Labour Court Database
File Number: CD86967
Case Number: LCR10964
Section / Act: S67
Parties: BAILIEBORO CO-OP - and - ITGWU
Claims for:- (a) an increase in pay under the 26th wage round and (b) payment of overtime for Saturday working.
Division: Mr Fitzgerald Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD86967 THE LABOUR COURT LCR10964
CC861736 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. 10964
PARTIES: BAILIEBORO CO-OPERATIVE AGRICULTURAL AND
DAIRY SOCIETY LIMITED
(Represented by the Federated Union of Employers)
IRISH TRANSPORT AND GENERAL WORKERS' UNION
1. Claims for:-
(a) an increase in pay under the 26th wage round and
(b) payment of overtime for Saturday working.
2. The terms of the 25th round wage agreement expired for the
forty-five workers concerned in January, 1986. However, due to a
combination of problems relating to Union representation and
financial difficulties at the Society (details supplied to the
Court) no formal 26th round pay claim was served by the Union. In
the course of negotiations at local level between the parties the
above two claims were discussed. No agreement was reached at
those discussions and the matters in dispute were referred, on
21st October, 1986, to the conciliation service of the Labour
Court. A conciliation conference, held on 3rd December, 1986,
failed to resolve the dispute and the matters were then referred
to the Labour Court for investigation and recommendation. The
Court investigated the dispute on 14th January, 1986.
Claim (a) - 26th wage round
3. The current basic pay of the workers concerned inclusive of
the terms of the 25th wage round, is as follows:-
general operatives - #137.20 per week
driver/helper - #144.48 " "
laboratory technician assistant - #135.08 - #148.88 per week
In the course of negotiations on the 26th wage round between the
parties the Union sought a pay increase of approximately 6% in
respect of these workers, which it claimed was the norm
established under this pay round. The Society rejected the claim.
4. (i) The level of increase sought by the Union is in line
with the policy of the Irish Congress of Trade Unions
of seeking increases under this pay round which would
protect the real value of wages and restore workers'
living standards. In this regard, settlements to date
under the 26th wage round provide for a 6.8% average
(ii) The last increase received by the workers was 5% with
effect from 1st January, 1985. Over the past two
years the Consumer Price Index has increased by 8%.
Consequently, the level of increase sought by the
Union would be insufficient to halt the decline in the
living standards of the workers concerned and would
not provide protection against the effects of income
tax and PRSI deductions on take home pay.
(iii) The overall level of earnings of the workers has
decreased by approximately #20 over the past two
years. Consequently the Union's claim is fully
(iv) Settlements under the current pay round in the
co-operative creamery industry generally provide for
increases at least as high as that sought by the Union
in this case (details supplied to the Court). In
addition a bonus of 4% of gross earnings payable as a
lump sum on an annual basis has become a feature in
the industry and is paid by the vast majority of
co-operatives. This bonus is not paid by the Society.
(v) A recent settlement under this pay round in Kerry
Co-Operative provides for a lump sum payment of #200
for 1986 and a three phased increase totalling 9% over
1987. The application of the lump sum element of this
settlement to the workers concerned would only cost
the Society approximately #9,000 and the increase
sought, payable on a phased basis, would be less than
1% of total costs for 1987.
(vi) The claim is a fair and reasonable one which is not
beyond the financial capacity of the Society to meet.
5. (a) For various reasons (details supplied to the Court)
the Society for some time has been experiencing a
serious strain on its financial resources while also
incurring substantial losses. This had the effect in
1986 of a rescue package having to be put together by
financial institutions in order to secure the
Society's continued operation. With this in view a
long-term plan over five years has been introduced
which involves contributions and sacrifices from all
parties involved (details supplied to the Court). In
these circumstances, it would be inappropriate to talk
of any cost increases for 1986.
(b) The milk supply is the life line of the Society
without which the business does not exist. The milk
producers are free to transfer to other outlets and
some have already done so. This cannot be allowed
occur on a greater scale. Any wage agreement with the
Society's employees which does not reflect the
Society's unprecedented difficulties and the
substantial contribution/sacrifices of the other
parties involved will be an inducement for suppliers
to leave the Society, taking their milk supply
elsewhere. Suppliers simply would not accept a
situation where they are expected to take a decrease
in nett income of 5% to 10% whereas the employees
receive an inappropriate wage agreement. In view of
this it is of vital importance that the wage agreement
with the employees fully recognises and has regard to
these facts. Therefore, as a minimum any wage
(i) must be from a future date and contain no
element of retrospection
(ii) must make provision for a very moderate
increase over a long period (having regard to
the Society's acute difficulties and
relatively low inflation) and
(iii) must contain provision for full and ongoing
co-operation and no further cost increases for
(c) In all the circumstances the Company's position in
relation to this claim should be upheld.
