INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Owens
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. (1) Development Programme, (2) Shift Work.
2. The Company develops and manufactures medical diagnostic reagents for use in hospitals, clinics and laboratories. Its parent Company in Germany manufactures the diagnostic machinery. The Company markets its products in a package system of diagnostic instruments and reagents. It supplies its products to Olympus subsidiaries world-wide and employs 160 workers at its location in County Clare.
The dispute before the Court concerns the proposed implementation of the Company's Manufacturing Development Programme. In October/November, 1996 discussions took place regarding the implementation of the Manufacturing Development Programme but agreement could not be reached.
Management claims that the implementation of the plan is vital to ensuring existing levels of employment and the future viability of the Company. The Company is also seeking the introduction of shift work to enable it deal with a short-term accumulation of orders.
The Union in principle welcomes the plan but argues that the plan will result in substantial savings to the Company and that the workers should share in the savings.
The matter was referred to the Labour Relations Commission. A conciliation conference took place on the 13th December, 1996. As agreement could not be reached the dispute was referred to the Labour Court on the 19th December, 1996 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 11th March, 1997.
3. 1. The Company has acknowledged that the implementation of the Manufacturing Development Programme would have significant implications for the workers in terms of skills development and would require a programme of intensive training to be put in place.
2. The proposed changes would result in substantial benefits to the Company in terms of improved efficiency and output and in the capacity as instanced in the Report to increase productivity in some areas from 50% to 100%.
3. It was the Union's understanding that provision would be made to recompense the workers for co-operating with the changes required and with those which have taken place in the past 3 years.
4. The Union is seeking that discussions take place between the parties to negotiate a reward structure which would reflect the level of multi-skilling and the increased responsibilities which will be required of the workers.
5. The issue of shift work is inextricably linked with the Manufacturing Development Programme. Its introduction would allow management address some of the objectives outlined in the Programme.
4. 1. The difficult trading conditions within the industry will mean that many companies will not survive. The Irish branch of Olympus Diagnostica is in direct competition with leading medical diagnostic companies in a global market. The falling price trend of this Company's products which is expected to continue for the foreseeable future can only be counteracted by increasing operational efficiencies and reducing costs.
2. The fundamental aim of the Manufacturing Development Programme is the survival of the Company in the medium term. The Programme requires the immediate and urgent rationalisation of the Company's intensely manual operation. Such ongoing change and operational improvement must always be a feature of an industry which must operate to the highest quality standards.
3. After years of accumulating significant financial losses, the Irish branch of the Company is now trading on a profitable basis. Notwithstanding this fact, the consolidated results of the Company as a whole are still extremely negative. The Company is willing to submit financial information to the Court confirming this situation.
4. The profitable situation pertaining in the Irish plant is only made possible by the parent company placing machines in the market below cost and thereby incurring losses for the Company as a whole. This has become market strategy in the medical diagnostic industry due to pressure from larger competition seeking increased market share.
5. The Company has adhered to the terms of recent national Wage Agreements. In May, 1994, it agreed to pay the 3% local bargaining element of the PESP in return for SIPTU's agreement to co-operate with measures to improve the competitiveness of the business. It has also announced the introduction of a Defined Contributory Pension Scheme from 1st April. It is estimated that the start up costs in the first year will be in the order of £80,000.
6. The Union's refusal to co-operate with the Development Programme and the requirement to operate shift work clearly contravenes the terms of the Company/Union Agreement. The Company has operated shift work in the past without any problems and has paid a rate of 20% shift premium for working a two cycle shift work. Shift work is not part of the Manufacturing Development Programme. It is required solely in this instance to deal with a short term accumulation of orders.
7. The Company requests the Court to uphold the Company position on the immediate implementation of its Manufacturing Development Plan and its right to operate shift work as a condition of employment as contained in the Company/Union Agreement. The future preservation and success of the Irish plant depends upon the ability and capacity of the organisation to implement the terms of the Company Manufacturing Development Programme on an immediate basis which will serve to regain the confidence of the Parent plant in the Irish operation.
The Court having considered the submissions from the parties recommends as follows in relation to the two items in dispute.
In the long term interest of the Company the Union should agree to the implementation of the Management Development Programme in return for the introduction of a Pension Scheme. When the new work practices have been in operation for 12 months the parties should meet to assess the changes in productivity, the effect on the Company's viability, and the resulting sharing of any gains.
The Company/Union Agreement clearly supports the Company's position on the requirement to work shift as dictated by work demands. The Court accordingly does not find the Union's position sustainable. On the question of the introduction of a 2 shift roster as part of the Management Plan the Court recommends that this be accepted and that the Company pay a sum equivalent to 6 months the loss of overtime involved.
Signed on behalf of the Labour Court
15th April, 1997______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.