Labour Court Database __________________________________________________________________________________ File Number: CD/87/439 Case Number: LCR11341 Section / Act: S67 Parties: NENAGH CO-OPERATIVE SOCIETY - and - ITGWU |
Claims on behalf of approximately 90 employees under the 27th wage round for an increase in pay and a reduction in the working week.
Recommendation:
1987
Division: Mr Fitzgerald Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87439 THE LABOUR COURT LCR11341
CC87580 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 11341
PARTIES: NENAGH CO-OPERATIVE CREAMERY LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claims on behalf of approximately 90 employees under the 27th
wage round for an increase in pay and a reduction in the working
week.
Background:
2. The 26th wage round expired on 31st December, 1986 and in
early 1987 discussions took place between management and the Union
on claims for increased pay and a reduction in the working week.
The current basic wage is approximately #139 (inclusive of a bonus
paid at Christmas). The Union quantified its wage claim as a 10%
increase for twelve months from the termination date of the 26th
round. Management offered a 2% increase from that date. The
current working week is forty hours. The Union sought a reduction
in this but management was unwilling to make any offer. No
agreement was reached and the matter was referred, on 7th April,
1987, to the conciliation service of the Labour Court. A
conciliation conference was held on 27th May, 1987. No agreement
being reached, the matter was referred to a full hearing of the
Labour Court. The hearing took place on 7th July, 1987, in
Limerick.
Union's arguments:
3. (i) At the end of 1986 the workers' wages were generally
in line with those existing in adjacent co-operatives.
However, many of these co-operatives have negotiated
agreements which extend into 1987. Management's offer
of 2% would not bring wages into line with those in
other co-operatives during 1987 (details of
settlements in local co-operatives and other
employments were supplied to the Court).
(ii) The workforce and the payroll have reduced by
approximately 6% to 7% in recent years. New
technology has also been introduced. The workers have
co-operated in these matters without any monetary
compensation. Furthermore, increases under recent
rounds were below the local average.
(iii) The Co-operative is in a healthy financial situation
and can afford to concede the Union's claim.
(iv) The Union is seeking a reduction in the working week
in line with European, and increasingly, Irish trends.
This would be possible to accommodate within the
pattern of workflow as dictated by milk supply.
Management's arguments:
4. (a) The rate of pay of these employees has not fallen out
of line with rates in comparable employments (details
supplied).
(b) Pay has more than kept pace with inflation in the
period from December, 1982, to December, 1986. The
Consumer Price Index increased by 27.4% in that period
while wages in the Company increased by 33.5%.
(c) Management does not accept that there has been an
increase in productivity which would warrant
concession of the Union's claim. The payroll
increased by 50% between 1982 and 1986.
(d) The general pattern of work in the industry is based
on an average 40 hour week. Because of the high
seasonality of milk this is worked on the basis of a
44 hour week in summer and a 35 hour week in winter.
While the Union want a reduction to 34 hours in the
winter, the Company could not agree to this unless
there is an increase to 45 hours in summer. With the
current reduction in milk supply and the increasing
tendency toward higher seasonality, there is a case to
be made for maintaining hours as at present and
reducing staff numbers in the winter period.
Management may be forced to consider this within the
near future. The 40 hour week is standard in the
industry.
(e) The industry is experiencing a serious economic
recession. This co-operative has seen its surplus
revenue reduced to 0.2% of turnover. The average
percentage nett surplus in dairy co-ops was
traditionally in the order of 4%. Unless a return to
that level is achieved the outlook is bleak. The high
seasonality of milk requires a significantly large
investment in capital assets. The current trend in
milk supply will lead to an increase in spare capacity
in machinery. The industry cannot afford to have
machinery partially used for part of the year.
There must be a trend to greater efficiency and a
reduction in spare capacity. Given the difficult
circumstances, management feels that it has dealt
equitably with the employees.
RECOMMENDATION:
5. The Court, having considered the submissions made by the
parties, recommends a 27th Round Wage Agreement covering 14 months
and providing for an increase of 2% for 7 months effective from
1st January, 1987 and a 2% increase effective from 1st August,
1987.
The Court does not recommend concession of the claim for a shorter
working week.
~
Signed on behalf of the Labour Court
27th July, 1987 Nicholas Fitzgerald
A.K./P.W. Deputy Chairman