Labour Court Database __________________________________________________________________________________ File Number: CD87883 Case Number: LCR11670 Section / Act: S67 Parties: CAVAN CRYSTAL LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim on behalf of approximately 50 workers for payment of average bonus for downtime.
Recommendation:
6. In Recommendation 10,240 the Court recommended that the
parties should discuss problems arising from downtime in the light
of their experience of such downtime occurring. In the period
since that recommendation it seems clear that despite a difficult
market situation no major problem with downtime appears in fact to
have arisen. In the circumstances therefore and in the light of
the terms of Recommendation 10.240 the Court does not consider
that it has sufficient grounds upon which to base a specific
recommendation on this issue at this time.
Division: Mr O'Connell Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD87883 RECOMMENDATION NO. LCR11670
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CAVAN CRYSTAL LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim on behalf of approximately 50 workers for payment of
average bonus for downtime.
BACKGROUND:
2. In September, 1985, following negotiations between the Company
and the Union an incentive bonus scheme was introduced. The Union
at that time sought payment of average earnings for downtime. The
Company rejected this claim. The matter, along with other claims
was referred to the Labour Court for investigation and
recommendation in late 1985. The Court in January, 1986, issued
LCR Recommendation No. 10240 which stated in relation to this
item -
"On the fundamental issue of payment for down time, the Court
is of the opinion that the difference in large measure is due
in large part to a lack of confidence between the parties as
to the circumstances in which it may occur and the manner in
which it is best dealt with.
For this reason the Court considers that the experience of
both workers and management of the scheme as it presently
operates is too short to draw any hard and fast conclusions
and recommends that the scheme as initially introduced
continue for another year during which time the Court would
hope that difficulties which might arise will be dealt with
in a reasonable and equitable fashion.
After a year the parties should review the operation of the
scheme and the Court would be willing in the event of
disagreement to recommend on specific points of difference".
3. Following the expiry of the 12 month period a number of
meetings were held between the parties at which no agreement could
be reached. The matter was referred to the conciliation service
of the Labour Court on 11th September, 1987. A conciliation
conference was held on 18th November, 1987. As no agreement was
possible both parties agreed to a referral to the Labour Court for
investigation and recommendation. A Court hearing was held in
Cavan on 13th January, 1988.
UNION'S ARGUMENTS:
4. 1. Performances under this scheme have ranged from 92% to
102% which is a reasonable attainment level under any Bonus.
Furthermore, while the workers have achieved all targets, the
targeted sales figures were not achieved by the Company. The
direct consequence of that failure is that the entire
production staff have been on short time working since July
1986. In these circumstances the workers have performed very
well.
2. Contrary to the Company's initial expectations, the
workers have produced the goods under the new bonus and are
entitled to have built-in protection against loss of bonus
earnings due to Management inefficiencies, lack of materials
or machine breakdown. There should also be no loss of bonus
arising from time spent at Union/Management meetings.
3. Recorded downtime in the period since the paties were
before the Court previously has been mainly due to
interruptions to workflow between departments within the
factory. Under the old piece rate system, earnings were paid
in the event of such delays.
4. The Union sees the provision of downtime payment at
average earnings as an incentive to Management to ensure that
there are no interruptions to workflow and that machines are
properly maintained. On the other hand, payments are not
expected to apply in the event of a major power failure or
storm damage.
COMPANY'S ARGUMENTS:
5. 1. During the course of negotiations on the incentive bonus
scheme through 1985, the company repeatedly stated that no
payment above that of basic pay would be made for down time.
It was on this basis that the company concluded an agreement
in 1985 with the Union. The fundamental criterion for this
payment by results (PBR) scheme was that the extra production
would fund the bonus payment, i.e. that it would be a
self-financing and cost effective scheme.
2. At the time of signing the agreement both sides clearly
recognised the need to achieve production on a cost
effective basis. The claim for average earnings to be paid
for down time made by the Union undermines the spirit and
intention of this agreement and could not be tolerated under
any circumstances by the Company. This viewpoint has been
expressed by the Company throughout all the discussions on
this issue.
3. Cavan Crystal Ltd is at a critical stage in its
development. The main markets for crystal have become
dramatically competitive over the past two years and the
Company is now trading in a very difficult and sensitive
environment where the satisfying of customer needs,
competitiveness in terms of price and general cost efficiency
are the keys to remaining in business. The Company's main
competitors in Eastern Europe, Portugal, Germany and England
are all extremely competitive in terms of prices and can
afford to be so as their wage costs and general overhead
costs are lower and bonus is only paid for on the basis of
actual increased production.
RECOMMENDATION:
6. In Recommendation 10,240 the Court recommended that the
parties should discuss problems arising from downtime in the light
of their experience of such downtime occurring. In the period
since that recommendation it seems clear that despite a difficult
market situation no major problem with downtime appears in fact to
have arisen. In the circumstances therefore and in the light of
the terms of Recommendation 10.240 the Court does not consider
that it has sufficient grounds upon which to base a specific
recommendation on this issue at this time.
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Signed on behalf of the Labour Court
29th January, 1988 John O'Connell
M.D./P.W. Deputy Chairman