Labour Court Database __________________________________________________________________________________ File Number: CD87188 Case Number: LCR11176 Section / Act: S67 Parties: COMER INTERNATIONAL LTD - and - ITGWU |
Claim under the 26th wage round on behalf of 100 workers for: (a) A 12% increase on basic pay. (b) An additional 2 days annual leave (20 days at present). (c) An increase in service pay from 10p to 20p per week per year of service.
Recommendation:
9. Having considered the submissions made the Court recommends
(a) The basic rate should be established at #120 per week
with effect from 1st December, 1986.
(b) An increase of 6% on basic rate with effect from 1st
January, 1987 in respect of an agreement to terminate
on 31st December, 1987.
The Court does not recommend concession of claims for additional
leave or increased service pay.
Division: Mr O'Connell Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87188 THE LABOUR COURT LCR11176
CC8776 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11176
Parties: COMER INTERNATIONAL LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
Claim under the 26th wage round on behalf of 100 workers for:
(a) A 12% increase on basic pay.
(b) An additional 2 days annual leave (20 days at present).
(c) An increase in service pay from 10p to 20p per week per
year of service.
Background:
2. The Company is engaged in the production of spun yarn for the
knitting and weaving industries. The 25th wage round expired for
the workers here concerned on 31st October, 1986. The Union on
behalf of the workers served the above mentioned claim on the
Company.
The Company responded, at local level, with an offer of 3% for 12
months, with no offer on annual leave or service pay. No
agreement was reached at local level, and on 12th January, 1987,
the matter was referred to the conciliation service of the Labour
Court. A conciliation conference took place on 5th March, 1987.
The Company's position at conciliation remained 3% over 12
months. This position remained unacceptable to the Union, which
referred to productivity improvements at the plant due to the
introduction of new machinery. As agreement could not be reached,
the matter was referred to the Labour Court for investigation and
recommendation on 9th March, 1987. A Court hearing took place in
Kilkenny on 7th April, 1987.
Union's arguments:
3. (a) In late 1984 Comer Mills announced a 3 year major
capital investment plan which is now nearing
completion. The cost of same is forecast at #3 million
with approximately #1 million to be funded from the
I.D.A. One of the factors for the parent Company
choosing Castlecomer for the plan was the level of
achievement attained there despite the fact that the
workers were working with machinery that was older than
elsewhere. The parent and local Company, therefore
have demonstrated their confidence in the ability and
performance of the Castlecomer workforce. As a result
of the total co-operation exhibited by the workers
coupled with the introduction of new machinery mill
output has improved on a weekly basis from 26.2 tons to
37.5 tons and will eventually be in excess of 45 tons.
This 43% to 71% increase is far in excess of the 25%
increased capacity originally forecast and planned for
this investment package.
(b) This massive increase in output will be partially
offset by the addition of approximately 14 new
employees, but an examination of the downturn in the
labour cost of each ton produced should leave the Court
in no doubt but as to the validity of the claim
(details with Court).
(c) The workforce in Comer Mills followed the philosophy
which we hear today from sources such as the I.D.A.,
F.U.E., and indeed the Labour Court itself. They
didn't say no to change, new machinery, changed
workloads - they assisted where possible and it is time
that they realise the fruits of their labour. This is
essential not only from a wage round perspective, but
also having regard to maintaining credible industrial
relations in the plant.
The objective of capital investment should be better
and secure employment - all the financial indications
point to the fact that it is now time to compensate the
labour element for their productivity achievement.
(d) As a result of an agreed system for the use of casual
labour the Company in Castlecomer finds itself in the
position of effectively never having to cover sickness
or absenteeism by overtime. There is a pool of casual
workers available in the area and called upon by the
Company to cover same whenever the need arises
without any additional cost to the Company. There are
no resultant overtime payments at time and a half or
double time as would be the case if this system did not
apply, and which as the Court is aware is the case in
virtually all other employments. Indeed, the Court
will recall the fact that for this concession alone
there are many firms that would be prepared to concede
a considerable pay increase as they would not be faced
with increased wage costs of at least .50% for each 1%
absenteeism which would be the case if this system did
not apply. It should in fact be noted that this system
does not apply in the Company's Bunbeg plant, so
employees there have an opportunity to enhance their
basic wage, (which is the same as at Castlecomer).
This facility does not exist for the workers in
Castlecomer.
(e) The Company in pay negotiations and discussions has
constantly identified the need to produce competitively
with its counterparts in northern Europe. However, an
examination of labour costs in the textile industry in
these countries as outlined by "Incomes Data Services,
1986" reveals that rather than being disadvantaged in
this regard Comer Mills is at a further advantage.
