FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : NVD LIMITED (NATIONAL VEHICLE DISTRIBUTION LIMITED) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Cryan Worker Member: Ms Ni Mhurchu |
1. (1) Restoration of pay rates per 2009 Agreement (2) Reversal of cuts and changes made without Agreement (UK Work)
BACKGROUND:
2. Established in 1980 the Company is engaged in the transportation of cars, after they are imported into Ireland, to dealerships throughout the island. The Company also provides services to the automotive industry both in France and Britain. In 2009 the Company embarked on a major rationalisation and cost cutting programme which included pay rate cuts initially on a temporary basis. The Union is seeking a reversal of the pay cuts that were introduced and a return to the conditions that pertained before the rationalisation programme, for their members who are employed as car transporter drivers. Also, members working in the UK have had both their basic pay rate and their daily bonus cut. Management have also reduced the frequency of their flights home.
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 21st April, 2011, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 9th November, 2011.
UNION'S ARGUMENTS:
3. 1. The Company is the dominant player in the market and has benefited from the measures already agreed by the Workers. Now that there has been an upturn in business activity there can no longer be any argument about the timing of a return to the terms and conditions that prevailed prior to the 2009 "Carlow Agreement".
2. The terms and conditions of pay of the Drivers who work in the UK must also revert to previous levels.
COMPANY'S ARGUMENTS:
4. 1. The vehicle sales market in Ireland has declined by 77% between 2007 and 2009. The sales forecast for 2012 is for an increase in sales but is still a long way below the sales in 2007. Storage levels have also collapsed which in turn had a catastrophic effect on workshop business in Rosslare where staff numbers were cut by over 90%.
2. The temporary nature of the restructuring of drivers wages would not have been agreed to if the Company was in a position to predict the decline in activity due to the economic recession back in 2009. The Company is now as a result of the exercise more competitive and this is evidenced by the new business contracts secured in Britain and France.
RECOMMENDATION:
- The dispute before the Court concerns the Union’s claim for (i) restoration of pay terms as an agreement made between the parties on 25th February 2009 and referred to as the “Carlow Agreement†and (ii) reversal of cuts made to pay and terms of employment when working in UK.
The “Carlow Agreement†was completed to ensure the competitiveness and survival of the Company due to the serious drop in business caused due to the economic crisis and the decline in market activity since 2007. In mid 2009 a temporary arrangement was entered into to restructure UK contract rates in order to generate earnings similar to those earned while working in Ireland. This was necessary in order to be able to compete for UK business.
The Court notes that the “Carlow Agreement†provided for the restoration of pay terms and conditions when the business climate improves. The Union submitted that business has improved and accordingly the cuts should be reversed.
Management told the Court that the restructuring of rates of pay allowed the Company to compete and secure new business which in turn provided more work and consequently helped to sustain and improve driver’s earnings. However, the decline in market activity has not improved and the Company continues to be adversely affected, in some parts of the business that effect had been catastrophic (in the workshop and storage areas).
Management submitted to the Court that it was now anxious to restructure pay and develop a new system which rewards the high performer while improving efficiencies. A representative group of employees and management under the auspices of a mediator had presented proposals on a new system which had not found acceptance with the drivers.
Having considered the submissions of both sides the Court fully accepts that the business has not improved in the current climate to warrant a reversal of the measure taken to ensure its competitiveness and survival and accordingly does not find in favour of the Union’s claim.
In all the circumstances of this case the Court recommends that the group entrusted to devise proposals on a new payment structure should continue with their discussions and endeavour to complete this process within six weeks of the date of this Recommendation. The Court recommends that any new payment structure which may emerge from these discussions should include a fallback basic rate of pay and should comply with the revised statutory requirements on working time.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
28th November, 2011______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.