Labour Court Database __________________________________________________________________________________ File Number: CD87756 Case Number: LCR11617 Section / Act: S67 Parties: PACLENE LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim on behalf of 72 workers for an increase in pay and improvements in conditions of employment under the 27th wage round.
Recommendation:
5. The Court having considered the submissions from both parties
recommends that the Company's original offer of 2% over 12 months
should be increased to 3% for the same period.
(Agreement to terminate on 31st May, 1988).
The Court does not recommend concession of the other items in the
claim.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87756 RECOMMENDATION NO. LCR11617
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: PACLENE LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim on behalf of 72 workers for an increase in pay and
improvements in conditions of employment under the 27th wage
round.
BACKGROUND:
2. 1. The Company is based in Ennis and is part of the Smurfit
Group of companies. It is engaged in the plastics industry
producing bags for the supermarket/retail industry. The
Company has been in operation for 17 years and currently
employs 80 people.
2. The 26th wage round expired on 31st May, 1987. On the
27th May, 1987 the Union lodged the following claim with the
Company:-
(1) 12% increase on basic rates - 12 month agreement - no
pay pause.
(2) The introduction of a production/productivity bonus.
(3) Standard rate for bag/roll printers.
(4) Improvement in service pay.
(5) Improvement in tea allowance from #127 per annum to #200
per annum.
The Company requested that negotiations on the pay round be
deferred until September when it could better assess the
situation. The Union agreed to defer negotiations.
3. At a meeting held on the 14th September, 1987 the Company
put forward the following offer:-
(1) 2% increase in basic rates effective from 1st June,
1987. Agreement for 12 months to expire on 31st May,
1988.
(2) This offer was subject to there being no further claims
of a cost increasing nature for the duration of the
agreement.
(3) It was stated that in the event of the offer being
rejected, the Company reserves its right to review its
offer in the event of a further deterioration in the
market situation.
2. 3. This offer was rejected by the Union and the issue was
referred to the conciliation service of the Labour Court on
14th September, 1987.
4. A conciliation conference was held on the 30th September,
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 Limerick on 25th
November, 1987.
UNION'S ARGUMENTS:
3. 1. In spite of a continuing reduction in the workforce there
has been an increase in production as the Company has retained
its customers and indeed has recovered some of those it had
previously lost.
2. Some of the Company's main competitors have already left
the market.
3. The decline in the workforce has meant an automatic
increase in productivity and efficiency on the part of the
workers, which has resulted in decline of labour cost per
unit.
CLAIM FOR PRODUCTION/PRODUCTIVITY BONUS:
4. The Company at a meeting of 14th September, 1987 indicated
that they were looking at a production/productivity bonus
based possibly on the purchase of a Lemo machine. We believe
that any objective professional analysis of the Union's
argument will vindicate claim for a productivity bonus, more
especially in view of the unrewarded effort already given the
Company by the workers.
CLAIM FOR STANDARD RATE FOR BAG/ROLL PRINTERS:
5. The claim here is on behalf of 3 people who manufacture
plastic bags on a roll; some of these are printed and others
plain. Six of their colleagues enjoy a premium payment
whether they produce printed or plain bags while the 3 people
here concerned doing exactly the same work do not get it
except when producing printed bags. The Union claims that all
9 men should be paid the same rate as they operate in exactly
the same conditions.
CLAIM FOR IMPROVED SERVICE PAY:
6. The working conditions of the workers involved here are
very dreary and depressing and in the context of ergonomics
must have a retarding effect in that they are not stimulating
but functional and utilitarian. This is plain for anybody to
see and the Union is claiming that apart altogether from the
traditional basis for service pay the workers have a genuine
claim for an increase in their present rate as follows:-
3. 6. 0 - 5 years' service - #1.50 per week
5 - 10 years' service - #2.50 per week
10 - 15 years' service - #4.00 per week
15 - 20 years' service - #5.00 per week
The Court is asked to find in the Union's favour.
COMPANY'S ARGUMENTS:
4. 1. The Company has had the worse year in its history during
1987. Present indications are that very serious difficulties
face the Company during 1988. The principle difficulties
are:-
a. Over capacity in the market place.
b. This is leading to severe competition and substantial
price cutting, which was between 15% and 30% in 1987, and
c. Rising raw material prices, up 30% in 1987.
2. The combination of these three factors during 1987 has led
to the Company incurring very substantial losses. It is
anticipated that during 1987, the losses will be well in
excess of #300,000. Unless there is a major improvement in
the difficulties referred to in a. b. and c., these losses are
likely to continue in 1988, and would place a very serious
question mark over the continued operation of Paclene.
3. Labour rates which apply in competitor companies in the UK
are up to 40% below those applying in Paclene. The Company
depends for over 60% of its business on the UK market, and
therefore, its ability to be cost competitive vis-a-vis the UK
market has a major bearing on the Company's future.
4. Employees of Paclene are very well paid when compared with
the industry. (Details supplied to the Court). In addition
to the basic rates employees have the benefit of the sick pay
scheme, contributory pension scheme, service pay and 20 days
annual leave.
RECOMMENDATION:
5. The Court having considered the submissions from both parties
recommends that the Company's original offer of 2% over 12 months
should be increased to 3% for the same period.
(Agreement to terminate on 31st May, 1988).
The Court does not recommend concession of the other items in the
claim.
~
Signed on behalf of the Labour Court.
7th January, 1988 Evelyn Owens
M.D./ M.F. Deputy Chairman