INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
S2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001,
AS AMENDED BY THE INDUSTRIAL RELATIONS(MISCELLANEOUS PROVISIONS) ACT, 2004
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Grier
Worker Member: Mr Nash
1. Referral from the Labour Relations Commission under Section 2(1) of the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
2. The Company is a generic pharmaceutical manufacturer and employs 320 workers at its plant in Dublin. It was purchased by Merck KgaA in 1996 and is a division of the Merck Generics Group. In April, 2004 the Union sought a meeting with the Company to discuss a number of issues in relation to its members terms and conditions as follows:
Disciplinary and Grievance procedures
European Works Council
The Company refused to engage in negotiations with the Union and the issues were referred to the Labour Relations Commission under the provisions of the Enhanced Code of Practice on Voluntary Disputes Resolution (S.I.No.76 of 2004). Both parties participated in this procedure but agreement was not reached. The dispute was referred to the Labour Court on the 28th October, 2004 in accordance with Section 2 of the Industrial Relations Amendment Act, 2001 as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004. A Court hearing was held on the 9th December, 2004.
3. 1Sick Pay.The Company does not operate a contractual sick pay scheme. The Company Handbook states " The Company will at the discretion of Management pay up to 12 sick days in any year". The Union is seeking the introduction of a contractual sick pay scheme of 13 weeks sick pay in the year and that this discretion be removed.
2Pay.Merck KgaA in Germany respects the collective agreement negotiated between the chemical industry and the relevant trade union there. It provides for a minimum wage of €426.00 per week for the lowest grade. The agreement provides for the payment of an annual bonus of 0.6% of salary. Collective bargaining with the Company in Ireland would have resulted in a similar bonus. The minimum rates of pay of competitor companies in Dublin, which are in excess of those in the Gerard Laboratories, are supplied to the Court. The Union is seeking a minimum rate of pay for Production Operators of €597.86, €554.21 for Packing Operators and Warehouse /Stores workers and an increase for Packing Team Leaders sufficient to maintain their 21.8% differential. The Union also seeks the payment of a bonus of 0.6% of salary, that the new rate should be subject to the 2nd phase of the second schedule of the Sustaining Progress agreement (1/1/2005) and that the effect of any pay increase be backdated to 31st August ,2004( date of referral of the dispute to the LRC.)
3.Disciplinary and Grievance Procedure. The disciplinary and grievance procedure as outlined in the Company's Handbook does not comply with the Code of Practice on Disciplinary and Grievance Procedures (S.I. No. 146 of 2000). The Union is seeking the introduction of a Disciplinary and Grievance Procedure which conforms to the general provisions of the Code of Practice on Disciplinary and Grievance Procedure. Staff should be informed in writing of the changes.
4.European Works Council. Merck KgaA operates a Euro Works Council known as Merck Euroform. No election of a representative from Ireland to this body has ever taken place since the Company joined the Merck Group in 1996. The Union is seeking that an election for a representative of Merck KgaA workers in Ireland be held within one month and that the right of all employees based in the State to vote for an employees' representative and to stand as a candidate (provided they have one year's service) as provided for in the Transnational Information and Consultation of Employees Act, 1996.
5. Other terms and conditions. The Union is seeking that the Court recommend that conditions of employment presently obtaining not be altered in consequence of its recommendation, and particularly, where any worker currently holds terms and conditions in excess of those which might be recommended, they should continue to hold that rate or condition on a personal basis. In particular the Union asks the Court to recommend that workers who have been paid sick pay under discretionary arrangements should not have those terms reduced as a result of this application.
4. 1.Sick Pay. The Company has a clear Sick Pay policy and Scheme which provides for the payment of sick pay at the discretion of Management .The introduction of an arbitrary sick pay scheme would reduce the Company's ability to assess each case on its own merit and impose set sick pay entitlement, regardless of the employees circumstances.
2.Pay.The Company provides excellent benefits and conditions of employment. Research carried out by the Company shows that its rates of pay and conditions of employment are not only in line with but also, in most cases, in excess of those in the generic pharmaceutical manufacturing sector. There is no logical reason why the Company's rates of pay should be compared to the ethical (branded) pharmaceutical sector. The Company operates in a vastly different environment from the ethical pharmaceutical companies. Generic companies do not enjoy the competitive advantage held by their ethical competitors. Generic companies not only command a far lower price for their products, they must also compete against ethical products which have been present in the marketplace much longer, command a higher market share and have the additional selling power of a leading brand name.
