FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GLAXOSMITHKLINE (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Mr Nash |
1. Compensation
BACKGROUND:
2. The hearing before the Court concerns issues arising from LCR19722 which issued following a Labour Court hearing in January 2010. Labour Court Recommendation 19722 recommended that compensation be paid in relation to the termination of the Holiday Cover Agreement and it provided scope for further discussions on issues raised in the Company's submission. Further discussions at the Labour Relations Commission have focused on specific issues and yielded agreement with regards to areas such as timing and terms of redundancies that are set to take place. However, agreement was not reached on compensation relating to, amongst others, loss of shift premium, loss of business driven overtime and step-up and step-down roster arrangements. The parties also remain in dispute with regards to the compensation element of LCR19722 as to how it will be applied to employees leaving the Company within the coming months.
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 25th June 2010, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 6th August, 2010.
UNION'S ARGUMENTS:
1. The Company has already experienced significant cost savings as a result of the Union's acceptance of LCR19722.
2. Since the acceptance ofLCR19722, members have suffered an immediate up-front loss of earnings to the sum of €300 per week on the basis that a compensation payment would be received.
3. The Union contends that the compensation payment was "stand alone" for the termination of the Holiday Cover Agreement and was not dependent on any other issues including further redundancies, shifts and shift patterns.
COMPANY'S ARGUMENTS:
1. The Company is facing a loss-making situation and is currently operating with 40% utilisation of production capacity. This under-utilisation poses a serious threat to the viability of the site within the GSK manufacturing network.
2. As a result of the current financial position, Management contend that there is an urgent need to restructure the organisation so that working hours are aligned directly to business needs. This will allow the Company to competitively attract new business and will be completed by 2011.
3. Management contend that the losses experienced by the site will be eliminated by 2013, by means of ongoing site restructuring, growth of GSK products and the attraction of new business.
RECOMMENDATION:
Matters arising from LCR19722
When the Court issued Recommendation LCR19722 redundancies were not in contemplation. Consequently the question of what, if any, compensation should be paid to staff leaving the Company for reasons of redundancy was not addressed by the parties nor was it considered by the Court.
The compensation recommended by the Court was in respect of future loss of earnings arising from the termination of the annual cover agreement. Those made redundant will not suffer an on-going loss of earnings and there is no logical basis upon which it could be held that they are entitled to the full amount recommended.
The Court is of the view that those being made redundant should receive, at the time the redundancy takes effect, an additional payment equal to the amount which they would have received under the annual cover agreement had it remained in force up to that time. Furthermore, the redundancy payments payable to those being made redundant should be calculated by reference to their earnings as they would have been had the agreement not been terminated.
Other Issues
Loss of overtime earnings
The overtime is issue in this aspect of the dispute was not regular and rostered. In these circumstances, and in line with its normal practice, the Court does not recommend concession of the Union’s claim.
Loss of earnings from shift patterns movement.
The Company believe that the change in shift patterns will not be permanent and that circumstances will arise in the future in which a 4 rota pattern will be reinstated. On that account the Company propose a step-down arrangement rather than compensation. The Union are concerned that the change in shift pattern will be permanent and they are seeking compensation of twice the projected loss.
In the Court’s view this matter cannot be definitively dealt with at this time. If the 4 rota pattern is reinstated, as the Company believe, compensation in the form claimed by the Union would not be appropriate. However if the change is to be permanent the Union’s claim is not unreasonable.
The Court recommends that Company’s current offer be accepted as an interim measure. The position should then be reviewed in September 2011. If, at that stage, a 4 rota shift has not been restored as a permanent pattern, compensation should be paid equal to twice the annual loss. In that event the amount paid under the step-down arrangement should be set off against the compensation payable.
In the case of workers who are made redundant who have moved from 4 rota to 3 rota working, an amount equal to the actual loss of earnings up to the date of redundancy should be paid at the time the redundancy takes effect. Furthermore, their redundancy payments should be calculated by reference to their earnings before the transfer to 3 rota working.
Signed on behalf of the Labour Court
Kevin Duffy
13th August 2010______________________
SCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.