INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
EASON & SON LTD
(REPRESENTED BY IBEC)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Ms Doyle
Worker Member: Mr Shanahan
1. Cost Reduction Programme.
2. The case before the Court concerns a dispute between the Employer and the Unions in relation to a cost reduction programme proposed by the Employer in order to ensure its future viability. The dispute relates specifically to the Unions' rejection of a set of proposals previously agreed between the parties in a Conciliation Conference held under the auspices of the Labour Relations Commission. The Employer contends that failure to implement the agreed proposals will have a detrimental effect on the survival of the business that is currently operating in extremely difficult market conditions. The Unions dispute the Employer's position, arguing that its members have outright rejected the proposals on the basis that there is no guarantee that the proposed plan will alleviate the Company from its current difficulties and ensure its future survival. Furthermore, the Unions are of the view that an increased contribution is required from top level management.The dispute was referred to the Labour Court on the 16th April, 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 16th May, 2014.
3. 1. The Unions contend that the contribution sought from its members is disproportionate.
2. The Unions assert that its members have outright rejected the Company's cost reduction proposals and strongly oppose any reduction in pay.
3. The Unions maintain that there is no guarantee that the Company's proposed plan will allow the Company to emerge from its current financial position.
4. 1. The Employer contends that the implementation of its proposals is crucial to ensure its future viability.
2. The urgent requirement for the proposed reductions has been endorsed by two independent financial assessors and furthermore has been agreed to by the Unions.
3. The Employer is seeking agreement on its proposals so that they may be implemented without further delay.
As this Court has consistently pointed out, it will only recommend retrenchment in established conditions of employment where, on independent financial evidence, it is plainly and unambiguously necessary to do so in order to protect employment. The Court notes that in this case an independent assessment of the Company’s financial position carried out on behalf of the Unions confirms the need for payroll cost reductions.
It is also noted that proposals were negotiated in the course of conciliation which were recommended for acceptance. However those proposals were rejected in a ballot of the Union members affected.
Nevertheless, the Court believes that the type and range of adjustments provided for in the LRC proposals remain necessary so as to sustain the viability of the business and the employment that it supports. The Court recommends that they be accepted with the following qualifications:
1. The changes in pay and conditions should be regarded as a temporary derogation from the terms of existing agreements, all of which should remain extant and unaltered.
2. The derogation should remain in place from the date of this recommendation until 30thApril 2016. At the end of the derogation (30thApril 2016) the rates of pay and other conditions of employment of those affected should automatically and unconditionally be restored unless it is agreed otherwise. The Court is conscious that the duration now recommended is somewhat shorter than that contained in the LRC proposals.
3. During the currency of the derogation the Company should be precluded from seeking or processing and further claims for a reduction or diminution in pay or conditions of employment.
4. Should the financial circumstances of the Company so permit in the future the Unions should not be precluded from seeking to recover the value of pay foregone during the period of the derogation provided for by this recommendation.
Signed on behalf of the Labour Court
19th May 2014______________________
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.