Labour Court Database __________________________________________________________________________________ File Number: CD87733 Case Number: LCR11501 Section / Act: S67 Parties: IRISH GLASS BOTTLE LTD - and - ITGWU |
Claim for a wage increase under the 27th wage round.
Recommendation:
5. The Court, having considered the submissions from both
parties, recommends as follows:-
Division: Ms Owens Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87733 THE LABOUR COURT LCR11501
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11501
Parties: IRISH GLASS BOTTLE LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim for a wage increase under the 27th wage round.
Background:
2. This claim concerns approximately 400 general workers. The
26th wage round terminated for these workers on 31st July, 1987.
The Union claimed an 8% wage increase. The Company did not want
to discuss any wage agreement until a rationalisation programme
was agreed and implemented. No agreement was reached through
local negotiations and on 10th September, 1987 the matter was
referred to the conciliation service of the Labour Court. A
conciliation conference was held on 25th September, 1987 but no
agreement was reached. On the same date the case was referred to
the Court for investigation and recommendation. A Labour Court
hearing was held on 22nd October, 1987.
Union's arguments:
3. (i) The Company is trading profitably and made a profit of
#1,297,554 in the year ending 24th June, 1986. Results
for this year are not available but indications are
that there will be an improvement on last year's
figures.
(ii) The value of the punt has declined significantly since
this time last year bringing an improvement in the
Company's competitive position.
(iii) The Company's future prospects have been enhanced with
the advent of E.E.C. legislation providing for the
restriction on the use of cans and plastic containers.
(iv) The Irish Glass Group's overall financial position will
be improved by the closure of a major lossmaker Irish
Plastic Packaging.
(v) The decline in interest rates must have a significant
effect on the Company's borrowings.
(vi) The Company is still benefiting from the effects of the
reorganisation/rationalisation agreement concluded in
1983.
(vii) The trend for the 27th wage round is clearly
established. To date there have been 210 settlements
covering 13,000 workers. These have produced an
average cumulative increase of 5.4% for an average
duration of 13.3 months.
(viii) As this claim was due and was in the course of
negotiation prior to the 19th November, 1987 it would
not be subject to the terms of the programme for
National Recovery if that programme is agreed on that
date.
(ix) The Union's claim for an 8% increase was submitted as a
negotiable figure. In all the circumstances the
workers should get a wage increase in line with the
trends for the wage round and with Labour Court
recommendations already issued on this round.
(x) It is not acceptable that the Union's wage claim should
be linked with reorganisation proposals.
Company's arguments:
4. (a) In recent years the Company's sales of glass containers
has declined by over one third. This decline has been
caused by an increase in the importation of packed
goods leading to a reduction in demand for the
Company's customers products (details supplied to the
Court). The basic problem for our customers is the same
as our own in that the cost structures for Irish
industry make it impossible for them to compete.
The Company is consequently under pressure to reduce
prices to retain sales volume.
(b) The pressure on the Company has intensified over the
past two years with the IR# going from 82p to 90p
Sterling. The cost of imports from the U.K. dropped by
10% as a result. In addition prices on the U.K. market
have also dropped by a further 4% to 5%.
(c) Due to lower energy costs the Company's results for the
year ending June, 1987 are better than anticipated.
This saving on energy costs will not be available to
the Company again. In addition the prospects are for
further increases in energy costs. The higher energy
costs are leading to increases in costs elsewhere. The
combination of this increase in costs and the pressure
on selling prices will result in substantially lower
profits in the coming year and into the future.
(d) The Company has failed to achieve a reasonable return
on sales since 1974. It must be borne in mind that
this is a capital intensive industry requiring regular
capital expenditure and also requires substantial
working capital because of the seasonal nature of the
business.
(e) In 1984, 1985 and 1986 the Company sought to achieve
self-financing wage increases through rationalisation.
In each year the Company, after protracted
negotiations, eventually conceded a wage increase not
linked to productivity, but with commitments of varying
degrees from the employees to enter into negotiations
on rationalisation. However the situation was that in
each of those years the workers received increases but
the Company did not achieve any rationalisation at all.
Because of this history, the Company is determined this
year to achieve rationalisation prior to discussing a
wage increase.
RECOMMENDATION:
5. The Court, having considered the submissions from both
parties, recommends as follows:-
~
4% increase from 1st August, 1987 and the agreement to
terminate on 31st October, 1988.
~
Signed on behalf of the Labour Court
Evelyn Owens
_________________________
Deputy Chairman
2nd November, 1987.
T.O'M/J.C.