Labour Court Database __________________________________________________________________________________ File Number: CD86897 Case Number: LCR10954 Section / Act: S67 Parties: PACLENE LTD - and - ITGWU |
Claims under the 26th wage round.
Recommendation:
5. Having considered the submissions made by the parties the
Court recommends that the Company amends its offer to provide for
an increase of 5% with effect from 1st June, 1986, and that this
amended offer together with the attached conditions be accepted by
the workers concerned.
The Court does not recommend concession of the other claims.
Division: Mr O'Connell Mr Heffernan Mr O'Murchu
Text of Document__________________________________________________________________
CD86897 THE LABOUR COURT LCR10954
CC861556 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR10954
Parties: PACLENE LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claims under the 26th wage round.
Background:
2. The Company is based in Ennis, Co. Clare and is a member of
the Smurfit Group of Companies. It has been in operation for the
past 16 years and employees 98 people in the manufacture of
plastic bags for the supermarket/retail industry. At a meeting
held on 23rd September, 1986 the Union served the following claims
on the Company under the 26th wage round (which is due with effect
from 1st June, 1986):
(1) A 12 month agreement - no pay pause.
(2) 14% increase on all rates.
(3) Service pay to be increased as follows;
0-5 years' service - #1.50 per week,
5-10 years' service - #2.50 per week,
10-15 years' service - #4.00 per week,
15-20 years' service - #5.00 per week.
The Union also informed the Company that it intended to seek a
productivity payment and also an agreed staffing level for the
Company and an adjustment of pay rates in the extrusion area of
the factory. In response the Company made the following offer:
- 12 month agreement to expire on 31st May, 1987.
- 2% increase in pay effective from 1st June, 1986.
- 2% increase in pay effective from 1st December, 1986.
Subject to:
(a) no further claims of a cost increasing nature for the
duration of the agreement.
(b) full flexibility and co-operation with ongoing change.
The Company refused to concede the other elements of the Union's
claim. As no progress could be made at local level it was decided
to refer the matter to the conciliation service of the Labour
Court. A conciliation conference as held on 22nd October, 1986.
As the issue could not be resolved it was agreed to refer the
claims to the Labour Court for investigation and recommendation.
A Labour Court hearing was held in Limerick on 2nd December, 1986.
Union's arguments:
3. (a) Bearing in mind the nature of the work performed and
the enormous profits being made by the overall Smurfit
Group, the increase in pay and the upward adjustment in
service pay is justified.
(b) A productivity payment is being sought because over the
last number of years staffing has been reduced and the
Company has gained from increased productivity because
of the installation of new machines.
(c) Recently employees have arranged their own redundancy
settlements without involving the Union. This is
having a serious effect on manning levels in the plant.
A manning level should be agreed between the Company
and the Union as is done in other employments. Then if
the Company felt the need to rationalise, the Union
would of course co-operate in every way in the working
out of an agreement satisfactory to both parties.
(d) Under the new system in the extrusion area there are
eighteen men running five machines on a three cycle
shift. Of these, three are supervisors, and a further
three are on the leading hand rate. The leading hand
rate was introduced under the old system. Under the
new system all the men operate their machines
independently of each other and the position of leading
hand is no longer necessary. Consequently the
remaining twelve men should have their rates of pay
adjusted accordingly and retrospectively.
Company's arguments:
4. (i) Severe competition within the industry where price
reductions of up to 15% to major customers have taken
place during the last 18 months, and any new business
obtained over the last 12 months is, on average, priced
at 11% below the existing business in Paclene. This
means that the Company has to continuously develop and
change in order to compete and survive in a changing
market place.
(ii) The market situation is dictating the pace at which
these changes need to take place and the Company have
been endeavouring to develop, so as to remain
competitive. Additional investment is necessary in
order to try and secure the jobs of the existing
workforce of 98 employees.
(iii) The Labour costs are now 25% of turnover, while 10
years ago it was 14%. The rates of pay (details
supplied to the Court) are significantly higher than
the Company's competitors in the U.K. - which accounts
for 60% of the Company's business.
(iv) The Company's offer is realistic having regard to its
effort to remain competitive and maintain security of
employment.
RECOMMENDATION:
5. Having considered the submissions made by the parties the
Court recommends that the Company amends its offer to provide for
an increase of 5% with effect from 1st June, 1986, and that this
amended offer together with the attached conditions be accepted by
the workers concerned.
The Court does not recommend concession of the other claims.
~
Signed on behalf of the Labour Court
John O'Connell
_______________________
Deputy Chairman.
3rd February, 1987.
M.D./J.C.