Labour Court Database __________________________________________________________________________________ File Number: CD87111 Case Number: LCR11189 Section / Act: S67 Parties: ARKLOW POTTERY - and - ITGWU |
Claim on behalf of approximately 150 operatives for a wage increase under the 26th wage round.
Recommendation:
5. In view of the difficulties still being experienced by the
Company, the Court does not consider it possible to recommend an
increase at present. However, having regard to the efforts of all
concerned to overcome these difficulties, the Court proposes that
it further review the claim in September and make a specific
recommendation in the light of the Company's performance and
prospects as they then appear.
Division: Mr O'Connell Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD87111 THE LABOUR COURT LCR11189
CC861972 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11189
Parties: ARKLOW POTTERY LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim on behalf of approximately 150 operatives for a wage
increase under the 26th wage round.
Background:
2. The Company employs a total of 180 people in Arklow and is
engaged in the manufacture of tableware, primarily for export. It
has experienced severe financial losses for the past number of
years and is currently funded by a Japanese company Nortaki and
Foir Teoranta.
In late 1986, the Union sought an unspecified wage increase under
the 26th round. The Company responded by informing the Union that
due to its financial position, it would be unable to grant any
wage increase for 1987. As local level discussions failed to
resolve the issue the Union referred the matter to the
conciliation service of the Labour Court on the 19th November,
1986. A conciliation conference on the 28th January, 1987, failed
to resolve the dispute and it was referred to the Labour Court for
investigation and recommendation. A Court hearing was held on the
9th April, 1987.
Union's arguments:
3. (a) The last wage increase received by the workers
concerned was in December, 1984, when 5% for twelve
months was paid. No increase was paid the following
year, due to the Company's poor financial position and
in addition, the bonus scheme was changed which
resulted in some workers receiving small increases and
others substantial reductions. Because it was aware of
the Company's financial situation, the Union
recommended to the staff that they accept this
situation. However, it was made clear to the Company
that there would have to be an increase in basic pay at
the end of 1986.
(b) The workers concerned have given full co-operation to
the Company on the proposals for the new bonus scheme,
which has yielded higher production. In addition,
despite their long service, they have not pushed for
sick pay or pension schemes and have taken smaller
increases than the national norm under earlier wage
rounds. However, the stage has been reached where the
goodwill shown by them could be seriously undermined if
the Company is not prepared to negotiate some increase
under the present round.
(c) The workers' hourly rates are low, ranging from #1.85
to #3.10 per hour while the bonus earnings can vary
between #26 and #15 depending on production yield.
Company's arguments:
4. (i) The Company has managed, following rationalisation,
to reduce its losses, eliminate its interest charges
and achieve greater productivity. It must now,
however, stand on its own resources as the parent
company is no longer prepared to subsidise losses.
(ii) Despite losses in excess of #4,000,000 the Company
has managed to increase earnings consistently; by 5%
per annum for 1985, 1986 and 1987, (details supplied
to the Court).
(iii) 70% of the Company's output is sold on the U.S.A.
market where unfavourable exchange rates have not
compensated for price increases achieved in this
market. Exchange rate losses on foreign loans in
1986 alone, accounted for a #250,000 loss.
(iv) The Company's financial backers/shareholders will no
longer subsidise its losses. Any further wage
increase would increase losses, projected at #215,000
for 1987 and would not be provided for by the
shareholders. In addition any further increase in
wage costs cannot be sustained. The Company has gone
a long way towards returning to profitability in a
very difficult and competitive market. Labour costs
are the Company's single largest cost, about 60% of
sales revenue, and any further increase in this area
will seriously undermine the Company's ability to
remain in business.
(v) An increase of 5% in earnings in 1987 will more than
compensate employees for increases in the cost of
living, with inflation currently at 3.4% for the year
to mid-February 1987.
RECOMMENDATION:
5. In view of the difficulties still being experienced by the
Company, the Court does not consider it possible to recommend an
increase at present. However, having regard to the efforts of all
concerned to overcome these difficulties, the Court proposes that
it further review the claim in September and make a specific
recommendation in the light of the Company's performance and
prospects as they then appear.
~
Signed on behalf of the Labour Court.
John O'Connell
____15th____May,____1987. ___________________
D. H. / M. F. Deputy Chairman