INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
ABS PUMPS LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Owens
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. New pay structure.
2. The Company and the Union, representing general operatives, agreed a framework understanding on the introduction of World Class Manufacturing (WCM), in 1994. The agreement provided, inter alia, for the introduction of a new simplified shop floor pay structure in respect of approximately 200 workers. [Agreement on WCM was finalised with the clerical and craft groups in 1998]. Negotiations on a new skills-based structure continued for over 2 years under the umbrella of a joint negotiating committee but no final conclusion was reached. In August, 1997, the Company made a detailed proposal to the Union on a new pay structure which the Union declined to put to ballot. The Union's position is that while the proposed pay structure is fundamentally acceptable, the issue of pay still needs to be addressed on the grounds that flexibilities sought by the Company exceed those originally envisaged by the Union, which is seeking weekly rates of £307 and £320 for grades 8 and 10. The Company has offered £297 and £307 respectively. Additionally, the Union will not accept a starting rate of £150, its policy at national level being for a minimum wage based on a rate of £5 per hour.
One section of the workforce, i.e., those deployed in the machine shop, is opposed to the proposed withdrawal of 2 quality assurance inspectors. The Company maintains that the check carried out by them is no longer necessary and that its elimination is in accordance with the 1994 WCM Agreement. This matter and the pay structure were the subject of two conciliation conferences under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 17th of February, 1998, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation, in Wexford, on the 29th of April, 1998.
3. 1. Existing general operatives, who comprise 2 main groups, 'setters' and general operatives, should be phased onto the new pay scale in such a way that the maximum of the new scale would be the existing settlers' rate plus the same increase given to the clerical and craft groups. All employees, subject to their progress in training, should reach this level. The scale should be paid in 4 phases, i.e., January 1st, 1997, 1998, 1999 and 2000. The 1st phase should be a minimum flat rate of £12.50 with the other 3 phases paid in equal instalments.
2. The general operatives were the first to commit themselves to WCM, to sign up for it, and to embrace it. They also accepted the position that increases had to be earned and money could not be paid 'up front' for change. After four years of negotiations on a new pay scale, the Company paid substantial increases to two smaller groups in advance of change. These two groups will now be shedding skills and responsibilities to the general operative group.
3. While the Company was negotiating with the general operatives on a document in which it was proposed to reduce potential shop floor earnings, to phase in a new pay rate lower by £100 per week and to expect the workers concerned to achieve third level qualifications for a £10.00 per week increase, it was conceding up front payments and access directly to the top of technical scales to Craft workers and a direct hand-out to clerical staff. The general operatives expect to be treated as equals in exchange for their on-going commitment to WCM and will no longer accept unfavourable treatment due to being the largest group of employees in the Company.
4. The new pay structure must reflect the same increase paid to the 2 other groups. The setters, who have contributed significantly to WCM, must receive at least the same increase and this figure should then be the new scale maximum, subject to training.
4. 1. The WCM Agreement provides that benefits can only be payable on the improved performance of the Company via World Class Manufacturing. Despite this fact, expectations on pay increases appear to be spiralling. The Company has applied the Partnership 2000 and, in addition, has guaranteed bonus, has consolidated bonus into basic pay and has introduced an income continuance sick-pay scheme. Inherent in the attitude to the recent pay offer, that doubled the national wage agreement increases, are unrealistic and hyper-inflationary expectations. If such expectations were met they would put the Company at risk and the Company is not prepared to do that.
2. The settlement on pay structure with other employees has given rise to a claim from the Union that the offer to them is less favourable. This is rejected on the grounds that:-
i) There were two scenarios of 'other' employees, i.e., craftspeople appointed on a personal basis to the 'staff' and, secondly, existing staff who claimed parity with the new appointees (as agreed in the staff WCM agreement);
ii) Twenty-three craftspeople were appointed to the staff and onto existing salary scales with progression based on existing terms and conditions for staff. Total pay for a 40-hour week amounted to £339.64 prior to appointment and £346.44 on appointment, giving an immediate increase of £6.80 (2%);
iii) The subsequent parity claim from existing staff was based on their interpretation of the value of the claim for the new entrants entering their system from the craft section, i.e., the top of the scale in question could, in time, yield an increase of £22.41 per 40-hour week, subject to personal performance. Consequently, the staff claim was settled at 2.75% effective on agreement with a potential phasing in of an additional 2.5% plus 2.5%, subject to personal performance;
iv) The Company made an offer to the shop floor group which provided for a potential increase for the general body of £23.16 per 40-hour week in phases based on personal performance. In addition, the offer included a settlement figure plus protection of rate for those on the top rate of pay. Therefore, the offer to this group is no less favourable than that made to others.
3. Other employees have settled their pay claim at a ceiling of 7.75%. Consequently, there is an equity argument. There would be an immediate 'knock on' effect were the Company to agree to a more favourable arrangement for this group.
4. It was stated by the Union that a 'more or less guaranteed £14 for everyone' would settle the matter. However, when the offer of a potential £23.16 was made it wasn't even put to ballot by the Union.
The Court has given careful consideration to all points made by the parties in this dispute. The Court understands the Union's feeling that they did not receive due recognition for entering into an agreement on WCM at an early date and frustration that other Groups in the Company appear to have achieved higher rewards. Whilst some of this grievance can be sustained, the Court could not agree that the Union claim should be conceded in full.
The Court is sensitive to the Union's problems in accepting the "criteria" set out in the Company's document. The Court, therefore, recommends that further discussions on this point take place in the context of WCM. The Court further considers that the Union aspiration of a maximum of £307 on scale is not unreasonable and should be conceded by the Company as part of further negotiations. The Company's proposal to "red circle" certain employees should be accepted by the Union and the Court further recommends that these employees be paid a lump sum of £2,500 each in compensation for the fact that they will receive no wage increase.
Signed on behalf of the Labour Court
8th June, 1998______________________
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.