Labour Court Database __________________________________________________________________________________ File Number: CD90435 Case Number: LCR13063 Section / Act: S67 Parties: THE CONCENTRATE MANUFACTURING COMPANY OF IRELAND - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;CORK NO. 2 BRANCH |
Claim by the Union for a pay increase of #50 per week in respect of new technology and productivity.
Recommendation:
5. The Court notes that this dispute has been in existance for
quite some time. Having given very careful consideration to the
detailed submissions made by both parties and to the expansion on
those submissions at the Court hearing, the Court concludes in the
present circumstances that there is no basis on which it can
recommend concession of the Union's claim for payment for new
technology and productivity.
Division: Ms Owens Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD90435 RECOMMENDATION NO. LCR13063
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: THE CONCENTRATE MANUFACTURING COMPANY OF IRELAND
(TRADING AS PEPSI - COLA MANUFACTURING (IRELAND))
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
(CORK NO. 2 BRANCH)
SUBJECT:
1. Claim by the Union for a pay increase of #50 per week in
respect of new technology and productivity.
BACKGROUND:
2. The 25th Wage Round agreement included the condition that
there would be no further claims of any kind in relation to any
equipment or process changes which the Company deemed necessary
before 31st December, 1987. In 1988 the Company established a new
salts room and on 9th December, 1988 the Union lodged a claim for
#5 per week increase per employee in respect of new technology and
productivity became of this new addition and indicated its
intention to serve a follow-on claim on completion of further
expansion by the Company. The Company rejected the claim and
stated that the terms of the Programme for National Recovery
(P.N.R.) excluded such claims. The pay terms for the P.N.R.
became operative from 1st November, 1988 but the Company decided
not to implement them until the position of the Union's claim and
potential follow-on claims was clarified. Local negotiations took
place but no agreement was reached on the matter. However, in
order to facilitate the payment of the P.N.R. and the processing
of the claim through procedures the parties agreed on 18th April,
1989 to the following without prejudice to the position of either
party:
"The Company contends that the Pay Agreement of 9th December,
1987 and the terms of the National Plan preclude the Union
from serving any claim of a cost increasing nature.
The Union does not agree with that statement.
The Union contends that a claim it would serve on the Company
during the period of the National Plan would not be contrary
to the strict interpretation of the Plan.
The Company does not agree with that statement.
The Company has agreed to implement the terms of the National
Plan with retrospective effect to 1st November, 1988 on the
basis that such implementation is without prejudice to its
position as set out in Paragraph 1 above."
The Company claims that the Union withdrew the #5 per week claim
at that stage. The Union does not accept that its claim was
withdrawn. Local negotiations on the Company's investment plans
subsequently took place and the Union again raised the matter of
compensation. No agreement was reached at local level and the
matter was referred on 11th July, 1989 to the conciliation service
of the Labour Court. On 17th October, 1989 the Union formally
submitted a claim for #50 per week increase for its members in
respect of new technology and productivity. A conciliation
conference was held on 28th February, 1990 at which no agreement
was reached and the matter was referred on 26th July, 1990 to a
full hearing of the Labour Court. The hearing took place in Cork
on 10th October, 1990.
UNION'S ARGUMENTS:
3. 1. Since the expiry of the technology/productivity agreement
on 31st December, 1987, the Company has become involved in a
major expansion programme with the introduction of new
equipment. In addition, the Company is now producing 7Up.
The above has resulted in a substantial increase in volume
production of between 40% to 50%. This has necessitated the
workers to be involved in an extensive training programme in
new systems of production and acquiring a varied level of
skills, such as computerisation etc..
2. In the past the Company has concluded agreements on
increases in pay in return for co-operation for changes in
technology and productivity. It has been the practice that
on-going payments have been made for on-going changes in the
Company. The Union does not accept that such payments are
contrary to the P.N.R..
3. The Company has consistently refused to pay any increase
to the workers concerned who have cooperated with the Company
in introducing new technology which has created massive
savings for the Company. However the Company introduced
changes in the maintenance department and the three workers in
that department received increases in pay for the increased
level of skill required. The other workers should also
receive payment in respect of a comparable level of skill and
expertise required by the changes in technology and
productivity.
COMPANY'S ARGUMENTS:
4. 1. The pay terms of the P.N.R. have been agreed by the
parties and clause 4 of that agreement specifically excluded
any further cost-increasing claims for its duration. The
Union's claim would represent a significant cost increase,
with attendant implications for unit cost, competitiveness and
future investment. The claim is fundamentally in breach of
clause 4 and therefore must fail.
2. There is no guaranteed level of volume to any one plant
and the Company must compete both within the Pepsi Cola
manufacturing system and with external soft drinks producers.
Volume in 1989 dropped but it is projected that there will be
growth in 1990 mainly due to the production of 7 Up, the
introduction of which formed the major part of the investment
in the plant in 1989.
3. In order to remain competitive the Company must be able to
make continued investment in plant and equipment. Such
investment contributes to the long term security of the
Company and its employees. For such investment to attract the
penalty of an additional labour cost premium would be a
recipe for disaster.
4. One of the driving principles behind the P.N.R. was the
expansion of employment. Due to the investment by the Company
in 1988/89 there has been a consequent expansion of the
workforce (details supplied to the Court). The Company has
therefore made a major contribution towards the employment
goals of the P.N.R.
RECOMMENDATION:
5. The Court notes that this dispute has been in existance for
quite some time. Having given very careful consideration to the
detailed submissions made by both parties and to the expansion on
those submissions at the Court hearing, the Court concludes in the
present circumstances that there is no basis on which it can
recommend concession of the Union's claim for payment for new
technology and productivity.
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Signed on behalf of the Labour Court
Evelyn Owens
__________________________
29th October, 1990. Deputy Chairman
A.S./J.C.