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2007

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LCR18979

FULL RECOMMENDATION

CD/07/428
RECOMMENDATIONNO.LCR18979
(CCc-047233-06)
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990



PARTIES :
DONEGAL CREAMERIES
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)

- AND -

AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION


DIVISION :

Chairman: Mr Duffy
Employer Member: Mr Murphy
Worker Member: Mr O'Neill
SUBJECT:
1. Implementation of new pay structure and new Company/Union Agreement


BACKGROUND:

2. The Company has a milk processing plant based in Killygordan, Co. Donegal which employs approximately 80 workers. In March, 2005, a number of meetings took place between the parties in relation to a new grading system and rates of pay with the Company seeking to establish a more simplified and fair pay structure. The Company/Union agreement was also due for review. Agreement was reached on most issues but the following three are still in dispute:

1. Grade rates

There are four grades in the Company but it is Grade 1, the lowest paid grade at €8.65 per hour, which is causing a problem for the Union. The Union is also seeking application of the National Pay Agreements (NPA).

2. Red-circled employees.

There are 10 red-circled employees. The Company proposed removing the red-circling arrangement but the Union believes that they should continue to retain the higher rate of pay.

3. Sick pay

The Union claims that the Company's proposals will reduce the sick pay benefits.

The dispute was referred to the Labour Relations Commissions and a conciliation conference took place. As the parties did not reach agreement the dispute was referred to the Labour Court on the 26th of June, 2007, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 21st of August, 2007.

UNION'S ARGUMENTS:

3.1.Rates of pay were set out in the Plant Agreement of 2000.The Current Grade 1 rate of pay is less than the minimum rate of pay.The Company is profitable and can afford to pay the National Pay Agreements.

2. The 10 workers concerned have a contractual agreement that their pay will be protected by a "red-circling, personal-to-holder" agreementwith the Company.

3.ThePlant Agreement of 2000, which includes the sick pay scheme, states that the terms continue until the parties agree an amendment or a replacement agreement.No such agreementhas been reached.


COMPANY'S ARGUMENTS:

4. 1. The Company's proposal will lead to substantial pay increases for grades 2, 3, and 4 above and beyond the National Pay Awards. The Proposed rates compare favourably with other industries in the area.

2. The Company wants the current red-circling arrangement, plus other individually negotiated pay rates, to come to an end. The Company is willing to compensate the 10 workers for any possible losses due to forthcoming payments of NPA.

3. Absenteeism level were 8.39% in 2006 which clearly cannot be sustainable in the context of the current business environment. The Company believes that the attractive pay scheme play a major role in the level of absenteeism which has added significantly to the overtime bill.

RECOMMENDATION:


It is clear from the submissions of the parties that substantial agreement has been reached on the introduction of a new pay structure and associated conditions. Three net issues remain in dispute, in respect of which the Court recommends as follows: -

Grade Rates.

  • The Court recommends that the proposed rate for Grade 1, applicable to newly recruited employees, be increased from €8.65 to €9.00 per hour. The Court further recommends that all other grade rates proposed by the Company in its final offer be accepted. These rates should be inclusive of National Pay Agreement increases to date. However, arrears of National Pay Agreement increases should be paid by way of a lump sum.
Red-Circled Employees.
  • The Court notes that the current red-circling arrangements are of long standing and have become an established feature of the individual employment conditions of those affected. In these circumstances the Court does not recommend any compulsory change in those arrangements. However the parties should seek to negotiate an acceptable voluntary buy out of the difference between grade rates and red-circled rates.
Sick Pay
  • The Court notes that the new grading structures, as modified by this Recommendation, will result in significant improvements in pay for the majority of staff as well as introducing a more rational and transparent pay structure. In consideration of these improvements the Union should agree to modify the current sick-pay scheme by introducing three waiting days as proposed by Management. However the rates of benefit should remain unaltered at 100% for the first six weeks and 75% for the next six weeks in any twelve-month period.

    The Court further recommends that the parties should cooperate with each other in putting in place joint initiatives to combat unnecessary absenteeism.



Signed on behalf of the Labour Court



Kevin Duffy
29th August, 2007______________________
CONChairman



NOTE

Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.




 
 
 
 
 
 
 
 
 

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