Labour Court Database __________________________________________________________________________________ File Number: CD88765 Case Number: LCR12256 Section / Act: S67 Parties: MCCANN'S BAKERY LIMITED - and - THE BAKERY AND FOOD WORKERS AMALGAMATED UNION |
Claim for the implementation of a wage increase under the terms of the Programme for National Recovery (P.N.R.).
Recommendation:
6. Having considered the submissions made by the parties and
noting the financial position of the Company, the Court recommends
that the parties agree to implement the first phase of the
National Plan with effect from 1st January, 1989. The Court also
recommends that the parties should review the question of payment
of the 2nd phase on 1st April when it falls due.
Division: Mr Fitzgerald Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88765 RECOMMENDATION NO. LCR12256
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: MCCANN'S BAKERY LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
THE BAKERY AND FOOD WORKERS AMALGAMATED UNION
SUBJECT:
1. Claim for the implementation of a wage increase under the
terms of the Programme for National Recovery (P.N.R.).
BACKGROUND:
2. The Company is a family owned bakery which has been in
business for over one hundred years. It employs forty seven
people. Of the twenty two production workers, nineteen have been
on a three day week since November, 1987. In February, 1988 at a
meeting of the National Joint Industrial Council (N.J.I.C.) for
the Bakery and Flour-Confectionary Trade, the Union sought the
implementation of the terms of the P.N.R. for its members, which
is due from 1st April, 1988. At a further meeting of the
N.J.I.C., the Company stated, that due to financial reasons, they
were unable to pay any increases due under the plan. Local
discussions failed to resolve the issue and the dispute was
referred to the Conciliation Service of the Labour Court on the
23rd June, 1988. A conciliation conference was held on the 20th
September, 1988, but no agreement was reached. The dispute was
referred to the Labour Court for investigation and recommendation
on the 11th October, 1988. A Court hearing took place in Dundalk
on the 22nd November, 1988. A copy of the Company's Management
Accounts was forwarded to the Court (at its request) on the 29th
November, 1988.
UNION'S ARGUMENTS:
3. 1. The Union is requesting on behalf of its members that the
Company immediately implement the terms of the P.N.R. with a
minimum increase of four pounds per week on the adult basic
rate. The Union participated in the P.N.R. in order that some
stability might be obtained in wage increases for its members.
The pay rise now sought on behalf of the employees is
relatively small and would not significantly increase the
Company's costs.
2. In the past year the Union has given every assistance
possible to the Company by way of agreeing to the re-rostering
of hours, starting time of four a.m., and the introduction of
night baking. Employees work long and unsociable hours, rates
of pay in the industry are poor, and the increase would only
amount to approximately five pounds per week per individual.
Most other companies have paid the wage increases due under
the terms of the P.N.R., and there is no reason why this
Company could not do likewise.
3. The Union rejects the Company's argument that financial
difficulties, and the impact of competition from non-union
bakeries are the causes of its inability to pay. Unionised
bakeries are as efficient as non-union ones, and it is
Management's job to counteract the selling of low cost bread
by the non-union companies to various outlets. The Company
has recently expanded its operation and if finance is
available for this purpose, it should also be available to pay
a modest wage increase.
4. The employees within the Company have made many sacrifices
for the Company in the past year. The Company has stated that
if it is forced to pay this increase it may go into
liquidation. The Union is not prepared to accept the
Company's threat of 'going into liquidation' as an excuse to
avoid paying a small wage increase.
COMPANY'S ARGUMENTS:
5. 1. There have been unprecedented difficulties in the
unionised bakery industry since the late 1970's. Details have
been supplied to the Court of various bakeries which have gone
into liquidation in recent years. Many jobs have been lost.
With the decline of unionised bakeries there has been an
expansion of non-union bakeries.
2. The Company has been in a serious loss making situation in
recent years, and accumulated losses are in excess of
#160,000. The total number of creditors has increased since
1987, as has the total amount of credit outstanding. In 1987
the Company and the Union entered into cost reduction
discussions, in order to try to secure the survival of the
Company. The outcome of those discussions was that the
majority of employees worked a three day week, and claimed
their social welfare entitlements for the remaining days.
This situation has left employees in a very advantageous
position, (details of their earnings have been supplied to the
Court). In recent months the Company appears to be operating
in a break-even situation. This has been achieved by a very
tight control of expenditure and a stabilisation of the
decline in sales. Were the Court to recommend implementation
of the wage agreement it would reverse this position and put
the Company back in a loss making situation. Based on last
year's salaries (and assuming an average increase of 2.75%)
the total cost of implementing the wage agreement over the
three year period would be in excess of #50,000. This could
represent the difference between the Company being in a
position to continue trading, or having no alternative but to
cease trading.
4. The Company has no reserves or assets it can realise, and
the only way that the present difficulties can be overcome is
to try and trade out of the situation. In the past year a
number of family members have made personal cash injections of
monies which were necessary to keep the Company viable. None
of the clerical employees have received any wage increases
this year, and management have not had any increases for over
two years. This situation will continue. In order to
stabilise the Company's situation and improve its performance
(as opposed to just avoiding liquidation) it will be necessary
to make further investments in the future. This will include,
as a priority, the purchase of a reconditioned slicer
reconditioned retarders, and new mixers if possible. This
will involve a considerable financial outlay for the Company.
5. The Company feels confident that with the full
co-operation of the Union and the workforce, it can implement
measures to secure the continued operation of the bakery.
However an integral part of this plan is a moratorium on
additional cost increases where possible. In these
circumstances, and given the present advantageous financial
position of the employees, the Company requests that no
increases be granted for the three year duration of the wage
agreement.
RECOMMENDATION:
6. Having considered the submissions made by the parties and
noting the financial position of the Company, the Court recommends
that the parties agree to implement the first phase of the
National Plan with effect from 1st January, 1989. The Court also
recommends that the parties should review the question of payment
of the 2nd phase on 1st April when it falls due.
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Signed on behalf of the Labour Court
Nicholas Fitzgerald
_______________________
7th February, 1989. Deputy Chairman
T.O'D/J.C.