FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GALTEE MEATS - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Rates Of Pay
BACKGROUND:
2. The Company employs approximately 370 operatives in 3 grades, unskilled, semi-skilled and skilled at its location in Mitchelstown. In 1992, as part of a re-structuring plan agreement was reached on the introduction of a new lower rate of pay for new entrants. Employees employed prior to the agreement were 'red-circled' on their existing rates of pay. The new rate agreed is the 'official' rate in the Company. There has been some improvement in the post '92 rates culminating in an agreement in July, 1998 which provided for the introduction of a further three increments resulting in a seven year pay scale.
The dispute concerns the Union's claim for the upward adjustment of the official rate of pay. It argues that the official rate of pay was accepted in 1992 as an alternative to closure and that the Company is now in a position to improve these rates of pay. Management rejects the claim. It argues that the agreement entered into in 1992 to protect employment was not intended to be a short term but rather a long term approach.
The matter was the subject of two conciliation conferences held under the auspices of the Labour Relations Commission. A proposal put forward at conciliation that the parties agree to the introduction of a year 8 point on the official scale of 2.5% was rejected by the workers. As agreement could not be reached, the dispute was referred to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990 A Labour Court hearing took place in Cork on the 18th of October, 2000, the first date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. Many of the post '92 employees are performing higher skilled functions than many of their colleagues who are paid a higher rate of pay.
2. Given the current sound financial performance of the Company, the Union's claim is justified. It has indicated to the Company, that while it is seeking the harmonisation of the pay rates, this position and the period of time in which it might be achieved is negotiable.
3. The Union considers that its approach to this matter has been reasonable. While it concluded an agreement in 1992 which secured the Company's survival, it caused financial pain to the workers. This included foregoing two increases amounting to 6.75% and a reduction in personal allowances from 12% to 8%. It was always the workers' understanding that the Company would review the situation when the economic climate improved.
COMPANY'S ARGUMENTS:
4. 1. There are a number of factors which the Company must take into account in relation to pay rates in order to sustain its long term commercial viability.
2. Galtee is fully aware of the product and market development of its competitors and, therefore, needs to invest in existing and new products to sustain its existing market share and customer base.
3. The current year 7 official wage rate is higher than the Company's highest paid competitor by approximately 3%.
4. Galtee is undertaking a substantial capital investment programme over the next 2 years. This has only been possible by the accumulation of its profits over the past number of years for reinvestment. Similar long term investments will not be achievable if concessions of this nature are made.
5. The retail trade, particularly new foreign retailers in Ireland, have demanded greater margins and improved quality of existing products. Galtee must be proactive if it wishes to continue a 'grow and expand' strategy.
6. Galtee has also the threat of cheaper foreign imports with which it must compete in order to sustain its commercial viability.
7. While the Company is fully committed to the full implementation of the Programme for Prosperity and Fairness, it must be emphasised that it places a severe constraint on its operating financial position. Despite this the Company is, in good faith, prepared to apply the proposals that emanated from the conciliation conferences. It cannot take any further cost risks in the market environment in which it operates. Accordingly, having regard to all the factors as outlined above, the Court is asked to affirm the Company's rejection of the Union's claim.
RECOMMENDATION:
It is clear that the present arrangement is creating tensions where employees are doing work of higher skill than those getting the same rate of pay.
The Court is concerned that this practice of a two tier system will continue to create tensions. However, the Court accepts that an agreement exists between the parties in relation to rates of pay. In the circumstances, the Court recommends that the proposal arrived at during the conciliation talks should be implemented and the parties should continue discussions to endeavour to find a means of addressing tensions highlighted above by the Court.
Signed on behalf of the Labour Court
Finbarr Flood
27th October, 2000______________________
FB/CCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.