FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(5), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AER LINGUS - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AER LINGUS CRAFT GROUP IRISH MUNICIPAL, PUBLIC AND CIVIL TRADE UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr Nash |
1. 1. Alleged breach of Agreements, 2. Company's proposed Programme for Continuous Improvement (PCI-07), 3. Future security of Agreements.
BACKGROUND:
2. The Labour Court invited the parties to attend a Labour Court hearing in accordance with Section 26(5) of the Industrial Relations Act, 1990. Labour Court hearings took place on the 27th February,and 1st, 2nd, 3rd and 4th of March, 2007. The following is the Court's recommendation:
RECOMMENDATION:
The dispute came before the Court against the background of the Company having become a publicly listed company in September 2007. At that time certain agreements were concluded with the Trade Unions representing its staff. Amongst other things, these agreements provided that continuous improvements in efficiency, productivity and cost-effectiveness would be achieved through a process of consultation and agreement between the parties. The agreements further committed the parties to adherence to all existing collective agreements and guaranteed that existing staff would not be brought to less favourable conditions of employment to those applicable at the date of the IPO, save in accordance with a collective agreement.
Following the commencement of trading as a plc the Company became the subject of a hostile takeover bid from another airline. In response the Company formulated and announced plans to effect savings and efficiencies so as to ensure a sustainable return for shareholders. As part of this commitment the Company undertook a benchmarking exercise for the purposing of identifying if its terms and conditions of employment were out of line with aviation industry norms and national practice.
In consequence of that benchmarking exercise the Company formulated a Programme for Continuous Improvement 2007 (PCI-07). This programme sought adjustments in the conditions of employment applicable to Company staff and, in the case of new staff, new salary scales. Despite some level of engagement between the parties there was no agreement on the Company’s proposals. The Company says that it sought to engage with the Unions on its proposals but that they failed to respond in any meaningful sense. The Unions say that the Company did not provide them with sufficient information on the underlying basis of the proposals.
In these circumstances the Company announced its intention to implement the changes provided for by PCI-07. It proceeded to employ some new staff in certain categories on the revised conditions and announced its intention to introduce revised conditions for existing staff.
Having regard to the deteriorating industrial relations situation which ensued the Court decided to investigate the dispute pursuant to Section 26(5) of the Industrial Relations Act 1990.
There are three issues in dispute, namely:
�Alleged breach by the Company of collective agreements,
�The Company’s proposals for PCI-07
�Future security of agreements.
The Court met with the parties in joint and side session on 27th February 1st, 2nd 3rd and 4th March, 2007. Having considered the submissions of the parties the Court recommends as follows.
Breach of Agreements.
It is clear that the Company concluded a collective agreement with the Unions at the time of the IPO by which it undertook to achieve continuous improvements in efficiency and cost-effectiveness through negotiation and agreement. Moreover, the agreement recited a commitment that existing agreements would be honoured until they were renegotiated. The clear and inescapable import of that agreement was that neither party would act unilaterally in seeking to impose change. The Court notes that the Company sought to impose change (for reasons which they outlined to the Court and in circumstances in which they felt constrained to do so). Nevertheless, the Court must conclude the Company’s decision to depart from agreed conditions of employment in respect of new and existing staff without agreement was inconsistent with the spirit and letter of the collective agreements to which it is party.
Programme for Continuous Improvement.
The PCI-07 for the various categories associated with this dispute contains proposals for significant diminution in established conditions of employment. The Court is fully cognisant of the difficulties which these proposals cause for the staff of the airline and their trade unions, particularly against the background of the commitments given in the agreement preceding the IPO and the various restructuring agreements previously concluded. Nonetheless the Court is satisfied that the current circumstances of the Company are such as to warrant the implementation of measures which will bring about further cost savings and efficiencies.
The Court does, however, believe that where holidays are relinquished, or where a loss of earnings accrue in direct consequence of the implementation of the recommendations which follow, fair and reasonable compensation should be paid.
The Court does not intend to fix the level of compensation at this time. Rather, the parties should engage in a process of negotiation with a view to reaching agreement on a compensation package within four weeks. If agreement is not reached the matter should be referred back to the Court for a definitive recommendation.
The Court recommends that the following adjustments in conditions of employment be implemented with effect from the date of acceptance of this recommendation for all new and existing staff.
Annual Leave
Staff who are currently entitled to 26 or more days annual leave should relinquish 2 days. Staff with 23, 24 or 25 days should relinquish 1 day.
Lieu Days.
Where a public holiday falls on a day on which an employee is otherwise entitled to a paid day off (a rest day) one day in lieu should be provided. Where a staff member is rostered to work on a public holiday, current arrangements should continue to apply except that all new staff and all current staff with less than five years' service should receive a double days' pay and one day in lieu.
Overtime.
