Labour Court Database __________________________________________________________________________________ File Number: CD89179 Case Number: LCR12407 Section / Act: S67 Parties: ARKLOW POTTERY LTD - and - IRISH TRANSPORT AND GENERAL WORKERS UNION |
The implementation of the Programme for National Recovery with the #4 minimum payment.
Recommendation:
5. Having regard to the full circumstances of this case, the
Court recommends that the Union's claim be conceded.
Division: CHAIRMAN Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD89179 RECOMMENDATION NO. LCR12407
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ARKLOW POTTERY LTD
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION
SUBJECT:
1. The implementation of the Programme for National Recovery with
the #4 minimum payment.
BACKGROUND:
2. The company is engaged in the manufacture of table ware,
primarily for export. It was taken over by Noritake, Japan in
February, 1987. A pay agreement which resulted from Labour Court
Recommendation No. 11513 expired on 31st December, 1988. In
December 1988 discussions on the implementation of the Programme
for National Recovery took place between the company and Union.
The company sought to implement the agreement without the #4
minimum payment while the Union claimed that the minimum payment
clause should be honoured. As no agreement was reached the matter
was referred to the conciliations service of the Labour Court and
a conciliation conference took place on 15th February, 1989.
Following the conference on 15th February, the company offered a
minimum payment of #3.50 which was rejected by the Union. The
Union requested a Labour Court hearing and the company agreed.
The Court investigated the dispute in Arklow on 9th May, 1989.
UNION'S ARGUMENTS:
3. 1. Management are not pleading "inability to pay" the #4
minimum, so failure to apply the increase will damage the
goodwill and co-operation of workers in the company.
2. The special provision for low pay is an integral part of
the Programme for National Recovery. It is as a result of the
low rates of basic pay in the company that the minimum payment
is even an issue. The workforce had no wage increase in 1987
and only got a 3% increase from 1st January, 1988.
COMPANY'S ARGUMENTS:
4. 1. The company is in the early stages of a recovery
programme and its labour is its single major cost. Increases
in labour or in any other costs cannot be passed on by way of
higher prices. The company has increased its prices by 40%
since 1986, in an attempt to curtail losses.
2. Rates of pay in the company reflect the nature of the
industry. The cost of implementing the pay terms of the
Programme for National Recovery as proposed by the company is
#37,500 in 1989. Management cannot seek further loans from
the parent company to cover additional costs.
3. Each one cent fall in the value of the US. dollar
represents #14,000 per annum loss in revenue to the company.
As a result of dollar exchange rate changes since January
1988, the company has lost revenue of #280,000. If the dollar
continues to weaken, further losses will be incurred as 63% of
the company's total revenue is earned in the USA markets. In
an attempt to diversify its markets the company has invested
heavily in developing the U.K. market. In 1986 this market
accounted for 10% of the company's business - it now
represents 26%..
4. The terms of the Agreement on Pay as contained in the
Programme for National Recovery are very specific and it is
the company's view that these terms should be adhered to by
the union and its members. Clause 2 of the Pay Agreement
states that the #4 increase in basic pay can be paid by "local
negotiation and local agreement". Local negotiation failed to
reach agreement locally and as this is specifically provided
for in the Agreement the #4 minimum cannot be imposed.
5. Clause 3 of the Pay Agreement in the Programme for
National Recovery states:-
"These increases shall be applied through existing industrial
relations machinery, due regard being had to the economic and
commercial circumstances of the particular firm or industry".
The economic and commercial circumstances of the company are:-
- labour intensive.
- a competitive market.
- accumulated losses in excess of #7m.
- volatile trading position, exposed totally to
fluctuations in the U.S. dollar/Irish punt exchange
rate.
- an inability to pass on further cost increases via
price increases.
These factors were taken into consideration by the company in its
approach to the pay claim.
RECOMMENDATION:
5. Having regard to the full circumstances of this case, the
Court recommends that the Union's claim be conceded.
~
Signed on behalf of the Labour Court
Kevin Heffernan
19th May, 1989 ----------------
A.McG/U.S. Chairman