Labour Court Database __________________________________________________________________________________ File Number: CD8821 Case Number: LCR11761 Section / Act: S67 Parties: KILKENNY TEXTILE MILLS - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claims, on behalf of 150 employees under the 27th wage round.
Recommendation:
6. The Court has considered the submissions made by the parties
in this case. It is of the opinion that in light of the
developments in the wage structure whch have come about in the
comparatively short period in which the Company is operating that
a period of relative stability is necessary. The Court, for this
reason, does not recommend concession of the Union's claim for a
review of the grading structure.
On the question of the incentive scheme, the Court is not
convinced that any fundamental fault exists in the principles upon
which the scheme is based or that it has been in operation long
enough to provide definitive information upon which it might be
properly reviewed. The Court therefore recommends that the scheme
as presently constituted continue in operation.
On the matter of basic wages the Court recommends that the offer
set out in the Industrial Relations Officer's document dated 9th
December, 1987 be amended to provide for a lump sum of #30 for
each worker concerned and the offer so amended be accepted by both
parties.
Division: Mr O'Connell Mr Heffernan Mr Devine
Text of Document__________________________________________________________________
CD8821 RECOMMENDATION NO. LCR11761
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: KILKENNY TEXTILE MILLS
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claims, on behalf of 150 employees under the 27th wage round.
BACKGROUND:
2. The Company is part of a Belgian Group and its principal
product is cotton yarn which is shipped to the continent to be
woven into towels. There are seven grades of employees and
current weekly earnings are as follows:
Grade 1 #140.30 (9 workers)
Grade 2 #132.58 (1 worker)
Grade 3 #128.55 (9 workers)
Grade 4 #126.47 (53 workers)
Grade 5 #124.48 (39 workers)
Grade 6 #122.79 (15 workers)
Grade 7 #120.79 (15 workers)
There are also some probationary employees. Approximately 135
workers receive a 20% shift allowance. There is an attendance
bonus of 10% of basic pay for a full week's attendance plus a
further twice yearly #50. A productivity or incentive bonus which
averages at 8% to 10% of basic pay also exists.
3. The 26th wage round expired on 31st August, 1987 and in July,
1987 the Union served the following claims under the 27th round:
(a) Substantial increase in basic rates from 1st September,
1987.
(b) Amendment of the incentive bonus scheme.
(c) Reduction in the number of grades from seven to four
without loss of earnings.
(d) Review of the twice yearly #50 attendance bonus
(subsuming it into the weekly attendance bonus).
(e) Introduction of a service pay scheme.
(f) Increase in annual leave entitlement from 20 days to 22
days.
(g) A reduction in the working week without loss of
earnings.
The Company's final offer at local level was a 2.50% increase in
basic pay for twelve months and no concession on the other claims.
The Union referred the matter to the conciliation service of the
Labour Court on 3rd November, 1987 and a conciliation conference
was held on 9th December, 1987, the earliest suitable date. At
conciliation the Company withdrew the offer made at local level
and tabled the terms of the programme for National Recovery from
1st January, 1988 with an offer to negotiate a lump sum to cover
the period from 1st September, 1987 to 1st January, 1988.
Following lengthy discussions, a proposal to increase basic rates
by 1% from 1st September, 1987, and apply the National Programme
from 1st December, 1987 for three years, all other claims to be
dropped for this period, was drawn up. This position was set out
in writing in a document signed by the Industrial Officer of the
Court and dated 9th December, 1987. The Union representatives
agreed to recommend this offer to the members, but the offer was
heavily rejected in a ballot of the workers. The Company was not
prepared to resume conciliation talks and the matter was referred
to a full hearing of the Labour Court. The hearing took place on
1st March, 1988.
UNION'S ARGUMENTS:
Claim (a) Basic pay
4. 1. Average basic pay is currently very low. The physical
conditions in the factory are uncomfortable since, for
production reasons, the temperature must be maintained between
27 and 32 degrees centigrade. As well as the hot environment,
the work is dusty, repetitive and tedious. These difficulties
would be more acceptable to the workers if there were a
substantial increase in pay. If the workers must accept the
terms of the National Programme, the best possible pay
increase must be applied from 1st September, 1987 to the date
of its implementation. The offer of 1% for three months is
unacceptable.