The Company proposed new arrangements on the management of overtime working which will achieve significant cost savings. These arrangements will not involve any change in existing overtime rates. These cost savings will be achieved through greater flexibility in shift arrangements and the elimination of the current practice of working through breaks and early finishing. In that regard breaks will have to be taken in accordance with the Organisation of Working Time Act 1997. Arrangements on minimum duration of overtime will also be eliminated. The Court recommends that the Company’s proposals be accepted. The detailed arrangements on implementation should be agreed at local level.
With regard to cabin crew the practice of providing 75 credits for working on a day off should be replaced with an arrangement of providing 6, 7, 8 credits per hour. This should apply to cabin crew members, seniors and managers / supervisors
Standard Working Hours.
The Court recommends that the Company’s proposal for a standard working week of 37.5 hours be accepted. This is to be exclusive of a main meal break during the day and inclusive of a morning break of 15 minutes.
Pension Contributions for Part-Time Staff
The Court recommends that the Company’s proposals for pro-rata pension contributions for those working less than standard full time hours should be accepted. However, where an individual staff member affected by this recommendation opts to pay the difference between the employer and employee pro-rata contribution and the contribution of a full-time equivalent, this should be facilitated by the Company.
Shift Pay and Rostered Duty Allowances
The Company advanced proposals for the introduction of a standard shift allowance for all shifts and for the incorporation of RDAs into that allowance. This, if implemented, will achieve significant cost savings, details of which were provided to the Court.
Having considered the implications of this proposal the Court believes that further discussions are necessary between the parties on the practical aspects of what is proposed and on the avoidance of anomalies in the allowances for different shift patterns. The Court recommends that the parties should have further engagement on this proposal, extending over not more than 2 weeks, for the purpose of agreeing new arrangements within the general financial parameters on which the Company’s proposal is based.
Ab Initio Training for New Staff.
The Court recommends that new cabin crew be paid 80% of the basic salary
Manpower Ratios – Cabin Crew
The Court recommends the following: -
�A reduction in A321 Seniors to 1 (2-3 to 1-4)
�A reduction in A330 short haul Seniors from 3 to 2 (1-3-4 to 1-2-5) for all economy services.
Foreign Bases
The Court recommends that the Company should be free to establish foreign bases as appropriate. The Unions representing cabin crews should be consulted and provided with relevant information on the establishment of such bases. However the pay, terms and conditions of employment and work practices of staff concerned should be determined solely and exclusively by reference to local market conditions.
Fly Anywhere Agreement
There are significant differences between the parties on the continued operation of the Fly Anywhere agreement in so far as it provides for the time off before and after transatlantic duty. It was not possible to deal with this matter to finality in the process leading to this recommendation.
The Court recommends that the parties engage in an extensive process of negotiation and discussion on this matter which should not extend beyond 16th March, 2007. If agreement is not reached outstanding issues should be referred back to the Court for final and binding adjudication.
Revised Terms for New Staff and Broadband Grading Structures
The Company proposed the introduction of new salary scales for certain categories of new staff and for a new broadband grading structure. The Union concerned indicated its opposition to the proposals.
In the absence of any level of engagement between the parties on these points (including the provision of detailed information) the Court is unable to make a helpful recommendation of these matters at this time. The Court recommends that without prejudice to the position of either party an intensive process of negotiation on the question of revised rates for new staff and grading structures should take place following acceptance of this Recommendation. This process should commence immediately following acceptance of the Recommendation and should continue for a period of four weeks. The assistance of the LRC should be obtained. If agreement is not reached the matter should be referred back to the Court which will facilitate the parties with an early hearing.
Future relationships.
It is clear to the Court that the Company will continue to experience a need for continuous change and adaptation. The Court is firmly of the view that this will best be achieved through consultation and agreement between management and the Unions representing staff. On acceptance of this recommendation all parties should reaffirm their commitment to the achievement of change through that process.
The Court is further of the view that the parties could usefully put in place new structures which would support a partnership approach to managing change and provide a speedy and effective means of resolving disputes where they arise. While it is primarily for the parties themselves to design the type of structures which are most suited to meet the needs of the Company there are a number of models in other employments which could be usefully examined.
The Court recommends that on acceptance of this Recommendation the parties should have discussion with a view to putting in place an appropriate joint forum at which matters relating to the introduction of change and improvement can be negotiated and agreed and, where necessary, conciliated and adjudicated upon by an agreed facilitator / chairperson.
Should the parties so request, the Court will provide further assistance on the implementation of this proposal.
Recently Recruited Staff.
In light of the terms of this recommendation all staff recently recruited should be covered by the terms of the then current collective agreements.
Crafts Group.
Any outstanding issues involving the Graft Group should be resolved locally and within a four week period.
Signed on behalf of the Labour Court
Kevin Duffy
5th March, 2007______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.