Labour Court Database __________________________________________________________________________________ File Number: CD86974 Case Number: LCR11048 Section / Act: S67 Parties: AER RIANTA - and - GROUP OF UNIONS;FWUI |
Claim, under the 26th wage round, for a wage increase, a shorter working week, increased annual leave and a Company Holiday on 1st May each year.
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
----------------
26th June, 1987
T O'M/U.S. Chairman
Division: CHAIRMAN Mr Collins Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD86974 THE LABOUR COURT LCR11048
CC862002 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11048
Parties: AER RIANTA
and
AUTOMOBILE GENERAL ENGINEERING & MECHANICAL OPERATIVES UNION
ELECTRICAL, ELECTRONIC TELECOMMUNICATIONS AND PLUMBING UNION
ELECTRICAL TRADES UNION
FEDERATED WORKERS' UNION OF IRELAND
UNION OF CONSTRUCTION, ALLIED TRADES AND TECHNICIANS
Subject:
1. Claim, under the 26th wage round, for a wage increase, a
shorter working week, increased annual leave and a Company Holiday
on 1st May each year.
Background:
2. This claim concerns approximately 900 workers employed by the
Company in various grades. The 25th wage round expired for the
majority of the workers on 30th September, 1986. For the
remainder the wage round expired on 30th November, 1986 or 31st
January, 1987.
3. In October, 1986, the Unions quantified their 26th wage round
claim as follows:-
(a) a 15% wage increase over eighteen months, with a
minimum weekly increase of #30.
(b) a reduction in the working week to 35 hours and
(c) an increase in annual leave and 1st May to be a Company
Holiday.
The Company proposed a six months pay pause with a review of the
situation after four months. The Union rejected this proposal.
4. On 2nd December, 1986 the matter was referred to the
conciliation service of the Labour Court. A conciliation
conference was held on 8th December, 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 9th December, 1986 the case was referred to the
Court for investigation and recommendation. A Labour Court
hearing was held on 3rd March, 1987, which was the earliest date
suitable to both parties. A recommendation was issued by letter
to the parties on 13th March, 1987.
Union's arguments:
5. (i) There have been no significant improvements in pay and
conditions in recent years, nor have any special
increases been implemented. It has been reported in
the media, however, that senior management have
received bonus payments above the norm.
(ii) Since 1980 pay increases have not matched the rate of
inflation. The shortfall in take home pay is
significant when account is taken of pay pauses in
previous wage agreements. The basic rate of pay is
over 3% below the 1982 gross figures before the
increased take in PRSI, PAYE and other deductions are
taken into account.
(iii) During the last three wage rounds pay increases in the
commercial semi-state companies were approximately 5%
below the average increase in employments generally.
The average increase for the 26th wage round appears to
be 6.8% for twelve months. There must be no further
erosion of pay rates in this wage round.
(iv) There have been many wage settlements of up to 9.5%
over twelve months in the 26th wage round with a number
of these resulting from Labour Court Recommendations.
Labour Court Recommendation, LCRNo10631, which
concerned Air Motive, a subsidiary company is a
relevant example. The Court recommended an 8% wage
increase with no pay pause.
(v) It is clear that the Company can compete with any
foreign or native carriers as it provides an excellent
service to customers. It should be noted that
passenger figures on the Company's London route have
increased since Ryanair started operations.
(vi) There should be a reduction in the working week to
bring conditions in Ireland into line with other E.E.C.
countries. Concession of a reduced working week should
help increase employment.
(vii) Compared to similar entitlements in European countries
the current annual leave entitlement in the Company is
not high. It is logical to increase annual leave in
this era of great stress.
(viii)There should be recognition in this wage round of the
fact that the workers co-operated with cost-cutting and
staff reductions in accordance with the Labour Courts
Recommendation on the last wage round.
(ix) The Company's fortunes are inter-linked with those of
Aer Lingus particularly in relation to passenger
numbers. The throughput of passengers has increased
over the last year which has lead to improved revenue
for the Company. The Company has performed well
despite financial difficulties in Cork and Shannon.
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 changes. 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 has 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
airlines 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
workers 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 inthe 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
----------------
26th June, 1987
T O'M/U.S. Chairman