FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ROSDERRA FARMS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Unilateral reduction in pay
BACKGROUND:
2. The issue before the Court concerns a claim by the Union on behalf 31 farm operatives employed by the Company regarding a reduction in pay. The Company has pig production units in five farms across Loais, Cavan and Mayo. In late 2009 the Company approached the workers at each farm with a view to securing cost reductions. A number of meetings took place between the parties and various proposals were made. No agreement could be reached and the matter was referred to the Labour Relations Commission for conciliation. A number of conciliation conferences were heard but no agreement was reached. The Company took the decision to unilaterally cut the pay of the workers concerned by €29 per week. The Company's position is that substantial losses had been made since 2008 and it was continuing to lose money. It could no longer sustain its wage costs. The Union's position is that it has offered to the Company a proposal that will reduce wage costs and that the Company is due to return to profitability this year. The Union also argues that the Company should not have cut wages in advance of the conclusion of industrial relation procedures.
The dispute could not be resolved at local level and was the subject of a further conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the19th September, 2011, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
UNION'S ARGUMENTS:
3. 1 At the time of the LRC conciliation conference the Union had delivered a number of cost saving measures across all the farms. This was in addition to increases in productivity.
2 The Workers were prepared to consider a pay reduction under certain conditions. A cut of €29 per week is unacceptable. The Company is now profitable and the arrangements with respect to pay should be reinstated from the date that the cuts were applied and the workers should be compensated the full amount of the deduction.
COMPANY'S ARGUMENTS:
4. 1 The Company has accumulated substantial debt since 2008. It has supplied the financial data to the Union to support the position that the farms are loss making.. Further investment is necessary in the farms due to obligatory changes in pig rearing related to animal welfare. The Company could no longer sustain its wage costs.
2 The proposals of the Union fell far short of the necessary savings required. On several occasions the Company put forward an intended implementation date, all of which were extended as a matter of good industrial relations practice until the Company was left with no alternative but to implement the cuts.
RECOMMENDATION:
The matter before the Court concerns the Union’s claim on behalf of thirty one workers employed as farm operatives for the restoration of pay and payment of retrospection as a result of pay deductions unilaterally made by the Company from 6thDecember 2010 at its farm in Castlebar and from 2ndMay 2011 at its other farm locations.
Rosderra Farms employs 35 people and Rosderra Irish Meats Group employs 900 people.
The Company stated that pay cuts were necessary due to the serious economic difficulties facing the business and in order to secure the viability of the farms into the future. It stated that despite protracted discussions there was no agreement forthcoming from the Union and it had no other alternative but to make a deduction of €28.50 from the workers’ weekly pay.
The Court notes that the Union entered into discussions on cost reductions with the Company in a proactive way and due to the Company’s financial difficulties in February 2011 it indicated that it would accept a pay deduction of €22.00 from the workers weekly pay. However, since then the Union submitted that due to the Company’s changed financial circumstances, it was no longer willing to accept a deduction in pay and sought a reversal of the deductions already made plus retrospection.
The Company, while accepting that its meat processing business had made small profits, stated that its pig farm business continued to make significant losses and in any event it asserted that the meat processing business was a separate and distinct business to the pig farm business.
Having considered the submissions made by both parties the Court notes that with the exception of the Claimants all other workers at all levels in the business as a whole have agreed to cost-saving measures. The Court notes that due to recent cost saving measures taken in Rosderra Irish Meats, a small level of profit was made however, it also notes that Rosderra Farms has made significant losses. The Court accepts management’s contention that the level of profit made in Rosderra Irish Meats cannot be considered as significant when account is taken of the financial costs necessary to comply with the new regulatory changes due to come into effect in 2013 on pig farms.
In all the circumstances the Court is of the view that there should be a fair and equitable distribution of cost-saving measures taken by all employees within the business as a whole and to that end the Court recommends that the Union should enter into discussions on agreeing restructuring and cost-saving measures having regard to the needs of the pig farms' business and which will yield similar cost-savings to those achieved by other employees in the business as a whole.
Therefore, in line with Labour Court Recommendation No:20190 the Court recommends that such discussions should take place with immediate effect and in the meantime pay deductions and retrospection should be restored/refunded in three equal phases on the following basis:
(a)Phase one should be paid on acceptance of this Recommendation.(b)Phase two should be paid when agreement is reached between the parties on the measures required to bring the costs of production on the pig farms sustainable levels.
(c)Phase three should be paid six months after the agreement referred to at (b) above has been concluded between the parties and subject to full co-operation with its implementation by both sides.
The Court so decides.
Signed on behalf of the Labour Court
Caroline Jenkinson
8th December, 2011______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.