Labour Court Database __________________________________________________________________________________ File Number: CD9415 Case Number: LCR14402 Section / Act: S26(1) Parties: JAMES MCMAHON LIMITED - and - MARINE PORT AND GENERAL WORKERS' UNION |
Dispute concerning: (i) claim by general operatives for implementation of the 3% increase in pay, under Clause 3 (local bargaining) of the Programme for Economic and Social Progress (P.E.S.P.) ; (ii) the Company's Pension Scheme.
Recommendation:
CLAUSE 3, P.E.S.P.
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.
PENSION SCHEME
The Court accepts the Union's argument that it is open to them,
under Clause 4 of the P.E.S.P., to seek a revision of the terms of
the existing benevolent scheme, or to enter into negotiations on
the introduction of a properly-funded scheme.
However, having regard to the financial position of the Company,
the Court does not regard the introduction of such a scheme as a
practicality in the short-term. Nevertheless, a full examination
of the costings, both to the Company and the workers, should be
undertaken, so that the preliminary work will have been completed
when the Company's financial situation improves sufficiently to
cater for a scheme.
In the interim, the parties should meet and negotiate some
improvements in the existing benevolent scheme. In particular the
absolute requirement of 30 years' service should be changed and
consideration given to pro-rata benefits.
The possibility of workers' contributions should also be
considered.
Division: Mr Heffernan Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD9415 RECOMMENDATION NO. LCR14402
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
MARINE PORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute concerning:
(i) claim by general operatives for implementation of the 3%
increase in pay, under Clause 3 (local bargaining) of
the Programme for Economic and Social Progress
(P.E.S.P.) ;
(ii) the Company's Pension Scheme.
BACKGROUND:
2. The Company was founded in 1830 and has operated a builders'
providers business at Corcanree, Limerick since the early
1970s. The Union is seeking the implementation of Clause 3
of the P.E.S.P. and the re-structuring of the Company's
pension scheme, from a benevolent retirement payment scheme
to a contributory pension scheme. The Company maintains that
it cannot afford to pay the P.E.S.P. Clause 3, 3% increase.
The Company's position on the pension scheme is that Clause 4
of the P.E.S.P. provides for the introduction of a pension
scheme "where none already exists". The Company also claims
that it cannot afford the considerable cost-implications of
the scheme.
The dispute was referred to the Labour Relations Commission
and a conciliation conference was held on the 5th of
November, 1993, at which agreement was not reached. The
dispute was than 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:
CLAUSE 3 P.E.S.P.
3. 1. In 1989, a dispute concerning productivity and
rationalisation was referred to arbitration. In his
findings, the arbiter stated that, in 1991, on the
expiry of the Programme for National Recovery (P.N.R.),
the parties could then "review the pay structure,
without commitment on either side". Since 1991, three
staff have left the Company and have not been replaced.
The remaining workers have also given increased
co-operation. However, the Company has consistently
refused to implement Clause 3.
2. The Clause 3 increase was paid to Clerical and
Administrative grades with the Company. The General
Operatives have contributed equally to the efficiency of
the Company's operation and should not be treated less
favourably than the other grades.
PENSION SCHEME
4. 1. The benevolent scheme in operation is inadequate.
Unless an employee has 30 years' service he is not
entitled to benefit under the scheme. Employees who
fall ill and are forced into early retirement are not
catered for by the scheme, even on a pro-rata basis.
2. There already exists within the group properly insured
schemes which make appropriate provisions, as standard,
for other grades of workers in the Limerick operation.
There is also an insured plan for manual and office
staff in the Company's Dublin operation.
3. The claim for the introduction of a properly-funded and
insured pension scheme is reasonable and in accordance
with Clause 4 of the P.E.S.P.
COMPANY'S ARGUMENTS
CLAUSE 3, P.E.S.P.
5. 1. Arising from the recession in the industry, high
interest rates and increased competition, the Company is
in a loss-making situation and cannot afford to concede
the Clause 3 increase.
2. The increase was paid to another section of workers in
1992, on foot of an agreement reached in 1991, when the
Company's performance was at a acceptable level. The 3%
increase was agreed in respect of changes in
work-practices, including lunch-time opening, Saturday
opening and the introduction of new technology.
3. Implementation of the 3% increase would have
considerable knock-on effects within the Company. The
cost of conceding the increase to all employees of the
Group would be in the region of #85,000 per annum,
sufficient to tip the Company's finances from serious to
critical.
PENSION SCHEME
6. 1. Clause 4 of the P.E.S.P. provides for the introduction
of a pension scheme "where none already exists". There
is already in existence a non-contributory scheme which
benefits employees who retire at 65 years of age, or who
have 30 years of service. Clause 4 of the P.E.S.P.,
therefore, does not apply.
2. Without prejudice, the Company investigated the cost of
the introduction of a new scheme. The proposal received
showed a cost of #20,000 per annum for the 17 workers
involved in the claim ; given the loss-making situation
of the Company, the cost of #20,000 in prohibitive.
3. Knock-on effects of the claim would leave the Company
facing costs of almost #250,000 to cover all 200
employees. This would be sufficient to bankrupt the
Company.
RECOMMENDATION:
CLAUSE 3, P.E.S.P.
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.
PENSION SCHEME
The Court accepts the Union's argument that it is open to them,
under Clause 4 of the P.E.S.P., to seek a revision of the terms of
the existing benevolent scheme, or to enter into negotiations on
the introduction of a properly-funded scheme.
However, having regard to the financial position of the Company,
the Court does not regard the introduction of such a scheme as a
practicality in the short-term. Nevertheless, a full examination
of the costings, both to the Company and the workers, should be
undertaken, so that the preliminary work will have been completed
when the Company's financial situation improves sufficiently to
cater for a scheme.
In the interim, the parties should meet and negotiate some
improvements in the existing benevolent scheme. In particular the
absolute requirement of 30 years' service should be changed and
consideration given to pro-rata benefits.
The possibility of workers' contributions should also be
considered.
~
Signed on behalf of the Labour Court
18th April, 1994. Kevin Heffernan
M.K./A.L. _______________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.