FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CELTIC MEDIA PRINT LIMITED - AND - UNITE DIVISION : Chairman: Ms O'Donnell Employer Member: Mr Murphy Worker Member: Mr McCarthy |
1. Reduction in working week.
BACKGROUND:
2. This dispute concerns the Employer's plan to reduce working hours by five hours per week.
- The Union says that this is an attempt to lessen their Members' terms and conditions.
The Employer maintains that the cut is necessary to stay competitive in an increasingly very difficult market.
- This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 29 June 2018 in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 4 September 2018.
UNION’S ARGUMENTS:
3. 1. The Union says that the Company has "cried wolf" in the past and they don't believe that this reduction in working hours is necessary.
2. The Union contends that there is a better way to make cost savings than reducing their Members' working hours and that administration costs in the Company are too high and should be addressed.
3. Union members feel that they have nothing left to give to the Company and they will not agree to anything that reduces their pay.
EMPLOYER'S ARGUMENTS:
- 1. The Company has been told by its funder, Bank of Ireland, that it must reduce its payroll costs immediately. It believes that a five-hour reduction in the working week can be achieved without any business disruption. This shorter-time working would remain in place until a December 2019 review with the Union.
2. The Company says that as an alternative to the above it proposes the implementation of four redundancies on a permanent basis to achieve the required payroll saving.
3. All other non-payroll related costs, including Management charges, have been significantly reduced.
RECOMMENDATION:
The issue in dispute between the parties is Management’s proposal to reduce the working week for its full-time staff by five hours a week on a temporary basis in order to reduce its operational costs. The Employer posted a trading loss in 2017 and the forecast for 2018 is not positive. The Union’s position is that the Company has threatened closure in the past and it has not materialised. The Workers do not believe that their terms and conditions of employment should be adjusted in any way and are not prepared to engage in relation to same.
Union’s case
Over the last number of years, the Workers have agreed to a reduction in the workforce, to alter their contractual hours, redundancies and pay cuts. While they acknowledge that pay restoration was achieved over 2015/2016 this only returned them to the rate they were on ten years previously. In 2016 the Union sought to negotiate a pay increase, however, the Company produced proposals for further cost reduction measures in order to save the plant from closure. At the request of the Union an independent assessment of the financial position of the Company was carried out. There were issues between the Employer and the Union locally in the intervening period. When the outcome of the independent assessment became available the parties returned to Conciliation and this led to agreed cost-cutting measures in March 2017 which included reduced manning rosters, significant reduction in overtime and reduced holiday opportunity.
In September 2017 the Employer sought further cost reduction measures to save the Company from closure and a flexibility proposal was tabled at Conciliation. This was rejected by a ballot of the members in November 2017. No further action was taken by the Employer and the Company continued to operate.
In May 2018 the Company announced that it was their intention to implement a reduction in the working week with a commensurate reduction in salary and that they were relying on a clause in the contract to do this. It is UNITE’s position that no such clause exists and that Management have failed to produce contracts showing same. The Workers do not believe that there is a financial necessity to make the savings the Employer is seeking to make and, even if there is, it is their position that they have nothing left to give.
Employer’s case
The viability of the business is at major risk due to continuing losses, declining print volumes and very substantial increases in newsprint costs. The accounts lodged with the Companies Registration Office showed a year end loss for 2017. If the Company does not achieve the required savings it will turn cash negative by year end. The Employer is under pressure from both its Board and Bank to achieve substantial savings. While savings continue to be achieved in other areas the payroll bill has remained static and an immediate reduction in payroll costs is urgently required.
The Employer’s position was that a reduction of five hours a week as tabled would achieve the necessary reduction without adversely impacting on production. As an alternative the Employer was prepared to consider four redundancies. However, to date there has been no real engagement from the Union in relation to either options nor has the Union put forward any proposals of its own. If such proposals were forthcoming the Employer would be prepared to engage with the Union in relation to same but the proposals would have to achieve payroll reductions.
Discussion
It is clear to the Court from the submissions of both parties and the oral submissions made on the day of the hearing that little or no engagement has taken place in relation to the quantum of savings required or how such savings could be achieved. The Court notes that the statement from the Employer’s Bank was only presented to the Union on the day of the hearing and that the Union had therefore no opportunity to examine same. In the light of the above the Court is recommending that the parties return to Conciliation and engage on the substantive issue of the quantum of savings required and the measures needed to achieve same. These talks should be time-limited to no more than six weeks unless both parties agree otherwise and any residual issue(s) outstanding at that time should be referred back to the Court for a definitive Recommendation.
The Court so recommends
Signed on behalf of the Labour Court
Louise O'Donnell
CC______________________
12 September 2018Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ceola Cronin, Court Secretary.