Labour Court Database __________________________________________________________________________________ File Number: CD88637 Case Number: LCR12144 Section / Act: S67 Parties: MILFORD (DONEGAL) BAKERY AND FLOUR MILLS - and - THE BAKERY AND FOOD WORKERS' AMALGAMATED UNION |
Claim by the Union on behalf of 14 workers for the application of the terms of the Programme for National Recovery (P.N.R.).
Recommendation:
6. The Court recommends that wages be increased in line with the
Joint Industrial Council for the Bakery and Flour-Confectionery
Industry agreement and the Programme for National Recovery.
Division: CHAIRMAN Mr Heffernan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88637 RECOMMENDATION NO. LCR12144
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: MILFORD (DONEGAL) BAKERY AND FLOUR MILLS
TRADING LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
THE BAKERY AND FOOD WORKERS' AMALGAMATED UNION
SUBJECT:
1. Claim by the Union on behalf of 14 workers for the application
of the terms of the Programme for National Recovery (P.N.R.).
BACKGROUND:
2. In February, 1988, the Joint Industrial Council for the Bakery
and Flour-Confectionery Industry concluded it's 1988 wage
negotiations by implementing the terms of the P.N.R. for a period
of 3 years.
3. The wage round in this Company is due from 1st April, 1988.
The Union claimed implementation of the terms of the P.N.R. The
minimum payment of #4 to apply as the basic wage rate is #127 per
week. The Company pleaded inability to pay the full terms of the
P.N.R. but proposed paying an increase of #4 per week from the due
date which would not be consolidated for overtime or premia
purposes. The Company further specified that if it found it's
position improving that it could, without commitment, review it's
ability to implement the full terms. The Union rejected the
Company's offer, which was subsequently withdrawn, and on 23rd
June, 1988, the issue was referred to the conciliation service of
the Labour Court. No agreement could be reached at a conciliation
conference held on 3rd August, 1988, and on 15th August the matter
was referred to the Labour Court for investigation and
recommendation. A Court hearing took place on 5th October, 1988,
in Letterkenny. The Company subsequently supplied the Court with
financial information relating to its recent performance.
UNION'S ARGUMENTS:
4. 1. The bakery workers must work odd hours and do not enjoy
the terms and conditions that other workers enjoy. The Union
entered into an agreement on the P.N.R. and expects it to be
honoured.
2. It has never been stated that bakery workers wages, have
caused the closure of any bakeries. The bakeries wanted the
price of bread de-controlled, and as a result a 'price war'
has developed. There will be no improvement in the industry
unless the Master Bakers get together on the matter. As a
result, if the Court finds that the Company cannot pay, then
in effect it will mean that the bakery workers will not be
getting an increase for 3 years.
COMPANY'S ARGUMENTS:
5. 1. The industry has been hit by massive increases in the
costs of raw materials, particularly since 1985. Over the
same period wages have increased annually between 3% and 7%.
The removal of the bread subsidy in 1987, was followed by
bitter price wars, dominated by below cost selling. Bakeries
were forced to absorb all cost increases.
2. In June, 1987, the Company had been selling bread at #8.18
per dozen, by December, 1987, this fell to #7.40, a drop in
price of some 10%. Since January, 1988, there has been no
improvement in price levels or margins. To the contrary, by
August, 1988, the Company's white sliced pan was retailing at
72p whilst a multiple operating in the Northwest was retailing
the same product at 49p, (32% cheaper).
3. The Company must also refer to the fact that whilst the
Company has to compete against aggressive marketing by the
multiples, the Company is also competing with other unionised
bakeries in it's catchment area and against non-unionised
bakeries which have lower labour costs and do not have sick
pay or pension fund arrangements as in the Company's case.
4. On an industry basis such pressures have had disastrous
implications for individual bakeries - an estimated 36
bakeries closed during 1987. Despite it's circumstances,
however, the Company has not been standing idly by and has
been making strenuous efforts to safeguard it's position in
the marketplace and to improve employment prospects within the
Company. To date investment has been made in a small bread
bakery with the resultant employment of an additional 3
people. It is as part of its attempt to improve on
competitiveness that the Company must seek to halt ever
spiralling labour costs. Whilst the basic tablehand rate
afforded in the Company is #127, average weekly earnings range
between #248 and #304.
5. 5. Having regard to the efforts of it's employees in
assisting the Company in its bid to regain competitiveness and
in the expectation that bakery performance would improve, the
Company set out the terms of it's original offer which was
subsequently rejected by the employees and therefore withdrawn
by the Company. In light of the bakery accounts (provided to
the Court) for the year ended 3/9/88 the highly unsatisfactory
results clearly indicate that even if the Court were to
recommend acceptance of the Company's original offer the
Company would have to seriously consider its ability to meet
the cost of same.
6. In view of the commercial and economic circumstances
facing the Company it is not in any position to implement the
wage increases as set out under the P.N.R. To do so would be
to ignore the financial position of the Company and do little
to inspire confidence in it's ability to compete in a
depressed market. In view of it's present position,
implementation of the P.N.R. could not be reviewed by the
Company until at least mid 1989.
RECOMMENDATION:
6. The Court recommends that wages be increased in line with the
Joint Industrial Council for the Bakery and Flour-Confectionery
Industry agreement and the Programme for National Recovery.
~
Signed on behalf of the Labour Court,
John M. Horgan
___________________
2nd December, 1988.
B. O'N. / M. F. Chairman.