INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr O'Neill
1. Rehearing arising from LCR 16178.
2. A claim by the union on behalf of 90 forestry workers, for the application of two 'analogue' pay increases (£16.04 and £12.65) which were applied to local authority workers under Clause 3 of PESP, was the subject of Labour Court investigation in 1999. The Union claimed that the group, who are employed on the Incentive Bonus Scheme (IBS) system, have a long standing pay relationship with the local authority workers and that they were guaranteed, in the legislation under which Coillte was established and under which they transferred from the former Department of Forestry, that their conditions of employment would not be diminished except in accordance with a collective agreement. The Company rejected the claim on the basis that no pay relationship existed with the local authority workers prior to the transfer legislation. In LCR 16178 the Court recommended as follows
"............The claim by the Union on behalf of Coillte workers for the application of the analogue settlement of £16.04 and £12.65, as applied to local authority workers and state industrial workers, is not conceded by the Court. The Court is not satisfied that there is a relativity between these two types of workers, as was decided by the Court in LCR 6781 in 1981. However, the Court believes that there is a basis for farther negotiations on clause 3 of PESP for IBS workers. These negotiations should reflect the intention of Clause 3 of PESP, i.e.Negotiations under this clause will take full account of the implications for competitiveness, the need for flexibility and change and the contribution made by employees to such change".
Subsequently information came to the Union's attention which it claims was not available to the Court in its investigation in 1999. The letter from the Court dated 5th December, 1978 confirms a relationship between forestry workers and OPW drainage workers and rural local authority workers. The Union copied this correspondence to the Company and sought a further hearing of the Labour Court in order that the issue could be clarified. A Court hearing was held on the 7th July, 2006.
3. 1. The Court's letter of 5th December, 1978 was issued against the backdrop of an earlier recommendation (LCR 4870) giving Board of Works Drainage Workers a £3.50 increase from 1st March, 1978. The Court's letter of 5th December, 1978 reads as follows
".....there is an existing ratio between the pay of forestry workers and drainage workers and that the arguments presented to the Court in a recent investigation of a claim on behalf of drainage workers are also relevant to the present claim. In these circumstances the Court now recommends that the terms of LCR 4870 in relation to claim (b) be applied by the Department of Fisheries and Forestry from the same date".
There is no doubt as to the confirmation of the established pay relationship, issued eleven years prior to the establishment of Coillte in 1989 and twenty one years prior to the hearing in 1999.
2. The Forestry Act 1987 Section 43(2) states;
"Save in accordance with a collective agreement negotiated with any recognised trade union or staff association concerned, a member of the staff of the Department of Energy referred to in subsection (1)staff shall not, while in the service of the company, be brought to less beneficial conditions of service or of remuneration than the conditions for service or of remuneration to which he was subject immediately before the vesting day".
No such collective agreement has ever been concluded.
3. Reference was made in the recommendation of 1999 to the earlier recommendation of 1981 (LCR6781). In this connection the Union wold confirm the critical relevance of the latter letter of December, 1978 referred to above, by reference to the text of the recommendation of 1981, viz:-In the Union's arguments as summarised at 3(a) of LCR 6781, attention is clearly drawn to the significance of the letter of 1978 in confirming the pay relativity. The Union also drew the attention of the Court to an earlier recommendation of October, 1973 and later agreements confirming the relationship. LCR 6781 does not deny the pay relationship but rather confirms the internal rationalisation/relativity basis of the local authority increase. This clearly would not of itself alter external relativities.
4. It is correct to assert that a pay relationship was established between the pay of State Industrial Workers and rural Local Authority Workers in 1993, it is equally fundamental to understand that the agreement concluded then applied only to State Industrial Employees in the OPW and the Department of Defence etc. who were hitherto related to the Construction Industry for pay purposes. In the case of Forestry Workers the relationship had been well established fifteen years previously.
4. 1. In 1981 the Court rejected a claim to have the rationalised pay structure in the Rural Local Authorities applied to forest workers. The Court's rejection was on the basis that the rationalised pay rates in the Local Authorities employment arose internally and were relative to the authorities only. These arguments are equally valid in this claim. The arrangements introduced in Government Departments in 1993 were:-
-applicable only to state industrial employees in Government Departments;
-relevant and appropriate only to conditions in Government Departments.
These developments took place after the establishment of Coillte and are, therefore, not applicable to Coillte or relevant to the conditions obtaining in Coillte.
2. Pay rationalisation also took place in Coillte, based on the circumstances relative to the specific needs of the Company the provision highlighted by the Court in 1992 (LCR 13711 refers). The provisions of this pay rationalisation package afforded staff the opportunity to fully avail themselves of the provisions of PESP while also contributing to addressing the problem of unit labour costs. It also presented staff with an opportunity to significantly enhance their earnings. This opportunity remains available to all those workers remaining on the Incentive Bonus Scheme.
