Labour Court Database __________________________________________________________________________________ File Number: CD913 Case Number: LCR13366 Section / Act: S67 Parties: IRISH RAIL - and - RAIL OPERATIVE TRADE UNION GROUP;IRISH CONGRESS OF TRADE UNIONS (I.C.T.U. |
Dispute concerning productivity payments for rail operatives.
Recommendation:
1992
Division: MrMcGrath Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD9103 RECOMMENDATION NO. LCR13366
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 18
PARTIES: IRISH RAIL
AND
RAIL OPERATIVE TRADE UNION GROUP
IRISH CONGRESS OF TRADE UNIONS (I.C.T.U.)
SUBJECT:
1. Dispute concerning productivity payments for rail operatives.
GENERAL BACKGROUND:
2. Following a dispute concerning a claim for productivity
payments to rail operative staff (on the basis of an approximate
reduction in staff numbers of 450/500) arising from the expiry of
a productivity agreement in 1985, the Labour Court issued LCR12785
on the 29th March, 1990. The recommendation reads as follows:-
"The Court having fully considered the oral and written
submissions of the parties finds that with the payment
of #5.40 on the basic rates in April, 1985 the
Productivity Agreement in respect of Rail Operative
staff was finalised, and no further agreement was put
in place since the termination of that agreement.
Accordingly the Court does not recommend concession of
the Union's claim for a productivity increase in basic
pay on foot of a reduction in staff numbers since that
date.
The Court however notes the extent of the reduction in
staff numbers since April, 1985 (some 500).
Given the significance of this reduction in staff the
Court recommends that the parties discuss the
consequences of such reduction and the adjustments
necessary for the operation of the service.
The Court recommends that the parties, in these
discussions take account of such issues as either party
may wish to raise, and seek to reach an agreement which
will address the needs of the staff and will secure the
cooperation necessary to the effective and efficient
operation of the service".
3. Both sides drew different conclusions from the recommendation
and sought clarification from the Court. By letter of the
8th June, the Court clarified the matter as follows:-
"The Court did not concede the Group's claim in respect
of payment on foot of the reduction in numbers that has
taken place since 1985.
The Court took cognisance of the fact that a reduction
of numbers of such magnitude would have an impact on
the operation of the rail service.
The Court in the light of the information available is
not in a position to evaluate the extent of changes
necessary to ensure the efficient operation of the
service.
The Court accordingly has recommended that the parties
in discussion carry out this evaluation and that the
parties be free to make such input to discussions as is
in the interests of their constituents".
4. However, despite exchanges of correspondence of several local
level meetings, no agreement was reached between the parties and
the Union took industrial action in the form of a one day stoppage
on 24th August, 1990.
The Labour Court intervened in the dispute under Section 18 of the
Industrial Relations Act, 1969. A Court investigation was held on
the 27th and 31st August, 1990 and recommendation LCR13017 issued
on 10th September, 1990. The recommendation reads as follows:-
"The Court in LCR12785 gave the parties the opportunity to
negotiate and put in place a structured agreement which would
(a) recognise that since the termination of the 1975
agreement in 1985 there have been significant staff
reductions, that as a consequence some changes in work
practices and/or increased responsibilities have
resulted, and that these need to be evaluated and
arrangements agreed between the parties as to how the
benefits which have accrued from these changes should
be dealt with,
(b) take account of the financial constraints under which
the Company is operating and the contention of the
Company that in its present viability situation changes
have been and are necessary to secure cost reductions
which together with other savings would sustain that
viability and secure the survival of the Company.
The Court notes that in view of the diverse interpretations by
the parties of the Recommendation such discussions as were held
did not deal with the substantive issues.
Accordingly, having fully considered the views expressed by the
parties in discussion and in their oral and written submissions,
the Court makes the following recommendations.
1. That the Company and Union commence an immediate joint
evaluation of the changes in work practices and or increases
in responsibility which occurred as a consequence of the
reductions in staff during the period 1985 to the present.
2. Concurrent with the evaluation at 1 above the Company and the
Union commence discussions on present and future working
practices for Irish Rail. These negotiations should include
any issues which may be raised by either party.
3. That as a matter of urgency and as part of the negotiations
at 2 above the Company and the Union reach agreement on a
fair manner in which to deal with the savings accruing from 1
and 2 above.
(In the context of this paragraph the Court calls on the
parties to reconcile their different views on the manner
which savings have to be dealt with i.e. the view of the
Company being that all savings in expenditure were used to
secure the survival of the Company in the 1985-90 period and
that future savings are required for the ongoing operation of
Irish Rail, and the claim of the Union that a proportion
(formula to be agreed) of any such savings should accrue to
the employees concerned.)
