LCR21242

The Dispute

This dispute was referred to the Court by SIPTU (the Union) for investigation pursuant to s.2(1) of the Industrial Relations (Amendment) Act 2001, as amended. The dispute concerns the rates of pay and conditions of employment of members of the Union employed by Freshways Food Company (the Employer).

The issues giving rise to the dispute were previously referred to the Workplace Relations Commission in accordance with the provisions of the Code of Practice on Voluntary Dispute Resolution made under s.42 of the Industrial Relations Act 1990. However no resolution was achieved in that process and the Court received a report from the Workplace Relations Commission to the effect that no further efforts on its part would advance the resolution of the dispute.

The employer is engaged in the business of preparing and distributing sandwiches. It operates from a production facility located in Finglas, Dublin. The business was originally established in 2001. In 2002 it was acquired by a well-known multi-national company. It was acquired by its present owners by way of a management buyout in 2013. Some 177 employees transferred to the employer in its present ownership pursuant to the European Communities (Protection of Employees on transfer of Undertakings) Regulations 2003. The employer does not recognise any trade union for collective bargaining or other employment related purposes.

Preliminary Matters

Number of Workers Represented by the Union

The employer employs 250 workers, 170 of whom are general operatives. The group of workers who are party to the dispute under investigation are in that latter category. The Union filed an Affidavit sworn by Joseph O’Flynn, General Secretary of the Union, on 12^thFebruary 2016 in support of its application to the Court. In that affidavit Mr O’Flynn averred that the number of members of the Union who are in the employment of the Employer, in the grade, group or category to which the dispute relates is 63. No issue was taken concerning the veracity of that averment.

Consequently, the Court is satisfied that the number of workers who are party to the dispute is not insignificant relative to the total number of general operatives employed by the employer.

Collective Bargaining

Section 2(1)(a) of the Act provides, in effect, that it is a condition precedent to the Court’s jurisdiction that it is not the practice of the employer to engage in collective bargaining. It provides: -

• Notwithstanding anything contained in the Industrial Relations Acts, 1946 to 1990, at the request of a trade union, the Court may, subject to this Act, investigate a trade dispute where the Court is satisfied that—
  • (a) it is not the practice of the employer to engage in collective bargaining in respect of the grade, group or category of workers who are party to the trade dispute and the internal dispute resolution procedures (if any) normally used by the parties concerned have failed to resolve the dispute,

The employer contends that it does engage in collective bargaining through a Staff Representative Group (SRG). The Court was told that this is a group comprising representatives of management and representatives of employees which was established internally to deal with employment related issues arising within the employment. The employer submitted that the SRG is an excepted body within the statutory meaning of that expression and that the practice engaged in by the SRG constitutes collective bargaining.

In its written submission and in the oral presentation made on its behalf, the employer told the Court that in 2015, before the Union sought to represent its members in the employment, the SRG negotiated a pay increase of 2.5% which was implemented February 2016, about the time that the dispute was referred to the Court. That increase brought the rate of pay for general operatives to €9.38. This, it was submitted, demonstrated that collective bargaining is a feature of the employment. Consequently, it was submitted, the Court can have no jurisdiction to investigate the within dispute. However, no documentary or other evidence was proffered in support of this submission. Nor was any evidence proffered of any prior incident of what the employer regarded as collective bargaining. Since its amendment by the Industrial Relations (Amendment) Act 2016, s.1A of the Act now contains a definition of the expression ‘collective bargaining’, as follows: - .

• For the purposes of this Act, ‘collective bargaining’ comprises voluntary engagements or negotiations between any employer or employers ‘organisation on the one hand and a trade union of workers or excepted body to which this Act applies on the other, with the object of reaching agreement regarding working conditions or terms of employment, or non-employment, of workers.

The Union submitted that the process engaged in by the SRG does not involve negotiation but mere consultation. There is no trade union involvement in the process and the Union further contends that there is no excepted body involved. Finally, the Union submitted that the SRG, being a consultation body, does not have as an objective the reaching of agreement.

In advancing its submissions on this point the Union referred the Court to a provision in the staff handbook issued by the employer, dealing with the constitution and purpose of the SRG, as follows: -

• “The company recognises the right of employees to regular ongoing information and consultation on matters of concern to them. The forum for same will be through the Staff Representative Group (SRG) made up of both elected employees representatives and members of the management team. Elections will be held annually and both parties agree the election of such persons to SRG shall be carried out in a free and democratic manner, by secret ballot, and the names of the representatives shall be made as soon as possible.

