INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1); INDUSTRIAL RELATIONS ACT; 1990
TYCO ELECTRONICS LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Carberry
Worker Member: Ms Ni Mhurchu
1. Compensation for change in overtime arrangements.
2. The Company was established in Shannon in 1979 and is involved in the production of heatshrink plastic components and overhead systems mainly for the electrical power industry worldwide.
In August, 2001, the Company became aware of a significant deficit in the labour budget. One of the ways it sought to combat this was by reducing Saturday overtime and in September, 2001, the Company closed on 3 consecutive Saturdays. Prior to this, workers were essentially free to select what overtime, if any, they worked on Saturdays. The Company decided to concentrate on weekday overtime, and when necessary, a more structured weekend overtime. The Union claims that the removal of Saturday overtime is a breach of custom and practice that extends back 23 years. It is seeking that the availability of 8 hours' overtime on Saturday be restored or else compensation paid on earning potential should there be a change to the current system. At the hearing, the Union stated that it would be seeking compensation at 2 times the annual loss.
The dispute was referred to the Labour Relations Commission (LRC) and a conciliation
conferences took place in April and May, 2002. The LRC issued a proposal on
compensation which, while recommended by both parties, was rejected by the Union
members. The dispute was then referred to the Labour Court on the 20th of June, 2002,
in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court
hearing took place on the 9th of July, 2002, in Killarney.
3. 1. Saturday overtime of 8 hours has been available to the workers for over 20 years and many of them have built their lifestyle around this regular availability.
2. Workers who did regular overtime e.g. 46 Saturdays per year, stand to lose a substantial amount of money if there is a change to the present arrangements.
3. The Union is not seeking compensation for those workers who never worked Saturday overtime.
4. 1. The Company was left with no choice but to reduce Saturday overtime due to an extremely poor performance in 2001. It held a number of meetings with the employees to explain the situation.
2. The Company has been trying to change the previous arrangements, where employees could select their amount of overtime on Saturdays, as it resulted in a lack of process continuity leading to gross inefficiency.
3. The Company is an excellent employer, something acknowledged by the workers.
4. The Company's proposals, which would involve specific hours overtime for Saturday when necessary, is fair and reasonable.
The Court notes that both sides are interested in changing the informal nature of Saturday overtime working. The Union had proposed the introduction of an annualised hours system, whereas the Company wished to introduce a new formalised structure system. Up to this, employees decided on a very casual basis whether they were available for Saturday overtime. Some employees never worked on Saturdays.
The Company now proposes to introduce a formal system with specific start and finish times and to put in place a roster for those who indicated their wish to be included on a roster. The Company is willing to compensate employees for any loss in overtimes earnings which may occur. A compensation proposal was devised through the auspices of the conciliation officer. This proposal was recommended for acceptance by both sides but was rejected by Union members.
The Union is seeking a formula which will take account of future loss relative to the best year of Saturday overtime earnings. The Court is of the view that such a formula is not the norm in industrial relations.
The Court notes that the Company has been experiencing severe financial difficulties allied to, and arising from, inter alia:
oThe labour budget deficit
oDecline in products
oCost reduction demands
oFailure to achieve targeted efficiency levels
oUnstructured Saturday overtime
The Court notes that the Union is not seeking compensation for those employees who never worked overtime on Saturdays.
The Court recommends that the parties should agreed a structured overtime arrangement for Saturday working which will meet the business and operational needs of the Company. A roster for overtime should be agreed, allowing overtime to be worked on an equitable basis. Furthermore, the Court recommends that the following formula should be acceptedin full and final settlementof this claim :-
1.Compensation, if arising, should be based on the loss in overtime earnings calculated twelve months following the introduction of the newly agreed structured overtime, as compared with overtime completed in the previous 12 months. Records will be maintained to monitor the situation.
2.Compensation will be calculated on the basis of an hourly rate at date of the introduction of the new structured overtime, at a level of 2 times the loss accruing.
3.The compensation payments, if arising, should be paid in two equal instalments, the first at the time of calculation, the second nine months later.
Signed on behalf of the Labour Court
22nd July, 2002______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.