Labour Court Database __________________________________________________________________________________ File Number: CD90731 Case Number: LCR13203 Section / Act: S67 Parties: ELASTOMETALL IRELAND LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning an increase in pay and the implementation of a 39 hour week.
Recommendation:
8. Having considered the submissions from the parties the Court
is of the view that the terms of the P.N.R. should apply to the
claimants and accordingly recommends that the Company's offer as
set out in appendix 3 of their submission should be accepted.
Division: Ms Owens Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD90731 RECOMMENDATIONS NO. LCR13203
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 TO 1976
SECTION 67
PARTIES: ELASTOMETALL IRELAND LIMITED
(Represented by the Federation of Irish Employers)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning an increase in pay and the implementation
of a 39 hour week.
BACKGROUND:
2. The Company is located in Manorhamilton, Co. Leitrim and is
the sole subsidiary of a German Company, Elastometall G.M.B.H.
The Irish Plant manufactures a range of products for direct export
to its parent Company in Germany. The range of products include
rubber and metal bonded products for use in the car and
engineering industry.
3. The Company commenced operations in 1988 with five employees
and it now employs a total of 14. Prior to commencement a
comprehensive Plant Agreement was concluded by the Company. The
following rates of pay applied in August, 1988; Grade I operator -
#120; Grade II operator - #127. From the 2nd July, 1989 the
Company implemented the following revised rates:- Grades I #119
(training rate) #125 full rate; Grade II operator #129 (training
rate) #135.89 full rate. In May, 1990 the Company introduced a
two cycle shift which carried a premium of 16.67%.
4. On the 25th July, 1990 the Company offered to pay the final
phase of the Programme for National Recovery (P.N.R.). This offer
was rejected by the Union who sought an increase of #7 in basic
pay effective from 1st July, 1990 and the implementation of 39
hour week effective from 1st January, 1991.
5. The issue was referred to the conciliation service of the
Labour Court on 26th September, 1990. A conciliation conference
was held on 1st November, 1990. At the conciliation conference
the Company reaffirmed its offer of the final phase of the pay
terms of the P.N.R. and in addition offered to implement the 39
hour week with effect from 1st February, 1991 (see appendix).
This offer was rejected by the Union on the basis that the pay
element was too low. As no agreement was reached the parties
consented to a referral to the Labour Court for investigation and
recommendation. A Court hearing was held in Sligo on
12th February, 1991.
UNION'S ARGUMENTS:
6. 1. The Company's offer is not acceptable to the workers due
to the low level of increase. The workers were not party to
the P.N.R. and do not accept that it should be invoked even
at the final phase. The main problem is the low level of
basic pay which applies in this Company. By any standards
the rates fall considerably below the norms which could be
reasonably expected to apply in industry in any part of the
country and in particular to those applying in the North
Western Region (details supplied to the Court).
2. Payment of such low rates will, in the long run, be
counterproductive. The Company will have difficulty in
holding on to workers even in an oversupplied market as
exists in the North West Region. The Union believes that the
Company now has an opportunity to start redressing the
imbalance of low pay. The amount of increase sought (#7 a
week) is modest and is not much above what might be available
under the Programme for Economic and Social Progress if it is
ratified i.e. #5.43 a week.
COMPANY'S ARGUMENTS:
7. 1. The Company is newly established and is striving to
develop a strategy for the future and must pay particular
attention to its unit labour costs, given that presently
labour amounts to 35/40% of production costs. The present
commercial climate facing companies in the automotive and
engineering industries is not positive. The Company exports
all its product to its parent plant in Germany where, due to
a downturn in sales, 60% of it goes straight to stock. The
Irish plant is currently operating at 50% capacity. Hence
the Company needs to take a pragmatic approach to management
of its costs.
2. The Union have argued that the rates of pay are low when
compared with those applying to other companies in the
region. The Company rejects these comparisons as the
companies referred to are long established and employ much
bigger workforces.
3. When set-up in August, 1988 the Company agreed a
Comprehensive Plant Agreement with the Union and the rates
then applying were known to the parties. The increases
afforded in July, 1989 were once-off and the Company is not
in a position to repeat such increases again. The present
pay rates afforded by the Company are not out of line when
compared to similar companies who are at a similar stage of
development and size.
RECOMMENDATION:
8. Having considered the submissions from the parties the Court
is of the view that the terms of the P.N.R. should apply to the
claimants and accordingly recommends that the Company's offer as
set out in appendix 3 of their submission should be accepted.
~
Signed on behalf of the Labour Court
26th February, 1991 Evelyn Owens
M.D./M.O'C. _______________
Deputy Chairman
APPENDIX 3 OF COMPANY SUBMISSION
1. Pay:
The Company restated its offer as communicated, dated 25.7.90
providing for the implementation of the final phase of the
PNR as agreed between FIE/ICTU, and back-dated to 2.7.90 for
a period of 12 months. This would amount to an increase of
#4.00 per week in basic rates.
2. Re: The 39 Hour Week
(a) The Company proposed the implementation of the 39 hour
week pursuant to the Framework Agreement on Working
Time, effective from 1.2.91.
(b) The method of implementation would be by way of a one
hour earlier finish on Fridays only, with Friday shifts
operating from 8.30am - 3.30pm and 3.30pm - 10.30pm.
(c) Regarding overtime, any overtime worked following the
date of implementation, to be on the basis of 1/39th at
existing premiums.
(d) There shall be full co-operation with normal on-going
change and there shall be no consequential claims
arising out of any agreement reached.
(e) The Company further stated that it will not be pursuing
agreement on measures to offset the cost of the proposed
reduction, pursuant to Clause 4. of the Framework
Agreement, on the understanding that the foregoing
proposals be accepted by the Union and its members.