FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ABB LONGFORD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Interim payment / arrangement pending introduction/operation of a new profit share scheme.
BACKGROUND:
2. The ABB Group of companies operates in about 100 countries and employs about 107,000 people. It was formerly know as Wessel Cable Ltd. The Company employs 140 people at the Longford site , of which 75% are members of the Union.
A gain sharing scheme was in operation in ABB Longford since 1999. Following a re-structuring in 2004 the gain sharing scheme was financially unfeasible for the Company and they commenced negotiations on replacing it with a profit sharing scheme.
The issues surrounding the withdrawal of the scheme became the subject of a conciliation conference under the auspices of the Labour Relations Commissions in November, 2004. As 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 Labour Court hearing took place on the 5th September, 2006.
UNION'S ARGUMENTS:
3. 1.The Company continues to increase its sales and reduce its unit labour costs due to the increased productivity given by the Union's members.
2. The Union members accepted the Profit Share scheme as there was an expectation that the Company's plans and increase in productivity would give increasing profits which would mean sharing in rewards which would be at least on a par with the interim payment of 2004.
3. The Union maintain that the failure of the Company to return a profit has more to do with the Company's internal budgetary system and capital charges than real losses on the manufacturing process which has become far more cost effective.
COMPANY'S ARGUMENTS:
4. 1. The Company are currently in a loss-making position.
2. Any pay out under the profit share scheme is wholly dependant on the Company making a profit.The Union claim for an interim payment contravenes the concept of the agreement made.
3. The Union's claim for an interim payment is a cost increasing claim that is outside the terms of the National Wage Agreements and cannot be sustained by the Company.
RECOMMENDATION:
The claim before the Court concerns the Union’s claim for an interim payment pending the finalisation of discussions on the introduction/operation of a new profit sharing scheme.
In November 2004 a detailed Labour Relations Commission proposal was accepted which, inter alia, withdrew the gain-sharing agreement and provided for the establishment of a joint committee to design and develop a new profit scheme. This proposal provided for “a once off payment of €580 gross to be paid in the month of December”. As the profit sharing scheme has still not been finalised, the Union sought an additional payment.
Having considered the views of the parties, the Court recommends that on finalisation and acceptance of an agreed new profit sharing scheme, an immediate lump sum payment of €500 should be paid to each of the claimants as an advance payment out of future profits.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th September, 2006______________________
MG.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.