INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
SMURFIT KAPPA CORK
FORMERLY SMURFIT CORRUGATED CASES
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Doherty
Worker Member: Mr O'Neill
1. Improved Sick Pay Scheme.
2. The dispute concerns a claim by the Union for improvements to the Company’s sick pay scheme by way of improved benefits to workers and the scheme’s conversion from contributory to non-contributoryand an improvement in current flat rate benefits to full pay for a period of 10 weeks and half pay for a further period of 10 weeks, with 5 days full pay for uncertified sick leave.The Union’s claim was rejected by the Company.
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 in November, 2005. As agreement was not reached, the dispute was referred to the Labour Court on the 15th November, 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 23rd May, 2006.
3.1 This Company is clearly a market leader and a significant multinational with vast market penetration and substantial profits. The Company is very healthy financially in terms of its local, national and international operations.
2. Substantial change occurred within the Company in recent years and the staff co-operated with the introductions of these changes with a view to ensuring the Company's future and profitability.
3. On more than one occasion the Company had promised in recent years to deal with the issue of the Sick Pay Scheme with a view to improving matters. This regrettably has not occurred to date.
4.1 The Company recognises the Union's right to have an aspiration towards the development of a non-contributory scheme. The Company cannot however adopt that principal for economic reasons such as competitiveness, the potential impact of higher absenteeism and the likely knock-on implications for other Sick Pay Schemes in operation in other Smurfit Kappa Ireland Companies.
2. The contributions from the employees give them a shared responsibility in monitoring payments and in working towards maintaining a low level of absenteeism in the Company. This principle has been part successful in bringing about awareness and also a reduced percentage level of absenteeism. The present level at 5% is considered to be higher than could be sustained by the Company and is above the national average.
3. The Unions claim ignores the fact that contributory schemes have always been a general feature of policy and practice in the Smurfit Kappa Group. Therefore there are no objective grounds for a change as this Company is not out of line with the prevailing practice within the Group.
4. The Company has a clear policy of maintaining cost competitiveness in an industry where cost sensitivity is very high. This claim fundamentally ignores this.
5. The Company has shown a willingness to cushion the benefit impact for employees when it indicated that the base figure for company sick pay weekly amount would be increased from €127 to €250. This would be funded by equal adjustments to the weekly contributions by both the Company and the employees to increase the contributions from €2.50 per week to €5.00 per employee, per week
The Union sought an improvement to the Company’s sick pay scheme. It sought the replacement of the current contributory scheme with a non-contributory scheme and an improvement in current flat rate benefits to, full pay for a period of 10 weeks and half pay for a further period of 10 weeks, with 5 days full pay for uncertified sick leave.
In response to the claim, the Company offered to improve the scheme. It offered to double the flat rate benefits on condition that the level of employee contributions was similarly doubled. This offer was rejected by the Union.
The Company told the Court that all of its plants operate on the basis of contributory schemes and it was not prepared to offer a non-contributory scheme. It gave details of the scheme, which operate in its other two sister plants. Each plant has a different scheme.
Having considered the submissions of both sides the Court is of the view that it would be fair and reasonable if the Company’s offer to improve the benefits of the scheme mirrored the contribution levels and the benefits of one of the schemes operating in its sister plant.
Accordingly, the Court recommends that the Company’s offer should be amended to reflect the enhanced benefits and contribution level, as outlined to the Court at the hearing, in its sister plant: -
- Benefits, with an Employee Contribution Level of €5.00 per week :
-€250.00 per week for weeks 2 to 4 of certified illness
-€200.00 per week for weeks 5 to 25 of certified illness
-€100.00 per week for weeks 26 to 52 of certified illness
The Court recommends that this improved offer should be accepted by the Union in response to this claim.
The Court so recommends.
Signed on behalf of the Labour Court
1st June, 2006______________________
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.