Labour Court Database __________________________________________________________________________________ File Number: CD87118 Case Number: LCR11137 Section / Act: S67 Parties: IRISH CASINGS LTD - and - ITGWU |
Claim, by the Union, on behalf of approximately 80 workers, for a wage increase under the 26th wage round.
Recommendation:
5. The Court, having considered the submissions from both
parties, recommends that the Company revise it's offer, as set out
on Page 4 (Table 3) of the Company's submission, by the
substitution of 13 months for 14 months from 1st April, 1987 and
the offer as so amended should be accepted by the Union in
settlement of the 26th round claim.
Division: Ms Owens Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD87118 THE LABOUR COURT LCR11137
CC87138 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11137
Parties: IRISH CASING COMPANY LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, by the Union, on behalf of approximately 80 workers,
for a wage increase under the 26th wage round.
Background:
2. The Company, which is German owned is based in Tullamore, and
is involved in the manufacture of sausage casings from cattle,
sheep and pig offal chiefly for the export market, especially for
the German parent Company. Two categories of worker exist,
direct (the majority of workers) and indirect, with the following
rates of pay: Directs #102.27 plus piece rate. Indirects
#119.32
On 31st December, 1986, the 25th round agreement expired and on
20th January, 1987, the Union served a 26th round claim, of 9%
over 12 months, on the Company. A number of local level meetings
were held, during which it was agreed that there would be no pause
and that the round would run from 1st January, 1987. The
Company's final offer at local level was 5% on basic rates and 6%
on piece rates phased over 15 months, with no further cost
increasing claims.
This proposal was rejected by the Union who revised their claim to
a total of 7% for indirects for 13 months and a two phase (4% and
3%) on basic at 1st January, 1987, and 1st July, 1987, with piece
rates to increase at a slower pace of 3% (6 months), 2% (3 months)
and 2% (4 months). As this proposal was unacceptable to the
Company the matter was referred on 27th January, 1987, to the
conciliation service of the Labour Court. At a conciliation
conference held on 17th February, 1987, the Union further modified
their claim as follows: Indirects, i.e. no piece rate - 6% for 13
months from 1st January, 1987. Directs, i.e. piece rate - 13
month agreement as follows:
Basic Rates Piece Rates
January 1, 1987 4% 3%
August 1, 1987 2% 1%
October 1, 1987 0 2%
Terminating 28 February, 1988.
This position was rejected by the Company from a cost point of
view. However, the Company indicated a willingness to seek
approval for an offer of 6% for 14 months for the indirects and
the following for directs:
Basic Rates Piece Rates
January 1, 1987 3% 3%
August 1, 1987 1%
September 1, 1987 2.5%
October 1, 1987 2%
Terminating 28 February, 1988.
The Union, however, were not willing to accept this proposal for
anything more than 12 months. As no agreement could be reached
the matter was referred, on 19th February, 1987, to the Labour
Court for investigation and recommendation. A Court hearing took
place on 24th March, 1987, in Tullamore, County Offaly.
Union's arguments:
3. (a) The comparative weakness of the Irish punt relative to
the Deutschmark, the very favourable labour cost ratios
between the two countries and the fact that the Company
utilises a readily available and relatively inexpensive
raw material, increases the value of the Irish
operation to the German parent company. The Company
may cite the comparative costs of Latin American
competition in it's response to our members claims but
those competitors do not possess the singular benefit
of E.E.C. membership nor indeed a safe and totally
acceptable product. Irish casings because of their
content and durability factor are of significant value.
(b) It has been accepted that basic wages are generally
low. The Company points out that earning for most
workers can be complemented by a piece rate return.
However, these returns are subject to external
considerations such as quality of materials,
temperature etc.... as well as the worker's own
efforts. Piece rate returns are also affected by
management changing the workers from one job to
another.
Company's arguments:
4. (i) The sausage casings market is highly price competitive
due to competition from countries outside of Europe who
can produce and supply cases at a far lower price than
the Company. Despite a number of measures taken, the
Company has experienced a very difficult trading
position since 1983.
(ii) In an effort to combat the difficult market situation,
the Company has both diversified and adapted with a
view to trying to remain viable. The piece rate bonus
system was introduced during that period with a view to
reducing costs and providing an opportunity for high
earnings for the employees. This system has been
successful with average earnings in the Company having
increased dramatically (details provided to the Court).
(iii) The manufacture of casings is very labour intensive and
any increase in labour costs, which represents some 36%
of total costs, has a very significant effect on the
final product cost. As a result, a realistic approach
to wage increases is of extreme importance to future
viability.
RECOMMENDATION:
5. The Court, having considered the submissions from both
parties, recommends that the Company revise it's offer, as set out
on Page 4 (Table 3) of the Company's submission, by the
substitution of 13 months for 14 months from 1st April, 1987 and
the offer as so amended should be accepted by the Union in
settlement of the 26th round claim.
~
Signed on behalf of the Labour Court
Evelyn Owens
_________________________
Deputy Chairman
26th April, 1987.
B.O'N./J.C.