4. That an agreement on these and any other issues the parties
may wish to raise be put in place before 31st December, 1990.
The Court further recommends that the parties consider jointly
requesting the Court to register this agreement.
In the event that the parties cannot reach agreement the Court is
prepared to make available such assistance as is necessary to help
resolve any matters in dispute within the time scale it has
recommended".
BACKGROUND:
5. 1. Following the issue of LCR13017 the parties commenced
discussions on its implementation with particular reference
to clauses 1 and 2 of the recommendation. In relation to
clause 1, the Company claims that its understanding of the
proposed evaluation of the changes in work practices was that
it took the form of a joint fact-finding exercise in relation
to the reduction in the number of rail operative grades
between 1985 and 1990. On completion of that exercise the
parties would hold discussions at central level to establish
in how many instances there was a basis for further
negotiations on changes in work practices and/or
responsibilities. The Company claims there is only grounds
for further discussions in a maximum of 22 cases. The
Unions' claim that the Company agreed to a joint evaluation
by a working party, made up of lay members of the Union
Group, who would liaise with district nominees of the Company
regarding the number of jobs which were appropriate for
discussion on productivity. Following the joint evaluation
the parties would meet at national level to reconcile the
data collected by the working party. The Unions' claim that
there is a basis for productivity payments in 256 cases (112
cases estimated for the Dublin area and 144 in all other
locations).
3. In relation to clause 2 of LCR13017, the Company claims
that there were considerable delays and difficulties
surrounding talks concerning present and future working
practices and that virtually no progress could be made. The
Unions' claim that it has had discussions with the Company
concerning clause 2 and that it sought to implement fully the
terms of LCR13017. Talks are on-going but progress is being
blocked by the Company's refusal to honour clause 1 of the
recommendation.
4. The Labour Court intervened in the dispute under Section
18 of the Industrial Relations Act, 1969. A Court
investigation was held on 17 January, 1991.
UNIONS' ARGUMENTS:
6. 1. The Unions have sought to implement fully the terms of
LCR13017 but find that progress is being blocked by the
Company's refusal to honour clause 1 of the Recommendation
No. 13017. Discussion document No. 2 (details supplied to
the Court) issued by the Company in connection with clause 2
is the subject of on-going discussions between the parties.
The Company has failed to accept the urgency spelled out in
LCR13017 and has not made sufficient efforts to reach
agreement on a fair manner in which to deal with savings
accruing from clauses 1 and 2 of the recommendation.
2. Following the issue of LCR13017 the parties agreed to
establish a working party to carry out a joint assessment as
envisaged under clause 1 of the recommendation. To ensure
information was gathered in a uniform format two checklists
were drawn up for use by the working party. The working
party then visited each district and met with local
management to establish the number of jobs which were
appropriate for discussion on productivity. Following
intensive local investigations by the working party 144 jobs,
(excluding the Dublin area) were conceded by the Company
representatives as appropriate for productivity calculation.
The Company did not genuinely co-operate with the working
party in the Dublin area and difficulties were encountered in
carrying out a factual assessment. Based on the figures for
the rest of the Country the estimated figure for the Dublin
area is 112 jobs.
3. When the results of the working party evaluation were
compiled the parties met at central level to identify those
areas where there was agreement and those areas which
required further negotiations. Despite having agreed the
methodology and format of the joint assessment the Company
denied that any joint assessment had taken place. Due to the
Company's unfair and unreasonable response to the findings of
the joint assessment progress in securing agreement has not
been made.
4. Following the meticulous evaluation made by the working
party it is necessary that the claim for productivity
payments is dealt with in a fair and reasonable manner. This
is the key to on-going negotiations on changes in the
Company's operations.
COMPANY'S ARGUMENTS:
7. 1. The Company has co-operated fully with the joint
evaluation of the changes in work practices as provided for
in clause 1 of LCR13017. This involved a fact finding
exercise and the Company made the necessary information
available. There was never any question that productivity
levels would be conceded at local level by local Company
representatives. Productivity levels were to be discussed at
central national level between the parties following the
completion of the fact finding exercise.
2. When the parties met following the joint fact findings
exercise there was a wide divergence in the figures supplied
by both sides. It is apparent to the Company that the wide
divergence in figures stems from the fact that the Unions
have not moved from its original claim for a productivity
payment based solely on the reduction in staff numbers.
This is contrary to the Court's recommendation. Any changes
in work practices arising from staff reductions is marginal
and the Company has found that there are only grounds for
such discussions in a maximum of 22 cases.
