Labour Court Database __________________________________________________________________________________ File Number: CD87831 Case Number: LCR11674 Section / Act: S67 Parties: AN BORD BAINNE - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION (NO. 2 BRANCH |
Claim on behalf of approximately 72 administrative grades for a wage increase under the 26th wage round.
Recommendation:
6. The Court recommends that the offer should be amended to read
as follows:-
- two months' pay pause from 1st May, 1987
- 4% for seven months from 1st July, 1987
- 1.5% for five months from 1st February, 1988
- 2% for six months from 1st July, 1988.
The agreement to expire on the 31st December, 1988.
Division: CHAIRMAN Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87831 RECOMMENDATION NO. LCR11674
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AN BORD BAINNE
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION (NO. 2 BRANCH)
SUBJECT:
1. Claim on behalf of approximately 72 administrative grades for
a wage increase under the 26th wage round.
BACKGROUND:
2. Bord Bainne was established in 1961 as a semi-state body.
When Ireland joined the EEC in 1973 the ownership of the Board was
transferred from the State to a number of agricultural
co-operatives. The member co-operatives are shareholders in, and
suppliers to, the Board. There is a 15 member board and each of
the six larger co-operatives have a member on the board.
3. The 25th wage round for the workers concerned (11% for 21
months) expired on the 31st April, 1987. The Union sought a 6%
increase under the 26th round for twelve months. Local level
discussions failed to resolve the issue and on the 8th September,
1987, the Union referred it to the conciliation service of the
Labour Court. No progress was possible at a conciliation
conference on the 27th October (earliest suitable date) and on the
5th November the dispute was referred to the Labour Court for
investigation and recommendation. A Court hearing held on the 8th
December was adjourned to allow further local discussions to take
place (the Board had as yet not made a specific offer as it was
waiting for some of the co-operatives to settle their 26th round
claims). At a local level meeting on the 11th December the Board
made the following offer to the Union:-
- two month pay pause from 1/5/87
- 4% for ten months from 1/7/87
- 1.5% for five months from 1/5/88
- 2% for six months from 1/10/88
- agreement to expire on the 31/3/89.
This was rejected in a ballot of the workers concerned and a
re-convened Labour Court hearing was held on the 21st January,
1988.
UNION'S ARGUMENTS:
4. 1. Each wage round has seen Management argue that it could
not make an offer pending developments elsewhere. It
encouraged the claimants to accept a much longer 25th round
settlement of twenty one months in order that the agreement
would expire later than the dairy co-operatives and thereby
enable negotiations to take place against a backdrop of the
co-operatives having already concluded their negotiations.
Notwithstanding the sacrifices made by the claimants in
accepting an unduly long 25th round agreement (the norm for
the round was thirteen months), Management has successfully
stalled the 26th round negotiations for over eight months. It
is obvious that there is a total disregard by Management of
its obligations to staff or its obligation to co-operate with
a speedy processing of the claim. The Union referred the case
to conciliation on the 8th September but a conference was not
held until the 27th October and the subsequent Court
investigation took six weeks to arrange.
2. The Union assumed that it would have little difficulty
in negotiating an early settlement because the vast majority
of workers had the benefit of the 26th round in 1986 (norm
being 6% for twelve months) and because the claimants were
running at least twelve months behind the majority of
organised labour. For these reasons it did not seek to serve
the normal 26th round claim of 10% but merely asked that the
established norm (6%) be conceded.
3. Management has put great emphasis on the composition of
its board, made up as it is of a number of representatives of
different co-operatives. It is therefore essential in its
view that An Bord Bainne should follow timewise rather than
lead. However, it now appears that Management's argument has
been extended to include the constraint of being able to
negotiate in its own right at all. Apparently Management
would have the claimants placed in a position of handing over
all their negotiating rights to the unions in the various
dairy co-operatives.
4. Bord Bainne is a very successful operation thanks to the
commitment of the staff whose efforts in no small way
contributed to a profit of #5.5m in the last year. It is
eminently reasonable that the claimants expect to receive an
offer no less favourable than that which was afforded to the
vast majority of other workers in the economy.
BOARD'S ARGUMENTS:
5. 1. Over the last few years the dairy industry, largely due
to oversupply, has been experiencing very difficult export
market conditions. Increased competition, constricted markets
and lower support prices have severely limited the Bord's
ability to sustain cost increases. If the Bord is to remain
financially sound, realities must be taken into account when
deciding on the level of wage increase for 1987.
2. To counter a surplus supply/over production of milk, the
E.E.C. decided to reduce Ireland's milk quota by 8.5% from
April 1987. This policy amounts to a prohibition on
increasing milk production and will seriously affect the Irish
economy. The production of milk will decline and this will
have a knock-on effect on the volume of products marketed by
Bord Bainne. The net effect of decreasing volumes and rising
labour costs is increased unit costs (some 53% of the Bord's
administration budget is made up of labour costs).
3. Falling real prices, quota restrictions and declining
price supports will characterise E.E.C. agricultural policy
for the foreseeable future. These policy changes will require
a greater emphasis on cost effectiveness for Bord Bainne and
the Dairy Industry generally.
4. The Bord operates in an internationally competitive
market and at least two of its major competitors, New Zealand
and Australia, have very low cost production structures. Some
other countries can unload their surplus dairy products at
very low prices, hence the huge growth in international stocks
which of themselves tend to weaken markets.
5. The Bord exports dairy products on behalf of its members
several of whom are themselves exporters. If the Bord's costs
rise and it becomes less efficient as a result, its members
have the option to export products formerly marketed on their
behalf by the Bord. Therefore the Bord has an ongoing need to
remain both efficient and competitive.
6. At present there is insufficient investment in product
and market development. The Industry has just started to pay
0.35% of the Milk Price into a Market Development Fund. With
E.E.C. cutbacks in the CAP and the quota restrictions the Bord
will need to increase expenditure in the areas of new products
and new markets. Expenditure in this area has to be ongoing
and returns initially will be very slow.
RECOMMENDATION:
6. The Court recommends that the offer should be amended to read
as follows:-
- two months' pay pause from 1st May, 1987
- 4% for seven months from 1st July, 1987
- 1.5% for five months from 1st February, 1988
- 2% for six months from 1st July, 1988.
The agreement to expire on the 31st December, 1988.
~
Signed on behalf of the Labour Court
John M Horgan
4th February, 1988 ------------------
D.H./U.S. Chairman