INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
WM MC KINNEY & SONS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Dispute concerning pay rates.
2. The Company is engaged in the manufacture of confectionery and employs 123 workers. In 1995, following the issue of LCR 14847 and further discussions under the auspices of the Labour Relations Commission, the Union secured recognition and negotiating rights on behalf of its 67 members. The parties commenced discussions on pay rates. A number of different pay rates obtain within the Company and the Union sought the rationalisation of these to two rates i.e. £5.56 per hour and £4.30 per hour. Management rejected the claims on the grounds that it would result in a substantial increase in costs. The dispute was referred to the Labour Relations Commission and two conciliation conferences were held on the 24th April and 20th June 1996. Agreement was not possible and the dispute was referred to the Labour Court on the 25th June 1996. A Court hearing was held on the 4th July 1996. A letter recommendation was issued on the 17th July 1996.
3. 1. The workers concerned are on very low rates of pay. They have not received an increase since January 1994. Pay rates in the Company are out of line with industry norms. The Union is only seeking increases which, if granted, would place the workers concerned on pay rates comparable to the lower rates applying in the industry.
2. There are presently 17 pay rates obtaining in the Company. There is no rational basis for this number.
3. In a survey of comparator companies undertaken by the Union the lowest paid workers are paid £4.30 per hour. The Union seeks a similar rate for the workers concerned.
4. In many instances in the plant employees do similar work for different rates of pay. It is only fair that there should be one rate for production workers.
5. The Company cannot build a viable future on very low pay rates as inevitably this lends to low morale with a consequent effect on production, and high turnover levels.
6. The Union is, at all times, willing to discuss and implement, by agreement, cost saving measures to improve the Company's competitive position.
1. The Company faces extremely difficult competition in the market place and has suffered significant financial losses in recent years (Details to the Court). It is essential that a substantial injection of capital be made to update plant and equipment.
2. The Union's claim is unrealistic given the Company's position. In recent times Management was forced to eliminate 4 hours overtime per week and, owing to lack of orders, institute short-time working for two months affecting 46 workers. Against this background the Union submitted its claim which would cost £250,000 to implement.
3. The Company applied an across the board increase of 4% with effect from January 1994. In August 1995 the Company afforded a special once off pay increase of 4% to the lowest paid grade (57 workers).
4. The lowest pay rate is £3.40 per hour. This must be viewed in the context of a work regime where the 39 hour week includes a 30 minute paid lunch break for day work resulting in production hours of 323 per week. A further 4 hours per week overtime is available and a number of workers enjoy 'early start' payments.
5. Despite its financial and trading difficulties the Company is prepared to meet the terms of year 3 of the PCW without retrospection, in return for reasonable savings by way of a quid pro quid. The Company was also amenable to reducing the number of grades on the basis of agreed cost-savings.
The Court considered the written and oral submissions and the report of the subsequent negotiations between the parties.
The Court is presented in this case with a complex set of issues to be resolved against a deadline of a couple of weeks for the Company to make key investment decisions.
While taking this into account the Court is nevertheless concerned that the organisational transition being sought by both sides requires time to achieve, if it is to be completed successfully.
The Court does however find merit in the Union case for rationalisation of the grade structure, but would be concerned at an arbitrary reduction without any analytical basis.
The Court is equally conscious of the Company's poor financial performance and the current requirement for more capital investment.
Taking into account all aspects of this case the Court makes the following recommendations as a means of addressing in the short term, the Union's aspirations on grading, the PCW payments and the Company's financial position.
(1) A detailed job assessment exercise to be undertaken by an outside agency.
(2) On completion of this exercise a new pay structure to be negotiated and implemented. As part of these negotiations, the PCW payments must also be considered. Dates of implementation of the new pay structure to be based on improved Company financial performance.
(The Court will adjudicate on date of introduction if the parties fail to agree).
(3) Proposed change to the current lunchtime arrangements to form part of the pay structure negotiations, together with any other agreed changes.
(4) The Company to pay 1% increase to employees as an interim payment on the new pay structure. This to be subsumed into the final pay structure, and to be made immediately on acceptance by both sides of this recommendation in its entirety.
Signed on behalf of the Labour Court
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.