INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
TOP TECH IRELAND LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. Service pay.
2. Top Tech Ireland Limited has been in operation since 1989, and is engaged in electro magnetic shielding for the mobile phone industry. It employs in excess of 100 production workers, of which approximately 60 are temporary. All staff are initially employed on a temporary basis for two years before being made permanent. (The agreement which provides for staff to be made permanent after two years was reached some time ago pending the re-negotiation of the Company/Union agreement). After one year of permanent employment, staff qualify for service pay. The Union is seeking that staff qualify for service pay from the date their employment becomes permanent. Management rejects the Union's claim. It argues that the service pay scheme is implemented in accordance with the terms agreed with the Union.
The matter was referred to the Labour Relations Commission. A conciliation conference took place on the 26th of January, 1999. As agreement could not be reached the dispute was referred to the Labour Court on the 8th of February, 1999 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 14th of April, 1999.
3. 1. The effective application date of service pay is the employees' fourth year of service. This compares unfavourably with other employments generally where service schemes recognise all continuous service.
2. Under current employment legislation all service counts regardless of the status of that service. In the circumstances the Union's claim for the application of service pay from the date the worker's employment becomes permanent is reasonable.
4. 1. Service pay was introduced volitionally by the Company and has been implemented in accordance with the terms agreed with the Union.
2. The two year benchmarking exists due to the volatile nature of the computer and electronics markets in which Top Tech operates. Top Tech's customers manufacture products which have an 18-24 month life cycle resulting in cyclical reductions in staffing levels. The trading history of the Company will show that a significant number of staff have their employment terminated at the end of a two year cycle, due to fall offs in the business volume, hence the distinction between permanent and temporary staff.
3. The Union dispute the distinction between 'permanent' and 'temporary' status and contend that all employees, regardless of status, should be eligible to benefit from the service pay scheme after one year's continuous service. The Company believe that to award service pay on this criteria is incongruous.
4. The current criteria i.e., an entitlement to service pay one year after attaining permanent status, is fair and reasonable. If this criteria was to be altered, there would be a substantial increase in cost for the Company, which in the current financial climate it would be unable to absorb.
The service pay system agreed with the Union in 1993 has been implemented since without change. The Union accepts that it is seeking to have this agreement changed by advancing the eligibility basis by one year. This arrangement would only apply to future entrants.
As the costs seem to be supportable, given the high turnover ratio in this business, and the fact that the Union has indicated there will not be a claim based on any anomalies arising, the Court recommends that the Union's claim be accepted by the Company against changes sought by both parties in the current Company/Union agreement. The change in the service eligibility should date from the acceptance of the modifications in the Company/Union agreement and these should be formalised within 3 months from the date of recommendation.
Signed on behalf of the Labour Court
27th April, 1999______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.