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 McHenry
Worker Member: Mr Rorke
1. ''Plan for change''.
2. Coca-Cola Atlantic employs approximately 300 workers in the manufacture of soft drink concentrate and beverage bases for supply to the Coca-Cola system. The majority of the plant's output is exported.
In early 1997 the Company tabled a comprehensive rationalisation programme entitled "Plan for Change". It contains proposals for redundancies and other cost cutting measures, including the introduction of annualised hours, team-working, changes in manning levels and work practices, bonus and incremental scales.
The current operational capacity of the plant is considered to be between 10 and 14 million standard units per annum. The present volume load is just over 5 million standard units per annum. The Company argues that in order to secure the plant's future it must achieve 10 million standard units at an overhead cost of 3.00 US dollars per standard unit by the year 2000.
Local level discussions took place but progress could not be made and the matter was referred to the Labour Relations Commission. A number of conciliation conferences took place but agreement could not be reached and the dispute was referred to the Labour Court on the 23rd of June, 1997 under Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 8th of August, 1997 following which the Court referred the dispute back to the Labour Relations Commission for further negotiations. As progress could not be made the matter was referred back to the Labour Court. A Labour Court hearing took place on the 11th of September, 1997. A recommendation was issued by letter on the 12th of September, 1997.
3. 1. The Company's plan would severely impact on the terms and conditions and social lives of the workers concerned. It would replace the present system of a basic 39 hour week with a system of annualised hours which could require employees to work a 72 hour week in the peak period April/August and a 24 hour week in the low period October/April. The Company's proposal on teamwork would eliminate such roles as Supervisors and Chargehands.
2. The Union is not prepared to accept any changes in the workers' payment or bonus system which is not based on service. The wages and conditions of the workforce have been negotiated over many years and in some cases improvements have been the result of Labour Court Recommendations. The Union is willing to negotiate and would support any proposals which would make the Company more competitive but these proposals should not result in a reduction of the workers' terms and conditions of employment.
3. The Union submitted a proposal, which would give the Company flexibility in rostering hours over a 12 month period, would be demand driven, would eliminate overtime working, and would give the Company total access to temporary labour. It meets all the Company's criteria, with the exception of reserve hours. The Company's decision to reject these proposals confirms the Union's view that despite its statement concerning further negotiation the Company is insisting that its original proposals in relation to the main points, be implemented in full.
4. 1. The current operational capacity of the Drogheda plant is considered to be between 10 and 14 million standard units per annum. The present volume load is just over 5 million standard units. Over recent years, Coca-Cola's global marketplace has grown and become increasingly competitive. There has been constant and increasing pressure to achieve maximum efficiencies and reduce operating costs in order to provide the sales operations with the ability to maintain targeted growth rates.
2. The Drogheda plant has not been immune to these market and operational pressures. These pressures have been further accentuated by the ongoing and significant level of improvements made by the plant in France. In mid 1996, as part of a company-wide Benchmarking exercise, the Drogheda plant was identified to be the worst performing plant of the Company's large scale concentrate operations.
3. The Company believes that Plan for Change addresses fully the business imperative facing the plant and that its full implementation represents the best opportunity for long term success and sustainability for Drogheda and asks the Court to recommend in favour of this.
4. Notwithstanding the above, the Company would prefer a negotiated settlement. The Company is confident that an agreement can be achieved, but only if the Union immediately begins full and comprehensive negotiations designed to deliver a realistic outcome acceptable to both parties.
5. Management has agreed, albeit very reluctantly, to extend the implementation deadline to October 1st 1997. In agreeing to this extension, it has stressed that, for the Drogheda plant to maintain any form of credibility in rebuilding itself as an effective Company supply point, change must be implemented on or before this deadline.
Arising from a formal Court hearing on the 8th August the Court referred the dispute back to the Labour Relations Commission for further negotiations.
It took this course despite the fact that there had been already 19 meetings spread over 6 months. However, at the hearing both parties indicated a willingness to negotiate. Subsequent to the referral back the parties had 2 days of conciliation talks and 2 days involvement face to face in a working party. No progress was made and in accordance with the previous Labour Court recommendation the matter was referred back to the Court for final recommendation.
It is worth stating that the Court finds it difficult to comprehend that after the amount of time spent in negotiations and conciliation, that the dispute comes to the Court without any progress being made. The Court does acknowledge that both parties with the assistance of the Industrial Relations Officer did bring forward revised schemes but it is true to say that at the end of the process no progress had been made.
The Court was supplied with considerable information as to the Company's financial position and its cost of production compared with other plants within the Group. It was also made aware of the parent Company's position as to the future of the plant. It is clear to the Court that cost reduction must be achieved. The Court notes that the Union agreed that change was necessary. It is the scope and manner of the change which is in dispute.
The Court has examined in detail the various proposals put forward at both hearings. It has in particular examined the Union's plan to meet the Company's requirements and has concluded that the Union plan will not achieve the objective required and will not give the flexibility and cost reduction required.
The Court is satisfied that the way forward is the acceptance of a scheme which encompasses annualised and reserved hours and notes that in the negotiation process the Company has reduced its target for redundancies provided the plan is accepted.
The Company plan outlined to the Court and elaborated on at the hearings (particularly that of 11th Sept.) is not unreasonable and should be accepted for implementation on 1st October, 1997 with the following provisos:-
(1) The undertaking by the Company to agree numbers of staff and hours in the reserved hour category to be implemented (these were outlined at the Court hearing).
(2) The Company to include in the plan a provision for "opt-out". This would be granted to not more than 3% of staff and confined to those who have established in the past an inability to work overtime.
(3) The existing basic rate for each employee be guaranteed.
(4) The Court is not in a position to examine in detail the impact of many aspects of the plan. The Court therefore recommends that a monitoring committee be set up on a joint basis to oversee the implementation of the plan, to hear complaints and sort out difficulties which may arise. The Court sees that committee comprising of not more than 4 persons, plus an agreed independent Chairman.
(5) The implementation and operation of the new plan should be the subject of review after 12 months. This review should include a study of the effects of seasonality and the impact of reserved hours.
(6) On acceptance of this recommendation by the Union the parties should meet to address outstanding differences as to bonus and incremental scales. These discussions should not postpone the implementation of the plan on 1st October, 1997.
(7) On acceptance of this recommendation and as a gesture of goodwill the Company agree to pay an extra 2 weeks pay at Christmas 1997 and a similar sum when the plan is fully implemented.
(8) The Court recommends acceptance of the above proposals as being an appropriate resolution to the dispute.
Signed on behalf of the Labour Court
6th November, 1997______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.