FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GROUP 4 SECURITY - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Cost containment plans
BACKGROUND:
2. The issue before the Court concerns the Company's proposal to restructure wages in the Guarding Division of the business. In June, 2010 the Company approached the Union with a view to renegotiating pay structures due to the financial position of the Company and the emergence of low cost competitors. The Company proposed reverting all staff to the Joint Labour Committee rates of pay and paying compensation of twice the annual loss. The Union's members rejected the Company's proposals. It is the Union's position that the Company has already achieved cost saving measures through a reduction in hours and by introducing the fortnightly pay period in late 2009 to achieve a reduction in overtime payments.
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 18th February, 2011, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 9th March, 2011.
UNION'S ARGUMENTS:
3. 1 The Company have lost high profile business but they have equally gained comparable clients more recently.
2 The Company cannot expect workers to take pay cuts whilst also implementing measures to reduce hours and overtime.
3 The Company, by acting unilaterally in imposing cuts, has not helped garner support for their initiatives. The impact of external cuts imposed by the government must also not be ignored.
COMPANY'S ARGUMENTS:
4. 1 The Company's pay rates are significantly above those of its competitors. The Company is fundamentally uncompetitive. Where it has won new contracts it has done so through an integrated services approach or through international tender.
2 There is limited scope to generate efficiencies within the Guarding Division and there has been a 21% decline in the average monthly hours for that Division. The Company is also under pressure from clients to reduce costs as they themselves are struggling in this economic climate.
3 The Company is prepared to enter into a gain-sharing arrangement with staff whereby the benefits of returning to a competitive position will be shared by both parties.
RECOMMENDATION:
The matter before the Court concerns the Company’s cost containment plans. Due to the difficulties facing the Company it put forward proposals to address its uncompetitive wage structure in the Guarding Division of the Company.
Proposals put forward in December 2009 were rejected by the Union. Following further negotiations and further deterioration in the Company’s financial position a new set of proposals incorporating a reversion of all staff to JLC rates and paying compensation equivalent to twice the annual loss was presented to the Union on 29th July 2010. The Court notes that the parties had made considerable progress towards concluding a pay realignment agreement, however, the July 2010 proposals were also rejected, primarily on the basis of the level of pay reductions sought by the Company and the uncertainty with regard to hours of work available for staff.
The Court notes that while the Company’s proposals include pay cuts they also include a proposal to introduce a form of gain-sharing scheme once the business establishes a sustainable profit path. The proposal states that discussions on this arrangement are to be finalised between the Company and the Union by November 2011.
Having considered the submissions of both parties, the Court recommends the following amendments to the “Proposal for Obtaining Direct Cost Reductions in Security Service Operations 2010” as contained in Appendix 7 of the Company’s submission: -
4.1 Pay
�All security staff will be liable to a 5% reduction or to the appropriate JLC rate, whichever is the higher.4.2 Hours of Work
In allocating hours of work to individual security officers the Company will have due regard to their previous level of working hours and working patterns and will endeavour to optimise the hours of work available to ensure continuity of those arrangements. In doing so, the Company will be guided by business needs and not a “least cost” basis. In the event that the hours available to the security officer are less in the calendar year 2011 than those which were available in the calendar year 2010, the security officer may lodge a claim for loss of earnings.
4.3 Compensation
The following sentence to replace the first line of the third paragraph:
The compensation amount will be paid in two equal instalments, the first will be paid on 1st July 2011 and the second on 1st January 2012.
The Court recommends that the Company’s proposals as amended by the above recommendations should be accepted by the Union.
Signed on behalf of the Labour Court
Caroline Jenkinson
28th March, 2011______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.