Labour Court Database __________________________________________________________________________________ File Number: CD90294 Case Number: LCR12995 Section / Act: S67 Parties: COMHLUCHT SIUICRE EIREANN TEO - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the maintenance of a relativity agreement.
Recommendation:
5. The Court is satisfied that, by reason of the fact that the
agreement of 1980 establishing a relativity between Local
Authority rates and the rates paid to the workers concerned has
been effectively inoperative for a number of years it no longer
constitutes a valid basis for the Union's claim, and having regard
to the circumstances in which the Company now trades no
justification exists for its revival. The Court therefore does
not recommend concession of the Union's claim.
Division: Mr O'Connell Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD90294 RECOMMENDATION NO. LCR12995
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: COMHLUCHT SIUICRE EIREANN TEO
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the maintenance of a relativity agreement.
BACKGROUND:
2. Since the late sixties clerical and administrative staff in
the Company have had a specific relativity with the pay of various
clerical grades in the local authorities. In 1980 the Company and
the Union agreed that clerical scales would carry a productivity
premium over and above the relevant local authorities scales. In
early 1990 the Union served a claim for a special pay increase on
foot of a special pay award that had been made to clerical grades
in the local authorities. The Company rejected the claim and
claims that the relativity agreement is no longer appropriate or
operable and has not been the direct basis for pay increases
awarded to clerical staff since 1983. The Union claims that the
relativity agreement has not been terminated and should be
honoured by the Company. No agreement was reached at local level
and the matter was referred on 20th March, 1990, to the
conciliation service of the Labour Court. An invitation to attend
a conciliation conference was issued to the parties on 30th March,
1990 and, following the receipt of a response on 8th May, 1990, a
conciliation conference was held on 5th June, 1990. No agreement
was reached at the conciliation conference and the matter was
referred on 6th June, 1990 to a full hearing of the Labour Court.
A Labour Court hearing on the matter was held on 14th August, 1990
(the earliest date suitable to the parties).
UNION'S ARGUMENTS:
3. 1. It is a long established arrangement that clerical grades
in the Company maintain a pay relativity with similar grades
in the local authorities. In the 1980 agreement the Company
accepted that its scales carry a percentage productivity
premium related to the relevant local authority scales. Until
fairly recently the Company has honoured this agreement and
should continue to honour it.
2. Over the past eight years the Union has co-operated fully
with the Company's rationalisation programme and the
introduction of new technology. The workers have received no
financial rewards for their co-operation and the reduction in
manning levels.
3. With the existing grading structure there is little room
for advancement and promotion. The workers concerned have no
likelihood of receiving pay increases beyond the terms of the
Programme for National Recovery (P.N.R.). The same cannot be
said concerning some other categories of the Company's
employees.
4. The Company is in a profit making situation and has more
than sufficient financial resources to meet its commitments
under the 1980 agreement. The Company honoured the agreement
when substantial losses were being made and should not now in
times of high profitability breach the agreement.
COMPANY'S ARGUMENTS:
4. 1. The relativity arrangement on clerical pay scales between
the Company and the local authorities is no longer appropriate
and has not been implemented since 1983. Wage increases have
been negotiated since then which have not automatically
followed pay movements in the local authorities. For instance
the Company implemented the 26th wage round increases for
clerical staff whereas no 26th wage round increase was paid in
the local authorities.
2. The Company now operates a strict commercial brief and it
is not commercially possible to take on board special pay
increases. In order to compete with bigger foreign companies
the Company must strictly control costs. Special pay
increases cannot be recovered in the marketplace and could
lead to a reduction in cost competitiveness and loss of jobs.
3. The clerical staff are well remunerated and increases
since 1983 have kept pace with consumer price index movements.
Their pay scales are significantly ahead of those of the
Company's home-based competitors and the vast majority of the
clerical staff are on the promotional grades. Most of the
Company's business activities are at a significant cost
disadvantage in the clerical area relative to its direct
competitors.
4. The Company's business growth is in the agri-food sector.
During the past three years the Company has been trying to
broaden its base through joint ventures and acquisitions. It
has found that its existing clerical costs are too high to be
borne by any new acquisitions or ventures and in this
situation the Company has been unable to transfer its clerical
workers into any new business. .
5. The P.N.R. expires for the Company on 30th November, 1991.
In the meantime the Company is not in a position to consider
further cost-increasing claims which could have repercussive
effects.
6. The recent profits made by the Company do not mean that
the Company can afford pay increases. The Company shows an
accumulated deficit in excess of #14 million in its most
recent accounts to September, 1989. The Company has paid no
dividend to its shareholders for 10 years. There is a need
for major capital investment in plant and machinery for the
Company to remain competitive.
RECOMMENDATION
5. The Court is satisfied that, by reason of the fact that the
agreement of 1980 establishing a relativity between Local
Authority rates and the rates paid to the workers concerned has
been effectively inoperative for a number of years it no longer
constitutes a valid basis for the Union's claim, and having regard
to the circumstances in which the Company now trades no
justification exists for its revival. The Court therefore does
not recommend concession of the Union's claim.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
31st August, 1990. Deputy Chairman
A.S./J.C.