Labour Court Database __________________________________________________________________________________ File Number: CD87573 Case Number: LCR11407 Section / Act: S67 Parties: ARLINGTON LTD - and - ITGWU |
Claim under the 26th wage round for an increase of 10% in basic rate on behalf of approximately 380 workers employed in a wide range of categories.
Recommendation:
5. The Court having considered the submission from both parties
recommends the following increase.
#3.50 per week for seven months from 1st June, 1987,
and a further
#3.50 for seven months (14 month agreement).
Division: Ms Owens Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87573 THE LABOUR COURT LCR11407
CC87929 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11407
Parties: ARLINGTON LIMITED
(REPRESENTED BY THE FEDRATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim under the 26th wage round for an increase of 10% in
basic rate on behalf of approximately 380 workers employed in a
wide range of categories.
Background:
2. The Company which was established in 1967 manufactures costume
jewellery and decorative soap mainly for the European market.
Currently the Company employs a total of 483 workers. There are
nine grades of workers in the Company and their basic rates of pay
ranges from #138.63 per week to #220.10 per week. The 25th wage
round expired on 31st May, 1987. The Union lodged the above
mentioned claim under the 26th wage round at a local meeting held
on 19th May, 1987. At subsequent meetings held at local level the
Company proposed a fixed sum increase of #2.50 from 1st June, 1987
with a further increase of #2.50 from 1st January, 1988, agreement
to expire on 31st July, 1988. The Union modified their claim to a
two phased increase comprising 7% for twelve months and 1% for two
months. As no further progress could be made the matter was
referred to the conciliation service of the Labour Court on 3rd
June, 1987. A conciliation conference was held on 8th July, 1987.
As no agreement could be reached both parties agreed to a referral
to the Labour Court for investigation and recommendation. A
Labour Court hearing was held on 7th August, 1987.
Union's arguments:
3. (a) Traditionally the Company has attempted to foster a
high product quality-high wage opportunity work
environment. This principle is in line with the
"family and friendly spirit of Avon" which has as its
stated objective the provision of workers with "An
opportunity to earn in support of their well being and
happiness" (Ref. the Company's Blue Rule Book, page
2-3).
While previous round settlements may appear generous
(details supplied to the Court) their duration have
been of a longer duration when compared to other local
settlements. In addition no bonus or enhanced earnings
are payable by the Company. When the rates of pay of
the majority of the workers concerned are compared with
other workers (details supplied to the Court) it can be
seen that the workers concerned are by no means
overpaid bearing in mind the highly personalised
skilled work process involved.
(b) The Company's offer does not compare favourably with
the norm for the 26th wage round (details supplied to
the Court).
(c) The workers have contributed in achieving greater
productivity. Indeed some suggestions regarding cost
efficiencies and greater productivity have come from
the worker's side. However, these initiatives have not
been acted upon by management side. It is the Union's
contention that motivation for increased productivity
and greater efficiency can be brought about by
enhancing the workers earnings rather than restricting
them thus placing the Company in a stronger position to
deal with the market difficulties which they are now
facing.
(d) The Company has made comparisons between their plant in
Puerto Rico and here regarding comparative wage costs.
However, the levels of capitalisation at the various
plants have to be taken into account, as well as the
fact that Puerto Rico is a priority plant and also its
proximity to the U.S. markets. It is not disputed by
management that on a pound for pound basis Irish
workers are as productive as their counterparts
anywhere in the world.
(e) The Company have consistently returned positive
financial reports and are therefore well able to pay an
increase at least in line with the 26th wage round.
Company's arguments:
4. (i) Since the Company's establishment the workers have
benefited from the relative good performance of the
Company as can be evidenced from the excellent
remunerative package (details supplied to the Court).
However from a peak production of 9.3 million units
produced in 1984 the Company's performance has declined
on an annual basis and continue to do so. Steps must
now be taken to redress this situation.
(ii) The primary reason for the Company's decline in
performance has been its lack of cost competitiveness.
The Company cannot sell a sufficient volume of units at
a price it can afford to make these units at due to
competition from within and outside of the Arlington
Group. The Group has a plant in Puerto Rico producing
a similar line of products of 33 1/3% more cost
efficient which has led to a situation where it is
cheaper to import product from this plant for the
European market.
(iii) The Company's proposal on pay was extremely fair and
reasonable designed to secure the workers full
co-operation against a background of serious
difficulties. Given the current low rates of inflation
it represents an ideal opportunity to adopt a realistic
approach to wage increases in the interests of longer
term viability. In this regard the Company's proposed
increase in cumulative terms actually exceeds the rates
of inflation for the vast majority of the workers.
RECOMMENDATION:
5. The Court having considered the submission from both parties
recommends the following increase.
#3.50 per week for seven months from 1st June, 1987,
and a further
#3.50 for seven months (14 month agreement).
~
Signed on behalf of the Labour Court
Evelyn Owens
_________________________
Deputy Chairman
10th September, 1987
M.D./J.C.