Labour Court Database __________________________________________________________________________________ File Number: CD87218 Case Number: LCR11177 Section / Act: S20(2) Parties: FINSA PRODUCTS - and - MPGWU |
Claim, by the Union on behalf of approximately 100 production workers, for the elimination of an alleged discrepancy in the wage rates.
Recommendation:
5. The Court is satisfied that there has been a shortfall in the
wages of the employees herein concerned and accordingly recommends
that this shortfall be made up in the following manner:
3% from 1st January, 1988 and,
3% from 1st January, 1989 and,
2% from 1st January, 1990.
The Court records that this dispute was referred under Section
20(2) of the Industrial Relations Act, 1969, and that the parties
have agreed to be bound by the Court's recommendation.
Division: Ms Owens Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD87218 THE LABOUR COURT LCR11177
SECTION 20(2) INDUSTRIAL RELATIONS ACT, 1969
RECOMMENDATION NO. LCR11177
Parties: FINSA FOREST PRODUCTS LIMITED
and
MARINE PORT AND GENERAL WORKERS' UNION
Subject:
1. Claim, by the Union on behalf of approximately 100 production
workers, for the elimination of an alleged discrepancy in the wage
rates.
Background:
2. The Company bought the assets of Chipboard Products Limited
(C.P.L.), which had gone into liquidation in November, 1983. At
the time of re-opening an agreement was reached whereby there
would be a wage freeze from June, 1984, to June, 1985, followed by
an increase for the next 12 months of the Consumer Price Index
(C.P.I.) less 3%. This gave rise to a wage increase of 2.2%. The
agreement expired on 31st May, 1986. As part of the settlement of
the 26th Round, in which 11% over 2 phases was agreed, it was also
agreed that the Union's claim, that a shortfall in rates existing
in the Company should be referred to the Court under Section 20
of the Industrial Relations Act, 1969. The Union claimed that
before the Company took over and re-opened the works, the basic
rate in the Company was one of the highest in the area. This is
no longer the case. The Union felt that the rates have not kept
pace with increases achieved in other industries and those of a
similar nature. The Union wished to restore the Company's
relative position in the area. Before the case was referred to
the Labour Court, the parties agreed among themselves to use the
conciliation service of the Labour Court. Agreement could not be
reached at conciliation conferences held on 17th October, 1986 and
on 25th February, 1987, therefore as previously agreed the matter
was referred to the Labour Court on 18th March, 1987. A Court
hearing took place in Limerick on 22nd April, 1987. (Prior to the
Court hearing the parties agreed to be bound by the Court's
recommendation).
Union's arguments:
3. (a) The workers wages in this Company are out of line both
with industry in general and also with comparable
companies in the same manufacturing sector. Indeed,
the workers are at a disadvantage compared with other
workers doing the identical job under identical
conditions (details provided to the Court).
(b) According to figures from the Federated Union of
Employers (F.U.E.) the movement in the inflation rate
from 1983 to February, 1987, has been 30.1%. When this
is compared with the workers wage increases over the
period, there is a shortfall of 16.9%.
(c) Further F.U.E. figures show earnings have increased an
estimated 36.3%. Taking away the increases achieved by
the workers concerned of 13.2%, would leave a shortfall
of 23.1%.
(d) The Company is now operating on a much more favourable
level than the 'old' Company. It now has less workers
employed, and has practically doubled production.
These particular circumstances have come about as a
consequence of both the effort and dedication of the
workforce concerned. Taking the foregoing facts into
consideration the Union believes that the shortfall
must be eliminated over the shortest period possible.
Company's arguments:
4. (i) The Company recognised that there was a shortfall
against C.P.I. in the increase applied from the 1st
June, 1985. In its offer to the Union in negotiations
on the 1st June, 1986 wage agreement, the Company
offered to make up the shortfall by applying an
increase of 1.5% over the C.P.I. in each of the
following two years, thus making up for this 3%
shortfall within a two year period.
(ii) Comparisons with other companies wage rates are not an
acceptable guideline. The Company has an old plant
with obsolescent machinery rescued after two
liquidations, manufacturing a commodity type product
with a low selling price and operating in a competitive
market. Every penny of expenditure must be controlled
if the Company is to survive.
(iii) A comparison of rates of pay with those of companies
who are in a similar position to the Company, in that
they are a major employer in a small local town,
indicates that the Company's rates of pay compare
favourably (details provided to the Court).
(iv) If there is a shortfall in wage rates being paid by the
Company, only the shortfall since the Company took over
in June, 1984, can be considered. The increases
applied by the Company total to the same as the
increases in the C.P.I. Against the average increase
in wages there is a shortfall of 7.3%. The C.P.I. has
been the criterion used in all negotiations between the
Company and the Union and should be the criterion
applied in this instance.
(v) The Company has not been able to recover any of its
increased costs from the market place and due to the
market situation will only be able to apply a small
price increase over a limited range of products and
customers. To offer the increase sought by the Union
would put at risk the future of the Company, as in
order to survive it will be imperative that the Company
becomes a profitable and viable operation.
RECOMMENDATION:
5. The Court is satisfied that there has been a shortfall in the
wages of the employees herein concerned and accordingly recommends
that this shortfall be made up in the following manner:
3% from 1st January, 1988 and,
3% from 1st January, 1989 and,
2% from 1st January, 1990.
The Court records that this dispute was referred under Section
20(2) of the Industrial Relations Act, 1969, and that the parties
have agreed to be bound by the Court's recommendation.
~
Signed on behalf of the Labour Court
Evelyn Owens
_________________________
Deputy Chairman.
21st May, 1987.
B.O'N./J.C.