Labour Court Database __________________________________________________________________________________ File Number: CD87851 Case Number: LCR11604 Section / Act: S67 Parties: HP CHEMIE PELZER LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION;WATERFORD NO. 1 BRANCH |
Claim for a wage increase in respect of the 27th wage round.
Recommendation:
7. In the light of the pressure on the Company to reduce its
selling prices to remain competitive the Court recommends that the
Employer's amended offer of 3.50% be accepted in settlement of the
claim.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD87851 RECOMMENDATION NO. LCR11604
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: HP CHEMIE PELZER LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
(WATERFORD NO. 1 BRANCH)
SUBJECT:
1. Claim for a wage increase in respect of the 27th wage round.
BACKGROUND:
2. The Company which is a subsidiary of a West German Company
commenced operations in June, 1979. It manufactures soundproof
insulation for the auto industry and is 100% export orientated.
3. The 26th wage round for the workers expired at the end of
February, 1987 and at a local level meeting held on 10th July,
1987 the Union made a claim in respect of the 27th wage round as
follows:
- A 10% increase on basic pay and bonus with effect from 1st
March, 1987 for a twelve month period.
- Company to pay the new #10 hospital charge for
outpatients, in respect of accidents occurring at work.
- A clause to be added in the employment contract, to the
effect that lost service arising from temporary lay-off
following a fire in 1985 would count as normal service
within the Company.
- Income tax paid on the Christmas bonus to be borne by the
Company.
4. The Company rejected the claim for a 10% increase in pay and
made an offer of a 3.5% increase, the other items were conceded by
the Company. A further local level meeting was held on 15th July,
1987 at which the Company made an offer of 4% this was rejected by
the Union on the basis that it was below the general level of
increases (i.e. approximately 5%). On 15th July, 1987 the matter
was referred to the conciliation service of the Labour Court. A
conciliation conference took place on 10th September, 1987 at
which the Company withdrew its offer of 4% (as instructed by its
Parent Company Directors). No progress was therefore possible and
the matter was referred to the Labour Court for investigation and
recommendation (on 6th November, 1987 at a local level meeting the
Company made a final offer of a 3.50% increase on basic and bonus
which was rejected by the Union). The Labour Court investigated
the dispute on 9th December, 1987.
UNION'S ARGUMENTS:
5. 1. So far in negotiations in respect of the 27th wage round
307 agreements have been concluded giving an average increase
of 5.5% for an average duration of 13.5 months. On an
annualised basis this relates to an average increase of 4.9%.
Many of these agreements also provided for other improvements
in the terms and conditions of employment of the workers
which have not been sought in this case.
2. The rate of basic pay in the Company is #140.40 per week
which does not compare favourably with the general level of
pay in the area. In 1985 the Union agreed to Company
proposals which reduced the level of bonus payments and
reduced the extent of sick pay cover. The rates of pay in
the Company should not now be allowed to fall even further
out of line through the settlement of a lower level of
increase than is the norm for the 27th wage round.
COMPANY'S ARGUMENTS:
6. 1. The rates of pay and conditions of employment of the
workers are very favourable. The basic rates of pay range
from #140.40 per week to #148.40 per week and the bonus rate
which is calculated on a piece rate system ranges from #48.68
to #52.50 per week, 93% of all operators achieve maximum
bonus. A shift premium is also paid to some operators and
overtime is frequently available. Many other beneficial
conditions of employment exist in the Company (details
supplied to the Court).
2. The Company's offer of 4% was withdrawn following a
meeting between the parent Company Directors and senior
purchasing personnel of Opel (G.M.), to discuss price
reduction of future orders. 90% of the Company's total
output is supplied to G.M. and it is essential that the
Company can survive in this competitive market. The Company
has already been forced this year to reduce its selling
prices to remain in the market place. G.M. has been advised
to increase raw material purchases from other countries,
whose prices are considerably lower than ours. In order
therefore to secure the business from that Company it is
estimated that we will have to offer a price reduction of 3%
per annum for the next three years. In the circumstances, if
the Union's claim was conceded it would affect the Company's
ability to operate economically.
RECOMMENDATION:
7. In the light of the pressure on the Company to reduce its
selling prices to remain competitive the Court recommends that the
Employer's amended offer of 3.50% be accepted in settlement of the
claim.
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Signed on behalf of the Labour Court
John O'Connell
__________________________
21st December, 1987 Deputy Chairman
U.M./J.C.