INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
AUGHINISH ALUMINA LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL, ENGINEERING AND ELECTRICAL UNION
Chairman: Mr McGee
Employer Member: Mr Murphy
Worker Member: Mr O'Neill
1. Payment for CHP/PCP.
2. The Company refines alumina, and its product - alumina powder - is the ingredient for making aluminium. The claim is on behalf of 316 workers represented by the three Unions and concerns the expansion at the plant capital projects (PCP) and the construction of an on-site combined heat and power plant (CHP). In 2003/2004 the Company invested €200 million in PCP/CHP. In October, 2004, the Union made a pay claim based on increased production and new processes. In January, 2005, in association with the Labour Relations Commission (LRC) the Company made an offer which was rejected by the workers and in April, 2005, the Company made a second offer as follows:
- 4% paid in one increment from July 1st 2005
- €2,500 lump sum (payable 40% in July and 60% in December ) with €250 being a non-taxable voucher (the €2,500 incorporated the expected December 2005 gainsharing amount of approx.€1,100)
- Gainsharing pot for 2006 would increase to approximately €750,000 or a 50% increase to €1,650 approximately per person per annum from 2006 also the gainsharing "pot" was to maintain its value by increases equivalent to the Consumer Price Index (CPI) with a maximum cap of 4% each year going forward.
Again, the offer was rejected by the workers. At the Labour Court hearing the Unions clarified that the claim was now for a 10% pay increase. They are also seeking to re-develop the partnership arrangement which has deteriorated recently. The Company's response at the hearing was that due to huge cost increases in production it was withdrawing its offer of April, 2005, and could now only offer normal increases under Sustaining Progress (SP).
The dispute was referred to the LRC and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 25th of November, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 22nd of February, 2006.
3. 1. The Company operates in a buoyant aluminium market and production at the plant is increasing at the rate of 100,000 tonnes per year.
2. There are five areas within the plant known as "locals". An increase in production affects all areas and means increased work for everyone (the Unions supplied examples to the Court ). PCP/CHP has resulted in major additional work and responsibilities for the workers. This is reflected in the level of training.
3. The workers deserve to be rewarded because of their contribution to the success of the Company, particularly since the introduction of PCP/CHP, and a pay increase of 10% is not unreasonable.
4. 1. The cost of producing one tonne of alumina at Aughinish has increased since October,2004, from $190.47 to $249.94 in June, 2005, an increase of over 30%. The Company has continued losing money since then and forecasts a loss for 2006 at budget time.
2. As a result of the above the Company had to withdraw its offer of April, 2005, and cannot afford to offer any increase above S.P. Conceding the Unions' claim for a 10% increase would be disastrous for the Company.
3.The Company made two generous offers in 2005 but both were rejected by the workers. Pay and conditions at the Company are excellent and the Unions have admitted this.
4. The introduction of PCP/CHP has not meant a great deal of extra work/responsibility as the Unions claim. The Company believes that both projects are covered under on-going change in S.P.
The Court is concerned at the dilemma presented to it by the parties in this case. It is clear to the Court that the Company responded to the Unions' claim as made in 2005. It is also clear that commercial circumstances have altered considerably since that time. No credit is due to either party for the way this case has been dealt with and processed.
The Court urges all parties - Management, Unions and their members - to remain keenly aware of the real-world commercial and competitive pressures on commodity - based firms like Aughinish Alumina.
On the basis that
- no precedent is created,
- there is full and ongoing cooperation with all aspects of PCP and CHP, and
- immediate moves take place to restore, on a practical basis, the partnership approach in Aughinish Alumina,
the Court recommends that the last Company offer, dated 21st April, 2005, be reinstated in all details and be accepted by the Unions, this to be in full and final settlement of all Union claims regarding PCP and CHP.
Signed on behalf of the Labour Court
20th March, 2006______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.