Labour Court Database __________________________________________________________________________________ File Number: CD92379 Case Number: LCR13716 Section / Act: S26(1) Parties: CROWN BERGER IRELAND - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union for payment of a 3% pay increase to factory staff under clause 3 (local bargaining) of the Programme for Economic and Social Progress (P.E.S.P.)
Recommendation:
5. The Court has considered all of the alternatives proposed by
either side during the negotiations on the application of the 3%
increase and has come to the conclusion that the proposal put
forward at conciliation level on the 3rd March is the most
reasonable in the circumstances and should be accepted. (Subject
to the implementation date being 1/1/92). The Court further
considers that the terms of the proposal are in keeping with the
spirit and intent of Clause 3 of P.E.S.P.
Division: Ms Owens Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD92379 RECOMMENDATION NO: LCR13716
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: CROWN BERGER IRELAND
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union for payment of a 3% pay increase to
factory staff under clause 3 (local bargaining) of the Programme
for Economic and Social Progress (P.E.S.P.)
BACKGROUND:
2. 1. Clause 3 of the P.E.S.P. provides for local bargaining
on rates of pay for an amount up to but not exceeding 3%.
Such changes may be implemented not earlier than the second
year of the P.E.S.P. in each particular employment. Phase 2
of the P.E.S.P. was due in the Company on 1st January, 1992.
In late 1991 the Union claimed implementation of a 3% pay
increase for factory staff under clause 3. The Company
responded that it was willing to enter into negotiations on
clause 3 but that it had a problem concerning the affect such
an increase would have on the bonus scheme. The bonus scheme
was introduced in 1975 and it has become the practice that
all factory workers achieve the bonus standard. The scheme
includes a "trigger mechanism" whereby the bonus scale
remains unaltered until such time as it falls below 30% of
the basic pay rate. It is then triggered back to 33.33% of
basic pay. The problem for the Company is that if the basic
rate is increased by 3%, the 3% together with the activation
of the trigger mechanism in the bonus scheme will result in
an overall pay cost of approximately 6%. The Company claims
that such an increase is contrary to the intention of clause
3 and that some manner of reducing the effects of the trigger
mechanism is required. The Union claims that the 3% under
clause 3 should be conceded by the Company in full and that
the trigger mechanism should be activated as normal under the
bonus scheme.
2. No agreement was reached at local level discussions and
the matter was referred in January, 1992 to the Labour
Relations Commission. Conciliation conferences were held on
3rd March and 15th April 1992 at which the Company made a
final offer of 3% on basic pay and 3% on the bonus payment
which would result in an overall increase of 3% of total
earnings. The offer was made on the understanding that
formal re-triggering of the bonus scheme would not take place
until 1st January, 1993. This offer was rejected by the
workers. The dispute was referred to the Labour Court on
16th June 1992 under Section 26(1) of the Industrial
Relations Act, 1990. The Court investigated the dispute on
13th July, 1992.
UNION'S ARGUMENTS:
3. 1. The local bargaining clause 3 of the P.E.S.P. clearly
indicates the right to insist on the pay increases without
any additional contribution from workers. The Company is in
a strong financial position and can afford to pay the
increase under clause 3 from 1st January, 1992.
2. The trigger mechanism in the bonus scheme maintains a
link between basic pay rates and the bonus payment. This
link has existed since 1975 and the trigger mechanism has
operated since then. The workers should not be asked to
forego this clearly established link. The Company should
concede the claim with activation of the trigger mechanism in
accordance with the terms of the bonus scheme.
COMPANY'S ARGUMENTS:
4. 1. The wording of clause 3 is clear in its intent:-
"Exceptionally, employers and trade unions may negotiate
further changes in rates of pay.......which may be for an
amount up to but not exceeding 3%......"
It would be both inequitable and cost prohibitive for the
Company to be forced into paying in excess of 3% under Clause
3 by virtue of its effect on the re-triggering of the bonus
scheme.
2. The Company fully accepts that the adjusted bonus
payment will apply from January 1, 1993, following the
implementation of Phase 3 of P.E.S.P. as the increase is
compulsory, i.e. not negotiable. The local bargaining clause
on the other hand is negotiable, thereby requiring the rate
of increase and accompanying quid pro quo to be agreed by
both parties, taking into account relevant commercial
factors.
3. The Company is fully complying with the true meaning of
the P.E.S.P. local bargaining clause by agreeing to apply the
maximum 3% increase to both the basic rate and the bonus rate
from February, 1992, and by agreeing that the re-triggering
of the bonus scheme should not take place until January 1,
1993.
4. The paint market in Ireland is in steady decline and the
Company is competing with other companies who have lower unit
production costs. To increase costs further would lessen the
chances of survival of the Company's manufacturing operation.
RECOMMENDATION:
5. The Court has considered all of the alternatives proposed by
either side during the negotiations on the application of the 3%
increase and has come to the conclusion that the proposal put
forward at conciliation level on the 3rd March is the most
reasonable in the circumstances and should be accepted. (Subject
to the implementation date being 1/1/92). The Court further
considers that the terms of the proposal are in keeping with the
spirit and intent of Clause 3 of P.E.S.P.
~
Signed on behalf of the Labour Court
21stJuly, 1992 Evelyn Owens
A.S./M.H. ------------------------------
Deputy Chairman.
NOTE
Enquiries concerning this Recommendation should be addressed to
Mr. Alfie Smith, Court Secretary.