INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
UNIFI TYE LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Carberry
Worker Member: Mr O'Neill
1. Payment of 1% lump sum due under the revised terms of the Programme for Prosperity and Fairness (PPF).
2. The Company is part of a multinational group with headquarters in the USA. It manufactures textured yarn in Letterkenny and employs approximately 600 general operatives. The dispute concerns the method of calculation of the once-off 1% lump sum payment due under the revised terms of the PPF and of the Company proposal to seek cost off-setting measures in return for payment of the 1%.
The Union wants the 1% lump sum calculated as provided for in the guidelines issued by the National Implementation Body (NIB) which would include shift premium and possibly overtime. The Union does not accept that further cost off-setting measures are necessary in return for payment of the 1% lump sum.
The Company claims that in the revised terms of the PPF that the 1% applies to basic pay only. It also claims that it is entitled to seek savings in return for payment of the 1% lump sum. As there was no agreement between the parties the dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 10th October, 2002, but agreement was not reached. The dispute was referred to the Labour Court on the 25th October, 2002, under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 6th February, 2003.
3. 1. The workers have already agreed cost off-setting measures in respect of the PPF. They should not be required to accept more in respect of this modest payment.
2. There is no serious threat to competitiveness for the Company or to jobs or employment by payment of the 1% lump sum.
3. The correct method of calculation of the 1% lump sum is to take the weekly basic rate of pay plus shift premiums on the 1st April, 2002, and multiply by 52 to obtain its annualised value.
4. The Company's proposal that a worker transferring from a higher grade job to a lower grade job would lose the higher rate of pay is totally unacceptable and would destroy the present flexibility that exists in the factory.
4. 1. The Company offered to pay the 1% as a lump sum calculated as 1% of basic earnings for the previous 12 months, in return for a relatively minor concession.
2. The concession the Company is looking for is the discontinuation after an agreed period of time, the practice of "red-circling" the grades of employees transferred permanently to lower grades.
3. The Company has experienced a deterioration in competitiveness as a result of increases in energy costs, insurance, commercial rates and waste disposal, as well as the impact of the PPF.
4. The Company has been advised by IBEC that the method of calculation proposed by the Company is correct and in accordance with the letter and spirit of the PPF agreement and is in line with the clarification issued by the National Implementation Body.
Having considered the submissions of the parties the Court recommends as follows:
1.Definition of Basic Pay.
Basic rate in this employment is set out in the schedule of rates to which the Court was referred. These are the rates exclusive of shift premium, overtime or other supplements. The Court notes that these are the rates used in the calculation of overtime.
The Court recommends that the 1% lump sum should be calculated by reference to the basic rates as so defined.
2.Reference Period for Calculation.
The agreement in question, as elaborated by the NIB, provides that the lump sum should be calculated on the annual basic pay, on 1st April 2002. In the Court's view the correct approach is to take the basic weekly rate of the operative and to obtain its annualised value by multiplying the rate by 52.
3.Cost Offsetting Measures.
In the Court's view the cost to employees of the concessions sought by the Company would far outweigh the benefit derived by the payment of the 1% increase. In these circumstances the Court does not recommend that the payment of the 1% be conditional on the Union's agreement to the concession sought by the Company.
Signed on behalf of the Labour Court
26th February, 2003______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.