LCR16324

2. Bonus pay for imported wire cut into lengths.

3. Implementation of the Local Bargaining Clause of Partnership 2000.

BACKGROUND:

2. General Background

The Company, which was taken over by the French multi-national Alcatel in 1995, manufactures copper covered cable for the electrical and construction industry. It employs 120 workers in Athlone. The Union's claims were the subject of local negotiations without agreement being reached. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 22nd of April 1999. No agreement was reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 7th of May, 1999. A Court hearing was held in Athlone on the 12th of October, 1999.



Claim 1

BACKGROUND

The Company operates a defined pension scheme based on 1/40th of pensionable salary per year of service to a maximum of 40/60ths pensionable salary and is comprised of basic salary less 1.5 times a single worker's State old age pension. In the 1995 rationalisation it was agreed that £20 per week would be added onto the pensionable salary. In 1998, the Union requested that the Company agree to index link the £20 to wage increases from the date of its introduction.

At the Labour Court hearing, the Union's claim, having been clarified to Management was agreed to by the Company.


Claim 2

BACKGROUND

The bonus scheme provides for payment on an output per tonne basis. In 1997, the Company acquired a new contract from Telecom Eireann (Eircom) to supply heavy duty cable which would be stored at the Athlone plant before collection by Telecom. Following a change in storage arrangements the cable was re-cut into different lengths and distributed. As initially there was no processing element the cable was excluded from the bonus scheme . However, in view of the changed arrangements the Union claims that the bonus should apply.


UNION'S ARGUMENT'S

1. As the remuneration package of workers is made up of an output related bonus and basic pay the Company, is in effect, reducing workers' pay by not applying the bonus to this product.

2. As the extra work carried out by the claimants means additional values, then they should share the rewards which result from these added values.


COMPANY'S ARGUMENTS

1. The bonus scheme is an agreed scheme with set terms for its application. It is awarded on a percentage of the number of processes carried out in the Athlone plant (details to the Court). It is important for the Company in the present very competitive internal and external markets to take whatever marginal business it can obtain.

2. What happens in the Irish plant is that cable from Alcatel, Germany, already made up is re-cut and distributed. There is no added value placed on the product. It is brought in complete, therefore, the bonus is not applicable in this instance.

3. The claim is cost increasing and precluded under P2000.


Claim 3

BACKGROUND

The Union seeks the implementation of the 2% local bargaining clause of Partnership 2000 as from 1st of December, 1998. The Company does not oppose this date but claims that due to very difficult trading condition it is unable to pay the 2%.



UNION'S ARGUMENTS:

1. As the social partners agreed that the local bargaining clause was an integral part of P2000, then the Company should pay it from the due date 1st of December, 1998.

2. As this Company is the only employer in the Athlone area that has refused to pay the 2%, it is a cause of irritation and frustration for workers, who, since the rationalisation agreement,have co-operated with new work practices. In order to recognise the co-operation of the workers, the Company should pay the 2% local bargaining clause.

3. The Company has in recent times invested heavily in company cars, site development and updating the plant. It appears to the workers that the Company is willing to invest in everything except the workforce.

4. In March of 1998, the Company reached an agreement with the Union on:-

(i) The appointment of long-term temporaries to permanent positions.

(ii) The working time directive. In return the Company recognised the agreement as fulfilling any requirement needed for payment of the local bargaining clause. The failure of the Company to pay the 2% is a breach of an agreement.

COMPANY'S ARGUMENTS:

1. The Company sustained a significant loss in 1998 and for the first quarter of 1999. The aim of 1999 was to break-even, however, this forecast is not going to be met. In these circumstances it is very difficult for the Irish operation to justify the increase, however small, to the parent company, against that kind of back-drop.

2. The Company has not stated that it will never pay the 2%, rather that it will pay the increase when in a position to afford it.


RECOMMENDATION:

The Court having considered the written and oral submissions made by the parties recommends as follows on the issues in dispute:

1.Pension Scheme
This claim was clarified at the hearing to be for an indexation on the £20 per week added to the pensionable salary in 1995. The Company agreed this claim.

2.Bonus
The current arrangements for cutting the particular cable referred to in this dispute does not affect the employees ability to earn bonus to any degree. However, there is a fear that in a future working situation it could affect the bonus potential without being credited to the employees. The Court recommends that if this situation arises the parties should have further discussions at that time.


3.2% Local Bargaining Clause
The Company has accepted that it has a liability for this payment but claims it cannot pay at present due to financial constraints. The Court, having seen the accounts accepts the
Company's position at this time but recommends that this situation be reviewed in twelve months time.



Signed on behalf of the Labour Court



Finbarr Flood
16th November, 1999.______________________
TOD/BCChairman



NOTE

Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.