Labour Court Database __________________________________________________________________________________ File Number: CD95149 Case Number: LCR14834 Section / Act: S26(1) Parties: INTERBALCO LIMITED (THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim for a 3% increase in basic pay in accordance with the terms of Clause 3 of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
The Court is not satisfied that the 3% under Clause 3 of the
P.E.S.P. should be paid in this Company.
However, the Company has undertaken to clarify its financial
performance to the Union in order to allow the employees to
understand the Company position.
Further, the Court notes that the Company was prepared to make a
number of changes to the Employee package in return for changes
requested from the employees. Thus further discussions should
take place so that where possible the parties themselves should
endeavour to reach agreement on these particular items.
The Court so recommends.
Division: Mr Flood Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95149 RECOMMENDATION NO. LCR14834
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
INTERBALCO LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for a 3% increase in basic pay in accordance with the
terms of Clause 3 of the Programme for Economic and Social
Progress (P.E.S.P.).
BACKGROUND:
2. 1. The Company is a subsidiary of the multinational Snap-On
Tools. The Irish Company was established in 1983 to
manufacture wheel balancing and alignment equipment. It
employs 27 production operators.
2. Phase 2 of the P.E.S.P. was implemented on 1st January,
1992. On 7th February, 1992, the Union submitted a
claim for a 3% pay increase under the terms of Clause 3
of the P.E.S.P. and for an improved sick-pay scheme.
The Clause 3 claim was rejected on the basis of
inability to pay and an improved sick-pay scheme was
agreed and introduced in September, 1993.
3. The claim for a 3% increase in pay was reactivated in
March, 1994. The Company again rejected the claim on
the basis of inability to pay. The claim was referred
to the Labour Relations Commission and a conciliation
conference was held on 23rd June, 1994.
4. No progress was made at conciliation. In July, 1994,
the Company offered the Union an increase in sick-pay
entitlement, a reduction in waiting days and an increase
of 1% in the employer's pension scheme contribution, in
exchange for acceptance of payment by credit transfer
and a new reduced pay structure for new entrants
(details supplied).
5. The Company's non-negotiable proposals were rejected by
the workers. The proposals were then withdrawn. A
further conciliation conference was held on 6th
December, 1994. No further progress was possible and on
27th February, 1995, the claim was referred to the
Labour Court under the terms of Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated
the dispute in Limerick on 22nd June, 1995.
UNION'S ARGUMENTS:
3. 1. The claim was first raised in 1992 and there is now an
expectation that it will be addressed in a positive way.
The workers have a reasonable expectation of a 3%
increase in pay given the flexibility and productivity
which is given on a continuous basis.
2. The Company is very busy with an average of 15 hours'
overtime, per worker, per week over the last year. The
workers are paid negotiated salary scales which are in
line with those paid to similarly flexible workforces in
the economy.
3. Given that the Company is healthy and profitable, it
should meet the workers' reasonable claim. The Union is
prepared to consider some reasonable quid-pro-quo in
return for the 3% increase. It is not prepared to
consider reduced rates of pay for new workers. Although
the Company has made some improvements to its conditions
of employment, these improvements are basic and do not
reach the standard conditions of employment for the
industry and area.
COMPANY'S ARGUMENTS:
4. 1. Since 1991, the Company's profit margins have decreased
due to intense competition in the marketplace. A
reduction of 20% in the price of products has been
insufficient to maintain sales. In addition, the
Company's costs are out of line with other subsidiaries
of the parent Company. The lower cost U.K. plant has
enough spare capacity to absorb the Irish operation.
2. The Company is not performing exceptionally under the
terms of Clause 3 of the P.E.S.P.. It cannot incur
extra costs as its present costs are too high.
Additional costs would question the viability of the
Company in Ireland.
3. During the currency of the P.E.S.P., the Company
introduced a significantly improved sick-pay and a new
pension scheme. These schemes have resulted in an
overall increase in labour costs of approximately 5%.
Clause 3 claims must take account of implications for
competitiveness. The Company is not in a position to
pass on any increases to its customers.
RECOMMENDATION:
The Court is not satisfied that the 3% under Clause 3 of the
P.E.S.P. should be paid in this Company.
However, the Company has undertaken to clarify its financial
performance to the Union in order to allow the employees to
understand the Company position.
Further, the Court notes that the Company was prepared to make a
number of changes to the Employee package in return for changes
requested from the employees. Thus further discussions should
take place so that where possible the parties themselves should
endeavour to reach agreement on these particular items.
The Court so recommends.
~
Signed on behalf of the Labour Court
19th July, 1995 Finbarr Flood
J.F./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.