Labour Court Database __________________________________________________________________________________ File Number: CD86690 Case Number: LCR10811 Section / Act: S67 Parties: WESSEL INDUSTRIES - and - FUE;FWUI |
Claim for a 5% increase in basic pay for approximately thirty production operatives following redundancies.
Recommendation:
5. The Court recommends that the parties agree on the payment of a
lump sum of #500 in full settlement of this dispute.
Division: CHAIRMAN Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD86690 THE LABOUR COURT LCR10811
CC861148 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 10811
Parties: WESSEL INDUSTRIES LIMITED
(Represented by the Federated Union of Employers)
and
FEDERATED WORKERS' UNION OF IRELAND
Subject:
1. Claim for a 5% increase in basic pay for approximately thirty
production operatives following redundancies.
Background:
2. Following agreement between Management and the Union, the
Company implemented a redundancy package and restructured its
operations. Twenty general operatives plus five management
employees were made redundant. The remaining employees sought
compensation for the additional duties associated with the
restructuring of operations and lodged a claim for a 5% increase in
basic pay. Management responded by offering a lump sum payment of
#200 (a similar amount was paid to employees following redundancies
in 1983). Local level negotiations failed to resolve the issue and
on the 8th July, 1986, the Union referred the matter to the
conciliation service of the Labour Court. No basis for an
agreement could be reached at a conciliation conference, held on
the 13th August, and the matter was subsequently referred to the
Labour Court for investigation and recommendation. A Court hearing
was held on the 3rd October, 1986.
Union's arguments:
3. (a) In the cable works, numbers have been reduced from
fourteen to eight (40%) with no reduction in volume or
throughput. Furthermore, the remaining staff in that
section have taken on additional tasks and
responsibilities which were previously done by skilled
personnel in the quality control department (details
supplied to the Court). The claimants have also
subsumed the duties of chargehands into their day to
day work.
(b) A similar situation exists in the wire works, where
staff have been reduced from four to three, without any
corresponding volume reductions. Operators are now
required to carry out resistance and quality checks
along with associated documentation (details supplied
to the Court).
(c) Management's justification for reducing numbers in the
wire works were based on the multi-liner machine being
put down and bobbin sizes being increased to reduce the
required frequency of change. Neither of these
arguments stands up to analysis. When the multi-liner
was introduced it was as a prototype and has not run
properly since its introduction. No individual,
therefore, has been employed to run the multi-liner.
Staff have been allocated to it when it was running but
the primary duties of that person were to assist with
bobbin changes on the major machines. Therefore, at
best, Management can justify the removal of about ten
man hours per week when in fact it has reduced the
manpower available to the shift by forty man hours per
week. Management also indicated that the work on the
bunching machines would be easier by increasing bobbin
sizes and thus reducing the frequency of bobbin
changes. This in fact has not happened and staff in
the wire works have been told that for some wire sizes
the Company cannot use the bigger bobbin sizes (bobbins
are unavailable). The wires affected are the bulk of
the department's throughput. The argument for staff
reductions is therefore not sustainable.
(d) In the stores area, Management reduced manning levels
by three on the basis that it would hold only two weeks
raw materials supplies and that it would hold no more
than two months finished goods stocks. In both these
cases the Company has far exceeded the indicated
quantities.
(e) In all the Company has made eighteen employees
redundant, and with an average pay of #11,000 per
annum, it has made an annual saving of approximately
#200,000. The Union's claim is for a 5% increase for
thirty employees which equals #16,500 per annum. The
Company's offer of a once-off lump sum payment of #200
amounts to #6,000. The Union contends that in the
context of savings of #200,000 a claim for #16,500 is
reasonable.
Company's arguments:
4. (i) The recent redundancies were a final attempt by the
Company to rationalise its business and curtail heavy
losses. The Company has also ceased manufacturing a
number of totally uneconomic product lines which were
contributing to its losses. The Company has been in a
loss making situation since 1982 (details supplied to
the Court) and to date, in 1986, has incurred a trading
loss of #620,000, in addition to redundancy costs of
#280,000. It has also spent #600,000 on re-investment
in plant, machinery and buildings this year.
(ii) Redundancies and rationalisation have not caused major
changes in the responsibilities of the remaining staff.
The Company accepts that those remaining are required
to put in greater effort than prior to the redundancies
and to undertake some extra duties particularly in the
area of responsibility for quality control. General
operatives are now required to carry out quality checks
previously done by Quality Control staff. There has
been a reduction from twelve to eleven in the number of
machines in use in the wire works but no significant
change in manning levels in the cable works. The
manning level of one man per machine has remained with
a significantly lower throughput of product.
(iii) Rates of pay are very good and earnings, pre 26th Wage
Round, are in the region of #220 per week for shift
workers, i.e. all except stores and clerical employees.
Rates are as follows;
Production/Stores: Basic #135 - #138
Average Weekly Bonus #45
2 cycle shift Premium 22%
Service Pay - Average #5 per week.
To further increase these rates, by way of concession
of this claim, would seriously undermine the
competitiveness of the Company on an ongoing basis.
(iv) While accepting that some extra work is required from
those remaining, there has been no significant changes
in responsibilities or in work practices which warrant
concession of the Union's claim. The Company has
rationalised its business in the face of excessive
losses and at excessive cost and cannot now afford to
increase basic rates which would totally undermine its
ability to compete on a realistic price basis for the
future.
(v) Several previous Labour Court Recommendations on
similar cases back up the Company's case (details
supplied to the Court).
RECOMMENDATION:
5. The Court recommends that the parties agree on the payment of a
lump sum of #500 in full settlement of this dispute.
~
Signed on behalf of the Labour Court
John M Horgan
12th November, 1986 ----------------
D.H./U Chairman