INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
GALCO STEEL LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr Nash
1. Breach of agreement.
2. The Company introduced a gainsharing scheme in 1999 to provide enhanced earnings potential for production staff based on gains accruing to the Company from invoiced sales. In 2003 the Company, having reviewed the operation of the scheme, commenced deductions from the scheme based on the cost of in house repairs, customer claims due to damaged stock, quality and loss. The Union claims that the scheme does not allow for deductions to be made in respect of damage or lost materials nor was the scheme altered by agreement with the Union. The Union claimed compensation in the amount of approximately €500 per worker since 2003 for the deductions made to the scheme by the Company. The Company rejected the claim. The dispute was refereed to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. The dispute was referred to the Labour Court on the 20th October, 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 12th January, 2006.
3. 1. The Company made an arbitrary change to the bonus scheme in 2003 by the inclusion of a charge penalty reduction clause. It has meant a significant loss to each of the claimants. There was no consultation or agreement with the Union in relation to this change.
2. The Company's action is contrary to all good industrial relations practice.
3. The new proposals put forward by the Company in 2005 include an agreed mechanism for dealing with damage/loss adjustment in relation to the bonus/ gainshare scheme. The only issue in dispute is the claim for the loss experienced by workers which was brought about by the breach of the agreement by the Company.
4. 1. The Company made the deductions in 2003 on the basis that no gain arises from the cost of in-house repairs, customer claims due to damaged stock, quality and loss. On that basis no payments should be rightfully made when no gain accrues.
2. There is no breach of the agreement and the gain sharing scheme continues as the agreement states that it will do. The amendment made in 2003 is fair and properly applies to a gain sharing scheme. Indeed the scheme should have operated in this way since its commencement in 1999 and so it is argued that workers have had a benefit incorrectly applied from that time to the change in 2003.
3. The scheme will change as a result of the Company's proposals of 2005 and workers will enjoy enhanced earnings from the scheme as a result.
The issue before the Court concerns the Union's claim that the Company breached the "Agreement on Continuous Improvement Initiative" relating to the Company's Gain Sharing Scheme, when the Company introduced an amendment in 2003. The Union contended that the implications of these changes has resulted in a loss of approximately €500 per worker since 2003.
The Company stated that the changes made were necessary to ensure that payments made under the scheme fairly reflected the gains made. It quantified the loss incurred as approximately €150 per worker since 2003.
While recognising the informal nature of the discussions between the parties on the changes made to the scheme in 2003, the Court notes that the amendment made took place without negotiation and mutual agreement. However, the Court notes that recent amendments to the scheme were the subject of negotiations and agreement between the parties.
Having considered the matter, the Court recommends that to address the Union's claim, a payment of €250 should be made in full and final settlement as a gesture of goodwill to each of the claimants involved in this claim.
Signed on behalf of the Labour Court
16th January, 2006______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.