FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AGGRA MEATS (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Application of Programme for Competitiveness and Work (PCW) to piece rates.
BACKGROUND:
2. In March, 1994, the Company implemented a major rationalisation plan which included 45 redundancies and investment of £1.75 million. In April, 1994, and June, 1994, a new productivity piece rate payment system with a fall back was introduced in the abattoir and boning hall areas respectively. The Union is seeking retrospective payment of the second and third phases of PCW to be applied to the piece rates. The Company rejects the claim and maintains that the bonus scheme has resulted in wage increases of 15% to 22%, which is considerably in excess of any increases under the national pay agreements.
The dispute was the subject of conciliation conferences on 28th September, 1995, and 6th December, 1995, under the auspices of the Labour Relations Commission. As agreement was not reached the issue was referred to the Labour Court on 25th April, 1996, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute in Cork on 30th October, 1996, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The PCW allows for agreed wage increases over its three year life term. The workers accepted the new bonus scheme on the understanding that their entitlements under national wage agreements would be honoured.
2. Prior to the introduction of the new piece rate system, the Company has always applied wage increases to basic pay and to bonus. The Company has not pleaded inability to pay and, therefore, the increases of 2.5% due from 1st July, 1995, and a further 2.5% due from 1st July, 1996, should now be paid.
COMPANY'S ARGUMENTS:
4. 1. It was agreed that the piece rate scheme should constitute the sole method of payment. The agreement is silent in respect of the application of national pay agreements, but a provision was made for regular joint reviews of the scheme. The piece rate system must operate within an agreed competitive and efficient labour cost structure.
2. The Company bears the full cost of the additional labour required by the EU intervention programmes, while it maintains the level of earnings of permanent employees. The increased earnings of between 15% and 22% as a result of the bonus scheme are in excess of increases provided under the PCW. Further increases would erode the Company's cost efficiencies and would lead to a return to uncompetitive and unfavourable cost structures.
RECOMMENDATION:
The Court recommends that, in this case given all the circumstances and the views expressed by the parties in their oral and written submissions, the terms of the PCW should be applied to the piece rates.
The Court further recommends for the future that the application of increases agreed at national level to the piece rates should be the subject of negotiation between the parties at local level, when all relevant circumstances can be taken into account.
Signed on behalf of the Labour Court
Tom McGrath
27th November, 1996______________________
D.G./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.