Labour Court Database __________________________________________________________________________________ File Number: CD92392 Case Number: LCR13826 Section / Act: S26(1) Parties: MONAGHAN POULTRY PRODUCTS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
A dispute concerning the introduction of a bonus scheme.
Recommendation:
In considering the submissions and evidence of the parties the
Court noted the part which staff flexibility played in the
expansion of the business and the fact that the expansion created
corresponding additional employment.
However, in regard to its claim for discussions on the
introduction of a bonus-scheme, the Court is not satisfied that
the Union established that such schemes are either usual or viable
in the industry. The comparator scheme cited was found to have
been a failure and had become a fixed payment bonus.
In the circumstances and having regard to the financial and market
difficulties pertaining in the industry, the Court does not find
grounds to recommend concession of the Union's claim.
Division: Mr Heffernan Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD92392 RECOMMENDATION NO. LCR13826
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES: MONAGHAN POULTRY PRODUCTS LIMITED
(Represented by the Federation of Irish Employers)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. A dispute concerning the introduction of a bonus scheme.
BACKGROUND:
2. 1. The Company is involved in the processing of chickens
for the home and U.K. market with an average weekly
throughput of between 180,000 - 210,000 chickens. The
Company has expanded over the years with the workforce rising
from less than 50 in 1978 to approximately 260 to-day.
2. The Union are seeking the Company's agreement, in
principle, to the introduction of a production bonus with the
detail to be worked out by appropriate experts. The Company
pointed out that the production process did not lend itself
to an accurately measurable productivity scheme which would
operate on a self-financing basis and consequently, the
introduction of a bonus scheme would be a direct increase in
pay which could not be sustained. The issue was the subject
of a number of local meetings and two conciliation
conferences in November, 1991 and the 4th June, 1992. The
parties failed to reach agreement.
3. The issue was referred, with the agreement of both
sides, to the Labour Court on the 6th July, 1992 and the
matter was investigated by the Court on the 8th October, 1992
in Monaghan.
UNION'S ARGUMENTS:
3. 1. The wage levels of workers in the Company have fallen
behind those in competitor companies in the area. A
competitior in the area is operating a bonus scheme.
2. The workers have at all times been very flexible in so
far as they varied their starting times to ensure the maximum
output.
3. The Company receive full co-operation when the workers
are required to start at 6.00 a.m. in order to fill export
orders.
4. The Company has enjoyed very good industrial relations.
There were no days lost due to industrial action in a very
long time.
5. The workers have exhausted all avenues open to them in
pursuing their claim to have their earnings brought more in
line with rates paid in the industry.
COMPANY'S ARGUMENTS:
4. 1. Both Monaghan Poultry Products and the poultry industry
in general is going through an unprecedented crisis. This
was evident even before the present currency situation.
There is surplus production in the home market, an increase
in cheap imports and consequent severe pressure on prices.
2. There are no further growth possibilities within the
Irish market and consequently the only possibility of
achieving increases in throughput is in the export area which
can only be done if the Company is in a position to
drastically reduce its costs in order to reduce its prices.
3. Monaghan Poultry Products is in a particularly difficult
position because of the level of investment which is required
in order to comply with EC Directives. Without this
investment the Company is liable to lose its approved
premises licence and consequently will have no future unless
this investment is made.
4. The basic pay rates in Monaghan Poultry Products are
competitive in relation to the poultry industry. The Company
strongly believes that a bonus scheme could not operate on a
self-financing basis and this indeed has been the experience
of other companies in the industry. The bonus scheme cited
by the Union proved so difficult to operate that they changed
it to a fixed payment scheme. In its present uncompetitive
position and in the light of the extent of investment
required, Monaghan Poultry Products could not possibly
sustain any additional labour cost without putting the whole
operation in jeopardy.
5. A claim for the introduction of a bonus scheme is
clearly a cost increasing claim and is precluded under the
terms of the PESP.
6. The trading position of the Company at the moment is on
a knife-edge. Unless there is a devaluation of the Punt or a
sharp rise in the value of Sterling, the Company will be
facing a major and unprecedented crisis within the next few
months.
RECOMMENDATION
In considering the submissions and evidence of the parties the
Court noted the part which staff flexibility played in the
expansion of the business and the fact that the expansion created
corresponding additional employment.
However, in regard to its claim for discussions on the
introduction of a bonus-scheme, the Court is not satisfied that
the Union established that such schemes are either usual or viable
in the industry. The comparator scheme cited was found to have
been a failure and had become a fixed payment bonus.
In the circumstances and having regard to the financial and market
difficulties pertaining in the industry, the Court does not find
grounds to recommend concession of the Union's claim.
~
Signed on behalf of the Labour Court
3rd November, 1992 Kevin Heffernan
P.O'C./M.H. -----------------------------------
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Paul O'Connor, Court Secretary.