INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr McHenry
Worker Member: Mr Rorke
1. Process change.
2. The Company is involved in the production of a single product, extract of Ginkgo Biloba, which is the active ingredient for a prescription drug that is sold in France and Germany, the latter comprising 50% of the Company's market. The quality specifications and manufacture of the product are registered with the health authority of each country and, in order to comply with German registration requirements, the Company has to make changes to its process methods. The Union claims that the process changes are extensive and should be paid for. The Company argues that there will be no improvement to productivity arising from the changes and, accordingly, no gain to the Company and, further, that if the changes are not implemented, 50% of its market will be jeopardised. The dispute, which concerns 56 production workers of a total workforce of 158, was the subject of a conciliation conference under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court on the 27th of September, 1999, in accordance with Section 26 (1) of the Industrial Relations Act, 1990. The Court carried out its investigation into the dispute on the 28th of October, 1999.
3. 1. The process change being introduced is necessary to continue to meet the specific requirements of the German registration. If the Company does not implement this process change, 50% of its sales will be put in jeopardy.
2. As a botanical raw material, the quality of the Ginkgo Biloba leaves can vary depending on climate and other factors. Since its inception, in 1980, the Company has made many process changes, adding and dropping steps as necessary to cope with the continual variability of the raw material. While some of those changes have been on the same scale as the one now being introduced, the Company has never paid for implementing them as they are simply designed to protect the Company's business.
3. The process change now being introduced does not increase the production capacity of the Company and it does not produce any cost savings.
4. The production cycle of one batch of product takes about one week. Within the cycle, however, there are considerable periods of time when equipment is not being operated. The downtime of the equipment varies from 15% to 33% and is 25% on a weighted-average basis. The process change can easily be absorbed without disturbing the present production cycle. From a practical point of view, the process change involves operations that are physically no different from operations that are already being done.
5. The Company is heading into a downturn in the demand for extract of Ginkgo Biloba. Next year the Company will have about 15-20% excess production capacity. It had been hoped to introduce new products in order to maintain the level of activity of the Company and thereby protect the earnings of employees. The concept of process change is inherent in the introduction of any new product. If the Union does not accept the principle of process change, it will be impossible to introduce new products.
4. 1. The are major alterations to the conditions of the production workers concerned, covering increased productivity, loss of earnings, increased workload, elimination of overtime and the breaching of the area integrity (details supplied to the Court).
2. The workers concerned have always embraced change and will continue to do so. They also welcome new products to the site. The Union has sought discussions on an agreement on the implementation of the proposed changes, and has sought to engage the Company in a full exploration of Chapter 9 of Partnership 2000, to no avail.
3. There is a significant change to the process in question giving rise to a significant saving to the Company in that it now grows its own leaves. The dependence on outside suppliers is greatly reduced, if necessary at all. Accordingly, it is imperative that a proper agreement on the process change be negotiated immediately.
Having considered the submission of the parties, the Court recommends that the dispute be resolved on the following basis:-
1. The Union should agree to co-operate with the proposed process changes. They should be introduced immediately and the initial six months during which they are in place should be regarded as a trial period.
2. This trial period should be used to monitor and measure the effects, if any, which the changes have on employees, including their level of earnings and productivity. Either party should be free to engage the services of professional advisors in this review.
3. Should the review disclose any adverse impact on employees or a significant increase in productivity, this should be the subject of further discussions between the parties.
In the interim, the parties should explore further the introduction of the improvements in conditions of employment in the areas mentioned by the Company in the course of the hearing.
Signed on behalf of the Labour Court
15th November, 1999.______________________
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.