Labour Court Database __________________________________________________________________________________ File Number: CD87443 Case Number: LCR11356 Section / Act: S67 Parties: INTERNATIONAL FACTORS LTD. - and - IBOA |
Claim for a wage increase under the 26th wage round.
Recommendation:
5. The Court, having considered the submissions made by the
parties recommends that the employers offer be amended to provide
an increase of 5% in respect of a period of 12 months, and that
the offer so amended be accepted by the workers concerned.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87443 THE LABOUR COURT LCR11356
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11356
Parties: INTERNATIONAL FACTORS (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH BANK OFFICIALS' ASSOCIATION
Subject:
1. Claim for a wage increase under the 26th wage round.
Background:
2. This claim concerns approximately fifty clerical/administrative
workers. The 25th wage round expired for these workers on 31st
December, 1986. In February, 1987 the Association claimed a 10%
wage increase over twelve months from the end of the 25th wage
round. The Company rejected the claim and offered a 3.25% wage
increase over twelve months from 1st January, 1987. The
Association rejected this offer. No agreement was reached through
local negotiations and on 3rd March, 1987 the matter was referred
to the conciliation service of the Labour Court. A conciliation
conference was held on 24th April, 1987 but no agreement was
reached. On 3rd May, 1987 the case was referred to the Court for
investigation and recommendation. A Labour Court hearing was held
on 17th July, 1987.
Union's arguments:
3. (i) The salaries and living standards of Irish workers have
been decimated in recent years by virtue of increasing
inflation, excessive taxation and P.R.S.I. In these
circumstances successful companies, like the Company,
have a responsibility to increase their workers real
standards of living at a time of relativity low
inflation. The Union, in reaching a settlement of this
claim, must take cognisance of both the erosion of
living standards in the past and projected inflation
for the period in question. The Company's offer is
unacceptable and fails to respond to these factors.
(ii) It is clear from relevant settlements already secured
(details supplied to the Court) under the 26th wage
round that there is a major discrepancy between the
Company's offer and what is acceptable elsewhere.
Given these trends, the Union has a responsibility to
maintain the workers' relative position in the
community.
(iii) The Court has issued a number of recommendations on the
26th wage round. These relevant recommendations show
that the Company has failed to negotiate realistically
on this issue. The Company's offer should be
substantially increased.
(iv) The Company is part of the Bank of Ireland Group which
produced a profit of #88m in its last financial year.
Bank of Ireland Finance the Company's parent has also
had an extremely good year in its own right,
resulting in a profit of #11.5m for 1986. Given these
successes the Union believes that the workers must
receive a realistic increase under the 26th wage round
given the respective role which they have played in the
Group's success.
(v) For the last eighteen months the Company has had a
policy of non replacement of staff. This has been a
saving to the Company and produced additional
responsibilities and workloads on the remaining
workers. Allowing for these savings the Company has
more than the capacity to meet the workers aspirations
under the 26th wage round.
(vi) The workers have co-operated with recent changes made
within the Company as a result of internal
re-structuring and updating of technology. However,
they have been totally frustrated by the Company's
failure to deal realistically with their 26th wage
round claim.
(vii) The length of agreement in the Company has
traditionally been for twelve months. There is no
disagreement between the parties on this aspect of the
claim.
Company's arguments:
4. (a) The Company, in looking at any pay claim, must have
concern for the size of the market in which it
operates, and the general economic climate that
prevails. In addition, the Company's trading
performance was disappointing for the year ending 31st
December, 1986.
(b) A further concern is the advent of a new factoring
company which will be competing against the Company in
a very small market. The Company enjoyed a virtual
monopoly situation up to now. In the circumstances it
is totally inappropriate for the Company to take on
board substantial labour cost increases. Particularly
in view of the favourable settlement achieved last
year.
(c) Labour costs represent a major proportion of the total
operating costs of the Company. For the five months
ending 31st July, 1987 they amounted to 58.8%.
(d) In the five year period 1982 - 1986 inclusive, general
pay increases in the Company have totalled 64.4%
against an inflation rate for the same period of 43.1%.
(e) The Company is a totally independent subsidiary of the
Bank of Ireland. It must produce consistent adequate
results to ensure continuing financial support from the
Bank of Ireland Group. In this context a moderate pay
settlement for the 26th wage round is called for.
(f) The Company offered a realistic wage adjustment in all
the circumstances and could not accept that it has the
financial scope to increase its costs beyond the levels
proposed.
(g) The Company is concerned that the Union referred a
claim concerning salary restructuring to the Court
separately from this claim. The Company has
consistently argued that there should only be one pay
increase in the context of the 26th wage round.
RECOMMENDATION:
5. The Court, having considered the submissions made by the
parties recommends that the employers offer be amended to provide
an increase of 5% in respect of a period of 12 months, and that
the offer so amended be accepted by the workers concerned.
~
Signed on behalf of the Labour Court
John O'Connell
__________________________
Deputy Chairman
10th August, 1987
T.O'M./J.C.