Claim (b) Incentive bonus scheme
2. The Union is not satisfied with the operation of the
incentive bonus scheme. However, it has written to
management, by letter dated 29th February, 1987, with regard
to this matter. It seeks, therefore, to process the matter
separately and it does not form part of the claims before the
Court for consideration.
Claim (c) Reduction in the number of grades
3. When the Company was formed it was argued by management
that a seven point grading system would provide an incentive
for workers to perform better and thereby get promoted. In
practice, there has been little upward movement. The Union
proposes four grades with the following rates of pay:
Grade 1: Skilled, non-craft #140.30
(as at present).
Grade 2: Semi-skilled production operatives #132.58
(to include the present grades 2, 3 and 4).
Grade 3: General production operatives #124.48
(to include the present Grades 5 and 6).
Grade 4: Cleaner/utility worker etc. #120.79
(present Grade 7).
The Union has suggested that a job evaluation exercise be
carried out in the plant which would examine the grading
structure.
Claim (d) Twice yearly attendance bonus
4. This bonus was introduced three years ago when a
significant absenteeism problem existed. The Union considers
that at the present time, this twice yearly payment has lost
its motivation value. Therefore, it believes the Company
should abolish it and instead increase the weekly attendance
bonus to 11.50%. It is considered that this would act as a
better incentive to good attendance records.
5. Claims (e) (f) and (g) concerning service pay, an increase
in holiday entitlement and a reduced working week were
withdrawn prior to referral to conciliation.
COMPANY'S ARGUMENTS:
5. 1. The Company is a family owned business. The proprietors
have invested considerable capital in the Kilkenny unit and as
a result employment has moved from 50 at start-up to a total
of 180 now. The two most influential factors in the
decision-making of the owners are stability and cost. 1986
was a year of instability with prolonged discussions on pay
and bonuses, numerous conciliation conferences, several Labour
Court hearings, and instances of strike notice. The future of
the plant was in the balance for most of that year.
Fortunately, 1987 saw a return to normality in industrial
relations. The objective now is to maintain stable industrial
relations for the next three years (at least) in order to
enhance the future prospects of the plant. There is no doubt
that a return to the 1986 situation would threaten the job
security of all the Company's employees.
2. During negotiations on a pay increase the Company
emphasised the development of labour costs in the Company.
Since start-up in 1983 labour costs have increased by 50%.
Productivity in that time has increased by 13%. The rate of
inflation has been approximately 21%. Thus the Company is now
16% less competitive in labour costs than it was in 1983.
This figure worsens when one considers that the Company's
competitors are continental, where inflation rates over the
period of time have been significantly lower. Labour costs
represent approximately 25% of total costs and are the only
significant portion which are controllable.
3. The Company's craftsmen, have reached agreement with the
Company on an increase of 2% for 7 months followed by the
National Agreement for 3 years from 1st March, 1988.
4. The Company does not accept that the current rates of pay
are very low. It considers that the final offer made at
conciliation constitutes a significant increase in pay to its
employees. The Company is not prepared to make any offer on
the other claims.
RECOMMENDATION:
6. The Court has considered the submissions made by the parties
in this case. It is of the opinion that in light of the
developments in the wage structure whch have come about in the
comparatively short period in which the Company is operating that
a period of relative stability is necessary. The Court, for this
reason, does not recommend concession of the Union's claim for a
review of the grading structure.
On the question of the incentive scheme, the Court is not
convinced that any fundamental fault exists in the principles upon
which the scheme is based or that it has been in operation long
enough to provide definitive information upon which it might be
properly reviewed. The Court therefore recommends that the scheme
as presently constituted continue in operation.
On the matter of basic wages the Court recommends that the offer
set out in the Industrial Relations Officer's document dated 9th
December, 1987 be amended to provide for a lump sum of #30 for
each worker concerned and the offer so amended be accepted by both
parties.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
23rd March, 1988.
A.K./J.C. Deputy Chairman