This advantage has been further enhanced by the 8%
devaluation of the IR #. in August, 1986, (details
supplied to Court).
(f) Wages in Comer Mills have risen by 4.50% less than that
of the average private sector settlements since April,
1983, that is, the 23rd, 24th and 25th pay rounds. The
lower Comer Mills settlements have taken 10.25% longer
to achieve. The net difference, having regard to both
the payment and time factors is 7.50% (details supplied
to Court).
(g) The settlement suggested for the Castlecomer plant of
Comer International are out of line with the Irish
Textile Industry (details with Court). A local Company
which is a particularly apt comparator received a one
phase 6% settlement for 12 months, effective from 1,
September, 1986 (details with Court).
(h) When the above points are carefully examined, that is,
the increased productivity, output, cost reductions
through elimination of overtime, labour costs relative
to competitors, declining rise in basic wage rates in
Comer relative to the private sector, area settlements,
and the textile industry, it can only be concluded that
there now exists no valid reason to justify the
continuing deterioration in the level of pay of this
group of workers. Given the very considerable
advantages which the firm enjoys in relation to the
above points, it is time that the shortfall be
redressed and that a halt be called to below average
settlements in this firm which have left the workers on
a basic wage of #116.34 gross which when ravaged by
taxation reduces to less than #90,00 per week. This
leaves the workers #18.00 below the #134.00 threshold
identified by the Union as the weekly basic
necessitating immediate attention under the higher
earnings for lower paid campaign. Comer Mills is a
buoyant, healthy firm in every way except with regard
to workers' wage levels and it should be noted that the
Company's willingness of some years ago to throw out
their accounts to the Union has been replaced by a
marked degree of caution and reluctance in this regard
as our members produce a quality product at greatly
enhanced levels of output.
4. (i) The Union are claiming an additional 2 days holidays
bringing the total to 22 days and we would suggest that
these 2 days and perhaps 2 to 3 of the existing
holidays be taken as floating days. This method would
be ideally suited to Comer where a supply of casual
workers exists to do holiday relief thereby enabling
the Company to maintain production levels and indeed if
2 to 3 of the existing holidays were taken in this way
it would further increase productivity while
maintaining the stability of all fixed costs. This
would help to alleviate the cost to the Company. In
comparison with its European competitors, Comer
International emerges poorly as regards holiday levels
(details supplied to Court). Workers in Ireland
continually hear of the need to emulate their European
counterparts in work practices etc. - It is time for
employers and their organisations to put into practice
their own philosophy and agree conditions with Irish
workers which have long been the practice in Europe.
Certainly, now is the time for the holidays in Comer to
be increased given the increased output, the method
proposed for the taking of the holidays and the record
of European counterparts.
(j) The claim in regard to service pay is to increase the
existing level of service pay which starts at 30p after
3 years, rising by 10p per week per year of service.
This schedule of payments has been in existence for
over 10 years and despite the massive increases in
inflation (over 100% over the past 10 years) has
remained constant. It is now necessary to increase
same by 100% to bring them into line with their
introductory position. The principle of service pay is
not in dispute, the cost of concession of the claim is
minimal, and indeed the Company indicated no reluctance
to concede this aspect of the claim.
Company's arguments:
4. (i) Over recent years the Union have indicated that their
claims contain an element to enable workers to regain
purchasing power vis-a-vis the rate of inflation. The
workers concerned have kept well ahead of inflation
since the establishment of the Company in 1968. In
this context the effect of the 25th pay round
settlement of #7.75 per week over a fourteen month
period was the equivalent of 7.13% which in turn is the
equivalent of 6.11% pay increase over a twelve month
period to November, 1986. The quarterly inflation
figures over the period were mid-February, 1986 : 4.6%;
mid-May : 4.4%; mid-August : 3.1%; mid-November 3.2% -
an average of 3.82% over the equivalent twelve month
period during which pay rates increased by 6.11%.
(ii) Apart altogether from international competition, it is
important to stress the position of the Company
vis-a-vis textile producers in this country. The
current rates of pay of the workers here concerned are
significantly above those in the eleven companies
covered by the Woollen and Worsted Joint Industrial
Council. The average level of weekly earnings of those
companies is #136.14. The pre-26th round basic pay in
the Company is #116.39 per week and the average bonus
is #38.87 per week, giving a total remuneration for a
40 hour basic week of #155.26 per week. This indicates
that the workers concerned are #19.12 per week better
off than their counterparts throughout the remainder of
the industry.