3. The Company has experienced difficulties in processing
items under clause 2 of LCR13017. The Company issued a
discussion document in September, 1990 on which no progress
was made and a further discussion document (No. 2) was issued
in November, 1990. Despite a number of meetings regarding
discussion document No. 2 and the best efforts of the Company
no real progress has been made.
4. It is the Company's view that real increases in
responsibilities and significant changes in work practices
are readily identifiable and are separate and distinct from
reductions in staff numbers. The Company does not accept
that a real increase in responsibility or a significant
change in work practice automatically arises simply because
the same amount of work is being done by fewer staff. In the
rail section, it is not uncommon for staff to seek upgrading
because of additional responsibility. Such claims are
examined on their merits but upgrading is never conceded
solely on the grounds of an increase in workload.
5. The Company's financial position has deteriorated since
this claim was first investigated by the Court. It has been
necessary for the Company to reduce the subvention in real
terms by 3.5% per annum and the Government is seeking a
greater reduction. The projected loss for the Company for
1991 is estimated at #7.5m after account is taken of the
subvention - without any provision for the next pay round.
This clearly illustrates the magnitude of the financial
difficulties and the necessity for achieving cost reductions
solely in the interest of viability. It reinforces the fact
that the Company has not got the resources to make a special
pay increase to rail operative grades.
RECOMMENDATION:
8. The Court has fully considered the submissions of the parties
together with the detailed information supplied subsequent to the
Court hearing.
Since the termination of the Company/Union agreement in 1985 the
Company has sought to continue to improve it's commercial
viability by maximising savings and increasing revenue. In
seeking to achieve it's aims the Company has been reducing staff
by early retirements, natural wastage etc, while at the same time
seeking co-operation from it's employees in change. The Court
recognises the Company faces problems in the industry through
greater liberalisation of transport, and increasing competition.
The Court also recognises the limitations placed on the Company as
a consequence of the need to achieve greater viability whilst at
the same time meeting the demands for a reduction in the
subvention given to it.
The result of all of these factors has been the adoption by the
Company of measures which include the use of savings, including
savings in labour costs to effect greater efficiency measures and
increase labour cost competitiveness. It appears to the Court
that while the Company are engaged in this process the staff
perceive the situation in a different light. They are cognisant
of the constraints on the Company, however they see the reduction
in the job numbers as having a detrimental effect on employment
and promotional prospects in the long term. They take the view
that workers who have taken redundancy etc., have been compensated
while the employees remaining have had to take on additional work
without or with little compensation.
In the light of the above and taking into account the period
(which predated not only the P.E.S.P. but also the P.N.R.) during
which these matters have been in dispute the Court is of the view
that the concerns of the staff need to be addressed if there is to
be the co-operation between management and staff necessary to the
achievement of the radical changes required for the development of
the system for the future, and the achievement of the commercial
objectives of the Company.
To this end the Court makes the following recommendations in
settlement of the claims made.
(1) That with effect from 1st January, 1991. An increase of
#4.00 per week be paid to rail operatives.
(2) That this payment be continued up until 30th June, 1992 when
the rates of pay to apply as a consequence of the
negotiations at 3 and 4 below come into effect.
(3) That the parties commence immediate negotiations on such
changes as are considered necessary, including changes in
work practices, with a specific commitment to the elimination
as far as possible of practices which have over the years
been identified as sources of excessive cost. These
negotiations to be completed on or before the 30th June,
1992.
(4) That the parties in the context of the discussions at 3 above
agree rates of pay to be applicable to the specific
categories of rail operatives whose work is affected by
changes in work practices or as a consequence of a reduction
in staff.
The cost of such rates of pay to be derived from the
distribution of net savings arising as a consequence of the
actual implementation of changes in work practices and staff
reductions identified as a result of 3 above. Such savings
to be divided on an equitable basis. Net savings to be the
wage costs saved less costs such as redundancy, investment in
technology, extra overtime and additional labour costs. The
Court is conscious of the extreme difficulties currently
affecting the Company and it would be for the parties to
agree when and how the rates of pay in accordance with this
clause would be paid.
The Court urges the parties to accept this recommendation in it's
entirety, and immediately to commence the discussions outlined
above so as to reach an agreement acceptable to both parties which
will adequately reward the staff and provide the necessary
co-operation required to develop a successful railway system for
the future.
~
Signed on behalf of the Labour Court
Tom McGrath
26th July, 1991 ________________
A.S. / M.O'C. Deputy Chairman.