FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TUBE ROLLERS LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. 1996 Pay Increase.
BACKGROUND:
2. The Company, which is part of the Jones Group, was established in 1974 and manufactures steel tubing for a range of industries. Traditionally the Company and the Union negotiated pay increases in-house on an annual basis. In March, 1996, the Union lodged a claim for an increase of 5% for 1996, with an additional one day's annual leave and a reduction to a 38-hour working week. Several meetings took place at local level, following which the Union reduced its claim to a 3.5% increase which equates with Year 3 of the Programme for Competitiveness and Work (PCW).
The Company claims that when the business was successful in the past employees benefited through superior pay and conditions. It claims that its profitability has now collapsed and that difficult trading conditions do not permit cost increases. The Company, while not pleading inability to pay, maintains that pay rates should remain at their existing levels.
As no progress was made at local level the dispute was referred to the Labour Relations Commission. A conciliation conference was held on 10th July, 1996, at which agreement was not reached. The issue was then referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute in Kilkenny on 29th October, 1996.
UNION'S ARGUMENTS:
3. 1. The Year 3 PCW increases of 2.5% from 1st January, 1996, and a further 1% from 1st July, 1996, are the minimum increases that the Company is obliged to pay. The terms of the agreement must be applied to the agreed rate of pay on entering the PCW. Although wage increases in the past were negotiated in-house, they reflected the various national agreements almost to the point of "mirror image".
2. The Company has been profitable every year from its inception until 1995. The Company's cost based argument is unsubstantiated and unproven as, unlike a sister company, it refuses to disclose its accounts to the Union's financial advisers.
3. In the past overtime earnings amounted to approximately one third of employees' gross earnings. Overtime has now been almost eliminated and staff are struggling to cope with the 33% loss of earnings. They have received no compensation for this. They are now expected to accept a further indefinite pay freeze.
4. The cost of the claim is minimal and is well within the Company's financial capabilities. The Company has contributed to the Group's profitability for many years, but the Group's present difficulties should not be allowed to impact on the Company's financial position.
COMPANY'S ARGUMENTS:
4. 1. Bargaining has always been carried out in-house and without reference to national agreements. The Company cannot accept that the Union should now invoke the PCW as a determining factor in negotiations for 1996.
2. Employees have benefited throughout the successful years by superior pay and conditions. However, following a pay review for 1996 staff accepted salary reductions across the board.
3. The commercial structure of the business has changed, profits have collapsed and it is imperative to implement an investment programme to try to secure future business. While not pleading inability to pay, any increase on current high earnings cannot be sustained.
4. In recent months the market position has worsened to the extent that fundamental restructuring will now be necessary if the business is to survive.
RECOMMENDATION:
The Court, having considered all of the views of the parties as expressed in their oral and written submissions, finds that the PCW applies in this case.
In the light of the information available to the Court it is considered that no reason has been shown as to why the provisions of the PCW should not be applied.
However, in the interests of the future viability of the Company and the maintenance of security of employment, it is the view of the Court that the Company accounts should be made available to a representative of the Union on a confidential basis and that the parties should further discuss the situation, if necessary using the assistance of an Industrial Relations Officer.
The Court so recommends.
Signed on behalf of the Labour Court
Tom McGrath
6th December, 1996______________________
D.G./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.