3. Coillte was established in 1989 and the industrial staff who were transferred to the Company did so on the basis of the Incentive Bonus Scheme and not to any subsequent changes in pay structures in Government Departments. Since than the Company has applied the provisions of successive national wage agreements on the basis of the terms applicable to the private sector.
4. The 1993 agreement committed both the Company and the Union to work towards cost-effective operation and maximum efficiency throughout the Company. To now seek to align the pay of a significant number of Coillte workers directly with the pay movements in the non-commercial sector would have serious implications for cost -effective operation and also for the cost -effectiveness of the production linked payment arrangements which have been entered into by the majority of the industrial staff.
5. The Union sought this re-hearing on the basis that information not available to the Court i.e letter of 5th December, 1978 at the time of its recommendation had subsequently come to hand. This is not correct. The letter actually formed part of the Union submission to the Court in 1981 and it is clearly referenced in the text of the Union submission.
6. The Company has fully complied with its obligations under the terms of the Local Bargaining Clause of PESP and has applied the general provisions of all national pay agreements as appropriate to the private sector all staff including IBS staff. The Company remains fully open to allowing the remaining IBS scheme workers opt for the Piece-Rate Scheme and thereby avail themselves of the provisions of the Local Bargaining Clause of PESP while also contributing to addressing the problem of unit labour costs.
The case before the Court is a rehearing of Labour Court Recommendation No: 16178, which arise following a request by SIPTU, via the National Implementation Body.
Labour Court Recommendation No: 16178 dealt with a claim on behalf of Incentive Bonus Scheme (IBS) system forestry workers for the application of the two "analogue" pay increases (£16.00 and £12.65) which were applied to local authority workers under Clause 3 of the PESP. The Union claimed that this group have a long-standing pay relationship with the local authority workers and that they were guaranteed, in the legislation under which Coillte was established and under which they transferred from the former Department of Forestry, that their conditions of employment would not be diminished except in accordance with a collective agreement.
Labour Court Recommendation No: 16178 did not find that there was relativity between the two types of workers involved and therefore rejected the claim, however, it recommended that the parties should engage in further negotiations on Clause 3 of PESP for the IBS workers. The reason for the Court’s finding on the relativity issue was based on a 1981 Labour Court Recommendation - LCR No. 6781, which found that a case had not been established for application of rural Local Authorities pay structure to General Operatives in Government Departments outside Dublin (including forestry workers at the time).
The case has now been returned to the Court, as ‘new evidence’ has been submitted by SIPTU. This evidence relates to a letter dated 7th December 1978, which referred to Labour Court Recommendation No: 4870. The letter quotes the Recommendation :
- “The Court notes that there is an existing ratio between the pay of forestry workers and drainage workers …..”
and thereby recommended that from 1st March 1978, the forestry workers should receive the same £3.50 pay increases as Local Authority workers (Boards of Work Drainage Workers).
SIPTU now submit to the Court that this dispels any doubt that there was an established pay relationship at that time, 11 years prior to the establishment of Coillte in 1989. It submits that this relationship must continue to this day, due to the provisions of Section 43(2) of the Forestry Act, 1988, which protected the conditions of service and remuneration of the claimants unless varied by collective agreement with their Trade Union.
Having considered the views of the parties expressed in their oral and written submissions, the Court is not satisfied that the evidence presented is new evidence, this information was clearly presented as part of the Labour Court hearing in 1981 (LCR No. 6781), it is specifically referred to in the Union’s arguments to that case.
In reaching its conclusion on this issue, the Court has considered firstly the lapse of time since the establishment of a relationship between the Drainage Workers and Forestry Workers and the events, which have taken place in the meantime.
-A pay rationalisation agreement reached in Coillte in 1995, changed the remuneration structure of forestry workers and introduced a new pay structure whereby employees opted either for a new system - Piece Rate System/Autonomous Work Groups or continuation on the Incentive Bonus Scheme (IBS) system.
-The terms of the Local Bargaining Clause of PESP applied only to those who opted for the new payment system. However, this gap was dealt with in LCR No: 16178.
-Since the establishment of Coillte in 1989, the application of national wage agreement has been on private sector terms not public service terms, without any issue from the Union.
-LCR No: 6781 rejected the principle of relativity prior to the establishment of Coillte.
-Since at least 1995 when the pay rationalisation agreement was agreed, the Union has not disputed that the needs and conditions of Coillte are as a commercial organisation and it has accepted the revised terms accordingly.Based on all the foregoing points the Court does not support the Union’s contention that there is a continuing established pay relativity between the pay of Coillte forestry workers and Local Authority workers, and therefore upholds it findings and recommendation in Labour Court Recommendation No: 16178.
Signed on behalf of the Labour Court
17th July, 2006______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.