FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CASTLEMAHON FOOD PRODUCTS - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Ms Owens Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. Increase in basic pay.
BACKGROUND:
2. Castlemahon Food Products is part of the O'Kane group of companies. It was bought from liquidation by the group in September, 1984. It is involved in the poultry business and employs approximately 350 workers at its plant in Castlemahon, Co. Limerick.
In May, 1997 the parties signed a Company/Union Agreement. In July, 1997 the Union submitted a claim for a basic rate of pay of £210 per week. In addition the Union sought premiums for certain jobs, a bonus scheme, summer and Christmas bonues, service pay, on-call allowance and changes to overtime and shift rates. The Company rejected the claim.
Local level discussions took place following which the Company offered (a) a basic rate of £172 inclusive of Phase 1 of Partnership 2000, (b) the implementation of a productivity scheme within three months which it argues could achieve earnings of £200/£210 per week, (c) a commitment to introduce a pension and sick pay scheme.
The Company's proposals were rejected by the Union. Its position is that it is seeking to have an agreed basic rate of pay put in place before addressing the Company's proposal regarding a productivity scheme.
The disptue was referred to the Labour Relations Commission. A conciliation conference took place on 10 July, 1997. As agreement could not be reached the disptue was referred to the Labour Court on 6 August, 1997 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 25 August, 1997.
UNION'S ARGUMENTS:
3. 1. The rate of pay of the workers concerned is considerably out of line with workers in similar employment both local and nationally.
2. Since the take-over in 1984 productivity at the plant has increased substantially with the introduction of new machinery. The output/turnover of birds has more than trebled. It is evident that the Company has grown from strength to strength and is now one of the biggest producers in the industry. In the same period wage increases received by the workers have been below average due to the non-negotiated nature of the increases.
3. The workers recently agreed concessions which will result in substantial benefits to the Company.
4. The Union is prepared to consider the Company's proposals regarding productivity as soon as an agreed rate of basic pay is put in place.
COMPANY'S ARGUMENTS:
4. 1. The Company operates in an extremely competitive environment where margins run at 2/3%. The cost structure nationally is already out of line with Northern Ireland and the U.K. Producers in the U.K. benefit from a feed cost advantage, coupled with more competitive wage rates, technological advancement, which places enormous pressure on the Irish producers.
2. Over half of the poultry industry's produce is sold to large retail multiples. The multiples have begun to look more and more abroad to achieve cheaper products. Already the catering side of the market is importing larger quantities than ever before. Imports of poultry product now accounts for about 28% of the market compared with 9% two years ago.
3. The sale of Quinnsworth to Tesco poses further difficulties for the Company. Quinnsworth/Tesco accounts for 20% of the business. Indications at present are that Castlemahon's chicken prices are 25% out of line with U.K. prices. Further significant capital investment is required to bring environmental/processing standards up to Tesco's requirements.
4. The pay expectations of the workers are unreasonable in the circumstances. Concession of the claim would increase labour costs by approximately 65%.
5. The Company's proposals of 4 July, 1997 regarding productivity (details supplied) is a realistic way of addressing the Union's claim. The implementation of a productivity scheme would considerably enhance the earnings of the workers concerned.
RECOMMENDATION:
Having considered the comprehensive submissions from the parties the Court considers that the Company's proposals as set out in Appendix 7 of their submission and the Union's statement outlined in page 7 of its submission form the basis of an agreed settlement to the dispute.
The Court urges the parties to proceed immediately along those lines.
In the interim and pending the conclusion of the above negotiations the Court recommends that the basic rate payable be increased by £10 (off the rate).
In the event of the negotiations not having satisfactorily concluded by 31 December, 1997 the parties may referdirectlyback to the Court.
Signed on behalf of the Labour Court
Evelyn Owens
11th September, 1997______________________
F.B./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.