3.Disciplinary and Grievance Procedure. Both the Company's Disciplinary and Grievance Procedure expressly provide that employees may be accompanied by a fellow employee. The Company has considered its position and has decided to allow for representation by any other person of the employee's choice acting in a personal capacity in the latter stages of both Procedures.The Company believes itself to be fully compliant with SI No. 146 of 2000.
4.European Works Council.The Company does not accept that it is in breach of the Transnational, Information and Consultation of Employees, Act, 1996. In June, 2004 the Company ran a series of presentations which explained the origins behind, the reasons for and the functions of the Merck Europe Forum (MEF). Employees were informed that the Company would be setting up its own internal Employee Forum, that employees would be directly elected onto the Employee Forum and that a member of the Gerard Laboratories Employee Forum would be elected from the Forum to attend the MEF as Gerard Laboratories employee representative. Following the presentations held in June, 2004, further information was given to all employees at staff presentations in early September, 2004. Elections were held in September, during the course of which all employees were given the opportunity to vote.
This dispute was referred to the Court pursuant to Section 2(1) of the Industrial Relations (Amendment) Act 2000, as amended by the Industrial Relations (Miscellaneous Provisions) Act 2004. The Court is satisfied that the conditions specified at Section 2(1)(a) to 2(1)(d) of the Act are fulfilled in this case and that the dispute is properly before the Court for investigation and recommendation.
The Court has taken account of the submissions made by the parties and has had regard to all the information with which it was provided. In formulating recommendations which follow the Court has had particular regard to the information with which it was provided in relation to rates of pay and conditions of employment in comparable enterprises engaged in similar manufacturing activity. The Court has also had regard to the information with which it was provided concerning the economic and commercial circumstances of the employment.
The Court recommends as follows:
The Court recommends that the company introduce a sick pay scheme which provides for eight weeks paid sick leave, less social welfare, in any 12 month period. This should apply to all employees who have completed 12 months service. All absences should be medically certified and no payment should apply for the first three days of absence in any illness. The employer should retain the right to refer any employees claiming under the scheme to a medical practitioner of its choosing for a second opinion.
On the information before it the Court is not satisfied that the company's current pay arrangements are sufficiently transparent or that they are based on reasonable discernible objective criteria. The Court believes that a pay structure based on minimum rates for the jobs involved would be more in line with normal practice for similar work in comparable employments.
Having regard to all the circumstances of the case the Court recommends the following minimum rates should apply:
Packing Operatives / Warehouse/ Stores Operatives
On recruitment: €9.00 per hour. (€351 per week)
After six months service: €9.65 per hour (€376.35 per week)
After twelve months service €10.19 per hour (€397.41 per week)
On recruitment: €9.40 per hour. (€366.60 per week)
After six month service: €10.20 per hour (€397.80 per week)
After twelve months service €11.30 per hour (€440.70 per week)
The Court further recommends that the current differential applicable to packing team leaders be maintained.
The rates recommended should apply from 1st January 2005, to those with the requisite service on the due date, but should be exclusive of any increase otherwise due from that date.
Grievance and Disciplinary Procedures
The employer should put in place a disciplinary and grievance procedure which conforms to the general provisions of the Code of Practice on Grievance and Disciplinary Procedures (S.I. 146 of 2000). Consistent with the Code, the company procedure should provide for representation by an employee representative in proceedings individual grievances and disciplinary matters. An employee representative is defined by the Code of Practice as including a work colleague or a trade union. The procedure should contain provision for either form of representation as the employee may decide.
The procedure should also provide for the full utilisation of the normal dispute resolution machinery of the State, including the reference of disputes to conciliation, the Rights Commissioner service and the Court, as appropriate.
This procedure should be put in place within one month from the date of this recommendation. Any submission that the Union wishes to make with regard to its content should be taken into consideration. If there is any dispute in relation to the compatibility of the proposed procedures with the Code of Practice, the question may be processed under Section 43 of the Industrial Relations Act 1990.
European Works Council
The Court recommends that, when the term of office of the current members of the European Works Council expires, elections be held in accordance with the legislation.
Where employees are currently in receipt of rates of pay or other conditions of employment which are more favourable than those provided for by this recommendation, they should retain them on a personal to holder basis.
Save were it is otherwise provided, the terms of this recommendation should be implemented within one month from the date on which it is issued.
Signed on behalf of the Labour Court
25th January 2005______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.