FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SR TECHNICS AIRFOIL SERVICES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Cryan Worker Member: Mr Shanahan |
1. Pay claim
BACKGROUND:
2. This dispute concerns a pay claim for a 5.5% increase over an 18 month period beginning 1stJanuary 2014 until 30thJune 2015. The Union said the Company has been profitable every year since 2009, industrial relations are good in the plant and staff turnover in under 2% annually. The Employer said that while the Company is currently profitable, its profit margins have dropped significantly in recent years and is currently more than 50% behind its target for this financial year. This 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 23rd May 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 8th October 2014.
UNION’S ARGUMENTS:
3. 1. The Union had an analysis of the Company accounts undertaken by its Economic Advisor who concluded in her report that the Company could sustain the pay claim.
- 2. Management have never denied paying increases to other staff while at the same time holding the line of a pay freeze to the Union members.
EMPLOYER'S ARGUMENTS:
4. 1. The employees of the Company have enjoyed reasonable pay increases over the past few years and accordingly there is no basis for the current cost increasing claim.
2. The Company while profitable is under significant competitive pressure and has decreasing profits and margins. It urgently needs to secure its competitive base and attract new business in order to remain viable into the future.
3. Over 40% of the Company’s total cost or 68% of its total cost less direct materials and royalty is payroll related and any basic pay increase has a significant impact on its overall cost.
RECOMMENDATION:
The issue before the Court concerns the Union’s claim on behalf of its members for a 5 ½% pay increase, over an 18 month period, from 1stJanuary 2014 until 30thJune 2015.
While the Company accepts that its Cork plant is profitable, it rejected the claim due to the challenges facing the Company on an international level and its need to ensure competitiveness at local level. The Company offered to pay 1½% pay increase for a period of 15 months, as paid to non-union staff. The Company stated that given that its head office in Zurich had implemented a pay freeze, it had entered into significant negotiation with head office personnel in order to achieve this proposed offer.
Having considered the submissions of both parties the Court recommends that the Company should pay the Claimants the following pay increases:-
- 2% backdated to 1stJanuary 2014
2% effective from 1stJanuary 2015 for a period of twelve months
The Court so Recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
CR______________________
23rd October, 2014Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran Roche, Court Secretary.