Labour Court Database __________________________________________________________________________________ File Number: CD86911 Case Number: LCR10929 Section / Act: S67 Parties: GOLDEN VALE CO-OP - and - DAIRY EXECUTIVES ASSOCIATION |
Claim on behalf of approximately 120 managers for a wage increase under the 25th wage round.
Recommendation:
6. The Court, having considered the submissions from the parties
and taking into account the financial position of the Society
recommends as follows in relation to the 25th round pay claim:
.#250 lump sum payable in January, 1987, and consolidated
into basic from the 1st January, 1987.
.5% increase from the 1st January, 1987, to 30th June,
1987, and a further 2.5% from 1st July, 1987. Agreement
to terminate on the 31st December, 1987.
Division: Ms Owens Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD86911 THE LABOUR COURT LCR10929
CC861179 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR10929
Parties: GOLDEN VALE CO-OPERATIVE CREAMERIES LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
DAIRY EXECUTIVES' ASSOCIATION
Subject:
1. Claim on behalf of approximately 120 managers for a wage
increase under the 25th wage round.
Background:
2. The Co-operative is engaged in the collection of milk from
farmers and the processing of same into butter, cheese, milk
powder, process cheese and liquid milk. These products are sold
both on the home and export market. It also produces animal
feedstuffs for sale to farmers and sells fertilizers and other
farm inputs.
3. Cumulative ongoing losses (details supplied to the Court)
between 1981 and 1985 necessitated rationalisation and
reorganisation to restore the Society to profitability. These
measures included redundancies, a plant modernisation programme
and a wage freeze for 1985 and 1986 in respect of salaried staff
and for 1985 only in respect of non-salaried staff. Following the
expiry of the 24th wage round, on 31st May, 1985, the Association
lodged the following claim:
.1.6.85 - 31.3.86 - #150 lump sum in lieu of pay pause
.1.4.86 - 31.12.86 - 3% (9 months)
1.1.87 - 31.3.87 - 2.5% (3 months)
1.4.87 - 30.6.87 - 2.5% (3 months)
1.7.87 - 30.9.87 - 2.5% (3 months)
i.e. 10.5% over 28 months.
Management rejected this claim and as local level negotiations
failed to resolve the issue, the claim was referred to the
conciliation service of the Labour Court on the 4th July, 1986.
At a conciliation conference held on the 31st July, the Society
made the following offer:
.#200 once off payment payable in December, 1986
.5% on 1st January, 1987
.2% on 1st October, 1987
.3% on 1st April, 1988, to expire on 30th June, 1988.
The Association found this proposal unacceptable and put forward
the following counterproposal:
.#250 lump sum payable in December, 1986, to be
consolidated into the scale as and from 1st January,
1987
.6% from 1st January, 1987, to 31st March, 1987.
The Society accepted the proposal regarding the #250 lump sum and
the subsequent consolidation into salary scales but rejected the
claim for 6%. The Association subsequently put forward its final
proposal which was as follows:
.#250 lump sum, consolidated into salary scales with
effect from 1st January, 1987
.6% from the 1st January, 1987, to 31st March, 1987
.2.5% from 1st April, 1987, to 30th June, 1987
.2.5% from 1st July, 1987, to 31st December, 1987.
This proved unacceptable to the Society and as further progress
could not be made the issue was referred to the Labour Court on
the 25th November, 1986. A Court hearing into the dispute took
place on the 3rd December, 1986, in Cork.
Association's arguments:
4. (a) Despite the cost saving measures and pay freezes which
were introduced in 1985, the Society agreed a pay
increase for 1985 and 1986 for workers under the 25th
round which provided for a 10.5% increase over a 28
month period. In addition, despite a commitment to
retain shareholders' dividend, the Company's accounts
for 1985 show that the Society did not retain the Loan
Stock Dividend but paid it out to the supplier
shareholders, amounting to #244,000. In such
circumstances it is unreasonable and inequitable for
the Society to attempt to single out Managers for
selective application of a pay freeze.
(b) The average settlement for Managers under the 24th
round was a phased increase of 7% over sixteen to
seventeen months. This increase was a modest one,
reflecting the difficult trading position and
performance of the agribusiness sector.
(c) The claimants are conscious of the additional problems
facing the Society and have modified their claim still
further as compared to the established pay norm in the
industry.
(d) The Association's claim represents savings to the
Society of the order of 2% in 1985, 5.5% in 1986, and
2% in 1987. In addition the claim is consistent with,
and is within the terms of, the pay deal already agreed
by the Society for its other employees.
Society's arguments:
5. (i) The Society has been recording losses since 1981
and has been forced to introduce wage freezes and cost
cutting measures, including 232 redundancies, in an
effort to return to profitability.
(ii) Since 1980, it has been involved in the 'Munster milk
wars' (not by choice), where it has lost approximately
12 million gallons of milk because of its inability to
pay a competitive price for milk. The loss of this
milk was exacerbated by the introduction of the milk
superlevy which curtailed growth.
(iii) The inclement weather conditions for farmers during
1986, following the previous year's bad weather,
resulted in a significant drop in milk yields with a
consequent substantial increase in farmers'
indebtedness to the Society. The scale of this
indebtedness will take farmers a number of years to
clear, during which time the Society will have to carry
the cost through increased borrowings.
(iv) The general oversupply situation in both the domestic
and export markets has resulted in reduced margins for
the Society. Furthermore, the changes in the
intervention payment system have also reduced its
returns. Originally, payment was thirty days after
invoicing but this has gradually been extended to the
present position of payment 240 days after, which has
resulted in increased borrowings and pressure on the
Society's cash flow.
(v) Taking all the above into account, the Society could
see no way in which it could alter the terms of its
survival plan in respect of a wage increase for
salaried staff in 1986.
RECOMMENDATION:
6. The Court, having considered the submissions from the parties
and taking into account the financial position of the Society
recommends as follows in relation to the 25th round pay claim:
.#250 lump sum payable in January, 1987, and consolidated
into basic from the 1st January, 1987.
.5% increase from the 1st January, 1987, to 30th June,
1987, and a further 2.5% from 1st July, 1987. Agreement
to terminate on the 31st December, 1987.
~
Signed on behalf of the Labour Court
Evelyn Owens
___________________________
Deputy Chairman.
19th January, 1987.
D.H./J.C.