Labour Court Database __________________________________________________________________________________ File Number: CD88347 Case Number: LCR11910 Section / Act: S67 Parties: IRISH ALE BREWERIES LIMITED - and - NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION |
Claim on behalf of forty craftsmen for parity of pay rates with those of workers in Harp (Ireland) Limited.
Recommendation:
5. The Court, having considered the submissions from both parties
does not find grounds for recommending concession of the claim.
Division: Ms Owens Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88347 RECOMMENDATION NO. LCR11910
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: IRISH ALE BREWERIES LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
NATIONAL ENGINEERING AND ELECTRICAL TRADE UNION
SUBJECT:
1. Claim on behalf of forty craftsmen for parity of pay rates
with those of workers in Harp (Ireland) Limited.
BACKGROUND:
2. The Company is a wholly owned subsidiary of Guinness Ireland
and itself is a holding Company for four operating companies:-
E. Smithwicks and Sons Limited, Kilkenny,
MacArdle Moore and Company, Limited, Dundalk,
Cherrys Brewery Limited, Waterford,
Irish Ale Breweries (Sales) Limited - Dublin, Cork, Limerick,
Ballyhaunis.
On 20th February, 1987, the Union sought parity of pay for 30
craftsmen in Kilkenny with the rates existing in Harp (Ireland)
Limited, also part of the Guinness Group or in the Guinness
brewery. The current weekly rates for craftsmen in IAB (assuming
acceptance of the 27th round offer) are as follows:-
Induction rate £241.13
Second Year rate £249.12
Third Year rate £257.04
Fourth & subsequent
years rate £262.86
The rates in Harp are:-
Induction rate £256.85
After 6 months £266.82
Second Year rate £269.08
Third Year rate £272.62
Fourth & subsequent
years rate £284.92
The issue was deferred due to wage round negotiations and was
revived later in the year. No agreement being reached it was
referred, on 8th June, 1987 to the conciliation service of the
Labour Court. A conciliation conference took place on 2nd
November, 1987. Again, no agreement was reached and the matter
was referred to a full Labour Court hearing. The hearing took
place on 2nd June, 1988.
UNION'S ARGUMENTS:
3. 1. The Union is seeking equality of rates with craftsmen
employed in other sections of the brewing industry i.e.: in
Harp and Guinness. The craftsmen employed in Kilkenny perform
the same duties and have the same high level of skills as
their counterparts in other companies. They are also required
to update these skills in order to satisfactorily maintain
machinery which is subject to ongoing change. This has been
satisfactorily carried out by both the fitters and
electricians employed at Smithwicks where a great degree of
flexibility exists.
2. Like the other companies with whom the comparison is
sought Smithwicks have taken on the franchise for racking of
other lagers and beers (Harp and Budweiser) and their bottling
plant covers a large range of brand labels such as Satzenbrau,
Kaliber, Harp, Guinness and Smithwicks. The functions of
craftsmen are therefore similar to those in the other
breweries.
3. In all other cases where the Union negotiates on behalf of
craftsmen the rates of pay are the same within each industry.
4. In the past the equal skills of craftsmen were paid for on
an equal basis. In 1982 rates in Smithwicks were slightly
higher than those in Guinness and Harp (details of
comparative wages over the years were supplied to the Court)
but this situation has now altered to one where rates in
Smithwicks are considerably lower than those elsewhere.
5. The same conditions apply in each of the three breweries
in relation to profit sharing and the pension scheme.
COMPANY'S ARGUMENTS:
4. 1. Basic starting rates of pay are identical across the IAB
Limited Group of companies for any particular category of
worker. Thus craftsmen in any of the IAB Limited operating
companies have identical rates of pay. However, no relativity
agreed or implied exists between IAB Limited rates of pay and
rates of pay in other Guinness Ireland companies.
4. 2. The current pay and conditions of the claimants (details
supplied) represent a very substantial remuneration and
benefits package which places IAB Limited craftsmen in the
upper quartile of Irish industry. Average gross earnings for
Smithwicks craftsmen for the year ending 5th April, 1988 were
£24,000 approximately.
3. IAB Limited, has suffered a substantial decline in the
sales of its own produced brands since 1982 (details
supplied). Company profits are closely related to volume
sales. Profit levels in 1982 stood at £15.2m. By 1987 these
had dropped by 52% to £7.4m and despite a major
rationalisation programme, the projected profit in 1991 shows
a further drop to £5.2m or 34% of the 1982 level. In the same
period operating costs have risen from £17.8m in 1982 to
£28.9m in 1987 - a cost increase of 66%. There is only a
marginal drop in the projected operating costs to 1991. The
Company embarked on a major cost cutting exercise in 1983 and
as a result succeeded in 1985 in winning a contract to
brew/keg Harp lager in Smithwicks Brewery. However, the
on-going decline in the sales of the Smithwicks brand made it
necessary to launch a Survival Plan in 1986. Implementation
of both these Plans allowed the Company to make a successful
bid to contract in the brewing/packaging of the Budweiser
brand in 1987. The contracts for these two brands - Harp and
Budweiser - are vitally important to survival. Though they
make a contribution to profits, because they are processed at
a contract price, they are less profitable than the Company's
own brands and have not been in sufficient volumes to
counteract spare production/packaging capacity. The Company
has been forced to announce recently its intention to shut
down its Kilkenny Bottling plant for at least three months in
the year.
4. The Company has also recently announced an extension of
its 1986 Plans to cut costs with the objectives of narrowing
the gap between costs and profits, retaining as many people in
quality permanent employment as the level of business can
sensibly support and attempting to keep as many as possible of
its operating units intact.
5. Any form of concession of the present claim would have
definite knock-on effects and would widen the gap between
costs and profits, putting business and employment at risk.