Ireland: Collective agreement at food company follows first 'right to bargain' case

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A collective agreement implementing ‘right to bargain’ legislation has been negotiated between the Services Industrial Professional and Technical Union and food preparation company Freshways Food. This includes union–management relations, rules on industrial action, and union access to the company’s financial information. Freshways had previously opposed trade union recognition, as allowed by Irish law.

Background

The Services Industrial Professional and Technical Union (SIPTU), Ireland’s largest trade union, has concluded an exclusivity agreement with the food preparation company Freshways Food to promote cooperation and good industrial relations at its previously non-union Dublin-based operation. The agreement comes a year after the first recommendation ever made by the Labour Court under the provision of the Industrial Relations (Amendment) Act 2015.

The Act allows workers who do not have access to collective bargaining to bring a case on issues related to pay and conditions to the Labour Court. In response, the court may issue a legally binding decision. The Court can also instruct companies to make improvements where the representatives of the workers – usually a trade union – can demonstrate that conditions are inferior to similar firms in the same sector.

The Act amended the ‘right to bargain’ legislation that was first introduced in the Industrial Relations (Amendment) Act 2001. The amended legislation was also the fulfilment of a political promise made by the previous Fine Gael-Labour coalition government (2011–2016). It had made a commitment to rectify, from a trade union perspective, aspects of the original 2001 legislation rendered ineffective by the ruling of the Supreme Court in the case of budget airline Ryanair in 2007.

One of the Supreme Court’s findings in the Ryanair case was that the Labour Court had not demonstrated that collective bargaining did not already exist for the airline’s workers. The 2015 amendment to the Industrial Relations Act set out a definition of collective bargaining, established guidelines for how comparative claims might be assessed and suggested how evidence of union membership might be attested before a court.

Testing the new legislation

The Freshways case was the first test of this change in the law. The Labour Court’s initially non-binding recommendation backed a claim for significant pay rises. The case did not proceed to the legally binding stage because the union and management reached a collective agreement in June 2017 that covers union–management relations, access to information, pay and conditions, and how to process future claims.

The net effect of the case was that SIPTU secured formal recognition from a previously non-union employer and also secured improved pay and conditions. The specific details of pay rises and other terms have not been made public: the company preferred to keep this information confidential in the interests of competitiveness.

Gains for the union

The alternative to this directly negotiated agreement would have been the legal enforcement of the Labour Court's original ruling. This, however, would not have imposed formal union recognition or a collective agreement. For Freshways workers who are members of SIPTU (63 out of around 250 staff when the Labour Court case was heard in 2016), the advantage of this outcome is that their pay and conditions will in future be determined through a collective bargaining process.

The agreement states that the company has the sole right to recruit employees and that all employees will be given the opportunity of joining SIPTU, but no employee will be forced to do so. It also includes exclusive membership rights for SIPTU if new workers decide they wish to join a union and the deduction of union subscriptions at source. This is an important issue as it guarantees income flow. SIPTU is recognised as the sole negotiating body on behalf of general factory workers and van sales drivers.

Fundamental to the agreement is a statement that the company must be trading profitably and must ‘retain sufficient reserves to withstand market and commercial uncertainties’. This requires Freshways to update their performance indicators and make them available to SIPTU officials every six months.

Company secures guarantees

Freshways secured a guarantee that dispute procedures will be followed in any industrial disagreement. A separate ‘handbook agreement’ sets out locally negotiated pay arrangements and terms and conditions of employment, though the details remain confidential.

All negotiations are to be carried out by union officials. If there is any unofficial industrial action, shop stewards will be required to do everything possible within the terms of the agreement to ensure a resumption of normal working.

Shop stewards will be provided with reasonable facilities and will be allowed five paid days to attend SIPTU training courses. They will be expected to fulfil the same performance standards as other staff.

In the event of a dispute, Freshways has agreed to appoint an independent individual or practice to assess the situation, the outcome of which will be confidential to the company and SIPTU representatives.

The agreement states that consequently, both parties dedicate themselves to settle all differences … peacefully … by sincere and patient efforts and in accordance with Grievance Procedures’. No action will be taken until this procedure has been exhausted ‘… except in cases warranting instant dismissal’.

The agreement goes on to state that any shop steward who advocates or supports unofficial action will immediately step down from their union role and will be subject to disciplinary action in the same way as any other worker, including possible dismissal.

Commentary

There is no certainty that the Freshways case will act as a template for others under the Act, but this development has been carefully watched by other non-union firms and by trade unions.

The Irish weekly industrial relations journal, Industrial Relations News, has suggested that the Labour Court decision acted as a 'trigger', ultimately leading to SIPTU being recognised in an agreement that both parties have now formally registered with the Labour Court. The Freshways case also suggests that such direct engagement, rather than a ‘forced’ outcome imposed by a third party such as the Labour Court, may be preferable for some companies when faced with a case taken by a trade union.

In this particular instance, the union won its case for a pay rise and could have pursued its enforcement, but instead decided to secure a collective agreement and better terms and conditions.

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