Labour Court Database __________________________________________________________________________________ File Number: CD87714 Case Number: LCR11505 Section / Act: S67 Parties: N.E.T. - and - ITGWU;NEETU ETU UCATT;ASTMS TASS FWUI |
Claim on behalf of approximately 650 workers for a wage increase under the 26th wage round.
Recommendation:
1987
Division: Mr O'Connell Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87714 THE LABOUR COURT LCR11505
CC87685 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR LCR11505
Parties: IRISH FERTILIZER INDUSTRIES LIMITED
(FORMERLY NITRIGIN EIREANN TEORANTA)
and
GROUP OF UNIONS
(ITGWU, FWUI, NEETU, UCATT, ETU, ASTMS, TASS, AEU)
Subject:
1. Claim on behalf of approximately 650 workers for a wage
increase under the 26th wage round.
Background:
2. The 25th wage round for the workers expired at the end of
November 1986. The Unions served various claims on the Company in
respect of the 26th wage round (unspecified). A meeting took
place with all unions on 13th April, 1987 and it was agreed that a
central claim would be processed in respect of the 26th wage round
covering all unions. The Unions sought an increase in line with
settlements in industry generally in respect of the wage round.
The Company's position was that due to losses in 1985, 1986 and
continuing into 1987 it was not in a position to offer any
increase and proposed a twelve month pay pause. On 16th April,
1987 the matter was referred to the conciliation service of the
Labour Court. A conciliation conference was held on 15th June,
1987. The Unions stated that they were seeking a 7% increase over
12 months with no pay pause. The Company reiterated that it was
seeking a pay pause due to its financial situation. No agreement
could be reached and on 23rd September, 1987 the matter was
referred to the Labour Court for investigation and recommendation.
The Court investigated the dispute on 15th October, 1987.
Unions' arguments:
3. (i) There has been a severe erosion in the workers' living
standards over the past eight years due to inflation,
taxation and increased PRSI and health contributions.
From December 1979 to March 1987 average weekly earnings
increased by 110% compared to an increase in the
Consumer Price Index of 113%. A study has shown that
the living standards of a typical working class family
with two children on average male industrial earnings
are 10% lower than in December, 1979.
(ii) Due to the erosion in earnings the trade union movement
embarked on a national campaign in respect of the 26th
wage round. The pattern that has emerged for both
public and private sectors has been that out of 774
settlements the average cumulative increase has been
6.8% and the average duration 13.7 months. This
represents an annualised increase of approximately 6%.
(iii) During the past thirteen years the Company has had
trading profits in each year with the exception of 1977.
Between 1981 and 1985 trading profits have ranged from
#23.7m to #41.8m. Approximately 450,000 tonnes of
ammonia and 300,000 tonnes of urea are produced annually
and used both in Ireland and exported abroad. The
Company also produces other substances and has
contributed to the establishment of a heavy chemicals
industry in Ireland. Output per worker is high and
compares well on a european basis and the trading
profits show a satisfactory performance by the workers.
The reduction in the workforce from 1,665 in 1979 to its
present figure is a further indication of the
contribution made by the workers to high output with low
unit costs.
(iv) The kernel of the Company's financial problems has been
the escalation in the cost of the Marino Point which
was not the workers fault. It was understood that with
the formation of the new company it would be in a better
trading position. The workers are entitled to a
reasonable wage increase in line with settlements
throughout industry. The Court has established a
pattern of increases in recommendations for this wage
round including other State owned companies some of
which have similar borrowing problems to this Company.
Company's arguments:
4. (a) During 1986 all western european producers incurred
substantial losses and the industry was faced with
intense competitive pressure. There was an over supply
world-wide of nitrigin fertilisers and imports from the
eastern block caused a collapse in western european
prices. This Company had to reduce prices substantially
to retain market shares. Ammonia prices are now 50%
lower than in 1980 and urea prices are now 60% below the
1980 level in real terms. This situation has put a
severe strain on finances and reversed the profits of
recent years. On the home market, after many years of
steady growth, the demand for nitrigin has plateaued.
(b) The Company's results for the year ending 31st December,
1986, showed a net loss of #19.06m which was almost
totally due to the collapse in sales prices. The results
for the first nine months of 1987 show losses running at
#14m. Any further increases on the wages, salaries and
associated overhead costs will further reduce the
Company's competitive position.
(c) Due to the Company's present difficult financial
and trading conditions a twelve month's pay pause is
sought. This is reasonable taking into account the
substantial increases that have taken place in base rates
in the Company from adjustments under the 25th wage round
(details supplied to the Court).
Recommendation:
5. Having regard to the current market conditions in which the
Company operates the Court recommends that the Company offer:
(a) an increase of 2% with effect from 1st April, 1987,
(b) a further increase of 2% with effect from 1st October,
1987.
in respect of an agreement to terminate on 1st March, 1988, and
that the offer be accepted by the Unions' concerned.
~
Signed on behalf of the Labour Court
John O'Connell
3rd November, 1987. -----------------
UM/PG
Deputy Chairman