INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Ms Doyle
Worker Member: Ms Ni Mhurchu
1. Pay Increase.
2. The case before the Court concerns a dispute between the Company and the Union on behalf of approximately 120 of its members currently employed in various roles at the Company's dermatological product manufacturing plant located in Crumlin, Dublin. The dispute relates specifically to the Union's claim for a pay increase in exchange for agreement to proposals offered by the Company as part of an ongoing cost-saving initiative. In August 2011, the Company advised the Union of its requirement for the implementation of several cost saving measures and so put forward a number of proposals to the Union. A set of proposals were put forward by Management. Agreement was reached on six of the eight items, however four outstanding issues remained in contention between the Company and the Union. The Company maintained its position that it could not award a pay increase until agreement in full was given to its proposals in total. The Union rejected the Company's position and despite lengthy discussions between the parties, the matter could not be progressed further.
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. As agreement was not reached, the dispute was referred to the Labour Court on the 25th May, 2012 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 24th August, 2012.
3. 1. The Union contends that the Company is in a financial position to concede its claim for the increases sought.
2. The Union asserts that the increases sought are in line with industry norms and previously agreed pay deals.
3. The Union is of the view that the changes sought by the Company will significantly impact its members.
4. 1. Management strongly asserts that agreement in full to its eight proposals is imperative for the Company to remain competitive.
2. Management maintains that the offer put forward to the Union is both fair and generous.
3. Management contends that the pay increases sought by the Union cannot be conceded until all of the cost-saving requirements are implemented. Management further contends that increased salary overheads must be offset by increased productivity.
The issue before the Court concerns the outstanding issues following extensive discussions on a productivity/cost saving deal between the Company and the Union on behalf of general operatives within the plant in Crumlin. Having submitted a pay claim to the Company in March 2011, the parties agreed to enter into discussions on a cost saving productivity plan; agreement was reached between the parties on six items, however a number of items remain in contention between the parties.
The Union identified four areas which remain outstanding at this point. These related to (i) the proposal to eliminate Early Start; (ii) the removal of one operative from the Active Additions and Dispensing Section (TBBU); (iii) the level of pay increases in return for the plan; and (iv) the issue of retrospection.
Having considered the submissions of both parties the Court notes that the proposals which emerged from the negotiation process were reached following a very lengthy process of negotiations which took place between 15thApril 2011 and 1stAugust 2012.
Elimination of Early Start
As part of the negotiations the Company sought to save costs by eliminating overtime payments from an early start arrangement. The proposal was designed to facilitate prompt starting times and improve cross shift communication; therefore it intended to roster workers up to 30 minutes earlier and in return, to facilitate an earlier finishing time.
Due to the Union’s rejection of this proposal the Company submitted an alternative proposal which would yield an extra six minutes production time per day per operative. This proposal requires general operatives to be “garbed up” and ready to commence work at 7am, thereby requiring them to be present three minutes before starting time and to “garb down” after their normal finishing time. For those who work in the sterile areas an extra ten minutes would be made available before starting time to “garb up” in preparation for work at 7am until finishing time at 3pm. The same arrangements to apply for all other shifts.
Having considered the difficulties the elimination of early start posed for the Union and in particular the fact that a small number of operatives would be affected by it, the Court is of the view that the alternative “garbing” proposal presented by the Company is reasonable in all the circumstances and should be accepted as one of the productivity/cost saving measures required in return for the pay increases.
Removal of One Operative from TBBU
In examining cost saving measures, the Company concluded that there was no requirement for three personnel to perform this duty and it proposed the removal of one operator and the retention of an operator and a supervisor. One of the main objections to the Company’s proposal to remove an operative from TBBU concerned the alleged breach of an agreement concluded in 2009 which agreed that supervisors would not conduct any work currently performed by SIPTU CHD members, or any work identified and agreed regarding “shared tasks”.
The Court is of the view that in the context of negotiations on a new productivity/cost saving deal, the terms of the 2009 Agreement can form part of those negotiations. In any event the Court notes that there is no proposal to eliminate the role carried out by the operative in the TBBU section, there will be no job losses, and the operator will be transferred to another process operation with no loss of earnings or changes in terms and conditions of employment. In such circumstances, the Court is of the view that the proposal should be accepted as one of the productivity/cost saving measures required in return for the pay increases.
The Court notes that the performance bonus system in operation since 2009 has recently been the subject of discussions between the parties to address any shortcomings with the scheme. These discussions have resulted in improvements being made and the revised scheme is currently being piloted with a view to potentially improving bonus earnings.
The Court is of the view that the proposed increases in pay, plus additional performance bonus payments, in return for acceptance of the Company’s productivity/cost savings plan are fair and reasonable and in all the circumstances there is no justifiable basis upon which the Court can recommend that they be improved.
The extensive discussions and negotiations which have taken place between the parties have resulted in the required productivity/cost savings not having being achieved to date. However, despite this the Company agreed to pay nine months retrospection of the first phase of the proposed pay increases.
The Court is of the view that that the proposed pay offer including the retrospective payment is reasonable in all the circumstances, and recommends that on acceptance by the Union of the productivity/cost savings plan, the nine months retrospection payment should be paid as a lump sum within one month of the date of acceptance.
The Court recommends that the Company’s productivity/cost saving proposals as amended to reflect the recommendations of the Court as outlined above and should be put to a ballot of the Union members as a composite package in full and final settlement of all the outstanding issues referred to the Court.
The Court so recommends.
Signed on behalf of the Labour Court
24th September 2012______________________
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.