INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
BAUSCH AND LOMB LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' ORGANISATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr O'Neill
1. Claim for compensation and upgrading for workers in RP3 area for extra productivity and compensation for change.
2. The Bausch and Lomb Contact Lens Plant was established in 1980. It employs approximately 1,300 people at its plant in Waterford and a further 450 at its Ray-Band Sunglass Plant located nearby. The Company has its Head Office in Rochester, New York and employs 12,000 people world-wide.
The dispute before the Court concerns the Union's claim, on behalf of 67 workers, for regrading from Grade 3 to Grade 4 and a compensatory lump-sum payment in return for extra productivity and flexibility.
In 1995 the production process within which this dispute arises was uncompetitive and there was a serious question mark over its future. At that time the workers agreed to teamworking and flexibility and the changes made reversed the proposed transfer of this product line to Rochester. It is now the preferred supplier of this product and today 330 people are employed in this process with a further expansion currently taking place.
In its drive for continuous improvement and reduction in unit costs the Company in October, 1997 addressed all line operators identifying areas of possible improvement in relation to machine to operator ratio. A Project Group comprising of line operators/managers was set up to examine these possibilities. A list of 27 issues were identified by the Group. When the issues identified and graded as the most important was dealt with the Company started to implement the changes
The Union sought compensation for the introduction of the changes. It argues that the proposed changes will result in substantial savings to the Company. The Company's position is that the changes do not impose significant extra physical or mental burden on the employees concerned and that it has paid for extra flexibility and productivity by way of the 3% under the bargaining clause of the Programme for Economic and Social Progress (PESP) and 5% for the introduction of teamwork.
The matter was referred to the Labour Relations Commission. A conciliation conference took place on the 13th of January, 1998. As agreement could not be reached the dispute was referred to the Labour Court on the 4th of February, 1998 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 18th of March, 1998.
3. 1. The workers are prepared to co-operate with a number of significant changes in work practices and manning levels which will result in a substantial cost saving to the Company. The workers believe that they are entitled to a modest share of these savings and do not accept, given the magnitude of the changes, that past wage increases are sufficient compensation.
2. Three years ago there was a marked downturn in the fortunes of the RP3 area, with personnel deployed to other areas of the factory. The workers that remained accepted the need for change in the operational procedures in order to secure the future of the RP3 in Waterford. Continuous improvements were made which included reduced cycle times, new technology and numerous other changes which added more work and responsibility to the job. No demands for remuneration were put forward by the employees at that time.
3. There was a dramatic reduction in the unit cost and the process yields grew immensely. Further improvements were sought, and aided by the introduction of Teamworking, the process became the flagship producer of RP3 lens in the organisation world-wide. This is what the 5% was paid for and is just one of the ways the 5% realised returns to the company.
4. New technology was introduced recently in the form of the DAC lines, which consist of a spincast machine, a lathe and a polisher all interconnected. Where the operators prior to this only ran one type of machine, they gradually cross-trained on all three types, and were thus able to take up the new machinery. No pay increases were sought for these additions to the process.
5. The Union rejects the Company's claim that Partnership 2000 gives it free reign to implement whatever changes it sees fit, regardless of the impact on the workload of the workers. During the trial period of the proposed changes, it became clear that the company was moving away from the consensus decision making process of the Project Group, and was unilaterally implementing changes as it saw fit. Important changes that the group saw as vital were not implemented.
6. The Union is seeking that the workers receive proper remuneration in respect of the proposed changes. The remuneration sought is by way of regrading the workers from Grade 3 to Grade 4 which would result in an increase of £36 per week. The claim is self financing. The changes when implemented will save the Company approximately half a million pounds in wages alone.
4. 1. The proposed changes are vital to the on-going competitiveness of the product and do not impose significant extra physical or mental burden on the workers concerned.
2. The changes are within the meaning of "on-going co-operation with change", as provided for in Partnership 2000.
3. The Company already provides a total compensation package which is among the best in the country.
4. The operators concerned are already at the highest operator grade in the pay structure. Grade 4 is the Grade of "specialists" i.e. set-up operators and lead instructors, with approximately 60 people covered.
