Labour Court Database __________________________________________________________________________________ File Number: CD88212 Case Number: LCR11828 Section / Act: S67 Parties: GILBEYS OF IRELAND LIMITED - and - FEDERATED WORKERS' UNION OF IRELAND |
Claim, involving 300 employees, for the introduction of a profit sharing scheme.
Recommendation:
5. Having considered the submissions made by the parties, the
Court is not satisfied that a case has been made that
substantiates an argument that the total remuneration package in
the Company is out of line with comparators as a consequence of
the absence of a profit sharing scheme. Therefore, in view of the
above and having regard to Labour Court Recommendation No. 11288
on the issue, the Court does not recommend concession of the
claim.
Division: Mr Fitzgerald Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD88212 RECOMMENDATION NO. LCR11828
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: GILBEYS OF IRELAND LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
FEDERATED WORKERS' UNION OF IRELAND
SUBJECT:
1. Claim, involving 300 employees, for the introduction of a
profit sharing scheme.
BACKGROUND:
2. In January, 1986, as part of Recommendation No. 10249 on the
25th wage round for this Company, the Labour Court recommended
that negotiations take place on the question of the general
relativity of the Company's wage rates with those payable within
other companies engaged in the manufacture and distribution of
alcoholic beverages. Negotiations took place which culminated in
Labour Court Recommendation No. 10677 dated 21st August, 1986, in
which the Court recommended "that a basic rate of £179 be agreed
and implemented in the context of the finalisation of negotiations
on outstanding issues. A further Labour Court Recommendation No.
11288, of 7th July, 1987, considered various claims along with a
wage claim. Amongst these was a claim for the introduction of a
profit sharing scheme. On this matter the Court recommended as
follows:
"Insufficient evidence has been presented to the Court to
enable it to make a recommendation on this part of the claim.
The Court accordingly recommends that the parties pursue this
matter further by examining the total remuneration in the
Company vis a vis other Companies in the industry."
In the course of further local talks the Company contended that
its rates were in line with those prevailing in the industry and
was unwilling to concede the claim for the introduction of a
profit sharing scheme. The Union stated that it was willing to
surrender the existing holiday bonus of 3.5 weeks salary in return
for the introduction of such a scheme. No agreement could be
reached and the matter was referred, on 21st December, 1987, to
the conciliation service of the Labour Court. A conciliation
conference was held on 23rd February, 1988. Again no agreement
was reached. The Company initially reserved its position but
later agreed to attend a Labour Court hearing. The matter was
referred to the Court on 15th March, 1988 and the Court hearing
took place on 14th April, 1988.
UNION'S ARGUMENTS:
3. 1. The Union is seeking to have the total remuneration
structure in this Company brought into line with the
remuneration structure in the industry (details of
remuneration arrangements in the Company and in other
companies in the alcoholic beverages industry were supplied to
the Court). Profit sharing is a major feature in the
industry, since it exists in five of the six major companies.
Successive Labour Court recommendations have indicated that
remuneration in the Company should compare with that in the
industry generally.
2. The Union has stated that it is prepared, if necessary, to
surrender the existing holiday bonus in return for the
introduction of a profit sharing scheme.
3. This Company, by volume and value, is a major alcoholic
beverage exporter. Its fortunes have been extremely good in
recent years. The employees have contributed to the success
of the Company and should receive a share of the profit they
have helped to create.
4. Introduction of a profit sharing scheme would have a
significant incentive effect for employees.
5. Concession of the claim would present no threat to the
Company as in times of no profit, no pay-out would be made.
Other firms in the industry experience no problem in relation
to confidentiality of company affairs and yet operate profit
sharing schemes.
COMPANY'S ARGUMENTS:
4. 1. The Company competes in the market place with the cream
liqueur and wines and spirits distribution sector, and there
has been no traditional comparison with the brewing and
distilling sectors. Of all the companies stated by the Union
to operate profit sharing schemes, there are in fact only two
companies, to which the others are related. The Company
considers that its total remuneration package compares
favourably with that of its competitors taking into account
the holiday bonus which amounts to £700 (approx) p.a. for the
lowest paid employee and rises to over £1,400.
2. Where profit sharing schemes exist they have been
introduced on a voluntary basis and other companies should not
be expected to follow suit. It is not a normal well
established condition of employment in industry.
3. International competition and the need to preserve market
share means that the Company must reinvest its profits in the
business, if employment, markets and profits are to be
maintained. A profit sharing scheme would reduce the
Company's investment potential, curtail its expansion
programme, reduce its employment prospects and undermine its
continued economic viability and competitiveness.
4. Other companies with whom comparisons have been made have
had very serious problems relating to competitiveness of wage
rates and conditions. To correct these problems hundreds of
jobs have been lost. This Company is determined to avoid the
same sort of problems in so far as it has control over them.
RECOMMENDATION:
5. Having considered the submissions made by the parties, the
Court is not satisfied that a case has been made that
substantiates an argument that the total remuneration package in
the Company is out of line with comparators as a consequence of
the absence of a profit sharing scheme. Therefore, in view of the
above and having regard to Labour Court Recommendation No. 11288
on the issue, the Court does not recommend concession of the
claim.
~
Signed on behalf of the Labour Court
Nicholas Fitzgerald
____________________________
3rd May, 1988. Deputy Chairman
A.K./J.C.