INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
G.E. SUPERABRASIVES (IRELAND) LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. (1) Redundancy Enhancement, (2) Compensation for loss of shift, (3) Shift cover
2. The Company is part of the plastics division of General Electric. It is engaged in the production of industrial diamonds mainly for export and was established in Ireland in 1980. There are 170 production workers represented by the Union.
In June, 1995, the Company implemented a re-organisation programme, known as the Turning Point Plan, to effect savings in labour costs. This was due to a fall in world prices for its products. In May, 1996 the Company decided on further re-structuring in the industrial products lines. This would involve 21 redundancies from the production workers.
There are 3 areas in dispute.
(1) Redundancy enhancement:
The Company claims that the Union is seeking to have the redundancy package expressed in terms of "weeks pay per year of service". At the time of the Turning Point Plan the package comprised statutory entitlements, 5.5 weeks' pay per year of service plus various additional payments (full details supplied to the Court). This equated to over 9 weeks' pay per year of service but was never expressed by the Company as such.
(2) Compensation for loss of shift:
The Union is seeking an amount equivalent to 2 years loss of earnings for moving from shift to day working. The Company estimates that 8-10 workers will be affected by the change.
(3) Shift cover:
At the time of the Turning Point Plan annualised hours were introduced, overtime was abolished and replaced by a system of reserve hours. Each worker was credited with 200 reserved hours annually. The Company is seeking the co-operation of the Union in using these reserve hours to provide cover during the transition period (2 months) in which the redundancies would take place.
The dispute was the subject of a number of meetings at local level and a conciliation conference on 9th September, 1996. As the parties did not reach agreement the dispute was referred to the Labour Court in accordance with Section 26(1), Industrial Relations Act, 1990. A Labour Court hearing took place on 30th September, 1996.
3. 1. Redundancy enhancements:
The redundancy payments at the time of the Turning Point Plan were equal to 10.5 weeks' pay per year of service. The package on offer to workers being made redundant now is equal to 9.5 weeks' pay per year of service. Wage rates have increased significantly in the year since June, 1995, and, consequently, the redundancy package on offer now should also increase.
2. Compensation for loss of shift:
The effect of the Company's plan to abolish shift work would be to reduce gross pay by up to 25%. Workers who were receiving wages of approximately £26,000 will now receive £17,000. The Union's claim of 2 years' loss of earnings is justified.
3. Shift cover:
The reserve hours were specifically intended to cover 3 types of situations - short term absences, peaks in production and quality problems. They were not intended to be used for the anticipated disruption which will result in the 2 months transition period. If the Company's plan was upheld it would place an inordinate demand on the reserve hours of those affected.
4. 1. Redundancy enhancement:
The redundancy package offered at the time of theTurning Point Plan was very comprehensive and generous. It far exceeded the industrial norm. It was, however, strictly related to the Turning Point Plan and was not expressed in a "weeks per year of service" formula. The Company agreed to extend the offer to the current redundancies, but to express it as a weeks pay per year of service formula would represent a cost increase and a guarantee that the Company cannot afford. The Company is making significant losses in the area which it is trying to restructure.
2. Compensation for loss of shift:
There is an existing agreement regarding the loss of shift which is as follows:
(1) The total value in weeks pay, as determined by the length of service on shift.
(2) The phasing of this payment is a step-down format.
Only 8-10 workers will be involved in a loss of shift, the majority of whom will have 4.5 - 5.25 years service. The agreement was used at the time of the Turning Point Plan when the average years on shift was 9.26. The Company offered an extra £200 per worker as a gesture but this was rejected. The Company is willing to accept volunteers (with a greater service and therefore greater entitlement) should they be found.
3. Shift cover:
The Union claims that the transition period could result in (1) those taking redundancy leaving early, (2) an increase in absenteeism and (3) those remaining having to provide additional training. While there may be some concern, the disruption will be limited. Of the 21 workers leaving, approximately half will be leaving from areas which are currently over-manned The cost of the reserve pool of hours, which is paid for by the Company, is approximately £4,000 per worker. To date, an average of only 2.5 hours per worker has been used. LCR 14882 provides that cover must be provided from the reserve hours by the workers as required.
On the 3 issues before it, the Court finds as follows:
The Court finds no grounds for recommending any change in either the presentation or content of the redundancy package on offer.
2.Compensation for loss of Shift:
The existing Company agreement to apply. However, taking into account the particular circumstances of this case, the Court recommends that the Company offer of £200 be increased to £1,100 and paid to those affected.
The Court notes management agreement to accept volunteers before selecting personnel for the change of shift.
3.Shift Cover during transition:
The Company is confident that any extra demands on individuals will not be unreasonable but the Union is concerned that there will be an abuse of the use of Reserved Hours.
Neither side is clear as to the actual effect the transition is going to have on individual working hours. Because of the above, the Court recommends that the issue is left for review until after the transition when the situation will be clear and can be discussed between the parties.
During the transition, current working arrangements should continue and every effort should be made by management to minimise the use of Reserve Hours.
Signed on behalf of the Labour Court
14th October, 1996______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.