INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PEERLESS RUG EUROPE LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Retention of higher rate on foot of redeployment.
2. The Company, which is Canadian in origin, manufactures bathroom rugs for both the home and export markets. The Company claims that its labour costs are substantially out of line with those of its European competitors and have contributed to a decline in its competitiveness. Employment has dropped from 150 staff in 1994 to 80 staff in 1996, of whom approximately 40 people are on lay-off. As a result of staff lay-offs on a "last-in-first-out basis" staff have been redeployed throughout the plant. The dispute concerns the redeployment of 6 chargehands at premium rates to non-premium general operative positions.
Following a similar dispute in 1994, an Industrial Relations Officer of the Labour Relations Commission issued a letter, dated 14th March, 1994, which included a proposal that, in a lay-off situation, the workers would retain the premium rate for three months following redeployment. The parties agreed to the proposal. The Company wishes to implement the proposal in this case. The Union claims that this would be a breach of Clause 9.04 of the Company/Union Agreement and that the workers concerned should retain their premium rate salaries on a "personal to holder" basis. The Company agreed to allow the rates continue until the date of the Labour Court hearing.
The dispute was the subject of a conciliation conference on 8th July, 1996, under the auspices of the Labour Relations Commission. As agreement could not be reached, the dispute was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing was held on 6th September, 1996.
3. 1. Clause 9.04 of the Company/Union Agreement provides for retention of existing salaries in cases of temporary transfers, as follows:-
"where an employee is assigned to a job which has a lower
basic rate of pay, the employee's normal basic rate of pay
will be maintained on a personal to holder basis, in the case
of a temporary transfer. The Union and Members undertake
that employees in receipt of the lower basic rate concerned
will have no objection to this".
Although the Agreement has been amended several times, Clause 9.04 has never been altered.
2. As lay-offs are, by definition, temporary, any resulting redeployments are also temporary and, are therefore, provided for under Clause 9.04. If the situation is permanent, the Company should openly negotiate its manning level requirement.
3. The Industrial Relations Officer's letter of 14th March, 1994, was a product of its time and does not constitute an amendment or an updating of the comprehensive Company/Union Agreement. The letter is not relevant to the current situation.
4. 1. The Company is experiencing very difficult trading circumstances and it cannot carry the additional costs claimed by the Union. High labour costs place the Company at a substantial competitive disadvantage in the industry.
2. Clause 9.04 was envisaged to deal with normal transfers arising from on-going day to day operations. It was never intended to apply to a lay-off situation. As the lay-offs took place in early 1996, a number of the workers have since claimed redundancy and it is not known when, or if, the remaining workers on lay-off may be recalled, the situation cannot be termed 'temporary'. Therefore, Clause 9.04 does not apply.
3. Without prejudice to the Company's position in relation to the non-applicability of Clause 9.04 to lay-off situations, the Company is willing to pay the premium rate for a period of three months following redeployment to a non-premium position as was the case in 1994.
The Court, having considered the submissions and examined the terms of the Agreement on which the Union based its case, has concluded that there is ambiguity in Clause 9.04 of the Agreement in that temporary is not defined.
In all of the circumstances the Court recommends that the claimants should continue to be paid the chargehand rate for a further three months from the date of the hearing.
Signed on behalf of the Labour Court
25th September, 1996______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.