  Only employees who have completed at least one year’s continuous service are eligible for election as representatives”

• 
  “Through this forum for information and consultation we hope to achieve the following objectives:
  • 
    -To give staff members a voice

    -To listen to issues and to decide on an appropriate corrective action or plan together

    -To give positive and negative feedback to staff

    -To provide up-to-date company news and progress

    -To help implement new policies and schemes within Freshways Food Company”

An excepted body to which the Act applies is defined by s.1B of the Act as follows: -

• For the purposes of this Act, ‘excepted body to which this Act applies” means a body that is independent and not under the domination and control of an employer or trade union of employers, all the members of which body are employed by the same employer and which carries on engagements or negotiations with the object of reaching agreement regarding the wages or other conditions of employment of its own members (but of no other employees).

• “Where an employer asserts to the Court that it is the practice of the employer to engage in collective bargaining with an excepted body to which the Act applies in respect of the grade, group or category of workers concerned, the employer shall satisfy the Court that it is the practice of that employer to engage in collective bargaining with the excepted body concerned in respect of the grade, group or category of workers concerned”

For the purpose of the Act“an excepted body to which the Act applies” is given a more restrictive meaning that the definition of an excepted body, simpliciter, contained at s. 6 of the Trade Union Act 1941, as amended by s.2 of the Trade Union Act 1942. The language of s.1B of the Act connotes an independent association or body of workers having many of the characteristics of a trade union without being such an organisation within the meaning of the Trade Union Acts 1871-1990. There are a number of requirements that must be met before the body can be an excepted body to within the act applies. It must be independent and not under the control of the employer. It must have members and all of those members must be employed by the same employer. Crucially, for present purposes, the body must carry on negotiations with a view to reaching agreement on the wages and conditions of employment of the members of the body and for no other person.

In response to a question from the Court, the representative of the employer stated that the members of the excepted body contended for are the members of the SRG. The Court was further informed that the membership of the SRG comprises representatives of management and representatives of workers. However, if the SRG does in fact conduct negotiations (and the Court makes no such finding) it plainly does not do so in respect of its own members alone since the employer readily accepted that it purports to do so in respect of the generality of those employed by the employer. On that account alone, the SRG could not be an excepted body to which the Act applies.

While that finding is sufficient to dispose of the preliminary objection taken by the employer to the Court’s jurisdiction, for the sake of completeness, it should be pointed out that the employer did not adduce any hard or reliable evidence that the process engaged in by the SRG in fact engages in negotiations as that term is generally understood. While the employer made submissions, unsupported by probative evidence, to the effect that the SRG negotiated a pay increase in 2016, what an employer is required by s,2(11) of the Act to demonstrate is that it is its ‘practice’ to engage in collective bargaining. For reasons previously stated herein a once off occurrence cannot amount to a practice.

For these reasons the Court is satisfied that it is not the practice of the employer to engage in collective bargaining and the preliminary objection to the jurisdiction of the Court taken by the employer is overruled.

The Substantive Dispute

Position of the Parties

In its submission to the Court the Union listed the issues that it wished the Court to address as follows: -

• 
  •Rates of pay,

  •Rostered overtime,

  •Overtime rates

  •Pension scheme

  •Sick pay scheme

  •Pay increases

  •Annual leave

  •Disputes and grievous procedures

The employer maintains that is business is characterised by low profit margins and that the control of cost is essential to the continued viability of its business. The employer takes issue with the appropriateness of the comparator employments relied upon by the Union in terms of their size, profitability and similarity to its business. The employer also relies on it economic and commercial circumstances in contending that the cost associated with conceding the Union’s claims is prohibitive.

Information provided to the Court

The Court was furnished with detailed information on the terms and conditions applicable in other named employments in the Prepared Foods Sector. The Court was also furnished with detailed financial information in relation to the employer. This information was furnished in confidence to the Union and was examined by the Union’s own financial advisors in conjunction with the financial advisors to the employer. A jointly agreed analysis of this information was then furnished to the Court following the hearing. The Court sought and obtained agreement from both parties that it should take this analysis into account without reconvening the hearing.

All of this information has been fully considered by the Court is formulating its recommendations.