(iii) The Company is engaged in an extremely competitive
international market and has pointed out to the Union
over several years that a continuation of pay increases
well in excess of those in competitor countries will
erode the Company's market and cause serious problems
for Management and staff alike. Notwithstanding the
fact that inflation in Ireland has dropped
significantly over recent years, it has now only come
in line with some competing countries, but there are
still a number of countries with a level of inflation
less than that in the Republic of Ireland. The Irish
level of wage increase would probably come in line with
competing countries if pay increases matched the
level of inflation currently applying in Ireland.
However, such is not the case and Ireland continues to
agree wage increases at a level significantly in excess
of inflation.
(iv) Because of international competition and over supply in
the world market, Comer International has had to
cut-back on price in order to maintain its position in
the marketplace. For the Company to do otherwise would
lead it down the path to retrenchment and in these
markets once a foothold is lost it is extremely
difficult to regain it.
(v) Some emphasis has been placed by the Union on
productivity as a justification for increases in excess
of industry norms. It should be emphasised that over
recent years the Company has been engaged in
significant capital investment which has resulted in
the installation of up-dated plant and machinery within
the mill. It has been emphasised many times to the
trade union that such an investment was absolutely
essential to enable the Company to maintain its
position as a modern textile mill. Failure to keep
pace with such development could only result in the
Company's inability to keep pace with international
competition and would inevitably result in a downwards
spiral of sales and production.
(vi) Workloads within the Company are established, measured,
and proven to ensure that equity applies. The
Company/Union agreement also makes provision that in
the event of workloads being queried, they are open to
examination by industrial engineers nominated by the
Union. it is accepted that extra production has
resulted from this very significant investment, but it
has also had the beneficial effect of the creation of
additional employment in Castlecomer which has risen by
approximately twelve jobs since the programme
commenced. Indeed on the employment front, it is
pointed out that Comer International Limited is one of
the few companies in the textile industry which has
provided secure and continuous employment over many
years against a background where many companies in this
industry have found it necessary to engage in lay-offs
or short-time working as a result of the recession in
the industry.
(vii) The Company is not prepared to concede either of claims
(b) or (c). The concession of 2 days additional
holidays would add 1% to the Company's costs, at a time
of fierce competition. The current level of service
pay is the norm throughout the industry, and the
Company can see no justification for increasing it.
RECOMMENDATION:
9. Having considered the submissions made the Court recommends
(a) The basic rate should be established at #120 per week
with effect from 1st December, 1986.
(b) An increase of 6% on basic rate with effect from 1st
January, 1987 in respect of an agreement to terminate
on 31st December, 1987.
The Court does not recommend concession of claims for additional
leave or increased service pay.
~
Signed on behalf of the Labour Court
John O'Connell.
_____________________________
Deputy Chairman
14th May, 1987
P.F./J.C.
CD87188 THE LABOUR COURT LCR11176
CC8776 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11176
Parties: COMER INTERNATIONAL LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
Claim under the 26th wage round on behalf of 100 workers for:
(a) A 12% increase on basic pay.
(b) An additional 2 days annual leave (20 days at present).
(c) An increase in service pay from 10p to 20p per week per
year of service.
Background:
2. The Company is engaged in the production of spun yarn for the
knitting and weaving industries. The 25th wage round expired for
the workers here concerned on 31st October, 1986. The Union on
behalf of the workers served the above mentioned claim on the
Company.
The Company responded, at local level, with an offer of 3% for 12
months, with no offer on annual leave or service pay. No
agreement was reached at local level, and on 12th January, 1987,
the matter was referred to the conciliation service of the Labour
Court. A conciliation conference took place on 5th March, 1987.
The Company's position at conciliation remained 3% over 12
months. This position remained unacceptable to the Union, which
referred to productivity improvements at the plant due to the
introduction of new machinery. As agreement could not be reached,
the matter was referred to the Labour Court for investigation and
recommendation on 9th March, 1987. A Court hearing took place in
Kilkenny on 7th April, 1987.
Union's arguments:
3. (a) In late 1984 Comer Mills announced a 3 year major
capital investment plan which is now nearing
completion. The cost of same is forecast at #3 million
with approximately #1 million to be funded from the
I.D.A. One of the factors for the parent Company
choosing Castlecomer for the plan was the level of
achievement attained there despite the fact that the
workers were working with machinery that was older than
elsewhere. The parent and local Company, therefore
have demonstrated their confidence in the ability and
performance of the Castlecomer workforce. As a result
of the total co-operation exhibited by the workers
coupled with the introduction of new machinery mill
output has improved on a weekly basis from 26.2 tons to
37.5 tons and will eventually be in excess of 45 tons.
This 43% to 71% increase is far in excess of the 25%
increased capacity originally forecast and planned for
this investment package.
