court concerns a dispute between Fournier Laboratories and SIPTU. Fournier Laboratories is a subsidiary of Fournier Pharma a European based Company which produces anti-cholestrol tablets. The parties are in dispute in relation to Pay Structures, Annual Leave, the application of Codes of Practice S.I. 146 of 2000 (Grievance & Disciplinary Procedures) and S.1. 139 of 2004 (Victimisation), Annual Bonus and the provision of canteen facilities at the Company's premises.
The Company rejects the Union's claim in relation to the Pay Structure on the basis that it is not out of line with acceptable standards. As far as Annual Leave is concerned, the Company's position is entitlements at the Company are well in excess of statutory entitlements.
The Company's position with relation to S.I. 146 of 2000 is that its procedures are adequate and have not required external involvement to date. The provision of S.I. 139 of 2004 will be discussed at the next review of the Employer Handbook. The provision of Canteen facilities is part of the development plan of the Company and will be put in place in due course.
The dispute was referred to the Labour Relations Commission in accordance with S.I. 76 of 2004 (Enhanced Code of Practice on Voluntary Dispute Resolution.As no agreement was reached the dispute was referred to the Labour Court on 8th March 2006 in accordance with Section 2(1) of the Industrial Relations (Amendment) Act, 2001 as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004. A Labour Court hearing took place on the 19th April, 2006.
UNION'S ARGUMENTS:
3. 1. The criteria for the performance related pay system is unclear. The Union contends that a basic rate of pay should apply as is custom and practice in comparable employments in the sector. The Union is willing to discuss a performance related pay system, but the criteria for payment must be clearly identified.
2. The Company had previously awarded 5 days extra leave when the four shift cycle was introduced but unilaterally withdrew it. The hours worked in excess of 39 hours per week on the four shift cycle should be paid for at double time for the first two hours and the third hour taken as time in lieu. This is standard practice in the Pharmaceutical industry.
3.The Company is offering "external representation" only on a case by case basis. The Union is seeking representation as provided for in S.I. 146 of 2000. (Code of Practice on Grievance and Disciplinary Procedure). The Union is also seeking inclusion of the provisions of S.I. 139 of 2004 (Victimisation) into the Employee Handbook with immediate effect.
4.The Company pays a 9% bonus which is discretionary. The Pharmaceutical sector provides a guaranteed bonus between 8% and 12% which also attracts shift premium. The Union is seeking the application of a guaranteed 9% bonus attracting shift premium where applicable.
5. The Company does not provide adequate canteen facilities to take into account work carried out on the four shift cycle. The Union is seeking that discussions commence immediately with regard to these facilities.
COMPANY'S ARGUMENTS:
4. 1. Rates of pay are not out of line with comparable employments in the solid dosage market. The Company maintains a performance related pay system in an attempt to reward employee performance on an individual basis. Recent pay increases in the Company have been well in excess of increases payable under Sustaining Progress.
2. In relation to Annual Leave entitlements, the Company's position is that employees receive 23 days per annum which increases to 25 after four years service. This is well in excess of statutory entitlements.
The Company made a business decision to pay for the additional three hours worked per week on the four shift cycle at a rate of double time. Other overtime is paid in accordance with the Company's overtime policy.
3. The Union is seeking external representation in the processing of issues of Grievance and Discipline. The Company does not exclude external representation from its procedures and will consider this issue on a case by case basis. To date, there has been no request for external representation in the Company.
The Company will discuss the provisions of S.I.139 of 2004 in the context of the next Employee Handbook review.
4. The Company has two Bonus Schemes in operation, a General Bonus Scheme to a maximum of 9% based on Company and individual performance and also a Cash Profit Sharing Scheme which is paid as a percentage and depends on the performance of the Fournier Pharma Group and applies to all employees on site subject to the qualifying conditions of participation in the Scheme.
5. The provision of canteen facilities are part of the Company's development plan and will be introduced in due course.
RECOMMENDATION:
This dispute was referred to the Court pursuant to Section 2(1) of the Industrial Relations (Amendment ) Act 2001 (the Act). The Court is satisfied that the conditions specified at Section 2(1)(a) to 2(1)(d) of the Act are fulfilled in this case and that the dispute is properly before the Court for investigation and recommendation.
