FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KOSTAL (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Consolidation of bonus into basic rate.
BACKGROUND:
2. The case before the Court concerns a dispute between Kostal Ireland Limited, a manufacturer of automotive electronic components for the European automotive industry, and SIPTU in relation to the consolidation of a bonus payment into the basic rate of pay for the Operative grade employed in the Company's Abbeyfeale plant, Co. Limerick.
The Union is claiming that the bonus payment be consolidated into the basic rate of pay as it is not a productivity based payment.
The Company is claiming that the consolidation of the bonus into the basic rate is cost increasing and precluded under National Wage Agreements and would have a detrimental effect on the Company's competitiveness.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 31st May, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 7th September, 2005.
UNION'S ARGUMENTS:
3. 1. The hourly rate of pay, exclusive of bonus is below the National Minimum Wage. This will result in a substantial pension deficit on retirement, which is unacceptable.
2. There is no target to be reached to qualify for payment of the bonus. It is not based on production and should therefore be included in the basic rate of pay.
COMPANY'S ARGUMENTS:
4. 1. The Company operates in an extremely competitive market.The consolidation of the bonus into the basic rate of pay is cost increasing and would inevitably lead to eroding the Company's competitiveness within the sector.
2. The Company has a high level of absenteeism and sick leave. The consolidation will result in an unsustainable increase in costs for the Company in terms of sick leave entitlements.
RECOMMENDATION:
The dispute before the Court concerns the Union’s claim for the consolidation of bonus payment into basic pay. The Union indicated that the bonus payment is in name only and that concession of the claim would impact on the level of contributions paid into the pension scheme and improve sick pay and overtime payments.
The Company held that the claim was debarred by the terms of Sustaining Progress and referred to the serious financial implications of the claim and its utmost need to remain competitive. It pointed out that concession of the claim would have the effect of significantly enhancing the sick pay scheme and would be detrimental in adding to an already serious absence problem.
Having considered the views of the parties expressed in their oral and written submissions, the Court is of the view that this is a cost-increasing claim and is consequently debarred under the terms of Sustaining Progress. The Court therefore, does not recommend in favour of the Union's claim.
However, in line with Clause 4 of Sustaining Progress, the Court recommends that the parties should consider implementing an improvement to the pension scheme contributions as sought by the Union. Considering the high levels of absenteeism, the Court does not recommend an improvement in the sick pay scheme at this time.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
26th September, 2005______________________
AH/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.