Labour Court Database __________________________________________________________________________________ File Number: CD87804 Case Number: LCR11572 Section / Act: S67 Parties: ERNDAC DELAIRE LTD. - and - ITGWU |
Claim for an increase under the 27th wage round, and a review of the rates in the Company.
Recommendation:
5. The Court having considered the submissions from both parties
recommends as follows:
Pay: 4% increae from 1/7/87 to 30/6/88.
Bonus: The Court notes the Company's undertaking to implement
a bonus scheme as set out in their letter of 20th July,
1987 and recommneds that when the Company achieves a
position as detailed to the Court a scheme such as
outlined in that letter be agreed by the parties.
Division: Ms Owens Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87804 RECOMMENDATION NO. LCR11572
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ERNDAC DELAIRE LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim for an increase under the 27th wage round, and a review
of the rates in the Company.
BACKGROUND:
2. The Company, which is involved in the electronic industry,
has been operating in Ireland since May, 1984 and is a subsidary
of an American Company. In July, 1987, the Union met the Company
at local level, in relation to the 27th pay round. The Union's
position was that the current basic pay rate of #129.90 was in
urgent need of review, not just in the context of the 27th wage
round, but also in the light of the rates of pay in comparable
industries. The matter of a sick pay scheme was sucessfully
negotiated between the parties. The Company were prepared to
offer a 3% cost of living increase with the commitment to
negotiate a bonus scheme when the Company is in profit. This was
unacceptable to the Union, who are claiming (1) that the Company
immediately re-enter serious negotiations on a self-financing
bonus scheme. (2) A 5% increase for twelve months on pay, plus an
adjustment upwards on the basic rate. On 18th September, 1987,
the matter was referred to the conciliation service of the Labour
Court. A conciliation conference took place on 16th October,
1987. Agreement could not be reached, and on 21st October, 1987,
the matter was referred to the Labour Court for investigation and
recommendation. A Court hearing took place in Dublin on 23rd
November, 1987.
UNION'S ARGUMENTS:
3. 1. The Company's offer of 3% over twelve months is
unacceptable. The Union has monitored 107 settlements up to
August, 1987, and the average cumlative increase is 5.4% over
13 months.
2. The Union believes and has evidence to support its belief,
that the Company withdrew from negotiations on a bonus scheme
because of a directive from the parent company. (Details
with the Court). This was most disappointing for the workers
as allusions had been made to possible increases which would
accrue as a result of the bonus.
3. 3. The basic rate of #129.90 is low by the standards of
comparable industries (details with the Court). In many of
the Company's competitors this rate would apply to new and
inexperienced employees. Most of the workers in Erndac are
more than two years with the Company. There is a morale
problem amongst the workers at present, because of the low
basic rate. This problem can only worsen if it is not dealt
with at this time.
4. The Union's members have been prevented from raising this
issue for two years, because of a clause in the Company/Union
agreement. If the programme for National Recovery is ratified
the door will be closed for at least another three years.
Hence the Union is asking the Court to recommend:-
(a) That the Company re-enter serious negotiations at a
self-financing bonus scheme.
(b) A 5% increase for twelve months on pay, plus an
adjustment of the basic rate of #129.90 to bring it somewhat
into line with comparable companies.
COMPANY'S ARGUMENTS:
4. 1. The wage levels and conditions of employment enjoyed by
Erndac employees are comparable with good paying competitive
companies in the same business environment within Ireland.
Recent salary surveys confirm that the relative position has
been maintained despite the Company's financial difficulties
(details supplied to Court).
2. To implement a wage increase in excess of 3% will
seriously put at risk the Company's ability to reach
profitability in 1988 and will thereby place the long term
economic viability of the Company and the security of its
employees at risk.
3. Due to currency fluctuations, market factors and the
general economic depression the Company has been forced to
decrease its prices in the UK by a further 15% in addition to
reductions in each of the last 2 years. To remain competitive
in the market place the Company cannot in any conscience pass
on price increases to our customers.
4. Given the level of wage increases which the Company has
conceded to its employees over the years (details supplied to
the Court) the Company cannot succeed in maintaining its
market position unless there is a significant productivity
improvement. The Company maintains that any increase above 3%
must be linked to a productivity/profit sharing agreement,
with the provisions that the Company must be in profit and
must closely monitor the situation.
4. 4. Given the Company's serious financial situation which
threatens its long term economic existence the Company
believes that it is offering its employees a generous package.
The coming year is of crucial importance to the Company and
for employee and employer alike. 1988 is 'make or break."
With this in mind the Company's plan is to reduce costs which
in the long run will make the Company profitable and secure
the jobs of its employees. The Company, accordingly asks the
Labour Court to issue a recommendation in its favour.
RECOMMENDATION:
5. The Court having considered the submissions from both parties
recommends as follows:
Pay: 4% increae from 1/7/87 to 30/6/88.
Bonus: The Court notes the Company's undertaking to implement
a bonus scheme as set out in their letter of 20th July,
1987 and recommneds that when the Company achieves a
position as detailed to the Court a scheme such as
outlined in that letter be agreed by the parties.
~
Signed on behalf of the Labour Court
Evelyn Owens
__9th___December,___1987. ___________________
P. F. / M. F. Deputy Chairman