FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TYTEX IRELAND LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Clause 3 of the Programme for Economic and Social Progress (PESP).
BACKGROUND:
2. The Company has been established in Youghal, Co. Cork since 1984 and produces health care products. There are approximately 85 members of the Union involved in the claim.
The Union first made the claim for a 3% pay increase under Clause 3 of PESP in late 1992. A number of meetings took place between the parties regarding the dispute. On 19th January, 1994, the Company indicated that it could not pay any cost-increasing claim outside the basic terms of the PESP. It cited the increasingly competitive nature of the business as a reason.
Further meetings took place without the issue being resolved and it was referred to the Labour Relations Commission. A conciliation conference took place on 23rd April, 1996, but as the parties did not reach agreement the dispute was referred to the Labour Court on 2nd May, 1996, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 6th November, 1996 in Cork.
UNION'S ARGUMENTS:
3. 1. The majority of the workers involved have a basic rate of pay of only £177 per week (exclusive of the current phase of the Programme for Competitiveness and Work PCW). In a letter of 10th May, 1994, the Company stated that "it was not the policy of the Company to enter into new discussions every four months on pay increasing claims. We will continue to honour the pay commitments under the PESP and PCW." The Company has not honoured that commitment.
2. The Union has continued to co-operate with the Company at all times since it first made its claim in 1992. The co-operation included rates of pay and conditions of employment, new technology and increased productivity. The Union also agreed to accept a training rate of £125 per week, more than £50 below the agreed rates of pay. The introduction of a world class manufacturing system has resulted in a much improved production rate and a change in the method of work and flexibility. None of these changes has resulted in a pay increase or improvement in conditions of employment for the workers. The Company acknowledges that it is profitable.
COMPANY'S ARGUMENTS:
4. 1. The Company is involved in an extremely competitive market. The economics of the business would not allow any pay increase, other than the basic pay adjustments under the PESP and PCW. The Company must protect its position by keeping costs at a minimum. Sales prices for the Company's products have fallen over the past number of years and are expected to continue to do so for at least another 2-3 years. The Company is in competition with new plants in Poland, the Czech Republic and Thailand which have much lower cost bases.
2. If the Company were to concede the Union's claim it could put jobs at the Youghal plant at risk. The Company needs to have further investment if the future of the plant is to be secure. Cost factors at various plants will be taken into account before decisions on investment are made. Granting a cost-increasing claim would not help the Company's position in securing this investment.
RECOMMENDATION:
Having considered the written and oral presentations made by the parties, the Court recommends that when the grants being sought by the Company are sanctioned, the parties should meet again to discuss a quid pro quo for the implementation of Clause 3 of PESP.
Signed on behalf of the Labour Court
Finbarr Flood
14th January, 1997______________________
C.O'N./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.