INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Pierce
Worker Member: Mr O'Neill
1. Appeal by the Union against Rights Commissioner's Recommendation No. RC661/97.
2. The appeal concerns three workers who were part of an Autonomous Working Group (AWG) W062 which was formed in March, 1995. The AWG is a group of workers which carries out a twelve month programme of work within a set budget. The work programme and budget are agreed between Management and the Group in advance. The key factors in the budget are, the volume of timber to be harvested, total revenue and cost figures, and wages. The primary role of the AWG was to harvest timber from the forests in the South East region. The operation was done with two machines, the Harvester Machine felled, stripped and cut tress into sections, the Forwarder Machine removed the wood from the forest and placed it at the roadside for collection. The three workers operated these machines. In June, 1997, the Company decided to cease the operation of AWG W062. The Company claimed that significant losses had accrued during its operation and the Harvester Machine which had broken down, was too expensive to replace. The Company proposed to re-deploy the three workers to general forest work. The Union claimed that AWG W062 should be retained, the Harvester machine replaced and that Management should propose a new AWG scheme to the claimants which would be subject to negotiation. Management rejected the claim The dispute was referred to a Rights Commissioner for investigation. On the 8th of August, 1997 the Rights Commissioner issue his recommendation as follows:-
"The facts in this case are not in dispute and having carefully considered the very detailed documentation submitted in relation to the existing and projected costs of the claimants' operation, by any criteria, I believe them to be inarguable. Essentially the Union's case boils down to their insistence that the Company should continue to carry and subsidise the operation and given that all the other comparable groups are financially viable, such an argument, I feel, is hardly legitimate.
Consequently I recommend that the Union's claim fails and that the claimants should therefore accept the Company's proposals, and agree to work at their designated locations, without delay."
On the 15th of September, 1997 the Union appealed the recommendation to the Labour Court. The Court heard the appeal on the 24th of February, 1998.
3. 1. At no time did the workers receive any training from the Company in relation to accounts management or spreadsheets etc. There was a lack of information from Management regarding the AWG's performance. The Company allowed losses to accrue by not replacing the old machine. This sent the maintenance budget out of control and created 'downtime' due to repairs in excess of the norm.
2. No work programme was provided for 1996 leaving the AWG travelling all over the South East picking up small amounts of timber. Each transfer of machinery was a day's production lost.
3. The harvesting of timber is being contracted out in all Coillte forests and the Company has virtually halved its workforce since 1989.
4. The deficient accounting and cost-controlling system operated by Management contributed to the financial losses accrued by the AWG. Coping with losses caused by the Company and the outlay involved in purchasing a new Harvester Machine is much more difficult than dissolving the AWG and sending three workers back to forest duties.
5. The claimants kept their wage costs under Coillte budget. They looked after the machinery in a responsible manner and sought a replacement for the ailing Harvester Machine. It should have been replaced in 1996. The workers extended the life of the machine by 30% to the benefit of the employer but to the detriment of their own 'autonomous' budget.
6. It is unfair to blame the three claimants for the losses accrued in the operation of the AWG. They did their best to interpret the spreadsheets even thought they had no training. They sought information on the profit/loss situation as soon as they suspected that losses had occurred. The Company also made errors and failed to manage its end of the business in a competent efficient manner.
4. 1. The AWG (W062) accumulated significant losses (details supplied to the Court). The three workers consistently sought to draw down a level of earnings for themselves which they knew to be clearly in excess of what was sustainable within the AWG's overall financial performance. Wage draw-down as a proportion of revenue increased from 39% to 47% in 1995/1996.
2. Problems were experienced with the quality of thinning work carried out by the AWG necessitating verbal and written warnings in this regard from local management in 1996. The overall market and consequent demand for pulpwood is in a significantly depressed phase.
3. The Company could not realistically contemplate the outlay involved in providing a new machine (approximately £250,000) which unlike the original machine would not attract grant-aid.
4. The failure of the group to work effectively led to substantial loss of revenue to the AWG resulting in some 2000 cubic metres of material not being forwarded.
5. In the past, other AWG's which had accumulated losses were successfully turned around on the basis of agreed remedial measures, including limitation of wage draw-down.
6. The Company made very reasonable accommodation to this AWG over the years of its operation, in the form of loss write-offs and other concessions over and above what might be expected in circumstances where such groups are expected to act commercially.
7. The majority of the other machine AWG's operating within the Company are profitable. The 'rules' and circumstances which apply to the AWG's are no different than those applying to this AWG. It is not realistic for the Company to carry on subsidising the operation of AWG W062, given that most others are financially viable.
A considerable volume of information was supplied to the Court by the Union in support of its appeal which was not available to the Rights Commissioner. Had this additional material been available at the original hearing, the Rights Commissioner may not have been as emphatic in his findings.
Having regard to the submissions made, it appears to the Court that the employer must bear some responsibility for allowing the difficulties with the AWG develop to the point where it became non-viable. Nevertheless, the AWG had incurred significant losses which were mainly attributable to poor budgetary and operational management by its members.
In the circumstances of this case the Court would not feel justified in requiring the employer to re-establish the AWG, particularly having regard to the magnitude of investment necessary to give effect to such a decision.
The Court, therefore, upholds the Rights Commissioners recommendation that the Union's claim fails and that the claimants accept re-deployment.
The Court would urge the employer to put in place adequate controls and effective monitoring and support services to AWG's so as to avoid a re-occurrence of the circumstances which arose in this case.
Signed on behalf of the Labour Court
2nd April, 1998______________________
Enquiries concerning this Decision should be addressed to Tom O'Dea, Court Secretary.