FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GLANBIA PLC - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr. Somers |
1. 1. Redundancy 2. Permanency 3. Temporary Positions.
BACKGROUND:
2. The Company runs a 'shared services' Division in Dungarvan, Co. Waterford which supplies financial administration services to all business units within the Glanbia group. These include services such as financial and regulatory accounting, payroll, expense processing and other administration processes. The purpose of the Shared Services Centre (SSC) is to provide these services in a cost effective manner. A number of agreements are in place between the Company and the Union which Company contend are not suitable for the operation of an effective SSC and the Company has proposed the following changes in relation to three issues:
- 1.Redundancy - The Company is requesting that where there is a requirement to make an individual redundant in the future that the Company would make the last permanent employee redundant rather than the current situation whereby the longest serving staff has first choice.
2.Permanency - When an employee is being made permanent the Company be allowed to select the best candidate rather than the current situation whereby the most senior temporary employee fills the post.
3.Temporary Positions- Temporary staff in future will be called back to work based on their knowledge of specific functions within SSC rather than the current situation whereby the most senior staff is automatically called back first.
The Unions rejects the proposed changes on the basis that they are in breach of current agreements.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 25th June, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 7th October, 2004, the earliest date suitable to the parties.
COMPANY'S ARGUMENTS:
3. 1. The current situation of voluntary redundancies where the most senior is made redundant is dramatically increasing costs. The Company has a number of employees who are temporary and the Company is reluctant to make these permanent due to the cost of making employees redundant should redundancies be required.
2. The current situation means that the longest serving temporary is called back to the job even if the Company has another temporary who already knows the job being filled and an experienced temporary can be released when they are still required and the longer serving employee has to be trained into the position.
3. The changes requested are reasonable to allow business to progress in effectiveness and to create additional employment in the future. The threat to SSC in the future is that employee numbers may fall with the introduction of new initiatives and it is very important that the experience and dedication of long serving staff is protected and maintained.
UNION'S ARGUMENTS:
4. 1. The current agreements are working satisfactorily and are acceptable to the Union and the members are totally opposed to any changes to the agreements.
2. The Union accepts that Management have the sole right as to whom they employ and decide whether the employee is suitable for the position or not. The Union argues that when an employee passes their probationary period that the employees establish some entitlements which are necessary in order to provide some protection for their members.
3. When SSC was set up in Dungarvan many of the members were redeployed and displayed outstanding flexibility in adapting to the new much changed working environment which was necessary within the centre.
RECOMMENDATION:
The issue before the Court, referred by the Company, relates to a Company/Union agreement, which provides for voluntary redundancies based on volunteers selected on the basis of their length of service. The Company put it to the Court that this method of reducing employee numbers in the event of such a need, will result in
(i) a loss of experience and skills
and
(ii) an expensive redundancy cost.
The Court notes that the parties are not dealing with a specific need to reduce staff numbers at the moment.
Having considered the views of the parties expressed in their oral and written submissions, the Court notes that the agreement in question was put in place for the Waterford Co-Op, Waterford Foods Headquarters, Waterford/Avonmore and Glanbia plc and had its origins in a manufacturing environment. The Court further notes that other Shared Services Centres do not operate with similar constraints.
While the Court accepts that there is an existing agreement between the parties on the issue, nevertheless the Court also accepts that it is a legitimate aspiration for the Company to seek to alter the agreement for its Shared Services Centres operations in its efforts to progress its business in the changing environment.
Therefore, the Court recommends that the parties should enter into discussions with a view to reaching agreement on alternatives to the present arrangement which would provide in the first instance for redundancies to be on a voluntary basis if possible and to allow for the retention of employees with key skills and experience.
The Company also seeks that when an employee is being made permanent that the Company should be able to select the best candidate rather than the longest serving and that temporary employees should be called back to work based on their knowledge of specific functions rather than on the basis of their service.
Bearing in mind the industrial relations difficulties posed by the Company's proposals, the Court recommends that the issue of permanency and call back should be dealt with through the Company recruitment process and in accordance with the terms of the protective legislation.
Signed on behalf of the Labour Court
Caroline Jenkinson
18th November, 2004______________________
JO'CDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.