INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Keogh
Worker Member: Mr. Somers
1. Rates for new employees.
2. The Company operates a continuous process plant for the manufacture of Commodity food ingredients, Citric Acid is its primary product. The dispute concerns the Company's proposal to introduce new lower rates and different conditions of pay in respect of temporary and future permanent workers only. The Company maintains that the implementation of the new pay and condition structure for future employers is necessary to enable it to improve competitiveness and to ensure the long term viability of the business. The Union representing 32 workers (Foremen, Storemen, Technicians and Administrative staff) indicated that it will accept a proposal on new rates for new employees provided that there is progression to existing rates built into such a proposal.
The Company rejects progression to existing rates, as this, it claims would be of no benefit in terms of long term competitiveness.
The dispute was referred to the Labour Relations Commission. A Conciliation Conference was held on the 2nd March, 2000. As agreement was not reached, the dispute was referred to the Labour Court by the Labour Relations Commission on the 19th April, 2000. A Court hearing was held on the 1st June, 2000.
3. 1. The Union has at all times indicated its willingness to enter meaningful negotiations with Management on the proposed rates of pay and conditions for new entrants to the Company. The pay levels and conditions can be the subject of negotiation but the Union's view has always been that ultimately employees must be in a position to reach the existing pay levels.
2. The Union advised the Company that this could take an agreed period of time which could be considerable but it has not received any movement from Management in this regard. Justification for this condition is predicated on the belief that new lower rates of pay will result in a divided workforce, with new employees angered at existing employees agreeing to reduced pay rates. If new entrants have the ability to realise the full rate, albeit after a length of service, then this will reduce any division and anger which would no doubt exist if the Company's present proposals were to be agreed to.
3. If the Union were to introduce so called "yellow pack employees" it would have a major impact on employee/employer relations with the Union and Management having to address the issues which would inevitably materialise from such poor relations on an ongoing basis.
4. While the Company had proposed reduced pay rates for the Craft grades, they subsequently conceded the principle of applying the existing pay rates to new Craft employees in the latest proposals.
5. The Union has requested details as the what the Company proposals would mean in real savings but to date has not received any information in this regard. The savings would be insignificant, insofar as the Union does not believe that there is any short to medium term plan for expansion within the Cork Plant.
6. Effectively, therefore, given the withdrawal of the early retirement package, the Union cannot understand how the Company can be so adamant in claiming that the plan is essential to the survival of the plant based on what will be minor savings. The Union's counter proposal would result in the Company securing agreement on new rates of pay and conditions with no cost increases for quite some time in the context of service related advancement to the existing pay levels.
4. 1. The Company operates a marginal commodity business in a hostile market environment. It is therefore incumbent on all staff to do everything possible to remain viable and provide security of employment into the future.
Labour costs are a significant percentage of overall operating costs. Current employees who transferred with the business enjoy an exceptional pay and benefits structure which is not sustainable into the future. Corporate executives consider labour costs to be excessive for a commodity business, and this has had an adverse effect of efforts to attract investment. For example the company's labour costs are significantly higher than those of its sister plant in Southport, North Carolina on an equal volume basis. Management estimate that major European competitors would also be operating on a much lower labour cost base than ADM, Ringaskiddy. The Company's proposal for lower pay rates will make a direct contribution to ensuring the long term viability of our operation and will therefore enhance local management efforts to secure much needed investment from Corporate Headquarters, which in turn will further protect the business.
2. The proposed new rates of pay are very competitive in the context of the current labour market and are significantly higher than those originally proposed by the Company. The Union's argument that new employee pay rates should at some time in the future catch up with current rates is contrary to what the Company requires, which is a labour cost structure appropriate for this business. These pay rates will be subject to the increases agreed under the terms of the Partnership for Prosperity and Fairness.
3. The Company's grading structure was established in the 1970's when there were approximately 550 employees working in the business. Plant modernisation and automation has changed the working environment and the business now employees 160 workers. It is proposed to reduce the clerical grades from four to three to reflect the current situation - currently only 7 clerical positions. It is also proposed to eliminate one technical grade to reflect current manning levels and work content. The same logic applies to the proposed eliminate of a foreman grade.
4. In the development of its proposals for change the Company is endeavouring to protect the future of the Cork ADM plant and therefore the secure employment for the long term. Inaction will protect nothing but only make the future uncertain.
5. The cost base that management has put forward under this plan is one which is possible to implement. The Company cannot maintain the existing cost base.
6. The Company has operated with fairness as a guiding principle in that its plan maintains the existing contractual commitments for current permanent employees. It does not disadvantage future employees since they would join the Company on terms and conditions outlined in an offer of employment. This would represent a break point in respect of contracts for permanent employees employed before the date of agreement and those employed after. The Company recognise the difficulties the Unions may have in negotiation change in this context. However, there is no alternative. Management does not accept that new employees will be disadvantaged when they come in on known terms and conditions of employment that are linked to the future rather than the past. Terms and conditions offered can be seen to be fair and reasonable in the context of the Company's operation.
The Court considered the written and oral submissions made by the parties.
It would appear from the hearing that while the Union is prepared to accept new lower rates for the posts, subject to the employees at some stage in the future, being allowed to go to the current maximum, the Company is insisting on a new maximum being agreed immediately.
The Court while conscious of the Management requirement for change, recommends that the Company accept the Union position, subject to the financial position of the Company at the time that the maximum becomes payable.
Signed on behalf of the Labour Court
13th June, 2000.______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.