Labour Court Database
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Subject:
Claims on behalf of fifty two workers for:- a) an increase in basic pay, and b) narrowing of differentials.
Recommendation:
Claim (a) - increase in basic pay
9. The Court recommends that the Company's offer of an increase
of 4% with effect from 1st October, 1986, be accepted.
Claim (b) - narrowing of differentials
10. The Court recommends that a phased increase of 6% be applied
in settlement of this claim. The first phase of 2% should apply
on 1st January, 1987, and two further phases at six monthly
intervals thereafter.
Division: CHAIRMAN Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD86867 THE LABOUR COURT LCR10958
CC861648 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR 10958
PARTIES: LUND INTERNATIONAL
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claims on behalf of fifty two workers for:-
a) an increase in basic pay, and
b) narrowing of differentials.
Background:
2. Lund International is an American based corporation with three
manufacturing plants, one of which opened in Athlone in 1981. The
Company is engaged in the production of agricultural knives,
blades and associated components and currently employs 90 workers
in its Athlone plant. The Union served a number of claims on the
Company under the 26th wage round. The Company, after negotiation
with the Union, made an offer which included the following:-
(a) an increase basic pay of 4% from 1st October,
1986, for 12 months and
(b) no concession in respect of differentials.
As no agreement could be reached at local level the matters were
referred to the conciliation service of the Labour Court.
Resulting from a conciliation conference held on 23rd October,
1986, the parties agreed to further local discussions on a number
of items but referred the matters of the wage increase and the
differential to the Labour Court for investigation and
recommendation. A Court investigation into the dispute was held
on 10th December, 1986, in Galway.
Claim (a) - increase in baisc pay
Background:
3. The Union claimed a 30% increase in basic rates over a 12
month period. The Company offered an increase of 4% for 12
months. This was not acceptable to the Union.
Union's arguments:
4. (i) The workers lost out under the 24th wage round because
of the Company's financial situation and the 25th
round increase, while substantial, did not fully
compensate for this loss. The Company recognised that
the workers were lagging behind other similar workers
and promised that when profit making was achieved it
would make up for lost ground. The Company has now
begun to make profits and there is, therefore, an onus
on it to make agreements on pay above any national or
local norm.
(ii) The work involves skill in many instances and there is
a danger element involved.
(iii) The workers' rates of pay lag behind those in other
industries in the Athlone area (details supplied to
the Court). The basic rate is one of the lowest in
the engineering industry in this country (details
supplied).
(iv) The effect of inflation justifies an increase. There
will also be the detrimental effects of the 8%
devaluation of the Irish punt within the EMS and the
7% devaluation of the Green Pound. The Company,
however, benefitted from the 8% devaluation as its
main export market is in Europe.
(v) The Company's offer compares unfavourably with the
settlement trend in the wage round so far (details
supplied to the Court). Local settlements have also
been higher (details supplied).
(vi) The workers' productivity is very high.
Company's arguments:
5. (a) The Company has been in a serious trading position
since it was established in 1981. The recent profit
in the Athlone plant was due to the change in the
Company's approach and was at the expense of the
Boston plant. Given the nature and size of the
Company, the future of the Athlone plant could be
jeopardised by increased costs at that plant.
(b) The depressed state of the agri-business sector
internationally, and particularly in Europe, has had a
very serious impact on the Company (details supplied
to the Court).
(c) The Company has always adopted a policy of paying its
employees as much as possible, given market
conditions. The offer of 4% is all that can be
afforded at present. That increase should be seen in
the context of talks on the consolidation of the bonus
into the basic rate, which will result in an overall
increase of 5.6% in the current wage round.
Claim (b) - narrowing of differentials
Background:
6. The Union is seeking an increase of 12% to restore
differentials between the semi-skilled workers, who receive
#147.29 basic pay at present, and the supervisory workers who
receive #207.00. The Company rejected this claim.
Union's arguments:
7. (i) The differential between the semi-skilled operators'
and the supervisors' basic rates is 40% and this rises
to 70% when total earnings are taken into account. In
a survey of firms in the midland region the Union
discovered that the norm for such a differential is
around 26%. The Union is therefore seeking that the
differentials be brought back to a more equitable
basis.
(ii) The Union has not taken fringe benefits, including
bonus, into account as they effectively cancel each
other out.
(iii) Due to different methods of application of wage
agreements over the years the original differential
has been widened.
Company's arguments:
8. (a) The differentials in question were established in 1981
and have remained undisturbed and undisputed until
now.
(b) The Union failed to take account of the operators'
bonus of #9.42 per week which leaves a differential of
only 32%, which is not more than is normal or
justified.
(c) The differential is not unusually large, given the
responsibilities of the supervisors.
(d) The Union's survey fails to take account of variations
between companies and their grading structures.
(e) Any change in the differentials would have wider
implications for the Company in respect of other
categories of workers.
RECOMMENDATION:
Claim (a) - increase in basic pay
9. The Court recommends that the Company's offer of an increase
of 4% with effect from 1st October, 1986, be accepted.
Claim (b) - narrowing of differentials
10. The Court recommends that a phased increase of 6% be applied
in settlement of this claim. The first phase of 2% should apply
on 1st January, 1987, and two further phases at six monthly
intervals thereafter.
~
Signed on behalf of the Labour Court
27th January, 1987 John M. Horgan
R.B./P.W. Chairman