Claim (b) - payment of overtime for Saturday working
6. This claim involves 35 employees employed in the Company's
dairy operation who at present work a rostered five over six day
week Monday to Saturday. The Union, on behalf of these workers,
served a claim on the Society for the introduction of a five day
week Monday to Friday with overtime paid for Saturday working.
The Society rejected the claim.
7. (i) The arrangement in the Society whereby workers are
required to work Saturdays with a day off during the
week is no longer a feature in the co-operative
industry. Arising from agreements locally most
co-operatives now operate a normal five day week,
Monday to Friday, with overtime paid for Saturday work
if required, as claimed by the Union in this case.
Moreover, all other workers within the Society's
complex work a five day week, Monday to Friday.
(ii) The Society accepted in 1986 that the present
arrangement was antiquated and gave a specific
commitment that the matter would be dealt with prior
to the end of the 1986 peak milk season. The Society
has failed to honour this commitment to date. Failure
to do so in the immediate future could give rise to
industrial relations difficulties in the Society.
(iii) The Union's claim is reasonable and should now be
conceded so that the present arrangement will not be
allowed to continue into 1987.
8. (a) Five over six day working is a feature of the
co-operative industry generally (details supplied to
the Court). It is normal practice that no additional
payments are made for Saturday working as part of the
roster. It is also a feature of the national industry
agreement. In 1977 and 1979 two additional payments
on the basic rates, #2.40 and #6.50 respectively, were
agreed at industry level for full flexibility and full
utilisation of time, plant and labour. This in itself
entitles the Society to roster staff on a five over
six day basis.
(b) At present the Society employs an additional number of
employees to operate the five over six day system.
Concession of this claim would force the Society to
reduce its workforce and would cause it to seek a
guarantee of a seven day work commitment from the
remaining employees. Furthermore, some flexibility
with regard to days off and annual leave exists at
present because of the additional numbers for the five
over six day roster. With lesser numbers this
flexibility would be eliminated.
(c) Concession of the claim would establish a precedent
for the industry generally and would also impose
additional costs on the Society which could not be
sustained, given its current financial situation and
the fact that there has been a substantial decrease in
milk throughput in the dairy.
(d) In all the circumstances the claim must be rejected.
Union's general arguments:
9. (i) The Society's difficulties were brought about by its
policy of diversification and the imbalance in the
ratio between its debts and equity capital, and also,
because of the apparent inefficiency of its credit
control system. The workers in the Society are not
responsible for any of these difficulties and, in
fact, the co-operation given by the workforce during
the period of the past year has been acknowledged by
the management. However, it would be unrealistic of
the Society to expect the workers concerned to sustain
their efforts, while, at the same time, not only
receiving no pay increases, but also incurring a
reduction in their earnings.
(ii) A lot of publicity has surrounded the involvement of
the Society's shareholders and the financial
institutions concerned. However, no reference has
been made to the money owed to the workers by way of
unpaid wage increases. These workers should be given
the same status as other creditors in respect of money
(iii) Decisions taken in Brussels on the reform of the
Common Agricultural Policy (CAP) resulting in cutbacks
in milk production has curtailed expansion and puts
pressure on costs. Unfortunately, there is no forum
available to the Union at national level to discuss
these problems as a result of the decision of the
co-operatives in 1983, to withdraw from national
negotiations with the Union. This leaves the Union
with no alternative but to deal individually with the
Co-operatives in order to defend its members'
interests and protect their living standards.
(iv) Farming interests, as distinct from the workers'
interests, have dominated in the Co-operative movement
over a long period. It has been advocated for many
years that co-operatives should reduce their debts,
but their shareholders have been unwilling to invest
in them. The dividends paid to shareholders are low
or non existent because, by and large, profits are low
as a result of high interest payments, and high
payments for milk. In other words, shareholders take
their dividend in the form of the highest possible
price for milk. This leads to competition between
Co-operatives for milk supplies. Neither is there any
consideration given to the workers in negotiations
between farm Ministers at European level. When
reforms of the CAP result in job losses or reduce
earnings for dairy process workers, because of
cutbacks in milk production, there is no scheme of
compensation for those involved, similar to the scheme
which is proposed for farmers, giving them generous
tax-free compensation. There is no comparison,
therefore, between a reduction in the price of milk to
a supplier/shareholder, and money being owed to
workers by the Co-operative by way of unpaid wage
(v) The workers concerned are no longer prepared to
tolerate a situation whereby they are without a wage
increase for two years and are in fact taking home #20
less in some cases than they were at that time.
10. The Court, having considered the submissions made by the
parties, recommends a 26th Round Wage Agreement as follows:-
(1) #180 lump sum to cover the period from 1st January, 1986 to
31st December, 1986,
(2) 3% wage increase for nine months effective from 1st January,
(3) 2% wage increase for six months effective from 1st October,
The Court does not recommend concession of the claim in relation
to Saturday working.
Signed on behalf of the Labour Court
4th February, 1987 Nicholas Fitzgerald
T.McC./P.W. Deputy Chairman