Labour Court Database __________________________________________________________________________________ File Number: CD87590 Case Number: LCR11431 Section / Act: S67 Parties: HARRIS CALORIFIC (I) LTD - and - FWUI |
Claims under the 27th wage round for an increase in pay, additional annual leave and a shorter working week.
Recommendation:
5. Having considered the submissions made by the parties and
particularly having regard to the current trading position of the
Company, the Court does not recommend concession of any increase
at the present time. However the Court does recommend that the
parties meet in March of next year to consider the situation as it
then prevails. In the event of agreement still not proving
possible the Court would be prepared to hear the case again.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD87590 THE LABOUR COURT LCR11431
CC871046 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11431
Parties: HARRIS CALORIFIC (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
FEDERATED WORKERS UNION OF IRELAND
Subject:
1. Claims under the 27th wage round for an increase in pay,
additional annual leave and a shorter working week.
Background:
2. The Company involved in this case is a subsidiary of a U.S.
Firm, and is engaged in the manufacture of gas cutting and welding
equipment. The 26th wage round expired in the Company on 31st
May, 1987. The Union, on behalf of the workers, served a claim on
the Company for the following:
(i) 9% increase in rates of pay,
(ii) Additional days annual leave (currently 21 days) and,
(iii) Shorter working week - reduction from 40 to 39 hours.
The Company stated that it was not in a position to make an offer
on the 27th wage round, as the Irish Plant was now contributing to
overall Company losses, and this placed a question mark over the
Company's future. The main difficulty was the strength of the
dollar against European currency, in particular the Irish Punt.
As agreement could not be reached at local level, the matter was
referred to the conciliation service of the Labour Court on 1st
July, 1987. A conciliation conference took place on 27th July,
1987. Again the Company pleaded inability to pay, and made no
offer. On 30th July, 1987, the matter was referred to the Labour
Court for investigation and recommendation. A Court hearing took
place in Dublin on 21st August, 1987.
Union's arguments:
3. (i) It should be noted that there is a first rate record of
industrial relations over the eight year period of the
Company's history in Rathnew and that the Union has no
dispute with the local management in their approach to
the pay round.
(ii) Productivity in the Rathnew plant has increased over
the last two years and the workers have remained
flexible in relation to the introduction of new
machines and methods of production.
(iii) It is unrealistic to expect the workers to carry the
cost of the Dollar strength against the Punt which the
Company advanced as the main problem in not making an
offer on the 27th Round claim.
(iv) Settlements in the 27th Round have averaged 5.1% over
12.4 months and the Court has recommended a settlement
of 3% for 6 months, followed by 2% for 7 months (Labour
Court Recommendation No. 11270 refers).
(v) In view of the above the Union requests the Court to
have regard to the workers continued contribution to
the viability of the operation in making its
recommendation.
Company's arguments:
4. (a) The Company has always had good industrial relations
with the Union. In the past, agreements have always
been negotiated on pay adjustments without too much
rancour. It is fair to say that past settlements were
somewhat excessive, but the Company adopted a pragmatic
stance, and concluded agreements with the Union. The
result is that the staff enjoy terms and conditions of
employment which, by any standard, are more than
favourable when compared with other employments in the
locality and in the Industry.
(b) In the past few years, the Gas Welding and Cutting
Industry has shrunk on a world wide basis. This has
placed increasing pressure on the Company which found
that it was now competing for the same share of a
shrinking market, and that competition for that market
had become extremely competitive.
(c) Rising costs and currency exchange fluctuations have
adversely affected the Irish Organisation with the
result that the Wicklow Plant is now contributing to
the Group's losses.
(d) The Irish/US Operation has been in a serious loss
making position since 1984, and this trend is expected
to continue for the foreseeable future (details
supplied to the Court).
(e) Cutbacks, rationalisation, and operating reductions
were introduced in both the US and Irish Plants to try
and meet the changed market environment and consolidate
the Group's performance. However this has only had a
marginal impact on the Company's performance.
(f) The facts speak for themselves with regard to the
financial circumstances of the Company, and there can
be no doubt but that the Company is in a serious loss
making position. This has undoubtedly placed further
pressure on the Irish operation which is now under the
microscope. The Company cannot afford, on cost grounds
alone, to pay any pay increase during this round. In
terms of the Group's position, it would be catastrophic
for the Irish Plant and its entire workforce, for any
pay adjustment to emerge in the context of the 27th
Wage Round.
(g) It is the Company's priority at this time, to try and
safeguard the Irish Operation, and maintain as many
people in employment as is possible. The Company
believe that the Union would share this objective as a
priority to the pay issue, but this is not to say that
the Union does not see pay as being an important
matter. However, in view of all the circumstances
outlined above, the Company feels fully justified in
presenting to the Union and to the Labour Court, a plea
of inability to pay a labour cost adjustment for the
27th wage round, and would earnestly request the Court
to recommend accordingly.
RECOMMENDATION:
5. Having considered the submissions made by the parties and
particularly having regard to the current trading position of the
Company, the Court does not recommend concession of any increase
at the present time. However the Court does recommend that the
parties meet in March of next year to consider the situation as it
then prevails. In the event of agreement still not proving
possible the Court would be prepared to hear the case again.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
Deputy Chairman.
28th September, 1987.
P.F./J.C.