Appropriateness of comparators

Subsections (3) and (4) of s.2 of the Act provides: -

• (3) The Court shall not make a recommendation providing for an improvement in the remuneration and conditions of employment of a grade, group or category of worker unless it is satisfied that the totality of the remuneration and conditions of employment of the workers concerned provides a lesser benefit to the workers concerned having regard to the totality of remuneration and conditions of employment of comparable workers employed in similar employments.

  (4) When considering if the totality of remuneration and conditions of employment of a grade, group or category of worker provides a lesser benefit to the workers concerned having regard to the totality of remuneration and conditions of employment of comparable workers employed in similar employments, the Court shall have regard to—

  • (a) the totality of the remuneration and conditions of employment of comparable workers employed in similar employments (whether such comparable workers are represented by a trade union of workers or are not represented by a trade union of workers), and

    (b) the comparability of skills, responsibilities, physical and mental effort required to perform the work in which the workers are engaged.

In this case those who are party to the dispute are general operatives and those who are relied upon as comparators are similarly classified. On the information made available to it, the Court is satisfied that the range of duties carried out by those who are party to the dispute are similar to those of the comparators in terms of the matters referred to a paragraph (b) of s.2(4) of the Act. However, it is also necessary to consider if those comparator workers are in similar employment to those associated with the claims.

The only guidance given by the Act on that latter question is in relation to the type of work performed by the respective groups. However, it seems to the Court that in considering the question of similarity of employment, regard should be had to such matters as the general line of business pursued by the employer in disputevis-�-visthose relied upon as comparators; the size of the undertakings and whether they are in competition with each other in the broad sense. In that regard consideration should be given to whether there is elasticity in demand for the goods produces or services provided by the enterprises concerned.

In this case, all of the comparator enterprises relied upon by the Union are in what is classified as the Prepared Foods Sector. While the employer produces sandwiches and others relied upon produce different types of prepared or convenience foods for immediate consumption, they serve broadly the same market and they are in what could reasonably be regarded as the same line of business although there are differences in size and scale. Overall, the Court is satisfied that the comparators cited are appropriate for the purpose of the exercise in which the Court is engaged.

Improvements Recommended

On the information and evidence before it the Court is satisfied that the totality of the remuneration and conditions of employment of those who are party to this dispute provides a lesser benefit than the totality of remuneration and conditions of employment of comparable workers in similar employment.
In making the recommendations that follow the Court has taken into account the financial and commercial circumstances of the employer. The Court has also sought to provide reasonable improvements in the totality of remuneration and conditions of employment in respect of the workers who are party to the dispute which do not undermine the viability of the employer’s business and the sustainability of the employment that it maintains.

Pay

The current rate of pay applicable to the workers who are party to this dispute is €9.38 per hour. On the information which it provided to the Court, the Union contended that the average rate applicable to comparable workers in similar employments is €13.34 per hour. The Court could not recommend adjustments of the magnitude necessary to bring rates of pay to that level at this time.

The Court recommends increases in basic pay as follows: -

• • With effect from 1^stSeptember 2016 Increase of 70c per hour

    With effect from 1^stJune 2017 Increase of 70c per hour

    With effect from 1^stJanuary 2018 Increase of 72c per hour

The Court notes that the employer does operate a pension scheme. The Court does not recommend any adjustment to the current scheme

Sick Pay

The Court recommends that the employer introduce a sick pay scheme providing for 10 days sick leave on full pay, less social welfare entitlements, after the first three days of certified absence in any 12 month period.

Annual Leave

The Court recommends an additional days’ annual leave for those who have completed five years’ service.

Grievance and Disciplinary Procedures

The employer should put in place a disciplinary and grievance procedure which conforms to the general provisions of the Code of Practice on Grievance and Disciplinary Procedures (S.I. 146 of 2000). Consistent with the code, the employer should provide for trade union representation in processing individual grievances and disciplinary matters, where an employee wishes to avail of such representation. The procedure should also provide for the full utilisation of the normal dispute resolution machinery of the State, including the reference of disputes to the appropriate service of the Workplace Relations Commission and the Court.

This procedure should be put in place within one month from the date of this recommendation. Any submission that the Union wishes to make with regard to its content should be taken into consideration. If there is any dispute in relation to the compatibility of the proposed procedures with the Code of Practice, the question may be processed under Section 43 of the Industrial Relations Act 1990.

Other Matters

The Court does not recommend concession of the other matters referred to in the Union’s claim.

Signed on behalf of the Labour Court



Kevin Duffy
LS______________________
3 June 2016Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Louise Shally, Court Secretary.