Labour Court Database __________________________________________________________________________________ File Number: CD87483 Case Number: LCR11345 Section / Act: S67 Parties: CASTLEBRAND CO. - and - ITGWU |
Claim, on behalf of approximately sixty general operatives for an increase in pay.
Recommendation:
5. The Court has noted that the present pay levels of the
claimants reflect the difficult financial situation of the
Company. In view of the financial situation as outlined at the
hearing the Court does not find it possible to recommend an
increase in pay at this time.
Management have indicated however that the installation of new
plant later in the year should secure some improvements in the
overall position. The Court, therefore, recommends that the
parties should review the situation early in 1988 with a view to
determining whether a wage increase can be sustained in the light
of the indicators at that time.
In the event of its not being found to resolve the matter the
parties should return direct to the Court.
Division: Mr Fitzgerald Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87483 THE LABOUR COURT LCR11345
CC87651 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 11345
PARTIES: CASTLE BRAND COMPANY
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, on behalf of approximately sixty general operatives for
an increase in pay.
Background:
2. The Company, which was set up in November, 1985, in Nenagh, is
a wholly-owned subsidiary of Commercial Aluminum Cookware, Toledo,
USA. It is engaged mainly in the manufacture of cooking utensils
and metal signs. A Company of the same name and producing the
same products had previously gone into liquidation and one of its
principals purchased the present Company, and started up a reduced
operation. The basic rate of pay is #110 which has not increased
since the Company commenced trading. The Union sought an increase
of 15% from 1st October, 1986, to 31st December, 1988. The
Company was unwilling to make any offer other than an agreement to
discuss the wages in December, 1988. The matter was referred, on
22nd April, 1987, to the conciliation service of the Labour Court
and a conciliation conference took place on 9th June, 1987. No
agreement was reached, however, and the matter was referred to a
full hearing of the Labour Court. The hearing took place on 8th
July, 1987, in Limerick.
Union's arguments:
3. (i) Wage rates in the Company are very much out of line
with those of local industry (details supplied). The
Union estimated that the average local basic rate is
approximately #142 per week compared with #110 in this
Company.
(ii) The Company acquired a workforce with scarce skills at
no training cost. This has been a major contribution
to the financial situation.
(iii) While the Company contends that substantial investment
has been necessary, it acquired the plant, machinery
and workforce at a very low cost. It also obtained
substantial funding from the I.D.A.
(iv) The new owner was aware of all the facts when the
Company was purchased because of the involvement in
the previous Company.
(v) The Company acquired a reputable trade name which
eliminated the need for marketing.
(vi) The Company has been very successful in the sale of
road signs and other signs.
(vii) The claim in effect covers the period from October
1985 to December 1985 - a period during which other
workers would have been secured the benefits of three
wage rounds.
Company's arguments:
4. (a) The parent Company was forced to invest more funds in
this Company than was originally intended, due to
various factors. An accountant's report made to Foir
Teo in April, 1985, was subsequently found to be very
inaccurate. Foir Teo took much longer than expected
to provide funds and negotiations on bank loan
facilities were prolonged.
(b) A market study prior to the commencement of trading
indicated that prices would require to be maintained
at 1984 levels. This situation still prevails. The
Company understood that, during the course of the
initial discussions at the time of opening there was
an inference that there would be a three year
moratorium on wage increases.
(c) During the liquidation process the plant was closed
down for eighteen months and all existing customers of
the former Company were lost to competitors.
(d) The Company presented audited finalcial statements to
the Court for the first complete year of operations
together with projected financial statements for a
three year period up to 1989, in support of its
contention that it is unable to meet any wage increase
at this time.
(e) The Company has incurred substantial expenditure on
machinery and buildings due to the fact that machinery
and electrical wiring were found to be in a
potentially dangerous condition. A programme for
acquisition of new machinery has been set up which
will give rise to further substantial expenditure.
However, such a programme must be embarked upon to
ensure competitiveness and safeguard the Company's
future.
RECOMMENDATION:
5. The Court has noted that the present pay levels of the
claimants reflect the difficult financial situation of the
Company. In view of the financial situation as outlined at the
hearing the Court does not find it possible to recommend an
increase in pay at this time.
Management have indicated however that the installation of new
plant later in the year should secure some improvements in the
overall position. The Court, therefore, recommends that the
parties should review the situation early in 1988 with a view to
determining whether a wage increase can be sustained in the light
of the indicators at that time.
In the event of its not being found to resolve the matter the
parties should return direct to the Court.
~
Signed on behalf of the Labour Court
30th July, 1987 Nicholas Fitzgerald
A.K./P.W. Deputy Chairman