5. Under the Local Bargaining Clause of PESP, the Company paid 3% in return for the workers' commitment to co-operate with the introduction of what was broadly referred to as "World Class Manufacturing". This commitment involved a culture of continuous improvement, which is essentially what the Company is seeking in this issue.
6. In July, 1996 the Company/Union agreed to the introduction of teamwork. This was to be the implementation of a work organisation change which would facilitate the continuous improvement ethos in a teamworking environment. In return for this the Company agreed increases in pay of 5%. The Company has also invested heavily in training for teamwork.
7. The Company is committed to putting in place a gain-sharing programme which it hopes all employees will gain financially from.
8. The Company has achieved a great deal in difficult times through the commitment of employees at all levels. Up to 1,000 extra jobs have arisen, between those delivered recently and those planned over the next 18 months. Some damage to this confidence has occurred due to current difficulties. The Union has continued to threaten industrial action. If this is implemented the effects in both existing and future jobs prospects are too serious to contemplate.
9. Management is satisfied that what is being sought is reasonable change which fills the working week of the operators concerned. Concerns which they have about the purely operational issues (as distinct from the compensation issue) can be addressed, if necessary, through involvement of both the SIPTU and Company Industrial Engineers.
10. The claim for remuneration is contrary to the terms of Partnership 2000.
11. The benefits of cost reductions will be shared with employees through the gain-sharing
The issue before the Court was a claim for an increase in remuneration by means of an upgrading for this particular group of employees, based on past changes in the job content but particularly on significant changes arising now from the introduction of new plant and methods of operation. The Union claimed that this was productivity in excess of what would normally be covered by the agreement and commitment to ongoing change. In addition they were claiming a lump sum payment as a share of the cost savings outlined in the successful turnaround of the plant over the last few years.
The Company, while accepting that change had been undertaken and that the new plant and method of operation would result in further change, did not accept the change was significant enough to bring an upgrading from Grade 3 to Grade 4 as claimed.
In rejecting the Union claim for a compensation payment, the Company position was that the changes introduced had been necessary for survival and while the plant had been turned around, it still required to be competitive and flexible on an ongoing basis. The Company further argued that a payment of 5% had been paid for team working, and the 3% productivity payment under the PESP was paid for a commitment to continuous improvement or worldclass manufacturing.
Claim for upgrading
The Court has been asked to agree that this group of employees is entitled to be regraded from Grade 3 to Grade 4.
It is extremely difficult for any third party to make such a recommendation without full knowledge of the relative merits of jobs in each grade.
The Court in similar situations would normally recommend the use of a third party to undertake an assessment exercise with a view to reporting back to the Court, and the Court would then make a decision in relation to the claim for upgrading.
Given that the Court has no way of measuring a Grade 4 job as against a Grade 3 job without an assessment being made, it is the Court’s view that the best way forward is for an agreed third party to assess the merits of the case, comparing the job, with the new elements operating, with jobs in Grade 4.
However, the Court, conscious of the employees' view that it was too soon at this stage to bring in an industrial engineer to make an assessment on the job content, recommends that the parties agree an independent third party to undertake this assessment exercise, when the employees are satisfied that the changes have settled and that the time is appropriate.
The Union argues that taking into account the amount of change undertaken by the employees and the resulting cost savings achieved in turning the plant around, they should be given compensation payment or a percentage of the savings.
The Company argues that the payments of 5% and 3% were made in return for the commitment to such change and that the only way the Company could have survived was with these changes and with a flexible approach to ongoing change.
The Company had indicated that it was prepared to discuss a gain-sharing option. The Court believes that at this stage it is unclear to the employees how the benefits of such a scheme would operate, and indeed there were claims that it had been painted in a negative manner within the Company.
The Court is satisfied that a gain-sharing scheme company-wide is the way forward to deal with this issue, particularly as other groups will also have contributed and will continue to contribute to the Company’s success in a similar fashion. However, any gain-sharing scheme introduced must be clearly understood, must be seen to take account of the contribution of the workforce, and must result in benefits to the employees based on their contribution to the Company’s progress.
The Court therefore recommends that the issue of compensation be dealt with by the parties commencing discussions immediately with a view to agreeing a meaningful company-wide gain-sharing scheme to be introduced for 1998. These discussions and agreement should be completed within two months of the date of issue of this recommendation.
Signed on behalf of the Labour Court
3rd April, 1998______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.