Labour Court Database
File Number: CD87923
Case Number: LCR11662
Section / Act: S67
Parties: WYETH (IRELAND) LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION
Claim, under the 27th wage round, for a wage increase and payment of V.H.I. cover.
6. In the circumstances presently prevailing in the Company the
Court is of the opinion that the Company's offers both in respect
of the 27th round wage increase and VHI payments are reasonable
and should be accepted by the workers concerned.
Division: Mr O'Connell Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD87923 RECOMMENDATION NO. LCR11662
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
PARTIES: WYETH (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
IRISH TRANSPORT AND GENERAL WORKERS' UNION
1. Claim, under the 27th wage round, for a wage increase and
payment of V.H.I. cover.
2. This claim concerns approximately 130 general workers employed
by the Company in Askeaton, Co. Limerick. The Company has a total
workforce of approximately 270 at Askeaton. The 26th wage round
terminated for the workers here concerned on 31st March, 1987. On
1st July, 1987 the Union submitted a 27th wage round claim which
consisted of seven separate items. Local negotiations took place
at which agreement was reached on some items of the claim but full
agreement was not reached. The Union is claiming an 8% wage
increase over twelve months in one phase with no pay pause and
that the Company would meet 50% of the cost of Plan A of VHI
cover. The Company offered 2.50% over twelve months with no pay
pause plus 50% of the cost of plan A of the VHI to those general
workers whose earnings exceed the limit of the medical hospital
cover under the Social Insurance Scheme, as agreed for the 26th
wage round. The Company was also willing to provide the subsidy
in the future to those general workers who qualified under the
26th wage round regardless of their earnings in future years. The
Union found the Company's offer unacceptable.
3. No agreement was reached through local negotiations and on
19th August, 1987 the matter was referred to the conciliation
service of the Labour Court. A conciliation conference was held
on 22nd September, 1987 but no agreement was reached.
Subsequently the Company made a final offer of a 6% wage increase
over eighteen months with effect from 1st April, 1987. The Union
rejected this offer. On 3rd December the case was referred to the
Court for investigation and recommendation 1987. A Labour Court
hearing was held on 16th December, 1987 in Limerick.
4. 1. The workers mandated the Union to conclude an agreement
for a period not greater than twelve months and for a
percentage increase in line with that paid in better
companies. This is in acknowledgement of the fact that the
Company has consistently shown a profit on its operation in
4. 2. In November, 1987 the Company made a revised offer of 6%
over eighteen months and a slight improvement in its position
on VHI. The shift in the Company's position resulted from
negotiations which it had with the A.S.T.M.S. who were
negotiating on behalf of the smallest grouping within the
plant. This was an attempt by the Company to stampede the
workers here concerned into accepting its offer.
3. All the indications suggested during negotiations that the
Company were prepared to conclude an agreement for 4% over
twelve months. Such an agreement would not have been and is
not, acceptable to the workers.
4. During the 26th wage round the Company conceded 50% of the
expense of VHI plan A cover for craftsmen whose income
exceeded #14,500 per annum on the basis that such employees
were required to pay their own consultants fees if
hospitalised. The Company extended the offer to production
workers. However, it was of no value as the vast majority
could not aspire to earnings in excess of #14,500.
5. The Union's argument has consistently been that the income
cutoff point in the Health Act (1970) as regulated from time
to time, is there to reflect the view that people with incomes
in excess of the cutoff point are in a position to and are
required to make their own arrangements regarding the payment
of consultant's fees. It does not follow that an employer can
decide that the Act is unfair and go on to make a concession
to an already favoured group and presumes that there will be
no consequential claims from the lower paid within that
6. There is no justifiable basis for the Company continuing
to deprive the workers of what they are reasonably entitled
7. The workers should receive a wage increase of 6% over a
twelve month period and the VHI plan A subsidy of 50% should
be extended to all the Company's workers.
5. 1. In September, 1987, the Company began to experience a
downturn in it's business in the middle east as Iran, the
Company's biggest customer did not place orders for repeat
business. The nature of the Company's business tends to be
cyclical and this is exacerbated by the volatility in the
middle east at the present time. This resulted in the placing
of two groups of employees on temporary lay-off. A total of
34 employees regrettably are still on lay-off.
5. 2. The downturn in business activity has increased the level
of competition among infant nutritional manufacturers.
Combined with an increasing price conscious customer it became
necessary for the Company to achieve an agreement of longer
than 12 months duration. This would enable the Company to
tender for business to be supplied into the third quarter of
3. The Company's offer of 6% wage increase for 18 months
effective from 1st April, 1987 was rejected by the Union. The
same proposals were made to the other unions at the plant and
acceptance was received from A.S.T.M.S. and the Wyeth Staff
4. The Company already provides a VHI subsidy of 50% Plan A,
26 fee units to those I.T. & G.W.U. members whose earnings
exceed the limit of the medical hospital cover under the
Social Insurance Scheme. This was improved upon further in
the Company's present offer when it conceded that the subsidy
would continue to operate in future years regardless of
earning levels. In effect, this means that should an employee
benefit from the subsidy in any year because his earnings
exceed the limit, he will retain the benefit for the future.
5. The Company believes that the existing concession on VHI
meets the needs of those employees who are not eligible for
free hospital services because of their earnings.
6. A subsidised VHI scheme as claimed by the Union represents
an increase equivalent to 1.2% on the base rates. In
addition, VHI is an escalating cost over which the Company
has no control.
7. An 18 month agreement is a departure from the norm within
the Company. However, the Company was prepared to forego a
phasing arrangement in order to make the offer more
8. The Company's plant operator rate of pay is #191.81 per
week, while the average rate for equivalent grades in the
mid-west region is #166.32 from a sample size of 51 companies
(details supplied to the Court).
9. The equivalent rates of pay at two competitor companies in
Ireland is approximately #40 per week less than that paid by
the Company. Therefore, the Company's offer of 6% represents
a reasonable 27th round offer on an existing competitive base
rate. Any further concessions could have long-term adverse
effects on the Company's operations.