INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
Chairman: Ms Jenkinson
Employer Member: Mr Doherty
Worker Member: Mr Nash
1. Sharing of benefits from Process Improvement Programme.
2. The Company is engaged in the manufacture of pallet trucks in Galway for over 40 years. In 2003 it introduced a process improvement programme (PIP) as a response to growing competitive pressure. Part of this involves the use of video camera to which the Union objected. The issue was referred to the Labour Court and LCR 18568 issued in August, 2003. Part of the Recommendation read as follows:-
"...the proposed use of video recording is part of normal ongoing change and recommends that the Union should co-operate fully with its use as part of the Process Improvement Programme. After a period of six months the process should be reviewed to evaluate benefits achieved and with a view to sharing the savings made. These benefits should be measured in terms of the improvements achieved in the levels of efficiency and competitiveness.".
Following the 6 month period, the Union wrote to the Company claiming 50% of all savings achieved by the PIP. Despite a number of meetings agreement could not be reached on the actual level of savings. The Union rejected an interim offer of €507 per worker. In October, 2004, the Company announced the sale of the Galway premises and the transfer of its pallet truck manufacturing operation to China. The Union is now seeking 50% of all savings to date without deduction of the costs associated in the process. The Galway operation is due to close in late 2006.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 11th of April, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 30th of November, 2005, in Galway.
3. 1. The issue of the PIP has been ongoing for two years. The workers have made a big contribution to the PIP and there was an expectation that they would benefit from the savings made.
2. Since LCR 17568 issued, the Union has accepted a voluntary redundancy package involving approximately 40 employees. Workers have also accepted the closure of the night shift and a reduction in the number of evening shifts. This has contributed greatly to the reduction in the cost of producing a pallet truck.
4. 1. One of the main reasons for the closure of the Galway plant was its uncompetitiveness despite the best efforts of management and the workforce. The Company had no choice but to sell.
2. The Company has negotiated a very good severance package with the Union; costing in excess of €7 million. The Company is not in a position to add any further expense by making a payment under the PIP.
Having considered the views of the parties expressed in their oral and written submissions, the Court is of the view that the Union’s claim for the sharing of savings from the Process Involvement Programme (PIP) is no longer appropriate in the present climate. PIP was designed to improve the Company’s efficiency and to achieve competitiveness in order to survive.
In LCR No: 17568 the Court envisaged PIP as an ongoing process and made its recommendation accordingly. The Court is of the view that while PIP contributed to the Company’s survival for the past two years it also contributed to the continued employment of staff for that period.
Events since then have been overtaken by the Company’s decision to close the plant in Galway. Recent negotiations were concluded on a Wind Down and Redundancy Agreement which both parties accepted.
Therefore, the Court does not recommend in favour of the Union’s claim.
Signed on behalf of the Labour Court
9th December, 2005______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.