INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
EASON & SONS LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. 2% increase under the Programme for Prosperity and Fairness (PPF).
2. The Union, on behalf of approximately 400 workers is claiming the increases due under the PPF. The Company rejected the claim stating that an agreement concluded in August 2000 provided for increases far in excess of the provisions of the PPF. The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 1st June, 2001. Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 24th July, 2001. The dispute was received in the Court on the 24 th July, 2001. A Court hearing was held on the 1st August,2001. Subsequent to the hearing additional information was submitted by the Company to the Court concerning an examination being undertaken, of all the Company's operations, by external consultants.
3. 1. The agreement concluded in August, 2000 was strictly in the context of Partnership 2000 (P2000). Negotiations commenced in February, 1999 and concluded in July, 2000. The first phase of the Programme for Prosperity and Fairness did not apply in the Company until December, 2000, four months after the conclusion of the agreement on the special pay increases. Were it not for the tardiness of Management in conducting these negotiations, it should never have taken 18 months to conclude it in the first instance. The negotiations should have been completed in 6 months. Had this been achieved these P2000 negotiations would have been completed long before the commencement of the PPF. Workers, by their conciliatory approach in agreeing to the phasing in of the increases over a period to August 2003 should not now be penalised for so doing.
2. In the context of an argument that the increases come within the ambit of the PPF it is the Union's contention that the "circumstances where competitiveness and employment are at risk " do not apply. Clause 7 of PPF does not have any relevance for Easons. It is a very successful Company and is set to considerably expand its operations.
3. Workers did not receive the benefit of the first phase of the PPF until 8 months later than most other workers. It would be most unfair if they were not to be paid the increases under the PPF amendment, specifically designed to restore the purchasing power of the original first phase.
4. 1. The 'August 2000' agreement provides for increases in basic pay ranging from 25.2% to 34.4 %. The agreement also provides for improvements to sick pay and pension schemes. The effect of the agreement is for increases far in excess of the PPF. The agreement also stipulated that there would be no further cost - increasing claims during the lifetime of P2000 or the PPF.
2. The agreed and revised PPF document expressly refers to 'Stability Enhancing Measures'. Clause 7 provides a mechanism to recognise difficulties employers may have in meeting the pay terms of the PPF and enables employers to claim inability to pay. In the context of these Stability Enhancing Measures, particular regard must be had for a number of circumstances where competitiveness and employment are at risk, including........"Employment where pay costs, have increased significantly above those implied by the terms of the agreement." Since the conclusion of the August agreement total labour costs have increased by 18 % when compared to the same reference period in 2000. Pay rates have increased by 22 %, this is already in excess of the cumulative increases due under the PPF. The Company's circumstances fall within the ambit of those envisaged by the 'Stability Enhancing Measures', therefore, Management contends that the Company is not entitled to apply the 2 %.
3. The Company's pay rates are extremely favourable compared to those within the retail trade.
The Court has considered the written and oral submissions of the parties. The Court is aware of the external consultants examination of the Company's operation on retaining it's competitiveness and reducing or eliminating losses in certain areas and which has already identified areas where staff numbers need to be reduced. The Court is of the view that a copy of this report should be given to the Union.
The Court makes it's recommendation on the claim for the payment of the 2% under the terms of the amended PPF, where pay costs have increased significantly over and above the terms of the PPF, on the basis that the payment of the 2% would put competitiveness and employment which the Company provides, at risk.
The Court is of the view that the cost of payment of the 2% could undermine the position of the Company to such an extent as to further the risk to competitiveness and employment. Therefore, the Court recommends that this claim should be deferred for a period of one year from it's due date. Accordingly, the situation should be reviewed in April, 2002.
Signed on behalf of the Labour Court
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.