Labour Court Database __________________________________________________________________________________ File Number: CD8776 Case Number: LCR11110 Section / Act: S67 Parties: PADMORE & BARNES INT.LTD. - and - ITGWU |
Claim, on behalf of approximately 150 production and 20 clerical staff for an increase in basic pay under the 26th round.
Recommendation:
5. The Court, whilst sympathetic to the Union's claim for a 26th
round increase, does accept that the Company is presently passing
through a fundamentally hazardous period and for this reason
recommends that the claim should be suspended pending negotiations
in April.
The Court, will if necessary be available, without further
formality, to arrange another hearing should no direct agreement
on the issue prove possible.
Division: Mr O'Connell Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD8776 THE LABOUR COURT LCR11110
CC861752 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 11110
Parties: PADMORE & BARNES INTERNATIONAL LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, on behalf of approximately 150 production and 20
clerical staff for an increase in basic pay under the 26th round.
Background:
2. The Company manufacture shoes at Kilkenny largely for export
to North America and the U.K. The 25th round expired on 30th
September, 1986 and the Union requested discussions with the
Company on the 26th round in October, 1986. The Company, on the
grounds that there were considerable losses in the second half of
1986 and further losses projected for 1987, declined to consider a
claim for the 26th round and sought a postponement of any
discussion until the end of March, 1987. The Union invoked a
procedural agreement with the Company, obliging participation in a
conciliation conference. As a result the claim was referred to
the conciliation service of the Labour Court on 21st october,
1986. At a conciliation conference on 21st January, 1987, the
Company re-stated its position that no offer could be made due to
the poor trading situation, particularly in terms of the strength
of the IR# relative to the currencies in its main exporting
markets and the expected heavy losses in 1987. Whilst the Union
was not unsympathetic to the Company's position, it felt its
members are among the lowest paid industrial workers in the
country and was adamant that an increase was necessary. At the
conference the Union quantified its claims for production staff
as;
- a #15 increase on basic rates from 1/10/86.
- A pro-rata increase in incentive bonus payments.
- Introduction of a service pay scheme.
- Improvements in sick pay scheme to bring it into line
with that applying to other personnel in the Company.
For the clerical staff the Union set out the following claims;
- A 12% increase in basic rates
- Two additional points to be added to the existing six
point incremental scale
- An extra day's annual leave in the current year.
Union's arguments:
3. (a) The production staff are among the lowest paid
industrial workers in the country. Average earnings in
the Company are now considerably less than a year ago
when the incentive bonus was more than double its
current figure. Even if the demand for a #15 increase
is conceded, the staff would still have a very low
basic rate in comparative terms.
(b) Similarly, the basic pay rates for clerical staff are
among the lowest in Ireland, for this grade of worker.
It is important that these workers receive a reasonable
increase under the 26th round, that will help them
maintain their position in real terms.
(c) The Union regards it as an absolute necessity to keep
incentive bonus payments, for production staff, in line
with wage levels so as to at least partly maintain
their real value. Most bonus schemes are based on a
percentage of basic pay and thereby have an automatic
indexation. This is something that the Union will
pursue in the future. In the interim, the Union
regards as necessary, the provision of a pro-rata
increase on the incentive bonus payments.
(d) The clerical staff do not receive bonus payments,
instead they have a merit payment system. These
payments range from just #2 p.w. to #21 p.w. This has,
over the years, led to a great deal of dissatisfaction
with many staff feeling entitled to a higher placing on
the award scale. However, the the Company argues that
the awarding of merit payments is the sole perogative
of the management. For this reason the Union claim two
extra points at the top of the incremental scale, as
this would form a more equitable basis for payment and
would reflect the greater experience and skill of those
with longer service.
(e) The Company is one of the oldest firms in Kilkenny and
many of the staff have very long service with the
Company. The Union feel that the loyalty, skill and
experience that go with such service should be
recognised and reflected in some way in their pay
packet. For this reason the Union seeks the
introduction of a service pay scheme similar to those
operating in other footwear companies.
(f) The production staff have a contributory sick pay
scheme which pays #10 p.w. sick pay for a maximum of
ten weeks. Clerical employees receive full pay for up
to four weeks of certified absence. This clearly is
not an equitable situation and some action needs to be
taken towards alleviating the hardship faced by
the production staff.
(g) Twenty-one days annual leave is quite a normal
entitlement for clerical grades. However, the clerical
staff concerned are only entitled to twenty days. The
granting of an extra day in the current year would not
be a significant cost increasing factor.
(h) The Company has by its own admission remained
profitable during the last year. The Union does not
accept as valid the argument advanced by the Company
that it might not make a profit in the next year and
therefore must have a wage freeze. If this argument
were valid then half of the wage round agreements made
this year should not have been concluded.
Company's arguments:
4. (i) The Company is experiencing severe difficulties in its
markets, arising from the continuing strength of the
IR#, which puts the Company's products at a competitive
disadvantage. There has been a decline in demand for
the traditional products that have been the mainstay of
the Company over the last number of years. As a result
the Company now expects to make a loss for 1986/1987.
(Details provided to the Court).
(ii) In an effort to combat the worsening situation the
Company has been examining all areas of controllable
costs with the object of reducing the trade price of a
pair of shoes by #5. This examination has involved
looking at materials usage, quality, transport, energy
and labour costs. (Details provided to the Court).
The Company is also in the process of product-testing
and market testing new products and is also
endeavouring to expand existing markets.
(iii) The results of the examination will not be clear for
some time. In the light of this, the Company feel that
discussions on pay should be deferred, without
commitment, to the end of March, 1987, when the
situation can be reviewed. Given the Company's
objective, of attempting to reduce trade prices, to
enter negotiations on an increase in pay would be
inappropriate at this time.
RECOMMENDATION:
5. The Court, whilst sympathetic to the Union's claim for a 26th
round increase, does accept that the Company is presently passing
through a fundamentally hazardous period and for this reason
recommends that the claim should be suspended pending negotiations
in April.
The Court, will if necessary be available, without further
formality, to arrange another hearing should no direct agreement
on the issue prove possible.
~
Signed on behalf of the Labour Court
John O'Connell
__________________________
Deputy Chairman
7th April, 1987
B.O'N./U.S.