Labour Court Database __________________________________________________________________________________ File Number: CD8796 Case Number: LCR11255 Section / Act: S67 Parties: NICHOLAS O'DWYER & PARTNERS - and - ITGWU |
Claim, on behalf of approximately thirteen workers, for a wage increase under the 26th wage round.
Recommendation:
6. Having considered the submissions made and the information
supplied to it, the Court recommends the following terms for
settlement of the 26th round wage claim:
- a pay pause of 6 months,
- an increase of 3% from 1/4/87,
- the agreement to last until 31/12/87.
Division: Mr O'Connell Mr Heffernan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD8796 THE LABOUR COURT LCR11255
CC87110 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11255
Parties: NICHOLAS O'DWYER AND PARTNERS
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, on behalf of approximately thirteen workers, for a wage
increase under the 26th wage round.
Background:
2. The partnership operates a civil engineering consultancy
business to local authorities, State and private sectors. In
addition, a proportion of its work is on behalf of clients outside
the State.
3. The 25th wage round for the workers concerned expired on the
31st August, 1986, and at local level discussions on the 26th
November, the Union sought an increase of 6% from the 1st
September, 1986, for twelve months. The Company stated that it
was not in a position to make an offer at that time and that it
hoped to respond in January, 1987. As no progress was made by
then, the matter was referred to the conciliation service of the
Labour Court on the 21st January, 1987. As no agreement could be
reached at a conciliation conference held on the 9th February,
1987, the matter was referred to the Labour Court for
investigation and recommendation. A Court hearing took place on
the 9th March, 1987.
Union's arguments:
4. (a) The claim for 6% is based on the average 26th round
settlement for a twelve month agreement (I.T.G.W.U.
survey of 616 settlements covering 65, 719 workers at
the 2nd March, 1987).
(b) The claim took into account the financial difficulties
of the Company in that the Union did not seek to
recover the 8.8% gap which could be made up from the
previous two wage rounds (details supplied) nor did it
seek to restore pay levels relative to the pay of
workers in similar grades employed in local
authorities, with whom the claimants had a pay
relationship.
(c) The Union does not believe that the Company's financial
difficulties are of such an extent as to warrant a pay
freeze. While the Union has not been given access to
the Company's accounts, the Company has admitted that a
small profit has been made over the past three years.
In addition, substantial profits were made in the past
and the Company has also found it possible to fund an
investment of some tens of thousands of pounds in a new
telephone system.
(d) Management has achieved significant savings in the
payroll costs. The number of workers employed has
reduced from 57 to 32 and only four of these were by
way of redundancy. Staff numbers have reduced by 44%
but there has been no reduction in the number of
partners or associates.
Company's arguments:
5. (i) The firm has given detailed consideration to the 26th
wage round. Examination of the financial situation of
the firm shows clearly that the firm is unable to offer
any increase under the 26th round, particularly since
it is committed to incremental salary increases for the
majority of the staff from the 1st June, 1987. These
increments will add approximately 3.5% to the payroll.
(ii) There has been a serious and continuing erosion of
consultants' income due to the failure to achieve
appropriate revisions to the scale and the thresholds
therein despite successive applications to the National
Prices Commission. The scale of fees on which
consultants are remunerated is a tapering scale set in
1964. An increase of 5% was authorised for new
appointments from the 31st May, 1978. The majority of
work is ongoing from appointments originating prior to
that date and does not benefit from this increase
(seven years after the 5% increase was authorised the
income increase was worth 1%).
(iii) A survey of consulting engineer firms in 1985 showed
that the payroll cost per employee including employers'
P.R.S.I. was #11,914. The cost in this firm per
employee in 1985 was #13,331 - 11.9% greater than the
figure for the industry as a whole. This is a
consequence of the salary scales agreed in 1984 as a
result of industrial action. In the current financial
year, 1986/1987 redundancy costs have to be met. This
is a serious problem in a loss making situation.
(iv) In addition to the squeeze on fee income, increasing
costs exacerbate the situation. These include
increases in holidays. P.R.S.I. levels, professional
indemnity insurance and rent as well as serious delays
in payment by clients of fees due.
(v) The diminishing workload arising from the recession in
the construction industry has resulted in the number
employed falling from 68 in 1984 to 43 at present.
Fortunately, the majority of this reduction occurred
through natural wastage. The fixed overheads have now
to be carried by a reduced workbase, which is
equivalent to an increase in operating costs.
(vi) Heretofore, the fee has been calculated on the final
construction cost of the project in accordance with the
scale fees. Now 70% of the fee is to be based on a
cost less than the final construction cost of the
project. In consequence, the total fee for a typical
contract will be reduced by 1.5 times the average
annual inflation rate over the duration of the project.
This has been imposed by departmental directive.
(vii) Fee competition is being imposed for projects costing
over #2m. For jobs costing less it is intended that
fees will be negotiated for public sector work. The
implications for firms with uncompetitive costs are
clear.
RECOMMENDATION:
6. Having considered the submissions made and the information
supplied to it, the Court recommends the following terms for
settlement of the 26th round wage claim:
- a pay pause of 6 months,
- an increase of 3% from 1/4/87,
- the agreement to last until 31/12/87.
~
Signed on behalf of the Labour Court
John O'Connell
_____________________
Deputy Chairman.
18th June, 1987.
D.H./J.C.
From: COFFEY 18-JUN-1987 14:40