Labour Court Database __________________________________________________________________________________ File Number: CD93188 Case Number: LCR14129 Section / Act: S26(1) Parties: BRAUN IRELAND LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning a claim for the payment of a 3% increase under the terms of Clause 3 (local bargaining) of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
5. Having considered the submissions of the parties the Court
notes that the Company accepts that the terms of Clause 3 of
P.E.S.P. apply to them. In the application of this clause there
is an obligation on the Union to negotiate its implementation
"taking full account of the implications for competitiveness, the
need for flexibility and change". Accordingly the Court
recommends that the parties meet immediately to negotiate on the
basis of item one (productivity) on the Company's list of savings.
When agreement is reached the 3% should be implemented with effect
from 1st July, 1993.
Division: Ms Owens Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD93188 RECOMMENDATION NO. LCR14129
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: BRAUN IRELAND LIMITED
(REPRESENTED BY THE IRISH BUSINESS EMPLOYERS AND CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning a claim for the payment of a 3% increase
under the terms of Clause 3 (local bargaining) of the Programme
for Economic and Social Progress (P.E.S.P.).
BACKGROUND:
2. 1. The Company was established in Carlow in 1974 and it
employs 1,000 workers in the manufacture of the Company's
personal care range. The terms of the P.E.S.P. were paid by
the Company with the last phase paid in January, 1993. The
Company is a manufacturing plant with no sales or research and
development responsibilities.
2. In January, 1992, the Union made a claim on the Company
for the payment of the 3% increase allowable under Clause 3 of
the P.E.S.P. The claim was made on the basis of past
flexibility and co-operation. The claim was referred to the
Labour Relations Commission and conciliation conferences were
held on 18th November and 10th December, 1992.
3. The Company's position was that any payment had to be
conditional on the increase being funded by operational change
within the Company. The Company put forward a number of
suggestions for cost savings which would allow an increase to
be paid. The Company's proposals were rejected by the Union
on the basis that they centred around the elimination of
negotiated benefits such as shift premia, overtime vouchers,
fixed shift and other allowances (details supplied). The
Company claimed that it was trying to address the Union's
claim for an increase in pay as in the present difficult
trading conditions, an increase in productivity would result
in the lay-off of staff.
4. No progress was possible at conciliation and the claim was
referred to the Labour Court on 23rd March, 1993 under Section
26(1) of the Industrial Relations Act, 1990. A Labour Court
investigation took place on 8th June, 1993 (the earliest date
suitable to both parties).
UNION'S ARGUMENTS:
3. 1. There is no doubt about the Company's ability to pay the
3% increase under the Terms of Clause 3 of the P.E.S.P. The
term "exceptional" as used in Clause 3 accurately describes
the Company's profit performance (details supplied). The
Company is very healthy and there is a low level of debt. In
these circumstances the failure of the Company to negotiate on
implementation of the 3% increase is unacceptable to the
workers. The workers rates of pay are low (details supplied)
and some workers are in receipt of the Family Income
Supplement. The workers rejected the attempt by the Company
to pay an increase which would result in no net benefit to the
workers.
2. The workers have never resisted change and consistently
given the flexibility required by the Company. If the workers
are expected to continue their current level of co-operation,
the 3% increase must be applied. The proposed elimination of
negotiated benefits is unacceptable in the light of the high
Company profits and the contribution made to those profits by
the workers. The Union is seeking the application of the 3%
increase without precondition, retrospective to 1st January,
1992.
COMPANY'S ARGUMENTS:
4. 1. The Company will pay the 3% increase proposed under Clause
3 of the P.E.S.P. In the current circumstances it can only do
so on a self financing basis. Immediate implementation on the
basis of productivity will, with no available market growth
opportunities, mean inevitable staff reductions being
effected.
2. The Company operates at labour efficiency levels
substantially below that of sister companies. The Company
competes for products and investment with other manufacturing
locations. The measure of the Company's success is the direct
cost of the product and not profitability as it is not a stand
alone business. The opportunities for funding the 3% increase
will be through increased labour efficiency. This option has
not been pursued to date as there are no markets for increased
production (details supplied). The Company asks that the
Court recommend that both parties await a more favourable time
when the Company can finance the payment which may be agreed
in return for productivity.
RECOMMENDATION:
5. Having considered the submissions of the parties the Court
notes that the Company accepts that the terms of Clause 3 of
P.E.S.P. apply to them. In the application of this clause there
is an obligation on the Union to negotiate its implementation
"taking full account of the implications for competitiveness, the
need for flexibility and change". Accordingly the Court
recommends that the parties meet immediately to negotiate on the
basis of item one (productivity) on the Company's list of savings.
When agreement is reached the 3% should be implemented with effect
from 1st July, 1993.
~
Signed on behalf of the Labour Court
Evelyn Owens
___________________
1st July, 1993. Deputy Chairman.
J.F./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.