FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SMURFIT KAPPA DUBLIN (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION UNITE THE UNION DIVISION : Chairman: Mr Hayes Employer Member: Mr Murphy Worker Member: Mr McCarthy |
1. Breach of an agreement on pay.
BACKGROUND:
2. This dispute concerns an agreement on pay between the Company and the Unions. The Company states that it is no longer in a position to pay the increase set out in the Agreement. The Unions are seeking the application of the Agreement in full. This 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 24th March 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 27th May 2014.
UNION’S ARGUMENTS:
3. 1. In 2009 the Company withdrew from the Transitional Pay Agreement of T2016 with a remaining 6% outstanding. Following tough negotiations an agreement was agreed which committed to pay 3% on 1stJanuary 2010 with negotiations on the balance of 3% in September 2009.
2. Following negotiations the Unions secured agreement from the members to postpone their 6% expectations in order to secure a guarantee of no pay cuts for 2010/2011. A similar proposal was agreed in 2012.
3. When the 2013 agreement came up for negotiation, the members were insistent on a percentage pay increase. However, in the end they were persuaded to accept a similar agreement to 2012 for 2013 on foot of a guarantee of 2% on 1stJanuary 2014.
EMPLOYER'S ARGUMENTS:
4. 1. Since the economic downturn in 2008 volumes in the plant have reduced by over 18%. This is in spite of the consolidation and rationalisation of other Smurfit Kappa facilities and that resulting transfer of work to the Ballymount plant.
2. The withdrawal of the percentage rate increase by the Company is regrettable but unavoidable given the market circumstances. It is noteworthy that the Company has avoided cuts to pay or other benefits despite the competitive pressure it is under.
3. The alternative proposal by the Company represents a considerable cost to the Company but, critically, the measures are once-off and do not represent a permanent payroll increase.
RECOMMENDATION:
Having carefully considered the submissions of both parties to this dispute the Court finds that agreements freely entered into should be upheld save in exceptional circumstances.
The Court finds in this case that while the circumstances have changed they have not changed to the extent that would justify the setting aside of the Pay Agreement freely entered into by the parties.
Accordingly, the Court recommends that the Pay Agreement be implemented as agreed between the parties.
The Court so recommends.
Signed on behalf of the Labour Court
Brendan Hayes
CR______________________
16th June, 2014.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran Roche, Court Secretary.