INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Murphy
Worker Member: Mr Nash
1. Retrospection payment of the Programme for Prosperity and Fairness and Sustaining Progress.
2. The Company, a German-owned employer based in Bruff, Co. Limerick, is involved in the manufacture of electro-mechanical bimetal thermostats and component parts. The parent Company has manufacturing plants in Europe, Canada, Brazil and China. The Company employs forty eight people. The dispute before the Court concerns a claim by the Union on behalf of its members for retrospective payments in respect of the final phase of Programme for Prosperity and Fairness (PPF) and late payment of the first phase of Sustaining Progress (SP). The Company contends that due to trading difficulties and financial losses it has not been in a position to make the payments on the due dates but that it has paid all other phases of the National Agreements and would be unable to cover the two outstanding phases retrospectively.
- 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 13th July, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 2nd November, 2005.
3. 1. The decision by the Company not to pay the Union's members under the National Wage Agreements is unacceptable to the Union given the losses incurred by its members. It argues that the members cannot be expected to continue to exist with this kind of pattern in relation to suffering financial loss when all around them there are constant increases in everyday living costs.
2. The Union's members have in the past accepted the Company's financial position and co-operated with the Company on an annual basis when the Company required them to reduce their working week. This loss, along with outstanding payments due, means that the members have suffered a greater financial loss.
3. The members cannot sustain the decrease in the value of their take-home pay because of non-compliance with the National Wage Agreements on the part of the Company. The Union is seeking that the Company implement these payments retrospectively to the due dates as agreed by the social partners.
4. 1. The Company faces intense competition from Eastern Europe and relies on volume orders to generate efficiencies. It relies on orders from the parent Company. The Company incurred losses in 2004 and it estimates further losses in 2005. The Company recognises that the Union is seeking to improve rates of pay for its members, however, job security must be of greater importance.
2. Sustaining Progress payments are up to date and the Company is working a five-day week. The Company does not have the monies available to pay the cost of this claim. The industry is in decline and the manufacturing base is shifting to Eastern Europe and China.
3. Clause 7 of the PPF agreement states that the pay element of the agreement shall be negotiated between employers and employees with due regard being given to the economic, commercial and employment circumstances of the particular firm. In this case the Company urges the Court to recognise that proposals worked out by the Labour Relations Commission which stated that "1. 3% of basic pay as provided for under phase 1 of SP will apply from 1 March 2004 for a period of 9 months. 2. This payment is made on the basis of no further claims in respect of the PPF."represent the best agreement possible under the circumstances.
The Union submitted a claim to the Court seeking the residual retrospection due under the terms of PPF and Sustaining Progress. Due to its severe trading conditions and its current financial difficulties the Company indicated that it is unable to meet the costs associated with the Union's claim.
The Court notes that these issues have been the subject of a number of Labour Relations Commission Conciliation Conferences and that a proposal dated 16th April, 2004, put forward by the LRC as a means of resolving the issues, was acceptable to the Company but was rejected by the Union.
The Court notes that the Company has committed to pay all phases due under both Sustaining Progress Agreements albeit at later dates than they were/are due. Having considered the matter and taking account of the Company's severe financial difficulties, the Court recommends acceptance of the LRC proposals referred to above with the following in addition to that proposed at points 1 and 2:-
3. Payment of a lump sum to each of the workers concerned of €1000, in two equal instalments; the first to be paid before Christmas, 2005, and the second to be paid before the end of July, 2006.
The Court recommends that this offer should be accepted by both parties in full and final settlement of the Union's claim.
Signed on behalf of the Labour Court
15th November 2005______________________
Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.