FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EASTERN ELECTRICAL, CORK (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Rate of pay.
BACKGROUND:
2. Eastern Electrical is a national electrical wholesaler, employing 130 employees throughout the country, 32 are employed in the Munster region. In 2001 the Company agreed to recognise the Union, and throughout 2002 negotiations took place between both parties. The dispute before the Court concerns 23 Union members who claim that the rate of pay is well below other employments in the electrical wholesale industry.
While resolution to the pay issue could not be achieved at conciliation talks, under the auspices of the Labour Relations Commission, both sides agreed in principle to third party evaluation of the situation. However, the Company's proposed evaluators Employers Association of Electrical Wholesalers were not acceptable to the Union. The Company was not in a position to fund the Union's choice, the Irish Productivity Centre. As agreement was not reached, the dispute was referred to the Labour Court on the 6th December, 2002, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 6th March, 2003, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The dispute involves 23 members, administration, sales, transport and outdoor staff. The Union are seeking (a) 10% increase to the current basic salary, (b) realignment of theProgramme for Prosperity and Fairness (PPF) dates which would bring forward the 4% payment from December 2002 to March 2002.
2. The Union claims that the final phase of the PPF should have been paid in March 2002. This is already covered and the new Sustaining Progress Agreement should commence in January 2003.
3. The Union's case is on the basis of the employment being newly organised. Its current wage structure is characterised by low pay and is out of line with other employments in the electrical wholesale industry. The basis of pay determination for staff in this Company over the past number of years was adhoc and totally controlled by local Management. Staff with significant service would not have a basic wage comparable to their counterparts in other Electrical Wholesale Companies.
4. According to the IBEC salary survey of 2000, when including the wage increases under the PPF, illustrates that member's pay is out of line with IBEC's own figures.
5. The Union has supplied factual documentation to the Company, the LRC and to the Labour Court to highlight the fact that the Company is paying well below par for the industry.
COMPANY'S ARGUMENTS:
4. 1. The claim is cost-increasing and debarred under the PPF and the Sustaining Progress Agreement. The Sustaining Progress Agreement will involve a huge increase in costs to the Company in very difficult competitive conditions. Further pay increases beyond this cannot be justified.
2. The Electrical Wholesale Distribution business is not a premium business, it is traditionally low margin, generating low profits and extremely cost sensitive.
3. The Company in an effort to ensure future productivity and profitability and generate extra pay for staff is implementing a Profit Share Scheme and is investigating a Performance Related Pay Scheme.
4 Compared to all figures provided, the Company is within the range of pay rates in the electrical wholesale industry in general and the industry at large. Turnover of employees is extremely low despite the Union's claim of low pay.
RECOMMENDATION:
The claim before the Court is clearly cost increasing and is for an increase in pay above the terms provided for by PPF. It is, however, the Union's contention that the employment is newly unionised and as such comes within an accepted exception to the stabilisation clause of PPF. Whilst the Court accepts that the employment is newly unionised, the exception upon which the Union relies only operates where the rates of pay are significantly out of line with appropriate standards in comparable employments.
The question of conducting a survey of comparable pay rates was discussed at conciliation but agreement could not be reached on who should be commissioned to conduct such a study. In the event, both parties conducted their own surveys which resulted in conflicting findings. In view of the manner in which these surveys were conducted and the lack of important detail in the results, the Court finds little assistance in the data presented by either side.
In the Courts view the matter cannot be satisfactorily resolved until the factual position is established in relation to pay rates in comparable employment and the commencement dates of National Pay Rounds within the sector concerned.
Accordingly the Court recommends as follows:
- The parties should resume discussions with a view to agreeing a list of employments which are regarded as analogues in terms of their size, business, range of occupations employed and location.
- The parties should seek to establish the rates applicable to such employments and the effective dates for National Wage increases.
- If agreement cannot be reached, the parties should appoint an agreed assessor who would establish the factual position with regard to 2 above and in default of an agreement successor, the Court will nominate a person.
- In light of the facts established the parties should resume negotiations on pay, taking full account of the commercial and financial circumstances of the Company.
If agreement is not reached within a period of three months of the date of this Recommendation the matter may be referred back to the Court.
Signed on behalf of the Labour Court
Kevin Duffy
7th May, 2003______________________
JB/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.