(b) This massive increase in output will be partially
offset by the addition of approximately 14 new
employees, but an examination of the downturn in the
labour cost of each ton produced should leave the Court
in no doubt but as to the validity of the claim
(details with Court).
(c) The workforce in Comer Mills followed the philosophy
which we hear today from sources such as the I.D.A.,
F.U.E., and indeed the Labour Court itself. They
didn't say no to change, new machinery, changed
workloads - they assisted where possible and it is time
that they realise the fruits of their labour. This is
essential not only from a wage round perspective, but
also having regard to maintaining credible industrial
relations in the plant.
The objective of capital investment should be better
and secure employment - all the financial indications
point to the fact that it is now time to compensate the
labour element for their productivity achievement.
(d) As a result of an agreed system for the use of casual
labour the Company in Castlecomer finds itself in the
position of effectively never having to cover sickness
or absenteeism by overtime. There is a pool of casual
workers available in the area and called upon by the
Company to cover same whenever the need arises
without any additional cost to the Company. There are
no resultant overtime payments at time and a half or
double time as would be the case if this system did not
apply, and which as the Court is aware is the case in
virtually all other employments. Indeed, the Court
will recall the fact that for this concession alone
there are many firms that would be prepared to concede
a considerable pay increase as they would not be faced
with increased wage costs of at least .50% for each 1%
absenteeism which would be the case if this system did
not apply. It should in fact be noted that this system
does not apply in the Company's Bunbeg plant, so
employees there have an opportunity to enhance their
basic wage, (which is the same as at Castlecomer).
This facility does not exist for the workers in
Castlecomer.
(e) The Company in pay negotiations and discussions has
constantly identified the need to produce competitively
with its counterparts in northern Europe. However, an
examination of labour costs in the textile industry in
these countries as outlined by "Incomes Data Services,
1986" reveals that rather than being disadvantaged in
this regard Comer Mills is at a further advantage.
This advantage has been further enhanced by the 8%
devaluation of the IR #. in August, 1986, (details
supplied to Court).
(f) Wages in Comer Mills have risen by 4.50% less than that
of the average private sector settlements since April,
1983, that is, the 23rd, 24th and 25th pay rounds. The
lower Comer Mills settlements have taken 10.25% longer
to achieve. The net difference, having regard to both
the payment and time factors is 7.50% (details supplied
to Court).
(g) The settlement suggested for the Castlecomer plant of
Comer International are out of line with the Irish
Textile Industry (details with Court). A local Company
which is a particularly apt comparator received a one
phase 6% settlement for 12 months, effective from 1,
September, 1986 (details with Court).
(h) When the above points are carefully examined, that is,
the increased productivity, output, cost reductions
through elimination of overtime, labour costs relative
to competitors, declining rise in basic wage rates in
Comer relative to the private sector, area settlements,
and the textile industry, it can only be concluded that
there now exists no valid reason to justify the
continuing deterioration in the level of pay of this
group of workers. Given the very considerable
advantages which the firm enjoys in relation to the
above points, it is time that the shortfall be
redressed and that a halt be called to below average
settlements in this firm which have left the workers on
a basic wage of #116.34 gross which when ravaged by
taxation reduces to less than #90,00 per week. This
leaves the workers #18.00 below the #134.00 threshold
identified by the Union as the weekly basic
necessitating immediate attention under the higher
earnings for lower paid campaign. Comer Mills is a
buoyant, healthy firm in every way except with regard
to workers' wage levels and it should be noted that the
Company's willingness of some years ago to throw out
their accounts to the Union has been replaced by a
marked degree of caution and reluctance in this regard
as our members produce a quality product at greatly
enhanced levels of output.
4. (i) The Union are claiming an additional 2 days holidays
bringing the total to 22 days and we would suggest that
these 2 days and perhaps 2 to 3 of the existing
holidays be taken as floating days. This method would
be ideally suited to Comer where a supply of casual
workers exists to do holiday relief thereby enabling
the Company to maintain production levels and indeed if
2 to 3 of the existing holidays were taken in this way
it would further increase productivity while
maintaining the stability of all fixed costs. This
would help to alleviate the cost to the Company. In
comparison with its European competitors, Comer
International emerges poorly as regards holiday levels
(details supplied to Court). Workers in Ireland
continually hear of the need to emulate their European
counterparts in work practices etc. - It is time for
employers and their organisations to put into practice
their own philosophy and agree conditions with Irish
workers which have long been the practice in Europe.
Certainly, now is the time for the holidays in Comer to
be increased given the increased output, the method
proposed for the taking of the holidays and the record
of European counterparts.
