Labour Court Database __________________________________________________________________________________ File Number: CD86889 Case Number: LCR11043 Section / Act: S67 Parties: AER RIANTA - and - ITGWU |
Claim, under the 26th wage round, for a wage increase, shorter working week and increased annual leave.
Recommendation:
7. The Court recommends that an increase of 5% be applied from
the date of expiry of the previous agreement for a period of
fifteen months. The Court does not recommend concession of the
other claims.
Division: CHAIRMAN Mr Collins Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD86889 THE LABOUR COURT LCR11043
CC861707 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11043
Parties: AER RIANTA
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, under the 26th wage round, for a wage increase,
shorter working week and increased annual leave.
Background:
2. This claim concerns approximately 850 workers employed by the
Company in various grades. The 25th wage round expired for the
majority of these workers on 30th September, 1986. For the
remainder the agreements expired on 30th November, 1986 and 31st
January, 1987. There is parity of pay between Air Rianta and Aer
Lingus.
3. In September, 1986, the Union outlined the following 26th wage
round claim:-
(a) a 10% wage increase over twelve months,
(b) a reduction in the working week to 35 hours and
(c) an increase in annual holidays of two days.
The Company proposed a six months pay pause with a review of the
situation after four months. The Union rejected this proposal.
4. On 15th October, 1986 the matter was referred to the
conciliation service of the Labour Court. A conciliation
conference was held on 7th November, 1986. At conciliation the
Company offered to pay a 3% wage increase over twelve months from
the end of the proposed six months pay pause. The Union rejected
this offer. On 14th November, 1986 the case was referred to the
Court for investigation and recommendation. A Labour Court
hearing was held on 12th December, 1986. On 9th January, 1987 the
Company supplied to the Court certain information concerning the
level of wage increases in previous years. The Union responded to
this information by letter dated 19th February, 1987. A
recommendation was issued by letter to the parties on 13th March,
1987.
Union's arguments:
5. (i) The Union's arguments in support of its claims for a
shorter working week and extra holidays are
substantially the same as were made to the Labour Court
when these particular claims were the subject of
investigations in recent wage rounds. The fact that
the national unemployment figure is now approximately
30,000 up on the figure when this claim was last before
the Court is a vindication of the Union's statement at
that time that shorter hours and additional holidays
were a way to combat job losses and create new
employment.
(ii) Workers in other E.E.C. countries have shorter working
hours and more holidays than Irish workers.
(iii) The Governments of France and Belgium have claimed that
a reduction in the working week has saved or created
tens of thousands of jobs.
(iv) The increasing unemployment figures makes it necessary
to protect existing employment and create new job
opportunities for the unemployed and the school
leavers. Shorter working hours and extended annual
leave have a big part to play in this area.
(v) The increasing pace and demand of present day working
environments poses severe demands upon workers,
resulting in stress and pressure and eventually leading
to health problems. Many medical experts have
supported the idea of shorter working hours and longer
holidays as being desirable to protect and safeguard
the health of workers.
(vi) Concession of the Union's claim for a 10% wage increase
is justified to take account of the increase in the
cost of living which will occur in the period of the
Agreement - 1st October, 1986 to the 30th September,
1987 together with the need to compensate the workers
for the erosion of their living standards over a number
of years.
(vii) Since 1979 the inflation rate has far outstripped wage
settlements. Since 1983 the members have suffered a
major reduction in their standard of living, especially
when account is taken of P.A.Y.E. and P.R.S.I.
deductions.
(viii)The claim is in accordance with I.C.T.U. policy for the
26th Round.
(ix) Over the last three wage rounds the workers have lost
ground compared to workers in the private sector.
(x) The workers have exercised wage restraint for a number
of years. However this has been in vain as it is now
clear that wage restraint is not part of the solution
to the unemployment problem.
(xi) An average of settlements already concluded for the
26th wage round shows a norm of 6% increases over
twelve months.
(xii) The Company has been profit making in recent years and
can afford to concede the Union's claims in full. The
indications are that 1986 will turn out to have been a
very good year for the Company.
(xiii)The Court should issue a favourable recommendation in
line with the Aer Lingus recommendation as there is
parity between the two companies.
Company's arguments:
6. (a) The Company's financial performance for 1985 was
satisfactory. However account must be taken of the
fact that the Company is dependent on funds from the
Exchequer to carry out capital works.
(b) The future funding of the new runway at Dublin Aiport
and the financing of the fuel farm in Shannon will
involve the Company, for the first time in its history,
in seeking loans from the Commercial banking sector
with the associated interest charges. Anything which
adversely affects the Company's financial position will
put a severe strain on the Company's ability to meet
the targets set over the coming years. Concession of
the Union's claim would jeopardize the Company's
financial standing.
(c) The Government's Green Paper on Transport sets out an
objective that terminal air navigational services will
have to be self-financing. This could involve payments
in the order of #3m. per annum having to be met by the
Company. It would also have reduced the Company's net
surplus by 50% in 1985.
(d) The fall off in revenue from the American trade and the
weakening dollar have seriously affected Shannon
Airport's continued viability and to some extent Dublin
Airport.
(e) In the last year increased competition has lead to
reduced air fares which have lead to increased traffic
through Dublin Airport. However, the performance at
the other airports, particularly Shannon, is of some
concern to the Company. In Cork the introduction of a
Cork/Swansea sea link, which expects to attract in
excess of 100,000 passengers yearly, will impact
seriously on Cork Airport's business.
(f) The Company is under increased pressure from the
airline companies to reduce the aiport charges levied
on them. They will resist any increases.
(g) Since 1982 the level of wage increases in the Company
was higher than the level of price increases by more
than 6%.
(h) As a result of changes made in the Budget for 1986
worker will have more disposable income.
(i) The average earnings in the Company for 1985/86 were
#12,100. This is a 10.3% rise on the average earnings
for the previous year and is 31.5% higher than the
average industrial earnings of #176.82 for a 40.8 hour
working week. It is evident from this that Aer Rianta
staff compare very favourably with average industrial
earnings.
(j) The Company, being in the public sector, must have
regard to Government pay policy which is that
commercial state Bodies should seek settlements below
the inflation rate, include a substantial pay pause and
be of eighteen months duration. The Company's offer at
conciliation was consistent with that policy and with
the corporate objectives set for the coming years.
The claim, if conceded, would jeopardise the Company's
financial standing and is totally unrealistic.
(k) The Company is heavily dependent on commercial revenue.
This source of revenue for the Company is threatened by
moves within the E.E.C. to eliminate customs barriers
which will effectively do away with Duty Free Shopping
from 1992.
(l) Tax free revenue is down 20% for the Company in the
first eleven months of 1986 due to the facility for
tourists to reclaim VAT on Irish purchases and the
absence of American tourists.
(m) The Union's claims for additional leave and reduced
working hours are not justified. The Company dealt
with these when the issues were last before the Court.
Nothing has happened since then to alter the Company's
position on these claims.
(n) The Company's offer is fair and sustainable in the
present financial climate.
(o) The Company confirms its policy to continue parity of
pay and conditions with Aer Lingus.
RECOMMENDATION:
7. The Court recommends that an increase of 5% be applied from
the date of expiry of the previous agreement for a period of
fifteen months. The Court does not recommend concession of the
other claims.
~
Signed on behalf of the Labour Court
John M. Horgan
----------------
20th June, 1987
T O'M/U.S. Chairman