Labour Court Database __________________________________________________________________________________ File Number: CD88305 Case Number: LCR11886 Section / Act: S67 Parties: THERMO KING EUROPE - and - AMALGAMATED ENGINEERING UNION |
Claims on behalf of 500 workers for increase in basic pay and improvements in conditions of employment under the 27th Wage Round.
Recommendation:
13. The Court having considered the submissions from both parties
recommends that the Company offer contained in letter dated 11th
April, 1988, be amended by the addition of
"a further 1% payable in respect of each quarter in which 60
B.S.I. plant/factory output is achieved"
and that the Union accept the offer as so amended.
Division: Ms Owens Mr Heffernan Mr O'Murchu
Text of Document__________________________________________________________________
CD88305 RECOMMENDATION NO. LCR11886
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: THERMO KING EUROPE
(Represented by the Federated Union of Employers)
and
AMALGAMATED ENGINEERING UNION
SUBJECT:
1. Claims on behalf of 500 workers for increase in basic pay and
improvements in conditions of employment under the 27th Wage
Round.
BACKGROUND:
2. The Company is a subsidiary of Westinghouse Electric
Corporation U.S.A. It manufactures transport refrigeration units,
primarily for the European market and it employs approximately 600
people at its plant in Galway. The Company has just opened a new
production unit in Blanchardstown in the plant formerly occupied
by Hyster.
3. The 26th Wage Round expired on 30th September, 1987. By
letter dated 27th September, 1987, the Union lodged the following
claims with the Company -
(a) 12% increase for 12 months.
(b) V.H.I. paid in full.
(c) The introduction of service holidays.
(d) 4 days extra annual leave per year.
(e) The introduction of 5 sick days per year.
(f) 16 hours paid time off for personal leave each year.
(g) Compensation for the increase in production which
resulted in discontinuation of time allowed for
tea-breaks.
4. The Company indicated at a meeting held on 7th December, 1987,
that any pay increase given would have to be considered in the
context of increased productivity. The Company rejected elements
(c), (d), (e) and (f) of the claim on the basis that they all
involved a reduction in productivity. Element (b) was rejected
because the cost of the scheme would be prohibitive and also the
Government proposals for change in the system of payment of
disability benefit had far-reaching implications for any
developments in this area.
5. During subsequent meetings the Company outlined its
requirements in the productivity area. It sought to have present
personal performance of 75 B.S.I. increased to 87.5 B.S.I. and the
factory output increased from 49% to 60%.
6. In February, 1988, the Company put forward the following
offer -
An increase in wages of 4% from 1st October, 1987.
A further increase of 2% on achievement of factory output of
60 B.S.I.
The terms of the National Plan to apply from 1st October,
1988.
The Company also undertook to review the achievement of standards
on a monthly basis and if the 60 B.S.I. was not reached by 30th
September, 1988, it would review the situation in the light of the
87.5 B.S.I. standards and the co-operation on the other steps
taken to increase productivity.
7. This offer was rejected by the Union and the matter was
referred to the Conciliation Service of the Labour Court on 29th
February, 1988. A Conciliation Conference was held on 5th April,
1988, at which no agreement was possible.
8. As a result of a further meeting held at local level on 11th
April, 1988, the Company amended its previous offer by letter
dated 11th April, 1988. The Company agreed to pay the second
phase of the increase on each individual reaching the new personal
performance standard (87.5 B.S.I.); it also agreed to remove the
clause linking the agreement automatically to the National Plan.
9. These proposals were recommended for acceptance but were
rejected by the workers following a ballot.
10. The parties then requested that the matter be referred to the
Labour Court for investigation and recommendation. A Court
hearing was held in Galway on 4th May, 1988.
UNION'S ARGUMENTS:
11. 1. The Company has enjoyed a position over the last 18
months where the workforce had increased production by 2% -
this was achieved as a result of the Company insisting that
the workers were no longer allowed to clock on green card for
their teabreaks but workers were still allowed 10 minutes for
a teabreak which was excluded from the actual time on jobs.
The method of calculation was changed to ensure that even
though the people had a 10 minute paid teabreak they still
had to produce work for those 10 minutes i.e. the 2%
increase. The Company has now sought an increase in
production from 75 on the B.S.I. scale to 87.5 which
represents an increase in production of 16.6%. The 2%
offered by the Company is totally insufficient to compensate
the workers for the increase in production and is not a fair
distribution of the savings.
2. While the Committee recommended acceptance of the offer
it must be borne in mind that after the Conciliation
Conference which Management infomred the Committee that if
the workers did not agree to the increase in productivity
under their terms it could result in some 150 jobs being
lost. The Committee at this stage was not prepared to go on
to the Labour Court without informing the workers what the
Company were saying and on that basis they were recommending
acceptance only to protect the 150 jobs which could be lost
as indicated by the Company.
3. The 4% on basic rates is acceptable to the Union as and
from 1st October, 1987, providing of course there are no
strings attached. Other workers in the plant enjoy the
benefits of the payment of V.H.I. and also the other elements
of the claims which were lodged including the benefits which
are sought on sick pay. They also have the facility to get
time off during working hours to attend to special business
in the town.
COMPANY'S ARGUMENTS:
12. 1. The Company has no doubt that the increased productivity
in question is achievable in Galway. Other plants within the
Group, including the Dublin plant, work to and achieve
personal performance standards of 100 B.S.I.. In time,
Galway will move to that standard. The Union has agreed that
the targets can and must be achieved. No one can be under
any illusion about the consequences of a failure to increase
factory output - put simply, the Galway plant will run down
over a number of years.
2. The impact of the failure to agree to increased
productivity is already being felt in a relatively minor way.
The Company's investment plan has been altered with important
new machinery being located in Dublin which had been
originally destined for Galway. In order to ensure that
similarly important decisions are not made in the future and
in order to maintain jobs in Galway the productivity increase
must be realised.
3. In moving this first step to increasing productivity, the
Company cannot afford to pay more than has already been put
on the table. It is already paying for an output of 75
B.S.I. and is achieving less than 50 B.S.I. Even the I.P.C.
Report on productivity estimated that an output of at least
60 B.S.I. should be achieved at personal 75 B.S.I. standards.
In assessing this question, the Company knows that to pay
more would undermine the objectives of the productivity plan.
It considers that what is being offered is very fair and in
the context of the Corporation as a whole, it is very
generous.
4. The Union's claim for a V.H.I. contribution cannot be
afforded or justified. The current estimated cost of such a
proposal is £135,000 which is equivalent to 2.6% of basic
payroll. This estimate does not take any account of the
implications for V.H.I. costs of the Government's current
proposals for disability benefits. Furthermore, the Court
will be aware that only a small minority of companies provide
such a subsidy for manual employees. Having regard to these
points, the Company considers that it is more equitable to
distribute the money available evenly to all its employees
than dissipate it through subsidies which would benefit some
more than others.
RECOMMENDATION:
13. The Court having considered the submissions from both parties
recommends that the Company offer contained in letter dated 11th
April, 1988, be amended by the addition of
"a further 1% payable in respect of each quarter in which 60
B.S.I. plant/factory output is achieved"
and that the Union accept the offer as so amended.
~
Signed on behalf of the Labour Court
3rd June, 1988 Evelyn Owens
M.D./P.W. Deputy Chairman