Labour Court Database __________________________________________________________________________________ File Number: CD86429 Case Number: LCR10615 Section / Act: S67 Parties: KILKENNY TEXTILE MILLS - and - ITGWU |
Claim on behalf of 153 general workers concerning the level of potential earnings under a proposed productivity bonus scheme.
Recommendation:
7. The Court has given careful consideration to the submissions
made by both parties and to the further points made at the
hearing. The Court notes that there is an obvious difference of
opinion as to the history and nomemclature of the #10 interim
bonus from the period the Company set up, to-date. Nonetheless
the Court is satisfied that, taking all aspects of the claim into
account, the Company's general proposals for a productivity bonus
scheme are reasonable.
The Court therefore recommends that the parties agree to the
introduction of a productivity bonus scheme which will produce 33
1/3 of basic pay at 100% BSI inclusive of the #12 which is
presently paid and described by the Union as an attendance bonus,
retrospective to 1st January, 1986.
Division: Ms Owens Mr Shiel Mr Walsh
Text of Document__________________________________________________________________
CD86429 THE LABOUR COURT LCR10615
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 10,615
Parties: KILKENNY TEXTILE MILLS
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim on behalf of 153 general workers concerning the level
of potential earnings under a proposed productivity bonus scheme.
Background:
2. The Company is engaged in the manufacture of spun yarn and
employs a total of 182 workers. It is situated on the site
previously occupied by Fieldcrest (Ireland) Limited and commenced
operations in 1983. Prior to start-up a comprehensive works
agreement was negotiated between the Company and the Union. This
provided for the application of the same pay rates and conditions
to the workers as existed in Fieldcrest, including a special
payment of #10 per week to each worker (since increased to #12) to
which the Company refers to as an interim bonus payment but which
the Union claims is paid as an attendance bonus.
3. When the Company commenced operations it gave a commitment to
negotiate a productivity bonus in the future. This commitment was
re-affirmed under the terms of the 25th pay round and a sum of
#200 was paid by the Company on account, to each worker concerned.
In the course of negotiations between the parties at local level
the Union sought the introduction of a productivity bonus scheme
for the 153 workers concerned which would yield 33.33% of basic
pay at 100% on the BSI scale. No agreement could be reached
between the parties and the matter was referred, on 5th March,
1986, to the conciliation service of the Labour Court. A
conciliation conference was held on 17th April, 1986, the outcome
of which was that discussions would again take place at local
level under definite headings. At these discussions the Company
put forward proposals for a productivity bonus scheme based on
H.E.K. (Hours per Employee per Kilogram produced.) These
proposals were unacceptable to the Union and the conciliation
conference was reconvened on 22nd May, 1986. At this conference
the Company made the following final offer, retrospective to 1st
January, 1986, in respect of a productivity bonus scheme:-
" The Company is prepared to pay #25 (21% of basic pay) in
addition to the existing interim bonus of #12 at 6.9 H.E.K.
(100% BSI). This would result in a total bonus payment of #37
per week on achievement of the required target of 6.9. "
The bonus values are as follows:-
H.E.K. Earnings
9.2 Basic + #12
8.5 Basic + #12
7.7 Basic + #12 + #12.50
6.9 Basic + #12 + #25.00
The Company says that its offer gives the workers a productivity
bonus payment of almost 33.33% of basic pay at 100% performance on
the BSI scale as claimed. The offer was rejected by the Union on
the basis that it is seeking a bonus scheme yielding 33.33% of
basic pay at 100% performance excluding the #12 special payment
which the Union refers to as an attendance bonus and as such
should not form part of the productivity bonus scheme but should
continue to be paid in addition to the scheme.
4. As no further agreement could be reached on the matter the
parties requested that it be referred to the Labour Court for
investigation and recommendation. The Court investigated the
dispute on 17th June, 1986, in Kilkenny.
Union's Arguments:
5. (i) The Union's claim is that if the workers concerned
perform to a given H.E.K. target, which the Company
does not dispute as being equal to 100 B.S.I. or
standard performance, they must be paid 33.33% of
their basic pay. This is the basis of all good
incentive schemes, where a zero payment applies at 75
B.S.I. and rising to a payment of 33.33% at 100 on
standard performance. Such schemes operate in
textile plants both at local and national level.
(ii) Under no circumstances should the Company be
permitted to include in the productivity bonus the
#12.00 already paid as an attendance bonus. It was
the Company that sought this bonus to be used as an
attendance bonus in negotiations with the Union
(details supplied to the Court).
(iii) The workers concerned have over the past few years
performed well in excess of ordinary day rate.
Examinations by the Union's industrial engineering
Department have confirmed this. These workers
continue to perform at that level in expectation of a
reasonable incentive scheme being introduced and are
now becoming anxious because of the delay in getting
the scheme implemented. They did receive a #200 lump
sum in December last for earned productivity from 1st
October to 31st December. It has already been agreed
with the Company that whatever level of payment is
eventually agreed, the scheme will be retrospective
to 1st January, 1986.
(iv) The Union is claiming the introduction of a bonus
scheme which would provide for a zero payment of 9.24
H.E.K. (75 BSI) rising to 33.33% of basic pay at 6.90
H.E.K (100 BSI). This is what is commonly referred
to as a straight line bonus scheme.
Company's arguments:
6. (a) The Company's offer and the required manning levels
relevant to it are based on the Company's current
existing production machinery and ancillary
equipment. Thus, for the current standard output
(7.7 H.E.K.) the Company is prepared to pay #12.50
more than had previously been paid. The scheme would
be introduced retrospective to January, 1st 1986.
(b) On starting production the Company agreed to apply
the same terms and conditions that pertained when
Fieldcrest was in operation. In addition to basic
pay an interim bonus of #10 per week applied. This
payment was agreed between Fieldcrest and the Union
in anticipation of the introduction of a productivity
bonus at some point in the future into which this
payment would then be subsumed. It was on this basis
that the Company applied the old Fieldcrest rates.
Arising from a serious absentee problem in the recent
past the interim bonus was used by the parties in an
attempt to improve this situation and consequently
assumed the title of attendance bonus. The bonus was
increased from #10 to #12. However, by its very