Labour Court Database __________________________________________________________________________________ File Number: CD9414 Case Number: LCR14394 Section / Act: S26(1) Parties: JAMES MCMAHON LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim for 3% increase in basic pay for clerical workers, under Clause 3 (Local Bargaining) of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
Having reviewed the submissions of the parties and the financial
position of the business, the Court does not consider the
circumstances under which payments would arise under Clause 3 of
P.E.S.P. to have been met. Accordingly, the Court does not find
grounds to recommend concession of the Union's claim at this time.
However, the Court considers that the situation should be reviewed
in September, 1994, having regard to the state of the business at
that time.
Division: Mr Heffernan Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD9414 RECOMMENDATION NO. LCR14394
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
JAMES McMAHON LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for 3% increase in basic pay for clerical workers,
under Clause 3 (Local Bargaining) of the Programme for
Economic and Social Progress (P.E.S.P.).
BACKGROUND:
2. The Company was founded in 1830 and has operated a builders'
providers business at Corcanree, Limerick, since the early
1970s. The Union's claim which is on behalf of 8 clerical
workers is for the implementation of Clause 3 of P.E.S.P.,
effective from April, 1992. The claim was rejected on the
grounds that the Company was facing financial and trading
difficulties and could not afford any increase in costs. The
dispute was the subject of a conciliation conference, under
the auspices of the Labour Relations Commission, on the 4th
of November, 1993, at which agreement was not reached. The
dispute was referred to the Labour Court on the 14th of
January, 1994, in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute, in Limerick, on the 23rd of March, 1994.
UNION'S ARGUMENTS:
3. 1. The claim is an "exceptional" claim. The Company's
business has not dropped pro-rata with the decrease in
the number of clerical positions ( 10 redundancies,
saving the Company #130,000 per annum).
2. The 3% increase was paid to members of a different union
following their agreement to the introduction of new
technology. Clerical employees have assisted in the
smooth implementation of Company plans and have fully
co-operated in the setting-up and operation of the new
computer system and accordingly should receive the 3%
increase.
3. The saving to the Company arising from the new computer
system far outweighs any possible knock-on cost that
might be incurred if the 3% increase was granted to the
clerical workers.
COMPANY'S ARGUMENTS:
4. 1. The Company's audited accounts (details supplied to the
Court) show the serious financial position of the
Company, which renders it inappropriate to concede the
claim for a 3% pay increase.
2. High interest rates and less building activity have led
to big decreases in the Company's turnover (down by 20%
in 1992). Increased competition has resulted in margins
being reduced to an all-time low. The Company's
cash-flow crisis has been exacerbated by the insistence
by clients that they be extended credit terms. High
incidence of bankruptcy among building contractors has
resulted in an enormous increase in the Company's bad
debts.
3. The 3% pay increase was conceded to another union in the
Company in 1991, for application in 1992 because, at
that time, the Company's performance was at an
acceptable level. The 3% was agreed in respect of
changes in work-practices including lunchtime and
Saturday opening and the introduction of new technology.
Claims for the 3% pay increase in respect of any other
of the Company's 186 employees have been met with the
argument that the increase cannot be paid due to the
Company's financial difficulties.
4. The knock-on effects of the concession of the claim
would cost the Company approximately #85,000 per annum,
sufficient to tip the Company's financial position from
serious to critical.
5. The rate of pay enjoyed by the clerical workers
(#240.00 p.w.) is in excess of 40% above typical rates
paid for similar work in this sector of the industry.
RECOMMENDATION:
Having reviewed the submissions of the parties and the financial
position of the business, the Court does not consider the
circumstances under which payments would arise under Clause 3 of
P.E.S.P. to have been met. Accordingly, the Court does not find
grounds to recommend concession of the Union's claim at this time.
However, the Court considers that the situation should be reviewed
in September, 1994, having regard to the state of the business at
that time.
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Signed on behalf of the Labour Court
11th April, 1994 Kevin Heffernan
M.K./M.M. _______________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.