Labour Court Database __________________________________________________________________________________ File Number: CD87515 Case Number: LCR11375 Section / Act: S67 Parties: MAXOL LTD - and - ITGWU |
Dispute regarding a wage round increase.
Recommendation:
5. Having regard to the terms of the offer made and accepted in
1986, and the contents of subsequent correspondence, it is clear
to the Court that the 26th round agreement terminated on 31st
December, 1986. The Court therefore does not recommend in favour
of the Union's claim.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87515 THE LABOUR COURT LCR11375
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11375
Parties: MAXOL LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Dispute regarding a wage round increase.
Background:
2. In the 26th wage round negotiations in Maxol, the Union
representing operative grades reached agreement on an increase of
3.50% for 7 months to end December, 1986 which was subsequently
applied to the white collar workers. Subsequently a 27th round
wage agreement was finalised for the operative grades which
provided for an increase of 5% over 12 months in 2 phases, 3% for
6 months and 2% for 6 months. With the exception of Maxol and
B.P., the other Oil Companies agreement for the 26th round for
white collar workers covered 12 months with 2 phases - 3.50% for 7
months and 2.50% for 5 months. The Union is claiming the 2.50% 2nd
phase under the 26th round for period 1st January - 31st May,
1987, for the white collar workers in Maxol, and rejects the
Company's offer of 1st phase of 27th round viz. 3% for period 1st
January - 30th June, 1987. The workers wish to maintain a
traditional alignment/relativity with their counterparts in other
companies. They argue that the agreement reached by the operative
grades is not binding on them. The Company for its part stated
that it was only interested in the ability of Maxol Limited to
fund pay increases and indicated that it had little interest in
its competitors' attitude towards this matter. In a letter dated
6th April, 1987, the Union confirmed its request for an extension
of the 26th pay round prior to entering into negotiations on the
27th pay round. The Company wrote to the Union on the 6th of May,
1987 and offered an increase of 3% from the commencement of the
first pay week in January, and a further 2% from the commencement
of the first pay week in July. This offer was rejected by the
Union on the grounds that it was a refusal to apply the same 26th
round as the Industry. On 22nd May, 1987, the matter was referred
to the conciliation service of the Labour Court. A conciliation
conference took place on 23rd June, 1987. No agreement was
reached and the matter was referred to Labour Court for
investigation and recommendation. A Court hearing took place on
30th July, 1987.
Union's arguments:
3. (i) Wages rates or wage rounds are seldom considered in
isolation and developments in the economy as a whole
and/or in a particular industry are often very
important. For those concerned in Maxol, developments
in the white collar grades in the Oil Industry are very
important and cannot be ignored. There is a very close
relationship between the grades and scales in the
industry as a whole and a very specific relationship
between the white collars grades in Maxol and Texaco.
It is unreasonable for Maxol Management to try to use a
wage round situation to achieve what appears to be
their ultimate goal of breaking the relationship
between the white collar grades and their counterparts
in the oil industry.
(ii) The initial offer of 3.50%, made by the Company to cover
the period to the end of 1986, did not make or seek to
make any commitment by either party as to what attitude
might be adopted at the end of the year. The majority
of the white collar grades in the industry secured a
26th round settlement of 6% (3.50% + 2.50%) for 12 months,
and these workers are seeking nothing more than a
similar settlement.
(iii) The Union asks the Court to recommend that its members
in Maxol should be paid the 2nd phase of the 26th Round
i.e. 2.50% for 5 months effective from 1st January, 1987
in line with the vast majority of their white collar
colleagues. This would ensure consistency in the
approach to the wage round issue, and also maintain the
long standing relationship between the scales in Maxol
and the rest of the industry particularly Texaco.
Company's arguments:
4. (a) It is the Company's view that pay round negotiations
must reflect the individual employer's ability to fund
any increases that may be agreed. In this instance,
the Court is not even being asked to consider a
situation whereby this employer is trying to settle for
less than terms agreed by other companies in the
industry, as, to the Company's knowledge, no company
other than BP Ireland, has reached a settlement with
its employees.
(b) Maxol has already reached separate settlements with two
other Union groups in the firm on precisely the same
terms as are now being offered to the Union members
represented in this instance (details with the Court).
Given that the Consumer Price Index figures for the 12
month period ending mid-May 1987 shows inflation
running at only 2.8%, the Company's proposals for a two
phase 12 months Agreement for 5.06% must be considered
generous.
(c) Negotiations on pay rounds within Maxol have had a
traditional pattern, whereby the white collar employees
have always been more than happy to settle for the same
terms as agreed with the manual categories. On some
occasions the parties have even dispensed with the
formality of holding meetings, as was the case with the
last pay round, when the employees concerned chose to
settle on the same basis as their blue collar
colleagues rather than follow the line taken by their
white collar counterparts in any of the other oil
companies.
(d) The Company's faith in the Union's willingness to
adhere to any negotiated settlement it reached under
any heading has been dented by the Union's attempts to
re-negotiate the agreement reached for the 26th pay
round. The Union and its members made their decision
in that instance in the full knowledge of all the
facts. They were aware that some other companies were
settling for a 12 month two phase Agreement and they
still opted, despite this, to accept a single phase 7
month proposal. To recommend concession of the Union's
claim on this occasion could impact on the situation in
the vast majority of the companies in the industry
where negotiations on the 27th pay round are still at
an early stage.
(e) By comparison with the cost of living figures, the
Company's proposals are quite generous. The recent
imposition of a price reduction by the Government has
knocked close on #2.50M off Maxol's budgeted annual
income and this has resulted in the Company changing
its projections for the second half of 1987 from a nett
profit situation to a nett loss. The Company had
considered withdrawing the offer already made to the
employees involved in this claim but not yet accepted
by them. However, while this would have made economic
sense, it would not have been in keeping with the
Company's stated policy of endeavouring to deal with
all employees of the firm on the same basis when it
comes to pay round negotiations.
RECOMMENDATION:
5. Having regard to the terms of the offer made and accepted in
1986, and the contents of subsequent correspondence, it is clear
to the Court that the 26th round agreement terminated on 31st
December, 1986. The Court therefore does not recommend in favour
of the Union's claim.
~
Signed on behalf of the Labour Court
John O'Connell
____________________
27th August, 1987. Deputy Chairman
P.F./J.C.