FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MCKENNAS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Carberry Worker Member: Ms Ni Mhurchu |
1. Pay claim.
BACKGROUND:
2. The Company was established in 1871 and is a fourth generation family-owned business located in Listowel, Co Kerry. The Company operates both a Builders Merchants and Hardware division. Its main market focus is the supply to small businesses, farming community, builders and people developing their own houses.
It has two premises in Listowel and employs 57 staff in total, 11 of whom are members of SIPTU.
During 2001, in response to a claim from SIPTU for an increase in the rates of pay for its members discussions took place locally. As agreement could not be reached, the Union referred the matter to the Labour Relations Commission. Conciliation conferences were held in April and May, 2002. As agreement could not be reached the matter was referred to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990, on the 20th of June, 2002. A Labour Court hearing took place on the 10th of September 2002, in Co Kerry.
UNION'S ARGUMENTS:
3. 1. The rates of pay of the workers concerned are substantially out of line with workers in similar employment in the locality.
2. The Company opened a new timber yard in December, 2001, and since it opened the sale of roofs has increased fourfold.
3. Stock has doubled in the past 12 months and the Company has introduced a new product (Truss Roofs) which has increased delivery demands.
4. The work in the saw-mills has also doubled and the number of forklifts in operation has increased from three to five.
5. The workers are seeking that the rate of pay be increased significantly to bridge the gap in pay that currently exists with other workers in similar employment.
COMPANY'S ARGUMENTS:
4. 1. Increased competition by new multi branch stores and PLC organisations in the locality have reduced sales and margins in the retail sector.
2. A downturn of 5% in sales is budgeted for 2002 due to the reduction of activity in the marketplace, and it is anticipated that there will be a reduction in margin over the coming years.
3. The Company has engaged the assistance of an Industrial Relations Consultant to compare the Company's labour ratio with those that are in the trade's average, and the results of his findings show that the Company is over staffed.
4. Insurance has increased by 46% and is likely to continue to rise. This is a huge burden on the Company and will be a major factor in controlling costs.
5. Profits halved in the last two years and if this trend is to continue there will be a loss-making situation for the Company in 2003.
6. Employees of J McKenna have received all increases falling due under National Wage Agreements in recent years. The current claim is clearly in breach of Clause 11 of the PPF, which prevents Trade Unions from pursuing any cost increasing claims outside the terms of the said Agreement.
RECOMMENDATION:
The Court notes the strong belief held by the workforce that their rates are seriously out of line with their industry generally. Similarly, the Court notes the Company's current financial difficulties. The Court is satisfied that the Company made a serious attempt to address this claim by making an offer of 11.13%, inclusive of the final phase of Programme for Prosperity and Fairness. The workers rejected this offer.
The Court recommends that the parties should resume negotiations on the claim with a view to providing an increase in pay in return for clear productivity measures being implemented including changes in work practices.
Signed on behalf of the Labour Court
Caroline Jenkinson
26th September, 2002______________________
HMCD/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Helena McDermott, Court Secretary.