Labour Court Database __________________________________________________________________________________ File Number: CD8726 Case Number: LCR11083 Section / Act: S67 Parties: MURPHYS BREWERY - and - ITGWU;IDATU;NEETU;UCATT;ETU UCATT |
26th wage round.
Recommendation:
5. Having considered the submissions made by the parties the
Court recommends that the Employers offer be amended to provide
for a 6% increase for an agreement of 12 months duration and that
the offer so amended be accepted by the workers concerned.
Subsistence Allowances.
The Court considers that this issue has not been adequately dealt
with between the parties and recommends that direct negotiations
be resumed.
Division: Mr O'Connell Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD8726 THE LABOUR COURT LCR11083
CC862008 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11083
Parties: MURPHY BREWERY (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
A GROUP OF UNIONS
Subject:
1. 26th wage round.
Background:
2. The 25th round agreement expired for the workers in the
Company on 30th September, 1986. The Unions on behalf of the
workers served a claim on the Company for a 12% increase on basic
pay. Payment was sought in one moiety with effect from October,
1, 1986, for a period of twelve months. A review of meal
allowances was also sought, with the benefit accruing from the
same date. A number of meetings at local level failed to resolve
the issue, and the matter way referred to the conciliation service
of the Labour Court. A conciliation conference took place on 11th
December, 1986. At the end of the conference the Unions formal
position was one of 8% over 12 months while the Company was
prepared to offer 5.50% over 12 months. At present the subsistence
allowance is fixed at #24.75 per week. The Company proposed a #1
p.w. increase which was rejected by the Unions. No agreement was
not reached at a conciliation conference on 11th December, 1986,
and on 12th January, 1987, the matter was referred to the Labour
Court for investigation and recommendation. A Court hearing took
place on 25th February, 1987, in Cork.
Unions' arguments:
3. (i) Pay settlements in the Company are considerably behind
those achieved within the industry generally over the
period from the 20th round, (i.e. November, 1980), up
to the termination of the 25th wage round in September,
1986 (details supplied to the Court. Over the same
period the Consumer Price Index has risen by 107.8% -
14.6% ahead of basic pay in Murphys.
(iii) On the 26th Round the Company propose that the workers
should go further behind, offering 5.5% as against a 6%
settlement over 12 months, and a 6.50% settlement over 13
months in two competitor companies. The inadequacy of
the Company's offer is clearly evident when viewed
against the national trend, which shows an average
increase of 6.1% over 12 months out of a total of 560
settlements covering 62,024 workers.
(iv) Workers in the brewing industry are most susceptable to
changes brought about by modern technology and
employment levels have reduced considerably over recent
years - so that labour costs have now become a
comparatively smaller proportion of overall production
costs. This claim on basic pay is fully in line with
I.C.T.U. policy of seeking pay increases which will
protect the real value of wages and help restore the
workers living standards and provide some protection
against inflation and the effects of tax and P.R.S.I.
deductions on take home pay.
(v) The present subsistence rates total #24.75 per week,
which is #4.95 per day compares unfavourably with other
companies in the industry. Even with an adjustment to
these rates on the occasion of the 25th round
settlement and the #1 on offer, the Company's rates
still trail the industry considerably. The Unions'
believe that a #5 increase on the present figure would
not be unreasonable.
(vi) The increases sought here are not excessive. This is a
profitable Company and expanding all the time.
Although little financial information is available,
Irish Business magazine lists turnover in 1985 at #35
millions making Murphy's the 140th largest Company in
Ireland. It is wholly owned by Heineken International,
which employs 28,410 and is the 127th largest company
in Europe and the third largest brewer in the world.
Heineken is the largest selling imported beer in
the U.S. and Murphy stout has been adopted by Heineken
as one of its corporate brands. Heineken has invested
#10 millions in Murphy's since taking over in 1983 and
has recently successfully extended the Murphy market to
the U.K.
Company's arguments:
4. (a) Heineken took over the old Murphy's brewery in 1983 and
since that date has invested substantially in the
Company with a view to making a success of its
acquisition. Since its establishment in 1983, the
Company has accumulated substantial losses. If the
Company is to achieve its objective of becoming a good,
viable, and secure employer then it must achieve an
acceptable level of profitability commensurate with its
investment in plant, pension funds, etc.
(b) The Company does not take responsibility for any
figures published regarding its level of turnover etc,
in magazines such as that quoted by the Unions. Also,
the average settlement figure of 6.1% is the Company
suggests, based on a highly selective choice of
figures.
(c) The existing level of payment in the Company is ahead
of the Consumer Price Index. Comparisons, either in
regard to wage levels or subsistence allowance are
entirely irrelevant. The Company must stand on its own
feet and achieve acceptable profitability. It should
also be noted that the Company bears no responsibility
for any events prior to 1983 when the present ownership
took over.
RECOMMENDATION:
5. Having considered the submissions made by the parties the
Court recommends that the Employers offer be amended to provide
for a 6% increase for an agreement of 12 months duration and that
the offer so amended be accepted by the workers concerned.
Subsistence Allowances.
The Court considers that this issue has not been adequately dealt
with between the parties and recommends that direct negotiations
be resumed.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
Deputy Chairman
6th April, 1987
P.F./J.C.