Labour Court Database __________________________________________________________________________________ File Number: CD89115 Case Number: LCR12344 Section / Act: S67 Parties: HOWLEY PLANT LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim for plus payments and a finishing bonus on behalf of approximately 16 general operatives.
Recommendation:
5. Having considered the submissions in this case the Court is of
the opinion that the claim for a finishing bonus or other similar
form of payment is clearly contrary to the terms of the Programme
for National Recovery. The Court therefore does not recommend
concession of the claim.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD89115 RECOMMENDATION NO. LCR12344
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: HOWLEY PLANT LIMITED
(REPRESENTED BY THE CONSTRUCTION INDUSTRY FEDERATION)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim for plus payments and a finishing bonus on behalf of
approximately 16 general operatives.
BACKGROUND:
2. The claim concerns general operatives employed by the Company
in the operation of earth moving machines at the development of an
open cast mine near Kingscourt, Co. Cavan. Their rates of pay are
those provided for in the Construction Industry Registered
Employment Agreement (details supplied to the Court). The claim
was first submitted by the Union in 1988 during negotiations with
the Company on a comprehensive site agreement which would provide
for productivity bonus payments, site allowances, industrial
relations incentive bonus travelling payments and bonus schemes.
The Company rejected the claim on the grounds that site agreements
were only appropriate to very large construction projects, and
that this site was not such a project. The Union subsequently
claimed that the workers concerned should be paid an additional 40
pence per hour (plus payment) on the grounds that the earth moving
machines operated by the workers were exceptionally large and more
difficult to operate than those provided for in the Construction
Industry Agreement. The Union also claimed a finishing bonus
amounting to ten weeks' pay arguing that productivity on the site
was high, there were no industrial disputes, and that the bonus
was the norm for finishing a project on time. The Company
rejected the claims. Local discussions failed to resolve the
matter and the dispute was referred to the conciliation service of
the Labour Court on the 24th January, 1989. A conciliation
conference was held on the 10th February, 1989 but no agreement
was reached. The dispute was referred to the Labour Court for
investigation and recommendation on the 15th February, 1989. A
Court hearing was held on the 16th March, 1989.
UNION'S ARGUMENTS:
3. 1. For the past twelve months the workers concerned have
operated to a high level of efficiency and have co-operated
with Management in every way (details supplied to the Court).
They have only been paid the basic rates applying in the
industry with no reference to the normal site payments which
could be expected on such a major project. At no stage has
there been any acknowledgement, in a monetary sense, of the
high levels of productivity, the consistency of work and the
unusual degree of co-operation on site.
2. In an effort to secure some just reward for the workers'
contribution to the construction site, the Union sought to
negotiate a normal finishing bonus. This is a regular feature
on such sites and one which is generally regarded as an
incentive to assist in the smooth completion of work. The
bonus acknowledges the fact that work is carried out within a
specified time schedule and enables the contractor to gain
maximum advantage within the terms of his contact. Such a
finishing bonus can be flexibly applied and related to payment
in lieu of notice, termination dates, service on site etc.
The Union has sought to negotiate a completion bonus within
the normal procedural agreements. The Company has made no
offer either in local negotiations or at the conciliation
conference. The workers concerned have made it clear that
they will pursue this claim to finality and will not accept
such poor treatment from an employer for whom they have worked
so consistently.
3. Most construction workers have to face long periods of
unemployment between sites and depend on bonuses, during the
period on site and on completion, to carry them over such
periods of inactivity. The Union is bitterly disappointed
that at no stage did the Company make a serious effort to
conclude a satisfactory agreement. The Union has not
deliberately specified the amount in order to allow for a fair
negotiated settlement. It should be noted that very
substantial finishing bonuses were paid on completion of the
Tara Mines site and on virtually every civil engineering
project in the State (details supplied to the Court).
COMPANY'S ARGUMENTS:
4. 1. Both the Union and the Construction Industry Federation
(C.I.F.) are parties to the pay agreement of the Programme for
National Recovery (P.N.R.). Clause 4 of the P.N.R. states
that
"It is agreed that no further cost increasing claims will
be made on employers."
The claims being made by the Union are clearly of a cost
increasing nature and are therefore barred by the pay
agreement for the C.I.F. which is not due to expire until 31st
March, 1991. Machine operators' plus rates are negotiated at
national level in the construction industry and there is no
precedent for local agreements of the kind sought by the
Union. The plus rates were the subject of negotiation and
Labour Court investigation less than two years ago when the
Court recommended a substantial increase. In fact, under the
terms of that recommendation, increases ranging from 6 to 16%
are due on the 1st April, 1989. Both claims represent a
significant cost increase for the Company after the start of
the contract and not allowed for in the tendered price. Cost
increases of this nature are not recoverable and would have to
be borne entirely by the contractor.
2. Because of the recession in the construction industry
contractors' margins have narrowed considerably in recent
years, as a result they are not in a position to bear any
increase in costs over and above those allowed for at the time
of tendering. Concession of the claims whether total or
partial, would undoubtedly lead to similar claims against
other contractors on the site. The Company is a national
contractor operating, from time to time, throughout the
country. The concession of a finishing bonus or plus rates no
matter how small, will have immediate and inevitable
repercussions on other sites. The ultimate cost of this claim
would have serious effects on an industry already deep in
recession and with unemployment continuing at record levels.
Investment and activity in the industry, in real terms, have
fallen considerably over the past five years. All forecasts
indicate that there will be no significant reversal of this
trend in the next few years. Any increase in contractors'
costs at the present time will serve only to widen the cost
differential already existing in favour of the 'black
economy.'
3. The kind of payments being claimed by the Union are
appropriate only to very large construction projects while the
site concerned is a relatively small one. In fact, this
project is by no means the largest under construction in
Ireland at the present time. Site agreements developed during
a period when profit margins in the construction industry were
greater than at present. During that time there was
sufficient leeway on most jobs to allow some extra payments to
be made. This is no longer the case. Nowadays, in order to
get the work in the first place, the contractors must pare
their margins, with the result that they simply cannot meet
the type of claims being submitted by the Union.
RECOMMENDATION:
5. Having considered the submissions in this case the Court is of
the opinion that the claim for a finishing bonus or other similar
form of payment is clearly contrary to the terms of the Programme
for National Recovery. The Court therefore does not recommend
concession of the claim.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
20th April, 1989 Deputy Chairman.
T.O'D./J.C.