Labour Court Database __________________________________________________________________________________ File Number: CD87605 Case Number: LCR11556 Section / Act: S67 Parties: ROADSTONE LTD - and - ITGWU;GROUP OF UNIONS |
Claim on behalf of approximately 725 craft and general workers for a wage increase under the 26th wage round.
Recommendation:
9. Having considered the submissions of the parties the Court
recommends that the Company amend its offer to provide for an
increase of 4% with effect from 1st June, 1987 in respect of an
agreement to terminate on the 31st May, 1988.
Division: Mr O'Connell Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87605 RECOMMENDATION NO. LCR11556
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ROADSTONE GROUP OF COMPANIES LIMITED
and
GROUP OF UNIONS
(I.T.G.W.U., A.G.E.M.O.U., F.W.U.I., N.E.E.T.U.
E.T.U., A.U.E.W.)
SUBJECT:
1. Claim on behalf of approximately 725 craft and general workers
for a wage increase under the 26th wage round.
BACKGROUND:
2. The 25th wage round for the workers expired on 28th February,
1987 (L.C.R. No. 10573 refers). Prior to this the Unions' wrote
to the Group seeking negotiations on a new agreement. A local
level meeting was held on 7th April, 1987 and the Group requested
the Unions' to withhold their pay claims until the end of
September. This was unacceptable to the Unions' and on 24th
April, 1987 the matter was referred to the conciliation service of
the Labour Court. A conciliation conference was held on 8th June,
1987 at which no progress was made and the matter was referred to
the Labour Court for investigation and recommendation. Following
conciliation a number of meetings took place at local level to
discuss the possibilities of paying the workers certain
expenses/allowances tax free.
3. The Unions' claims were:
- a 10% increase in pay for a twelve month period (no pay
pause);
- a reduction in the working week from 40 to 37.50 hours;
- increased annual leave;
- a review of the sick pay scheme;
- an examination of grade rates in accordance with the
procedures of the House Agreement during the period of the
agreement.
4. During the local discussions referred to above the Group made
the following proposals:
- an increase of #1 per day in allowances (tax free). This
payment to be introduced after a three month pay pause and
to apply for a twelve month period from 1st June, 1987;
- introduction of one extra day's annual leave;
- possibility of review of grades and related matters during
the period of the agreement;
- possible review of sick pay scheme to be considered in the
context of Government changes in social welfare payments;
- introduction of a share participation scheme.
5. However, following meetings with the Revenue Commissioners,
the Group were informed that it would not be possible to get
approval for the package of tax free payments.
6. The Group's final offer was for a six month pay pause from 1st
March, 1987 to 31st August, 1987 with a 3% increase in pay from
1st September, 1987, the agreement to terminate on 31st August,
1988. This was unacceptable to the Unions'. The Court
investigated the dispute on 13th November, 1987. Previous Court
hearings were postponed pending the outcome of discussions at
local level.
UNIONS' ARGUMENTS:
7. 1. The tax free allowances which were discussed as a
possibility equate to pay increases of between #8.73 and
#14.60, a percentage increase of between 4.7% to 8.8%. The
Group's offer of 3% with a 6 months pay pause would represent
a deterioration of the already depressed earnings of the
workers.
2. From the 22nd to the end of the 25th wage round the
workers received a cumulative increase of 56%. However,
taking into account pay pauses in the rounds the real
increase was only 32% (details supplied to the Court). In
the same period, inflation rose by 34% and according to the
October economic trends, P.A.Y.E. and P.R.S.I. as a
percentage of earnings has risen from 22.6% in December, 1982
to 27.4% in March, 1987, representing a loss in real earnings
of approximately 6.8%.
3. While workers in the Company are still negotiating their
26th round increase, workers in related industries/companies
have already received more favourable wage increases (details
supplied to the Court). Traditionally the pay and conditions
of employment in the Group have been acknowledged as being in
line with one of these companies - Readymix Ltd - which has
settled without a pay pause and with an extra day's annual
leave. An analysis of the first 100 Labour Court
recommendations on the 26th round show that annualised
increases of 5.08% were awarded (details supplied to the
Court) and out of 815 local agreements for 102,089 workers a
6% increase applied.
7. 4. 26,328 workers have already received 27th wage round
settlements averaging 4.9% on an annualised basis. The Court
in the 27th round (in a period of falling inflation) has so
far issued approximately 12 recommendations awarding
increases of between 3% and 5%.
5. The Group has consistently quoted economic circumstances and
price competition as reasons for holding down labour costs.
However, it is part of the C.R.H. Group which is an extremely
profitable organisation with funds for international
acquisitions and expansion (details supplied to the Court).
6. As volumes have dropped the Company has achieved
considerable cost savings. These have been achieved by; the
closure of many locations; the privatisation of virtually
all transport and contracting; significant reductions in the
labour force; regular short-time working; cutbacks in
overtime and other rationalisation schemes. The workers have
accepted these changes and accepted considerably lower
earnings in recent years. A significant increase is required
to maintain living standards and protect the workers low
earnings.
GROUP'S ARGUMENTS:
8. 1. Sales volumes decreased by 11% in real terms in 1986 over
1985. Sales volumes in 1987 will have decreased by 12% over
1986 which is 2% worse than anticipated. The Group has just
completed its budgets for 1988 and the fall in sales volumes
will be approximately 11% (details supplied to the Court).
The Government public capital programme shows that the fall
in volumes of construction output in 1988 will be down 10%
over 1987.
2. By the end of 1987 earnings in the Group will have
increased by 3.7% over 1986 without any increase in rates
(details supplied to the Court). Between February, 1986 and
February, 1987 inflation increased by 3.4% while rates of pay
for the same period increased by 7.1%.
3. Increases in other companies in the industry in most
instances are on lower basic rates of pay. Settlements of
pay alone in the C.I.F. or in other companies cannot
establish a norm for this group without taking into account
the full range of benefits and other conditions of
employment.
4. Due to the recession and the number of suppliers in the
industry the market will not bear any further increases in
costs. The Group has to compete with some 400 competitors
most of whom have much lower labour costs. Maximum economies
have been and will continue to be made in every aspect of the
Group's business.
5. With the drastic downturn in business this year and the
poor prospects for 1988 the Group cannot afford to pay any
increases above the level of inflation.
6. Further redundancies, lay-offs and short-time working
have been announced for 1988. The Group's offer of 3% from
1st September, 1987 to 31st August, 1988 is the maximum it
can consider for 1987/88. In addition, the offer of one
extra day's annual leave from 1987 still stands and is not in
dispute.
RECOMMENDATION:
9. Having considered the submissions of the parties the Court
recommends that the Company amend its offer to provide for an
increase of 4% with effect from 1st June, 1987 in respect of an
agreement to terminate on the 31st May, 1988.
~
Signed on behalf of the Labour Court
John O'Connell
______________________
Deputy Chairman.
2nd December, 1987
U.M./J.C.