Labour Court Database __________________________________________________________________________________ File Number: CD91396 Case Number: LCR13478 Section / Act: S26(1) Parties: MILFORD (DONEGAL) BAKERY - and - THE FEDERATION OF IRISH EMPLOYERS;THE BAKERY AND FOOD WORKERS' AMALGAMATED UNION |
Claim by the Union for the implementation of a 39 hour week and pay increases under the 3rd phase of the Programme for National Recovery (P.N.R.) and the 1st phase of the Programme for Economic and Social Progress (P.E.S.P.)
Recommendation:
5. The Court, having considered the submissions in this case,
recommends as follows:-
(1) Payment of the final phase of the P.N.R. to be made from
1st October, 1991. The arrears due from 1st April, 1990
to 30th September, 1991 to be paid no later than 31st
March, 1993.
(2) The parties to meet as soon as possible and not later
than 1 month from the date of this recommendation to
resolve the problems relating to production costs and the
future viability of the Company and also to reach
agreement on the introduction of pay terms of the
P.E.S.P. and the 39 hour week.
Division: Ms Owens Mr Keogh Mr Devine
Text of Document__________________________________________________________________
CD91396 RECOMMENDATION NO. LCR13478
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: MILFORD (DONEGAL) BAKERY
AND FLOUR MILLS TRADING COMPANY LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
THE BAKERY AND FOOD WORKERS' AMALGAMATED UNION
SUBJECT:
1. Claim by the Union for the implementation of a 39 hour week
and pay increases under the 3rd phase of the Programme for
National Recovery (P.N.R.) and the 1st phase of the Programme for
Economic and Social Progress (P.E.S.P.)
BACKGROUND:
2. The Company operates bakeries in Milford and Ballyshannon.
The Union is claiming the 3rd phase pay increases under the P.N.R.
from 1st April, 1990, the introduction of the 39 hour week under
the P.N.R. from 31st March, 1991, and the 1st phase pay increases
under the P.E.S.P. from 1st April, 1991. The Company is claiming
inability to pay the claim. No agreement was reached at local
level discussions and the matter was referred on 21st May, 1991 to
the Labour Relations Commission. A conciliation conference was
held on 15th July, 1991 at which no progress could be made to
resolve the dispute. The matter was referred to the Labour Court
on 30th July, 1991 in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute in Letterkenny on 23rd October, 1991. Before the hearing,
the Company submitted details of its financial circumstances to
the Court on a strictly private and confidential basis.
UNION'S ARGUMENTS:
3. 1. The Union entered into the P.N.R. and P.E.S.P. agreements
in good faith and has been patient in its demands for payment
of the pay increases due and the implementation of a 39 hour
week. The Company should comply with the terms of the two
agreements.
2. The Union is aware of the difficulties created in the
bakery industry in recent years. These difficulties are not
related to wage rates and the pay increases due to the workers
concerned should be paid.
COMPANY'S ARGUMENTS:
4. 1. In 1990 the Company was purchased by way of a management
buy out. The Company then engaged in a process of
rationalisation and re-structuring in an effort to become more
competitive and redress existing losses. This has proved
difficult given the financial position of the Company (details
supplied confidentially to the Court). The Company is not in
a position to absorb further increases in labour costs on top
of existing losses.
2. There have been traumic changes in the bakery industry
since 1985. While raw materials costs have increased there
has been downward pressure on bread prices. The Company is
competing against non-unionised bakeries which have
significantly lower labour costs. Many competitors do not
afford a comparable basic rate or pay traditional premiums
related to the industry. Many such companies are highly
automated and are non-labour intensive. In these
circumstances any development of the Company's business must
focus attention on plant technologies, distribution systems
and labour costs.
3. In 1990 the Company implemented 28 redundancies. Due to
continuing difficulties the Company instituted 9 temporary
lay-offs on 4th October, 1991. To implement the Union's claim
would further hinder the Company's position and would
negatively impact on the job security of the workers.
4. Given the severe difficulties encountered by the Company
it is disappointed that the Union at local discussions was
unwilling to accept any plan that would result in a reduction
of workers' earnings. The Union failed to make constructive
suggestions which might have enabled the Company to facilitate
at least in part some of the Union's claim. The Union also
rejected the Company's suggestion that its claim could be
considered as part of an overall re-organisation.
5. The P.N.R. and P.E.S.P. recognise that in particular
circumstances a Company may be unable to meet the pay
increases in the agreements, and that due regard must be had
to the economic and commercial circumstances of the particular
firm or industry. In this particular case it must be
recognised that increased labour costs would have a negative
effect on the viability of the Company and the preservation of
jobs.
RECOMMENDATION:
5. The Court, having considered the submissions in this case,
recommends as follows:-
(1) Payment of the final phase of the P.N.R. to be made from
1st October, 1991. The arrears due from 1st April, 1990
to 30th September, 1991 to be paid no later than 31st
March, 1993.
(2) The parties to meet as soon as possible and not later
than 1 month from the date of this recommendation to
resolve the problems relating to production costs and the
future viability of the Company and also to reach
agreement on the introduction of pay terms of the
P.E.S.P. and the 39 hour week.
~
Signed on behalf of the Labour Court
Evelyn Owens
___________________
21st November, 1991. Deputy Chairman
A.S./J.C.