Section 5(2) of the Act provides that a recommendation made by the Court shall not provide for arrangements for collective bargaining. Subject only to that restriction the Court is required to give its opinion on the matter under investigation and, where appropriate, its view as to the action which should be taken having regard to the terms and conditions of employment, and to the dispute resolution and disciplinary procedures, in the employment concerned.
Both parties made comprehensive written and oral submissions and provided the Court with comprehensive information on rates of pay and other conditions of employment in what they regarded as analogous employments. There were, however, significant differences between the parties as to what constitutes similar or analogous employment. The Union sought to rely on the pharmaceutical industry in Cork as being the appropriate reference point in advancing its claim that rates of pay and conditions applicable to those associated with these claims are out of line. For its part the Company maintain that the appropriate reference point is the solid dosage sector of the pharmaceutical industry.
It is the Company's contention that its rates of pay and conditions of employment, taken in their totality, compare favourably to those of other Company's engaged in similar commercial activity. On this basis the Company contends that the intervention of the Court is not warranted. The Company relied on Recommendation LCR 17745 of the Court in Bank of Ireland and IBOA in support of this submission.
Having taken full account of the submissions made by the parties and having evaluated on the information with which it was provided, the Court has concluded that it is appropriate for it to make recommendations in this case.
Pay:
A central argument in the Union's case is that the Company's pay determination system is out of line with accepted standards in that it is based solely on performance assessment and that there is no rate for the job. Having regard to all of the information with which it was provided the Court accepts that the predominant practice in the sector (whether the pharmaceutical industry as a whole or the solid dosage sector is looked at) is that employees are paid by reference to a basic rate for the job. The Court is further satisfied that where performance is taken into account in pay determination it is by way of bonus in addition to basic pay. Accordingly, the Court accepts that the pay determination system of the Company is out of line with normal standards.
The Company told the Court that the average salaries for production workers in 2006 was €29,949. It would appear from the information provided by the Union that actual basic rates (apart from starting rates) range from €534 per week (€27,768 p.a.) to €538.85 (€30,360 p.a.).
The Court recommends that this pay structure should be incorporated in a formal pay scale with increments. The scale should be as follow:
Year one = €534 per week
After one year = €564 per week
After two years = €593 per week
Where employees are currently paid rates in excess of these rates they should retain their current arrangements on a red- circled basis.
Future Increases:
In future pay adjustments should have regard to the provisions of National Pay Agreements and should maintain the concept of a basic rate for the job.
Bonus:
The Court does not recommend any change in the current arrangements regarding the Company's bonus schemes. Any dispute concerning the application of the scheme to individual employees should be processed, if necessary, through the internal grievance procedure, as amended in accordance with this recommendation.
Annual Leave:
The Court recommends that employees who work on 4 cycle shifts and work a 42 hour week , should be afforded a choice between accepting overtime and payments as at present for the additional 3 hours or of receiving at double time for two hours and additional leave in lieu of the third hour.
Grievance and Disciplinary Procedures:
The Union claimed that the current internal procedures for the processing of issues relating to individual grievance and disciplinary maters are inadequate in that they do not provide for representation of employees by a trade union in appropriate cases.
The Court recommends that the employer put in place a disciplinary and grievance procedure which conforms with the general provisions of the Code of Practice on Grievance and Disciplinary Procedures (SI 146 of 2000) and in particular that appropriate provision be made for representation by an employee representative as provided by paragraph 4.4 of the Code.
Any dispute on this issue should be processed through the procedures provided for by section 43(1) of the Industrial Relations Act, 1990.
Code of Practice on Victimisation:
The Company should put in place procedures which comply with the Code of Practice on Victimisation (S.I. 139 of 2004). Any dispute on this issue should be processed through the procedures provided for by the section 43(1) of the Industrial Relations Act 1990.
Canteen:
The Company should provide canteen facilities within 3 months from the date of this recommendation.
Implementation:
Save where otherwise appears, this recommendation should be implemented within one month from the date on which it is issued.
Signed on behalf of the Labour Court
Kevin Duffy
24th May, 2006______________________
AH/MB.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.