(j) The claim in regard to service pay is to increase the
existing level of service pay which starts at 30p after
3 years, rising by 10p per week per year of service.
This schedule of payments has been in existence for
over 10 years and despite the massive increases in
inflation (over 100% over the past 10 years) has
remained constant. It is now necessary to increase
same by 100% to bring them into line with their
introductory position. The principle of service pay is
not in dispute, the cost of concession of the claim is
minimal, and indeed the Company indicated no reluctance
to concede this aspect of the claim.
Company's arguments:
4. (i) Over recent years the Union have indicated that their
claims contain an element to enable workers to regain
purchasing power vis-a-vis the rate of inflation. The
workers concerned have kept well ahead of inflation
since the establishment of the Company in 1968. In
this context the effect of the 25th pay round
settlement of #7.75 per week over a fourteen month
period was the equivalent of 7.13% which in turn is the
equivalent of 6.11% pay increase over a twelve month
period to November, 1986. The quarterly inflation
figures over the period were mid-February, 1986 : 4.6%;
mid-May : 4.4%; mid-August : 3.1%; mid-November 3.2% -
an average of 3.82% over the equivalent twelve month
period during which pay rates increased by 6.11%.
(ii) Apart altogether from international competition, it is
important to stress the position of the Company
vis-a-vis textile producers in this country. The
current rates of pay of the workers here concerned are
significantly above those in the eleven companies
covered by the Woollen and Worsted Joint Industrial
Council. The average level of weekly earnings of those
companies is #136.14. The pre-26th round basic pay in
the Company is #116.39 per week and the average bonus
is #38.87 per week, giving a total remuneration for a
40 hour basic week of #155.26 per week. This indicates
that the workers concerned are #19.12 per week better
off than their counterparts throughout the remainder of
the industry.
(iii) The Company is engaged in an extremely competitive
international market and has pointed out to the Union
over several years that a continuation of pay increases
well in excess of those in competitor countries will
erode the Company's market and cause serious problems
for Management and staff alike. Notwithstanding the
fact that inflation in Ireland has dropped
significantly over recent years, it has now only come
in line with some competing countries, but there are
still a number of countries with a level of inflation
less than that in the Republic of Ireland. The Irish
level of wage increase would probably come in line with
competing countries if pay increases matched the
level of inflation currently applying in Ireland.
However, such is not the case and Ireland continues to
agree wage increases at a level significantly in excess
of inflation.
(iv) Because of international competition and over supply in
the world market, Comer International has had to
cut-back on price in order to maintain its position in
the marketplace. For the Company to do otherwise would
lead it down the path to retrenchment and in these
markets once a foothold is lost it is extremely
difficult to regain it.
(v) Some emphasis has been placed by the Union on
productivity as a justification for increases in excess
of industry norms. It should be emphasised that over
recent years the Company has been engaged in
significant capital investment which has resulted in
the installation of up-dated plant and machinery within
the mill. It has been emphasised many times to the
trade union that such an investment was absolutely
essential to enable the Company to maintain its
position as a modern textile mill. Failure to keep
pace with such development could only result in the
Company's inability to keep pace with international
competition and would inevitably result in a downwards
spiral of sales and production.
(vi) Workloads within the Company are established, measured,
and proven to ensure that equity applies. The
Company/Union agreement also makes provision that in
the event of workloads being queried, they are open to
examination by industrial engineers nominated by the
Union. it is accepted that extra production has
resulted from this very significant investment, but it
has also had the beneficial effect of the creation of
additional employment in Castlecomer which has risen by
approximately twelve jobs since the programme
commenced. Indeed on the employment front, it is
pointed out that Comer International Limited is one of
the few companies in the textile industry which has
provided secure and continuous employment over many
years against a background where many companies in this
industry have found it necessary to engage in lay-offs
or short-time working as a result of the recession in
the industry.
(vii) The Company is not prepared to concede either of claims
(b) or (c). The concession of 2 days additional
holidays would add 1% to the Company's costs, at a time
of fierce competition. The current level of service
pay is the norm throughout the industry, and the
Company can see no justification for increasing it.
RECOMMENDATION:
9. Having considered the submissions made the Court recommends
(a) The basic rate should be established at #120 per week
with effect from 1st December, 1986.
(b) An increase of 6% on basic rate with effect from 1st
January, 1987 in respect of an agreement to terminate
on 31st December, 1987.
The Court does not recommend concession of claims for additional
leave or increased service pay.
~
Signed on behalf of the Labour Court
John O'Connell.
_____________________________
Deputy Chairman
14th May, 1987
P.F./J.C.