Labour Court Database __________________________________________________________________________________ File Number: CD87582 Case Number: LCR11442 Section / Act: S67 Parties: ICOS - and - ITGWU |
Claim, on behalf of approximately 80 machine operators, for a wage increase under the 27th wage round plus a productivity payment.
Recommendation:
5. The Court, having considered the submissions made by the
parties, recommends a 27th round pay settlement of
(i) a 3% wage increase for twelve months effective from
the 1st April, 1987 and
(ii) a further increase of 2% of basic pay in respect of
on-going productivity effective from the 1st
October, 1987.
Division: Mr Fitzgerald Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD87582 THE LABOUR COURT LCR11442
CC87907 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 11442
PARTIES: IRISH CO-OPERATIVE SOCIETY LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION (LIMERICK NO 2 BRANCH)
Subject:
1. Claim, on behalf of approximately 80 machine operators, for a
wage increase under the 27th wage round plus a productivity
payment.
Background:
2. The 26th wage round for the workers concerned expired on the
31st March, 1987. On the 22nd May, 1987, at a local level
meeting, the Union lodged a claim for a 12% wage increase for
twelve months and for a #15 per week increase in respect of
productivity arising from a rationalisation programme implemented
in 1985. At a further meeting on the 8th June the Company
responded by offering a 2% wage increase for twelve months and by
rejecting the claim for an increase arising from productivity.
The Union claims that the Company gave a commitment to negotiating
on the productivity issue when it returned to profitability. The
Company rejects the suggestion that it gave any commitment to
paying productivity but accepts that the Union had reserved its
right to pursue this claim. The Union modified its claim to a 9%
increase in wage rates and an increase of #10 per week in relation
to productivity but this was unacceptable to the Company and the
matter was referred to the conciliation service of the Labour
Court. A conciliation conference arranged for the 17th June was
cancelled because of alleged unofficial action taken by the
workers. At a conciliation conference, held on the 21st July, no
agreement was possible and the issue was referred to the Labour
Court for investigation and recommendation. A Court hearing was
held in Limerick on the 15th September, 1987.
Union's arguments:
3. (a) The Company is long-established with a record of
profitability. Although it may not have done well in
some years this has now been reversed both by
rationalisation and co-operation from the workforce.
(b) The Company's offer in relation to the cost of living
increase takes no cognisance of the fact that in
addition to the quoted inflation rates, the take-home
pay of the claimants is constantly eroded by such
factors as increases in taxation and P.R.S.I., loss of
tax allowances in relation to interest charges on home
mortgages and increases in rates in local authority
housing charges.
(c) The offer is way out of line with local settlements
(details supplied to the Court).
(d) In relation to productivity, the claimants give a
level of flexibility with regard to operating
machinery, standing in for absent colleagues, manning
operations with short crews etc. which would be
unheard of elsewhere . It is through this flexibility
and taking on extra work that the level of output has
soared in the past two years despite reduced staffing.
(e) The workers have invested this commitment in the
Company and allowed financial recognition of their
contribution to be deferred in the last two wage
rounds. There is a very strong feeling that the
Company has shown itself unwilling to negotiate on
this issue. Any diminution of the voluntary
co-operation which would take place if financial
recognition is not given, would be very much to the
detriment of the Company.
(f) It is very clear from the increased output that the
underlying trend in this Company is toward
profitability and the Company has stated that it is
"in a position of optimism". It has invested in new
machinery and has built an extension to the factory
this year. The workers therefore believe that they,
as an asset, must also be invested in at this time.
Company's arguments:
4. (a) The Company is in a highly competitive market and in
these circumstances it is vital that it remains
competitive. As pay rates constitute a substantial
proportion of costs, improvements must be reasonable
both from the competitive point of view and from the
employee's point of view.
(b) The Company's rates are higher than in the majority of
its competitor companies (details supplied). In
addition to the basic rate, most of the workforce
receive a variety of differentials which increase the
basic rate and this consolidated rate then attracts
the shift premium. The employees also receive service
pay and a Christmas bonus.
(c) A substantial amount of overtime is also available to
the claimants.
(d) The Company is trying to keep its operation viable by
continuous on-going investment. This is enhancing
security of employment for the employees and is
therefore in everybody's interest. However, this
current investment has to be financed through
substantial borrowings and in order to try and secure
the future of the Company, these investments, which
are increasing unit costs, have had to be made.
(e) The rationalisation which took place in 1985 was
essential for the survival of the Company and without
it it would not be in business now. The greater
flexibility and co-operation which has been achieved
following from this rationalisation has helped to keep
it in business.
(f) It is against this background that the Company offered
an increase of 2% for twelve months and it has stated
that it is willing to pay a reasonable increase in the
current round. The Company would like the Court to
take the following factors into account when
determining what it considers to be a reasonable
increase -
- the Consumer Price Index is currently 2.8%.
- cost increases cannot be passed on in terms of
price increases (Company has not had a price
increase for three years).
- increases in the current round have in the main
tended to be between 1.50% - 2.50% below settlements in
the same companies in the previous round.
RECOMMENDATION:
5. The Court, having considered the submissions made by the
parties, recommends a 27th round pay settlement of
(i) a 3% wage increase for twelve months effective from
the 1st April, 1987 and
(ii) a further increase of 2% of basic pay in respect of
on-going productivity effective from the 1st
October, 1987.
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Signed on behalf of the Labour Court
5th October, 1987 Nicholas Fitzgerald
D.H./P.W. Deputy Chairman