Labour Court Database __________________________________________________________________________________ File Number: CD87448 Case Number: LCR11326 Section / Act: S67 Parties: HAMMOND LANE METAL CO. - and - ITGWU |
Claim, on behalf of approximately sixty operatives, for a wage increase under the 26th wage round.
Recommendation:
5. The Court, noting the present circumstances of the Company,
recommends that the Company restore its offer of an increase of #5
per week from the 1/2/87 to 31/1/88 and that the Union accept this
offer in settlement of the 26th round claim.
Division: Ms Owens Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87448 THE LABOUR COURT LCR11326
CC87398 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11326
PARTIES: HAMMOND LANE METAL COMPANY
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS UNION (NO. 14 BRANCH)
SUBJECT:
1. Claim, on behalf of approximately sixty operatives, for a
wage increase under the 26th wage round.
BACKGROUND:
2. The Company is involved in processing ferrous and non ferrous
scrap materials which are then sold to steel mills and foundries
at home and abroad. The Company has five branches throughout the
country, two in Dublin and one each in Athlone, Cork and Limerick.
The 26th round became due on the 1st August, 1986, but
negotiations did not commence until the following November. The
Company offered a #50 lump sum to cover a six month period to the
31st January, 1987, followed by an increase of #5 per week on
basic pay (excluding bonus) until January, 1988 (17 month
agreement). This was unacceptable to the Union, which because of
the substantial difference between the parties just several weeks
before Christmas, expressed a preference to reach an interim
agreement for the period up to the 31/1/87 and to then resume
negotiations in February with a view to reaching an agreement on a
percentage increase. This was accepted and agreement was reached
on a lump sum payment of #100 per man for the period to 31st
January, 1987.
At re-convened local negotiations on the 26th February, the Union
side claimed 6% on basic and bonus rates for further six months
(up to 31st July, 1987). However, the Company rejected this and
also withdrew its earlier offer of a #5 per week increase and
instead sought a pay pause, because of a deterioration in its
financial and trading position. As no local level agreement was
possible, the matter was referred to the conciliation service of
the Labour Court on 4th March, 1987. At a conciliation conference
on the 13th April, the Union agreed to consider accepting an
increase in basic pay only and an agreement of 17 months duration
in return for an increase of 6%. This was unacceptable to the
Company and on the 4th June, the matter was referred to the Labour
Court for investigation and recommendation. A Court hearing took
place on the 7th July, 1987.
Union's arguments:
3. (a) The claimants have repeatedly suffered cuts in their
earnings, particularly in the past twelve months, with
considerable losses in overtime and bonus earnings
together with a protracted period of short-time
working. The Union estimates this loss to be in the
region of at least #30 - #40.
(b) During the same period the Company considerably reduced
its manning levels whilst increasing flexibility and
maintaining productivity. In its Dublin plants manning
has reduced from 30 to 23 production workers,
representing a cut in labour of 23%.
(c) According to the latest Union research, settlements for
the 26th pay round averaged at 6.8% for 13.8 months
(5.9% annualised). The Union's final position of 6% on
basic pay only for a period of 17 months represents an
annualised increase of just 4.2% on basic or 3% of
basic and bonus earnings.
(d) This is considerably below the 26th round settlements
generally and is indicative of the Union's genuine
attempt to reach a negotiated settlement based on both
a concern for the Company's financial problems and the
need to achieve at least a minimum protection for the
claimants declining living standards.
Company's arguments:
4. (a) The Company sells all its ferrous steel scrap to Irish
Steel Limited in Cork at prices which are governed by
market conditions in the UK. The steel industry has
been in decline for a number of years with closures of
steel mills throughout Europe and this has resulted in
a drop in demand for steel scrap and a subsequent fall
in prices.
(b) On average the price for scrap paid by Irish Steel has
fallen by #20 per tonne since July, 1985. This
represents a drop of approximately 30%. Against this
background the Company has incurred substantial losses
in 1986 and an increase in these losses is forecast for
1987.
(c) Over the last two years the Company has operated a
week-on/week-off for the workforce and has made ten
people redundant. At present four men have been laid
off at its Cork branch and a week-on/week-off is in
operation at the Athlone branch. The Company needs a
wage freeze with maximum co-operation from the
workforce in order to survive the existing trade
situation.
(d) The Company operates a productivity bonus scheme which
is based on output and provides an opportunity for the
increased earnings related to productivity. The basic
weekly wage ranges from #133 to #155 and the bonus
scheme provides on average an additional 40% of basic.
(e) At present the average earnings for all employees
inclusive of bonus and overtime amounts to #226.13 per
week. These rates are in excess of the national
average, (#213.67 - Central Statistics Office
September, 1986) and are far higher than those paid by
any other scrap merchants in Ireland. The Company has
to compete with scrap merchants from Northern Ireland
where wage rates and energy costs are much lower.
Northern scrap merchants, as part of the UK are in the
privileged position of being able to export their scrap
to third countries where prices tend to be higher,
whereas, exports for the Republic are restricted to EEC
countries.