Labour Court Database __________________________________________________________________________________ File Number: CD87746 Case Number: LCR11551 Section / Act: S67 Parties: AVONMORE CREAMERIES LTD - and - ITGWU |
Claims on behalf of approximately 750 workers under the 26th wage round for an increase in wages of #15 or 8% a week whichever is the greater; introduction on a phased basis of the 4% annual dairy industry bonus to be converted to a flat rate payment equating to 4% of the average annual Avonmore wage/salary, that is #527 per annum; elimination of grade 111. .
Recommendation:
5. The Court having considered the submissions from both parties
recommends as follows:-
Pay: An increase of #4 per week on basic pay from
1/7/1987.
And a further #4 per week from 1/4/1988.
Agreement to expire 31/12/1988.
Bonus: Having regard to the financial circumstances
presently prevailing the Court does not recommend
concession of this claim at this time.
Elimination
of grade 3: The Court does not recommend concession of this
claim.
Division: Ms Owens Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87746 RECOMMENDATION NO. LCR11551
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AVONMORE CREAMERIES LIMITED
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claims on behalf of approximately 750 workers under the 26th
wage round for an increase in wages of #15 or 8% a week whichever
is the greater; introduction on a phased basis of the 4% annual
dairy industry bonus to be converted to a flat rate payment
equating to 4% of the average annual Avonmore wage/salary, that is
#527 per annum; elimination of grade 111. .
BACKGROUND:
2. 1. The workers involved in this claim are employed at the
various branches of the Avonmore Creameries and cover general,
laboratory and clerical workers.
2. The 25th wage round expired on 30th June, 1987. The above
claim was lodged with the Society on the 5th May, 1987.
Agreement effective from 1st July, 1987 and for a 12 month
duration. Meetings at local level were held on 22nd and 29th
June, 1987 and 27th July, 1987. As no progress was possible
the matter was referred to the conciliation service of the
Labour Court on 6th August, 1987. Conciliation conferences
were held on 17th September, 1987 and 21st October, 1987.
3. At the conciliation conference the Society put forward the
following offer:-
- 2 year agreement with 6 month pay pause.
- followed by an increase of 1.50% from 1st January, 1988 to
30th September, 1988.
- a further 1% from 1st October, 1988 to 30th June, 1989.
- no further claims for the life of the agreement.
The Society stated that they were not in a position to give
consideration to the elements of the Union's claim in relation
to grade 111 or the bonus on earnings.
4. As the Society's offer did not meet the Union's aspirations
both parties agreed to a referral to the Labour Court for
investigation and recommendation. A Court hearing was held in
Kilkenny on 3rd November, 1987.
UNION'S ARGUMENTS:
3. 1. Up to January, 1986, wage increases for the dairy industry
were negotiated nationally under the I.C.O.S./I.T.G.W.U.
national forum. Since January, 1984 all the major dairy
co-operatives have negotiated separately on pay rounds.
Avonmore Creameries have paid the lowest increases since that
time and if the Society's present offer were to be accepted,
it would further erode the differential of the wages of the
workers concerned, (details supplied to the Court).
2. Again for the 26th wage round all settlements achieved
locally to date have been far in excess of that proposed by
the Society (details supplied to the Court). The settlements
arrived at in the agricultural and non-agricultural related
employments annualise at 6.2% for 12 months and further
underscores the need to meaningfully address the Union's
claim.
3. Since agreement was reached on the last pay round almost 2
years ago, significant cost saving efficiencies have been
enacted throughout the various sectors of Avonmore. The
measures have resulted in significant savings for the Society.
The workers have co-operated fully by agreeing to changes in
work practices, method of payment for certain duties and to a
number of redundancies (details supplied to the Court).
4. The second aspect of the claim concerns the application of
the dairy industry bonus scheme, to the workers on a flat rate
phased basis. The annual bonus payment of 4% of gross wages
has now become the norm in the dairy industry. The method of
calculation suggested by the Union (details supplied to the
Court) would have particular benefit for the lower paid
workers as it would give every worker an annual payment of
#527.27 each (based on 1986 figures).
5. In 1985 the Labour Court in recommendation LCR9603 in
dealing with a similar claim for the introduction of a bonus
stated that:-
" Having regard to the financial circumstances prevailing,
the Court does not recommend concession of this claim at
this time. "
It is the Union's contention that the circumstances now
prevailing would allow for the introduction of a bonus scheme.
6. The final aspect of the claim involves the elimination of
the grade 111 rate which if conceded would go somewhere toward
assisting the position of the lower paid workers. The present
monetary difference between grade 111 and 1V is #4.13. Again
the same financial criteria apply as with the foregoing two
claims with the added consideration that a minimum of the
membership would be effected by this portion of the claim.
This claim is not being made in the interest of having a
series of "knock up" effects on the grading scales but made
3. 6. with a genuine commitment to do something positive for the
lower paid in the dairy industry.
SOCIETY'S ARGUMENTS:
4. 1. The Irish dairy industry is highly dependent on E.E.C.
support mechanisms. The European Commission is in the process
of fundamentally changing these mechanisms because of
budgetary pressures with resultant adverse effects on the
dairy industry in this country (e.g. reduction in milk quotas,
limited grant aid for reinvestment etc.)
2. The case in relation to Avonmore must be viewed in the
context of the economic position of the Society and should not
be contrasted with other major co-operatives, whose product
composition is totally different. Unlike those co-operatives,
46% of the Society's turnover, that is, #111m is in the
trading division. It is highly labour intensive. Virtually
all of this business is in the home market in competition with
other agribusinesses (mainly private).
3. Avonmore began a rationalisation programme in late 1986.
This programme continues. The objective is to strengthen the
business and protect as many jobs as possible. The scope for
additional cost increases in Avonmore in the foreseeable
future is minimal. It is against this background that the
Society sought - within a two (2) year agreement - a period of
stability with a level of cost increase that would not
adversely affect the capacity of the Co-operative to invest in
much needed plant and equipment, with associated
rationalisation costs.
4. The Society is seeking a higher and more realistic return
on capital employed. The return on sales has been absymal
with 1.8% return on a turnover of #232m in 1985 and in 1986 a
return of 1.6% on a turnover of #242m. Clearly this level of
return does not allow the necessary accumulation of capital
for investment, to the extent required.
5. The Society is also one of the major handlers of grain in
the country and the grain intake is a vital part of the
business activity within the trading division. The continuing
decline in grain activity (details supplied to the Court)
coupled with the reduction in feedstuffs, fertiliser and
general stores sales as a consequence of the reduction in milk
and grain volumes will result in a significant loss of
contribution to the trading division.
6. The object of the Society is to try to improve the return
on sales and provide significantly improved surplus for
investment, thus protecting as many jobs as possible in an
industry which faces enormous challenge.
RECOMMENDATION:
5. The Court having considered the submissions from both parties
recommends as follows:-
Pay: An increase of #4 per week on basic pay from
1/7/1987.
And a further #4 per week from 1/4/1988.
Agreement to expire 31/12/1988.
Bonus: Having regard to the financial circumstances
presently prevailing the Court does not recommend
concession of this claim at this time.
Elimination
of grade 3: The Court does not recommend concession of this
claim.
~
Signed on behalf of the Labour Court.
Evelyn Owens
___3rd___December,__1987. ___________________
M. D. / M. F. Deputy Chairman