Labour Court Database __________________________________________________________________________________ File Number: CD93418 Case Number: LCR14281 Section / Act: S26(1) Parties: WOODFAB CORK LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Implementation of (i) Increase in basic pay of 3.75% under Clause 1, phase 3 of the programme for Economic and Social progress (P.E.S.P.). (ii) 1.50% increase in basic pay under Clause 3 of the P.E.S.P. (1.50% has been paid since 1/1/92).
Recommendation:
The Court, having considered all of the views expressed by the
parties in their oral and written submissions, considers that the
employees are entitled to the payment of the 3rd phase of the
P.E.S.P., from the due dates. However, given the current
financial constraints on the Company, the Court recommends that
the 3rd phase should be implemented with effect from the date of
this Recommendation and that the parties review the situation in
April, 1994, with a view to agreeing arrangements for the payment
of the arrears.
The Court does not recommend payment of a 1.5% increase under
clause 3 of P.E.S.P. at this time.
Division: MrMcGrath Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93418 RECOMMENDATION NO. LCR14281
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: WOODFAB CORK LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Implementation of
(i) Increase in basic pay of 3.75% under Clause 1,
phase 3 of the programme for Economic and Social
progress (P.E.S.P.).
(ii) 1.50% increase in basic pay under Clause 3 of the
P.E.S.P. (1.50% has been paid since 1/1/92).
BACKGROUND:
2. The Company is based in Fermoy and is involved in the timber
industry. It is owned by the Smurfit Group. The claim for the
increases in pay is on behalf of approximately 50 workers. The
Company has pleaded inability to pay. The dispute was referred to
the Labour Relations Commission and a conciliation conference was
held on the 19th of May, 1993 at which agreement was not reached.
The dispute was referred to the Labour Court, on the 12th of July,
1993, in accordance with section 26(1) of the Industrial Relations
Act, 1990. The Court investigated the dispute, in Cork, on the
27th of October, 1993, the earliest date convenient to both
parties.
UNION'S ARGUMENTS:
3. 1. The workers cannot afford to forego any pay-increases
due, as they are already on a very low rate-of-pay (details
supplied to the Court).
2. Without exception, all organised employments in the area
have paid the 3rd phase of the P.E.S.P. on the due date.
3. The workers in Fermoy have greatly increased their
productivity; throughput has been increased by 25%, from 120
cubic metres/day to 150 cubic metres/day, over the past 9
years.
4. The Fermoy plant was profitable up to 1992 and the
Company has returned to profitability since August, 1993
(details supplied to the Court).
5. Since the conciliation conference, the Company has
procured two increases in the selling-price of its product.
Consequently, the loss-making situation that was forecast has
been transformed into a profit-making situation. Workers
have been informed that they will be required to work every
second Sunday, an unprecedented level of activity within the
Company.
COMPANY'S ARGUMENTS:
4. 1. The plant in Fermoy has incurred considerable losses
over the past number of years. #350,000 was lost in 1992 and
#305,000 has been lost to June, 1993. The losses are caused
by a combination of 3 factors:-
(i) High cost of raw material;
(ii) Low price achievable in the market-place;
(iii) High conversion-costs relative to the industry
in general. The cost at Fermoy to convert one
cubic metre is #19.8 compared with #17.5 for the
industry in general.
2. The Phase 3 claim would cost the Company in the order of
#27,000 per annum. Due to economic and commercial
circumstances, and projections available, it is unlikely that
this phase could be implemented in the foreseeable future.
3. The Clause 3, 1.50% increase was implemented on the 1st of
January, 1992, with no commitment to the payment of the
balance of the Clause 3 increase. The cost of the additional
1.50% would be approximately #11,000 per annum, which the
Company cannot implement, due to its economic and commercial
circumstances.
RECOMMENDATION:
The Court, having considered all of the views expressed by the
parties in their oral and written submissions, considers that the
employees are entitled to the payment of the 3rd phase of the
P.E.S.P., from the due dates. However, given the current
financial constraints on the Company, the Court recommends that
the 3rd phase should be implemented with effect from the date of
this Recommendation and that the parties review the situation in
April, 1994, with a view to agreeing arrangements for the payment
of the arrears.
The Court does not recommend payment of a 1.5% increase under
clause 3 of P.E.S.P. at this time.
~
Signed on behalf of the Labour Court
6th December, 1993 Tom McGrath
M.K./A.L. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should by addressed to
Mr. Michael Keegan, Court Secretary.