Labour Court Database __________________________________________________________________________________ File Number: CD93490 Case Number: LCR14241 Section / Act: S26(1) Parties: RALEIGH (IRELAND) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;ELECTRONICS AND ADMINISTRATION BRANCHES |
Claim for implementation of the Clause 1, Phase 3, 3.75% increase in basic pay, under the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
The Court, having considered all of the views expressed by the
parties in their oral and written submissions, finds that there is
an obligation on the Company to meet the terms of Clause 1 (3rd
Phase) of the P.E.S.P.
The Company and the Union should meet as a matter of urgency and,
taking account of the current difficulties, agree arrangements for
the implementation of the payment of the 3rd Phase of P.E.S.P.
The Court so recommends.
Division: MrMcGrath Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD93490 RECOMMENDATION NO. LCR14241
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: RALEIGH (IRELAND) LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
(ELECTRONICS AND ADMINISTRATION BRANCHES)
SUBJECT:
1. Claim for implementation of the Clause 1, Phase 3, 3.75%
increase in basic pay, under the Programme for Economic and Social
Progress (P.E.S.P.).
BACKGROUND:
2. The Company distributes bicycles throughout Ireland and
employs 36 staff. This claim involves 10 administrative and 12
Electronics/Engineering workers. The claim is for the
implementation of the Phase 3 (P.E.S.P.) increase of 3.75% due to
the workers since the 1st of April, 1993.
The Company is pleading inability to pay the increase, on the
grounds that it has suffered substantial losses since 1991, due to
difficult trading conditions. The dispute was referred to the
Labour Relations Commission and conciliation conferences were held
on the 10th of June and the 30th of July, 1993, at which agreement
was not reached. The dispute was referred to the Labour Court on
the 20th of August, 1993, in accordance with section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute on the 22nd of October, 1993.
UNION'S ARGUMENTS:
3. 1. The workers are entitled to the Clause 1, Phase 3
increase from the 1st of April, 1993. While there are
provisions in the P.E.S.P. (Clause 7) dealing with problems
which might arise, there is no suggestion that a plea of
"inability to pay" can validly be put forward by an employer.
2. While acknowledging the Company's reported losses in
1992, it should be noted that the Company made profits of
approximately #380,000 in 1990/1991. The recent decline in
the Company's sales volumes and price margins is short-term
and does not justify the Company's refusal to honour its
obligations under the P.E.S.P.
3. The workers have not received a pay increase other than
the increases granted under Phases 1 and 2 of the P.E.S.P.
In the meantime, they are subject to financial pressures
due to the rising cost of living. Without the Phase 3
increase, the workers are financially less well-off than they
were last year. This is in conflict with the aims and
purpose of the P.E.S.P.
4. The financial cost of implementating the Phase 3
increase would be between #25,000 and #30,000. Other
expenditure by the Company is not subject to the same
"belt-tightening" as are wages.
COMPANY'S ARGUMENTS:
4. 1. Business conditions for the Company have been difficult
since 1991. Factors contributing to these difficulties
include: increased competition, reduced selling prices,
decreased margins and decreased volume sales (details
supplied to the Court).
2. In order to turn around the Company's serious situation,
costs have been cut wherever possible. Non-payroll
expenditure is currently in line with the budget for 1993.
Various other measures have been employed to strengthen the
Company's position (details supplied to the Court).
3. The annual cost of a 3.75% pay increase would be #27,000
which the company cannot afford. Clause 2 of the P.E.S.P.
provides that the basic increases agreed under the P.E.S.P.
should have "due regard to the economic and commercial
circumstances of the particular firm, employment or
industry". It is appropriate, therefore, for the company to
plead inability to pay the increase.
RECOMMENDATION:
The Court, having considered all of the views expressed by the
parties in their oral and written submissions, finds that there is
an obligation on the Company to meet the terms of Clause 1 (3rd
Phase) of the P.E.S.P.
The Company and the Union should meet as a matter of urgency and,
taking account of the current difficulties, agree arrangements for
the implementation of the payment of the 3rd Phase of P.E.S.P.
The Court so recommends.
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Signed on behalf of the Labour Court
15th November, 1993 Tom McGrath
M.K./A.L. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should by addressed to
Mr. Michael Keegan, Court Secretary.