Labour Court Database __________________________________________________________________________________ File Number: CD94651 Case Number: LCR14678 Section / Act: S26(1) Parties: SUTCLIFFE CATERING SERVICES - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;SIPTU |
Implementation of 3% pay increase under Clause 3 of the Programme for Economic and Social Progress (PESP).
Recommendation:
The Court considered the written and oral submissions made by both
parties. In its considerations, the Court was conscious that, for
the Company, there is the added effect of the harmonisation issue.
Taking into account all aspects of the claim, the Court considers
that the best way forward is for the parties to complete the
negotiations on the harmonisation plan.
These negotiations to take into account the points raised by the
Union during the Court hearing.
Division: Mr Flood Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94651 RECOMMENDATION NO. LCR14678
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
SUTCLIFFE CATERING SERVICES
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Implementation of 3% pay increase under Clause 3 of the
Programme for Economic and Social Progress (PESP).
BACKGROUND:
2. The Company is engaged in the contract catering business and
was formed by the merger of J.D. Carroll Ltd. and National
Catering in 1993. The Company currently has 100 contracts
and employs approximately 800 workers, of whom approximately
260 permanent and 130 part-time are involved in the claim.
The Union claims that the Company's rate of pay is low for
the majority of employees and is seeking payment of the 3% on
the basis of ongoing flexibility and co-operation. The
Company's position is that its terms/conditions of employment
are good by industry standards and that concession of the
claim would put it at a competitive disadvantage. The
dispute was the subject of a conciliation conference under
the auspices of the Labour Relations Commission, on the 6th
of July, 1994, at which agreement was not reached. The
dispute was referred to the Labour Court, on the 9th of
November, 1994, in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute, on the 30th of January, 1995, the earliest date
suitable to both parties.
UNION'S ARGUMENTS:
3. 1. The Union has attempted to have the issue addressed on
an industry-wide basis, in the interest of creating a
fair and equitable system (details supplied to the
Court). This would result in the avoidance of the
situation where, if only one company implemented the 3%
increase, it would find itself at a competitive
disadvantage.
2. The rates of pay of employees of the Company, in most
cases, are below the average industrial wage.
3. Section II of the P.E.S.P. states that special
consideration should be given lower paid workers by
allowing for floor increases of up to #15 p.w. over the
3 years 1991 to 1993.
4. Recent figures show that the Company has grown by 20%
over the past year and has made a post-trade profit of
#578,000 in the year ending September, 1994.
5. In Labour Court Recommendation No. LCR14061 (Campbell
Catering/S.I.P.T.U.), the Court recommended that:-
"...... noting in particular the Company's position
vis a vis its clients the Court recommends as an
equitable way of dealing with the Union's claim
that the 3% be phased in as follows:
1.50 from 1/6/'93
and a further
1.50% from 1/12/'93
In making this recommendation the Court has taken
into account the Union's stated willingness to
discuss the implication of its Recommendation with
the Company.
The Court wishes to add that it considers that the
Company would be justified in seeking to have the
cost of the above increase covered in the course of
the pending negotiations with their clients on the
review of the contracts."
6. The Company's failure to implement the increase could
have a detrimental effect on the morale/performance of
the employees, especially if client companies implement
the increase.
7. The workers have ensured a smooth transition process
since the buy over of the J.D. Carroll and National
Catering. By their commitment, and by acting in an
exceptional manner, the workers have ensured the success
of the Company, as reflected in its profits.
COMPANY'S ARGUMENTS:
4. 1. The Company is not in a position to pass an additional
cost of 3% on to its clients. Like its competitors in
the industry, it is under constant pressure to keep
prices down and the clients will not pay an additional
3% to fund this increase. In recent years the Company
has been involved in major negotiations with clients, in
order to retain key contracts. All such negotiations
involved reducing costs. The commercial reality of this
situation is that the client company always has the
option of using an alternative catering company if it
does not like the cost-structure that has been offered.
2. Over recent years, the Contract Catering Industry has
undergone significant change. Competition has increased
substantially and, because of undercutting, contracts
are increasingly difficult for the contract company to
achieve and to maintain.
3. The Company has consistently argued against the Union's
industry-wide approach on the grounds that there are
specifics relating to its particular case which require
independent evaluation. Ultimately, the Company is
entitled to answer this claim on an independent basis,
through the procedures, and to have its case recommended
on by the Court, if necessary.
4. Both J.D. Carroll Catering and National Catering had
national agreements with the Union. The Company is in
the process of negotiating an overall agreement with the
Union to cover all of its staff and, in doing so, to
agree a schedule for harmonisation throughout the
Company.
5. The spirit of Clause 3 implied negotiation and an
implied quid pro quo for any concessions. This is not
practical in a contracting company where the
practicalities of each individual unit are different.
Management has proposed to the Union that the issue of
Clause 3 should be seen to be dealt with in full within
the context of harmonisation of conditions of
employment.
6. The Company has proposed that, on conclusion of a full
harmonisation agreement with the Union, the following
would apply:-
The J.D. Carroll rate of pay of #3.72 would apply
to all general assistants within the Company. This
implies substantial increases for the ex-National
Catering staff (current rate #3.61) and in addition
it should be noted that this rate is the highest
rate for a general assistant within the Industry.
(It should also be noted that 65% of the Company's
workforce are general assistants). The cost of
this concession represents a 2% increase on Company
payroll costs.
In addition, the Company has proposed to introduce
a pension-scheme for all staff. The dates and
details to be agreed within the context of the
overall agreement.
A death-in-service benefit has already been put in
place for ex J.D. Carroll employees in line with
the scheme that applied in National Catering.
Management has clearly stated that the
harmonisation process will take time and will have
to be phased-in over a period that the Company can
sustain without damaging its competitive position.
However, the improvements that are proposed
represent in excess of a 3% increase in the
Company's payroll costs and, therefore, would be
the most practical and equitable way for the issue
of Clause 3 to be dealt with.
7. Company/Union discussions on harmonisation should re-
commence, with a view to being completed at an early
date. Agreed phasing-in of harmonised terms and
conditions of employment would be seen to fulfil any
claims that would arise under Clause 3 of the PESP.
RECOMMENDATION:
The Court considered the written and oral submissions made by both
parties. In its considerations, the Court was conscious that, for
the Company, there is the added effect of the harmonisation issue.
Taking into account all aspects of the claim, the Court considers
that the best way forward is for the parties to complete the
negotiations on the harmonisation plan.
These negotiations to take into account the points raised by the
Union during the Court hearing.
~
Signed on behalf of the Labour Court
13th February, 1995 Finbarr Flood
M.K./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.