LCR15456

FULL RECOMMENDATION CD/96/663 RECOMMENDATIONNO.LCR15456 (CC96/1282) INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH BISCUITS LIMITED - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION BAKERY & FOOD WORKERS' AMALGAMATED UNION AMALGAMATED TRANSPORT & GENERAL WORKERS' UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Mr Rorke

SUBJECT:
1. Restructuring plan.


BACKGROUND:

2. Irish Biscuits Limited is a subsidiary of the Danone Group which is a multinational company with interests in the food and drinks sector and is a world leader in product areas such as biscuits, dairy products and mineral waters. Irish Biscuits manufacture a range of biscuit products under the "Jacobs" and "Bolands" label.

It employs 700 full-time and 170 seasonal employees mainly at its Tallaght factory and 40 within Northern Ireland. In March, 1996 the Company put forward restructuring plans entitled "Securing The Future". It involves major alterations within the existing workforce and a move away from current working arrangements to a new system of annualised hours.

The proposed restructuring will provide for the contracting out of the road transport section as well as the hygiene and office cleaning departments. It is also envisaged that 150 redundancies will be secured from the general workforce and approximately 50 redundancies from the craft, clerical and managerial sections. All redundancies are voluntary, either through early retirement or severance as appropriate. It is also proposed that certain jobs will be on a part-time basis.





Income Arrangements:


The Company is proposing to move to a four grade structure within the annualised hours contracts to replace the present six grades as follows:-



Grade Job Example Contracted Hours Stable Weekly
Income


A Non process jobs 1762 £195.69
B Packing operatives 1800 £222.65
C Wrapping assistant 2120 - 2220 £310.44 )
£330.69 )

D Wrapping machines 2000 - 2220 £321.24 )
£371.27 )


In addition to the above, service pay and shift increments are paid where appropriate. A profit sharing scheme will also operate. Where there is a loss of income as a result of the restructuring the Company has proposed a buy-out formula at 2.5 times the annual loss and to "red circle" up to the highest contract value. It will also sanction 29 higher grade jobs (Grade 6) to be made available to allow promotion from lower graded jobs.

The Unions are in broad agreement with the proposed restructuring. However, they have calculated projected savings of £2.65m accruing to the Company as a result of the proposed changes and argue that these savings should be utilised to bring all staff up to the current top grade salary (Grade 6) of £257.69 per week. They state that the inequality which currently exists in the pay structures in the Company should be eliminated.

Another issue in dispute concerns a group of key workers (35) who earn beyond the highest proposed contract value. The Unions claim that these key workers currently hold a rate under a 1993 Company/Union agreement and should be "red circled" at this rate. The Company propose to "red-circle" to the highest contract value and to buy out any overtime beyond that at 2.5 times the loss. The Unions are not agreeable to this proposal. The Unions also want contract values to be increased and that compensation for any loss of earnings be calculated at the rate of 6 times the loss. The Company rejected these proposals.



As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. Conciliation conferences were held on the 18th November, 1996, 29th November, 1996, 5th December, 1996 and 20th December, 1996.

No agreement could be reached at conciliation. It was agreed to refer the dispute to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 17th January, 1997.



UNIONS' ARGUMENTS:

3. 1. The Company will generate substantial cost savings as a result of the restructuring programme. The savings should be shared, on a fair and equitable basis, with the workforce.

2. The inequity which currently exists in the pay structures should be eliminated.

3. There should be one grade only and all staff should be put on the maximum of £257.69 per week.

4. It is not acceptable to the Unions that any group of workers should suffer any financial loss as a result of the restructuring plan.

5. The Unions have conceded a great deal on the proposed restructuring plan. The Company should reciprocate with a better financial offer to the workers.



COMPANY'S ARGUMENTS:

4. 1. The Company operates in a very competitive market. It must reduce costs substantially and reorganise its operations to secure a viable and vibrant operation for the future.

2. The restructuring plan "Securing The Future" (STF) will significantly improve the quality of jobs, increase leisure time and guarantee stable weekly income.

3. Annualised hours of contract removes the dependency on overtime for income and ensures compliance with the "Working Time Directive".

4. The Company's proposals significantly increases income for the lower graded jobs, improves pensionable income for all jobs, increases promotional opportunities and guarantees income levels where applicable.

5. The STF plan is vital for the future of the Company. If the plan is rejected it will end any further development of the business in Tallaght.





RECOMMENDATION:

The Court having considered the written and oral submissions made by the parties does not find merit in the employees' case for all to be on the top grade.

The Court in considering the two issues therefore recommends as follows:-
1) The proposed grading structure payments to be;
Grade A £195.69
Grade B £230.00
Grade C £240.00
Grade D £267.12

2) Earned income above the level of £22,361 to be bought out
at 3 times the annual loss.



Signed on behalf of the Labour Court



Finbarr Flood
21st February, 1997______________________
L.W./S.G.Deputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.