Labour Court Database
File Number: CD94298
Case Number: LCR14537
Section / Act: S26(1)
Parties: IRISH CABLE AND WIRE LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Revision of incentive earnings.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94298 RECOMMENDATION NO. LCR14537
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
IRISH CABLE AND WIRE LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Revision of incentive earnings.
2. 1. The Irish Cable and Wire Ltd (I.C.W.), manufactures
electrical cables. The Company was taken over in 1991,
by Alcatel Ltd., a French based multinational. It
employs approximately 112 workers of which 106 are based
2. The dispute before the Court concerns the Company's
proposals to change the bonus scheme which has been in
operation since 1982. The Union rejected the Company's
proposal. Under the old scheme any increased tonnage
output was paid by way of higher scale payments which
were applied to total tonnage.
3. In mid-1993, in order to lower unit costs, the Company
decided to increase its tonnage output from 9,000 tonnes
to 11,000 tonnes per annum. The Company claims that the
incentive scheme as currently structured is not suitable
for today's business where the Company must produce
consistent high volume to survive and would drive up
unit labour costs to the stage where it would be cheaper
for the Company to cut back on production.
4. The dispute was referred to the Labour Relations
Commission. A conciliation conference was held on 5th
May, 1994. As no agreement was reached the matter was
referred to the Labour Court on 24th May, 1994, in
accordance with Section 26(1) of the Industrial
Relations Act, 1990. A Labour Court hearing took place
on 6th July, 1994.
3. 1. The Company's proposals completely reverses its long
standing policy on wages which included a bonus scheme
which was an open ended incentive earnings scheme. In
the past the Company regularly published the bonus table
showing what could be earned at the highest production
2. The proposals would substantially reduce the earnings of
the workers concerned. The workers have been unfairly
treated as the original scheme was sold on the basis of
"the harder you work the more you'll be paid".
3. The workers have already made a considerable
contribution, and recently co-operated fully with
management in the introduction of changes in
work-practices and a rationalisation programme resulting
in the loss of 25 jobs.
4. This agreement has worked satisfactory over a long
period of time and if radically changed would seriously
affect industrial relations in the Company.
4. 1. The incentive scheme as currently structured is not
suitable for today's business where the Company must
produce consistent high volume to survive. The
incentive scale was agreed in 1981/82 and reflected the
weekly pattern of output then to supply projects in the
Middle East (small cables/low voltage one week and large
cables/high tonnage the next week).
2. Because of the significant fall in prices the business
is unable to support the current incentive scale. The
Company has proposed a revised scale that will extract a
contribution from this business and still give the
operator increased earnings.
3. Alcatel, through its subsidiaries, is the largest cable
manufacturer in the world. The distribution is owned by
Alcatel and it could supply its customers from any of
the other plants within Europe. I.C.W. is therefore,
facing both internal and external competition.
4. Since 1991, the I.C.W. has suffered losses as a result
of severe recession in the U.K. The Athlone plant must
be profitable. The parent Company expects and demands
profitable performance from its subsidiaries and the
expectation that they will meet budget.
5. The commitment sought from the workers is that they
forego some earnings (not earned previously) which the
Company is unable to afford. This commitment will
remove a significant impediment in seeking new business
and investment and secure the future viability of the
Having considered the submissions from the parties and taking into
account the current trading position of the Company, the Court has
concluded that the Company's proposals are unavoidable and
accordingly recommends that the Union agrees to the implementation
of the revised bonus scheme subject to the parties meeting and
jointly reviewing the position immediately following 31st March
The objective of the review being to establish in the light of the
then trading position whether it is feasible to restore the bonus
scheme to that in operation at present.
Signed on behalf of the Labour Court
4th August, 1994 Evelyn Owens
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.