FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DIAMOND INNOVATIONS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Payment of Sustaining Progress.
BACKGROUND:
2. Diamond Innovations Ireland has been in operation in Ireland since 1981. The Company was sold in December 2003 to Littlejohn LLC and in January 2006 Sandvik (Sweden) announced that it had entered into agreement to buy the entire business from Littlejohn. The sale of the business was completed on March 15th 2007.
The Company manufactures industrial diamonds and currently employs 110 people.
The dispute before the Court concerns a Claim by the Union on behalf of 49 members employed as General Operatives for the implementation of Phase 2 of Sustaining Progress.
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 20th November, 2006, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 27th March, 2007.
UNION'S ARGUMENTS:
3. 1. The Union's claim is that the Assessor's report, which found in favour of the Union, is honoured by the Company and all monies due from 1st July 2004 are paid at no loss to the Workers.
2. In March 2006 the Workers at the plant received part of the disputed increase in return for operating two extra presses. The Union maintain that this amounted to a 10% increase in production.
3. The Company sought further cost-offsetting measures in exchange for the outstanding pay claim. The Union members balloted on these proposals and rejected them.
COMPANY'S ARGUMENTS:
4. 1.The Company paid the first two phases of Sustaining Progress 2 totalling 3% to all unions in March 2006.
2. The Gainshare monies were encompassed as part of the sale of the business in early 2007, and as the Boardhave withdrawn the amended version of the LRC proposals, the Company is no longer in a position to re-table these proposals with respect to SIPTU members.
3.From its opening position, the Company moved significantly and offered a reasonable compromise in its ultimate proposals on November 16th 2006 and it was unreasonable of SIPTU not to accept these.
RECOMMENDATION:
This case has its origins in a survival plan launched by the Company in 2005. In the context of that plan the Company claimed inability to the pay the terms of the pay agreement associated with Sustaining Progress. A dispute ensued involving the group of unions representing the Company’s staff. That dispute was considered by the NIB which recommended that the claim of inability to pay be processed within the terms of the Sustaining Progress agreement and that an assessor be appointed for the purpose of evaluating the commercial and economic circumstances of the Company.
An assessor was duly appointed by the LRC from amongst the panel approved by employers and trade unions. The assessor reported in November 2005. The import of his report was that the Company could not reasonably claim inability to pay the increases due. The Company rejected the assessors report for reasons which were outlined to the Court. However, the Company would not then agree to have the matter referred to the Court for a binding decision pursuant to Clause 1.10(ii) of Sustaining Progress.
Further discussions followed in which the Company agreed to pay the disputed increases in part and sought cost off-setting measures in return. This was not accepted by the Union. The matter was again discussed by the NIB which asked the parties to engage further with the LRC in the matter. Having received a report from the NIB the LRC issued proposals to the parties on 20th July 2006. These proposals provided for the payment of the final phase of Sustaining Progress with effect from 1st May 2006 in return for certain cost off-setting measures. These proposals were rejected by the Union.
The Court notes that the dispute is before it pursuant to Clause 1.10(iii) of Sustaining Progress. That clause requires the Court to give serious weight to the report of an assessor appointed in accordance with Clause 1.10(ii) of the Agreement. The Court further notes that the Company have questioned the independence of the assessor appointed by the LRC and have rejected his report. The Court does not accept that any reasonable or acceptable basis exists for the Company’s claimed difficulties with the assessor. In any event, if the Company had a difficulty with any aspect of the assessment process the correct approach was to process the dispute to the Court in accordance with the relevant provisions of the Agreement.
The Court does, however, accept that circumstances have changed since the assessor issued his report. The parties have had further engagement with the NIB and the LRC and these Bodies have made an independent assessment of the current financial and commercial circumstances of the Company. Inherent in the proposals issued by the LRC in July 2006 is an acceptance of the need for some cost offsetting measures in order to allow payment of the disputed increases. On the basis of the information now before it the Court also accepts that some concessions on the strict terms of the Agreement are justified.
In all the circumstances of this case, and in the interests of bringing finality to this dispute, the Court recommends that the proposals of the LRC, dated 20th July 2006, be accepted with the following modification: -
�The final phase of 2.5% should be paid with effect from 1st January 2006.
�The SP 2 Agreement should expire on 30th June 2006.
The other aspects of the LRC proposal, including the cost off-setting measures (which if not already introduced should come into effect from the date of this recommendation) and the payment of the 2005 Gainshare should be accepted and implemented.
Signed on behalf of the Labour Court
Kevin Duffy
29th March, 2007______________________
MG.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.