Labour Court Database __________________________________________________________________________________ File Number: CD89475 Case Number: LCR12566 Section / Act: S67 Parties: CHILTON ELECTRIC LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim by the Union for the introduction of a bonus incentive scheme.
Recommendation:
5. The Court notes that present adult basic rates inclusive of
the 2nd phase of the P.N.R. are low by generally accepted
standards.
The Union has brought this claim in an attempt to redress the
situation but have indicated that there is no principle involved
for them in relaton to a bonus scheme. Both sides acknowledge
that the staff have been flexible and co-operative to on-going
change in the business. The Court therefore recommends that both
parties seek to negotiate practical and self-financing
productivity arrangements which can be of mutual benefit in terms
of both pay and production.
Division: CHAIRMAN Mr Brennan Mr O'Murchu
Text of Document__________________________________________________________________
CD89475 RECOMMENDATION NO. LCR12566
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CHILTON ELECTRIC LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim by the Union for the introduction of a bonus incentive
scheme.
BACKGROUND:
2. The Company, which was established in 1984, manufactures a
range of electrical domestic appliances and is a wholly owned
subsidiary of the Glen Dimplex Group. It is located in Dunleer,
Co. Louth and currently employs 210 people. The current basic
rate of pay for general operatives is #116 per week. (Wage rates
are age related up to age 20 and most of the workforce are very
young). The Union first raised the question of a bonus incentive
scheme in 1986, in the course of negotiations on the 25th wage
round. The Union contends that the then General Manager responded
positively to the claim in principle but was not prepared to
concede it at that time. The matter was again raised in the
course of the 26th round discussions. The settlement terms
reached in May, 1987 were as follows:-
1. "Basic Wage Increase 5% for 10 months commencing 1st
February, 1987, 1% for 3 months.
2. Incentive Scheme The Company will consider a
further request for an incentive scheme but wishes to point
out that such a scheme would necessarily include a total
review of the Company's operations, employment levels,
equipment and productivity.
No incentive schemes can be considered in isolation, simply
implemented on the present structures.
The determining factor in the Company's decision would be on
economic grounds, bearing in mind our unit labour costs and
the overall competitive situation for products in the context
of world pricing."
No progress was made on the question of the bonus scheme despite
local level efforts. The Company, having considered the position,
decided that a bonus scheme was inappropriate. The matter was the
subject of a Labour Court conciliation conference on 23rd June,
1989. No agreement being reached, it was referred to a full
hearing of the Labour Court. The hearing took place on 6th
September, 1989.
UNION'S ARGUMENTS:
3. 1. The current take home rates of pay in the Company are very
low ( approximately #101.37 for a married person and #87.56
for single person). The rates compare very unfavourably with
the average industrial wage and with rates in a
sister-company, Basic Engineering Limited (details supplied).
2. A bonus scheme operates successfully in Basic Engineering
Limited.
3. In 1987 the then General Manager conceded the claim in
principle. The inordinate delay in implementation has had a
negative effect on staff morale.
4. The Company has introduced efficiency measures in a number
of areas. The Union contends that the workers are currently
operating at incentive rate.
5. Bonus schemes are a generally accepted method of rewarding
workers for high performance.
COMPANY'S ARGUMENTS:
4. 1. Any bonus scheme, whether individual or group based would
not be self financing and would result in an increase in unit
labour costs. This would have a serious effect on
competitiveness which could seriously affect future
development and levels of employment. There would also be
administrative costs.
2. The Company has a very young workforce with wage rates
based on age up to 20 years. The effect of this has been to
increase the average labour rate by 9.5% last year and 9% in
the current year, despite the P.N.R. increase of less than 4%.
The Company must absorb these increases.
3. New products are constantly being introduced which could
upset the operation of a bonus scheme.
4. The Company's business is seasonal as most of its products
are heating appliances. Large numbers of temporary workers
are taken on for periods of up to 6 months each year. The
Company would foresee operational difficulties for long
periods with new trainees.
5. It is not the norm in the domestic appliances industry in
Ireland to operate bonus schemes. The fact that a scheme
operates in Basic Engineering, also part of the Glen Dimplex
Group, arises from that Company's history.
RECOMMENDATION:
5. The Court notes that present adult basic rates inclusive of
the 2nd phase of the P.N.R. are low by generally accepted
standards.
The Union has brought this claim in an attempt to redress the
situation but have indicated that there is no principle involved
for them in relaton to a bonus scheme. Both sides acknowledge
that the staff have been flexible and co-operative to on-going
change in the business. The Court therefore recommends that both
parties seek to negotiate practical and self-financing
productivity arrangements which can be of mutual benefit in terms
of both pay and production.
~
Signed on behalf of the Labour Court
Kevin Heffernan
____________________
3rd October, 1989. Chairman
A.K./J.C.