Labour Court Database __________________________________________________________________________________ File Number: CD92134 Case Number: LCR13692 Section / Act: S26(1) Parties: SHANNON AIRCRAFT MOTOR WORKS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the revision of a pay structure.
Recommendation:
5. The Court considers there is merit in the case being made by
the employees that the rates of pay should be improved.
However taking account of the current financial position of the
Company and the constraints of the pay provisions of the Programme
for Economic and Social Progress the Court takes the view that the
claim cannot be dealt with at this time.
The Court recommends that the employees accept the Company offer
and that at the termination of the agreement on the Programme for
Economic and Social Progress the parties address the issue of the
rates of pay.
Division: MrMcGrath Mr McHenry Mr Rorke
Text of Document__________________________________________________________________
CD92134 RECOMMENDATION NO. LCR13692
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: SHANNON AIRCRAFT MOTOR WORKS
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the revision of a pay structure.
BACKGROUND:
2. The Company commenced operations in 1989 and is engaged in the
rewinding of motors for the aircraft industry. It employs 32
workers whose grades and wage rates are as follows:
Group Leader - #220 Per Week
Winder Grade A #190 - #200 " "
Winder Grade B #150 - #170 " "
Winder Grade C #100 - #120 " "
Apprentices, Rate 40% to 80% of Grade B
Shipping and Stock Clerk #200 per week.
The Company recognised the Union in July, 1990. In January, 1991
following discussions between the parties, the Company increased
wages by 5%, holidays were increased and the 39 hour week was
introduced. In July, 1991, the Union submitted a claim for an
increase in the wage rates in excess of the terms of the P.E.S.P.
Management rejected the claim. The issue was referred to the
Labour Relations Commission on the 10th October, 1991. A
conciliation conference was held on the 17th January, 1992 but no
agreement was reached. The dispute was referred to the Labour
Court by the Labour Relations Commission on the 20th February,
1992. The Court investigated the dispute in Limerick on the 10th
June, 1992.
UNION'S ARGUMENTS:
3. 1. The Company's offer to implement the 1st phase of the
P.E.S.P. was rejected by the Union on the grounds that it did
not reflect a real commitment on the part of Management to
deal with the current low level of wages in the Company. The
Union's position is that before the terms of the P.E.S.P. are
implemented the matter of wage levels must be addressed and
must apply from 1st July, 1991. The Company's rates of pay do
not compare favourably with comparable employments in the
region (details supplied to the Court). If the Company is to
develop in the future it must make an investment in the
workers by paying them reasonable rates of pay in order to
ensure motivation and a commitment to the Company.
2. At conciliation the Union made the following proposal,
(i) Wage rates to be adjusted by 4% from 1st July,
1991.
(ii) First phase of the P.E.S.P. to be paid from 1st
April, 1992
(iii) Winder Grade C rate increased to 85% of the B rate
(currently 70%).
(iv) Apprentice rate to be percentage of Winder Grade A
rate (currently percentage of Winder B).
These proposals are fair and reasonable and should be
implemented by the Company.
COMPANY'S ARGUMENTS:
4. 1. The Company has not traded profitably since 1989 despite a
significant investment. The Company is in a start-up position
and this must be recognised. Profits have not been generated
and there has been no return on the Company's initial
investment. There is a recession in the aviation industry
which is expected to continue into 1993. In this context the
Union's claim for excessive wage increases is not justifiable.
The rewinding business is the only one of its type in Europe
and there was no trained manpower available. At the present
time over 50% of the workforce is undergoing training.
2. The Company has proposed to significantly adjust the wage
rate applying to Winder Grade C and also to apply the P.E.S.P.
to all grades from 1st October, 1991. These rates are
competitive in terms of the industry and the region and are
generous in the context of the Company's financial situation.
The Company is committed to implement Clause 3 of the P.E.S.P.
on a phased basis from 1st October, 1992, with the
implementation of phase 2 of P.E.S.P.
3. The Union's claim for additional increases is precluded
under clause 5 of the P.E.S.P. as a cost increasing claim and
must be rejected as being in breach of the Programme.
RECOMMENDATION:
5. The Court considers there is merit in the case being made by
the employees that the rates of pay should be improved.
However taking account of the current financial position of the
Company and the constraints of the pay provisions of the Programme
for Economic and Social Progress the Court takes the view that the
claim cannot be dealt with at this time.
The Court recommends that the employees accept the Company offer
and that at the termination of the agreement on the Programme for
Economic and Social Progress the parties address the issue of the
rates of pay.
~
Signed on behalf of the Labour Court
Tom McGrath
____________________
26th June, 1992. Deputy Chairman
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.