Labour Court Database __________________________________________________________________________________ File Number: CD87162 Case Number: LCR11145 Section / Act: S67 Parties: SIFCO TURBINE COMPONENTS LTD - and - ITGWU |
Claims under the 26th wage round for (a) wage increase and (b) review of the plant agreement.
Recommendation:
7. Having considered the submissions made by the parties, the
Court recommends as follows:-
(a) Wage increase:
That the Company's offer be amended to provide:
(i) a six month pay pause with effect to the 30th
June, 1987. A lump sum payment gross to each
employee of #120.
(ii) an increase of 3% from 1st July, 1987.
(iii) a further increase of 3% from 1st January, 1988 in
respect of an agreement to terminate on 30th June,
1988, and that the amended offer be accepted by
the workers concerned.
(b) Change of status:
The Court does not recommend concession of the Union's
claim.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87162 THE LABOUR COURT LCR11145
CC862096 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11145
Parties: SIFCO TURBINE COMPONENTS LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claims under the 26th wage round for (a) wage increase and (b)
review of the plant agreement.
Background:
2. By letter dated 28th November, 1986, the Union sought a
"decent increase in basic rates in line with wages in the
industry" from the 1st January, 1987, for twelve months, improved
shift premia, two extra days holidays, the introduction of a
pension/mortality and sick pay scheme as well as a review of the
plant agreement (details of the last point supplied to the Court).
At a local level meeting on the 10th December, 1986, the Company
put forward the following proposal:
- two year agreement from the 1st January, 1987, to 31st
December, 1988.
- six months pay pause from 1st January, 1987 to 30th
June, 1987,
- lump sum payment gross to each employee of #100,
- an increase of 3% from 1st July, 1987, for nine months
to 31st March, 1988,
- a further increase of 3% from 1st April, 1988, for nine
months to the 31st December, 1988.
The Union's other claims were rejected. This response was
unacceptable to the Union and on the 19th December, 1986, the
issue was referred to the conciliation service of the Labour
Court. Two conciliation conferences were held, on the 8th and
28th January, 1987, but no progress was made and on the 3rd March
the matter was referred to the Labour Court for inspection and
recommendation. A Court hearing was held in Cork on the 25th
March, 1987. At the hearing, disagreement arose between the
parties regarding the issues before the Court. The Union was of
the view that the wage claim and all issues relating to the review
of the plant agreement were before the Court while the Company
contended that the only issues in question was the wage claim plus
the matter of the status of workers (regrading claim). Having
consulted with the report of the Court's Conciliation Officer, it
appears that the Company's view is the correct one.
Claim (a) - wage increase
Union's arguments:
3. (a) The Union sought to improve the basic rate for all its
members to a more realistic level prior to payment of
the 26th wage round percentage increase. In an effort
to try to achieve agreement on this issue, it suggested
that the Company Q.P.R. bonus (quarterly performance
review) should be consolidated into basic and paid
weekly. This would have the effect of increasing basic
by approximately #20 per week and together with a
reasonable percentage increase under the 26th round,
would go a long way towards meeting the claimants'
demands.
(b) The current wage rates in the Company are very much out
of line with those in comparable employments (details
supplied to the Court).
Company's arguments:
4. (i) During the course of negotiations, the Union was
informed that while the Company's position had improved
over the last year, substantial losses had accumulated
over the first two years of the Company's operation.
This necessitates further substantial improvement in
the Company performance if these cumulated losses are
to be eliminated.
(ii) Changes in currency values have severely impacted on
the Company. In 1985 the U.S. Dollar was at par. In
1986 the U.S. Dollar was equal to 70p and forecasts for
1987 indicate that the Dollar will be equal to 65p. As
approximately 90% of Company sales are in U.S. Dollars,
the Court will readily appreciate the enormous impact
which this revaluation has had and will continue to
have on the Company's competitiveness.
(iii) The Company is competing directly for business with low
cost countries such as Mexico and Signapore. It is
also competing for business with other facilities
within the group and if it is to survive and grow, it
must be competitive against these facilities.
(iv) Pricing structures for the Company's products are based
on contractual arrangements. If increases in local
costs exceed the levels permitted by these contractual
arrangements, the Company is unable to recover the
excess. Furthermore, any wage increases in excess of
the Company's offer would be irrecoverable and would
inevitably lead the Company back into a loss making
situation.
(v) During the course of negotiations the Union has
referred to local industrial rates of pay. Whilst
interesting, such comparison has no relevance. The
Company has to survive in an international market not a
local one. Its future will be charted solely by its
competitiveness in the market place. In these
circumstances it is essential for the Company to
control its costs, develop and grow or face the
alternative of acceding to unrealistic demands, thus
placing its future in jeopardy.
Claim (b) - change of status to skilled operatives from general
operatives
Union's arguments:
5. (a) Many of the claimants have craft backgrounds prior to
coming to work at the Company and all are required to
be recruited through AnCO before being employed on a
nine month probationary period.
(b) The workers concerned have to perform to very high
standards of precision owing to the critical type of
product that they recondition (jet engine parts for the
world aircraft market). The skills that these workers
bring with them to the Company and the disciplines that
helped many of them to acquire these trades and skills
is of enormous benefit to the firm.
(c) Despite this, the Company has consistently refused to
regrade any of the claimants or to recognise, even in
financial terms, their skills.
Company's arguments:
6. (i) With the object of gaining a necessary share of the
worldwide market in aircraft part repairs, the Company
and the Union have from commencement of operations in
Cork agreed the general operator position. The Company
has accepted this as the only viable arrangement for a
successful future in Ireland. The development of the
general operator in Cork constituted a major risk in
that extensive training of personnel with little or no
relevant experience had to be undertaken.
(ii) Substantial capital expenditure in tooling, fixturing,
and plant had to be undertaken to ensure basic
operating requirements. The claim now to upgrade
general operators to skilled status cannot be
considered as the capital investments, training, and
recruitment has taken place. The Company does not
intend deinvesting, retraining, or indeed changing its
recruitment policy to change the workforce status
position that was never planned in the first place.
RECOMMENDATION:
7. Having considered the submissions made by the parties, the
Court recommends as follows:-
(a) Wage increase:
That the Company's offer be amended to provide:
(i) a six month pay pause with effect to the 30th
June, 1987. A lump sum payment gross to each
employee of #120.
(ii) an increase of 3% from 1st July, 1987.
(iii) a further increase of 3% from 1st January, 1988 in
respect of an agreement to terminate on 30th June,
1988, and that the amended offer be accepted by
the workers concerned.
(b) Change of status:
The Court does not recommend concession of the Union's
claim.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
Deputy Chairman
24th April, 1987
D.H./J.C.