INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Owens
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. Claim for payment of phase 3 of PCW.
2. The Company manufactures knitwear for the home market and for export abroad. It currently employs 49 workers in 2 plants.
The Company was a subsidiary of Udaras na Gaeltachta until 1995, when it was bought by a group comprising local investors and management. In 1994, in anticipation of the change of ownership, the Company introduced a rationalisation programme. At that stage, workers had not received any increases under the Programme for Economic and Social Progress (PESP) or the Programme for Competitiveness and Work (PCW), from 1992-1994.
The Company claims that there are a number of problems, particularly in the knitting department, which must be solved before it pays any further wage increases. The Company has paid all PESP/PCW increases due, up to and including 1995.
The dispute was referred to the Labour Relations Commission (LRC) and a conciliation conference took place on 19th December, 1996. Present at the conference was a company, Hawk Management Services, which had been employed by the Company to review the situation. On 20th December, Hawk Management Services sent a
report to the LRC with the following suggestions to offset cost increases:
- 1. The increase would be applied only to basic rates, and not any other payments.
- 2. The increase would be applied from 1997, with no retrospection.
- 3. Adjustment would have to be made to the starting point for bonus earnings. The starting point for Make-Up would change from 75 to 77 performance, and in knitting the efficiency figure would increase from 65 to 67%.
- 4. The overtime rules, as per the LRC document of March, 1994, would be implemented.
- 5. New, lower, rates of pay, bonus etc., would have to be established for all new employees. Differences between the new scales and existing scales would be "red circled".
- 6. Any consideration of wage increases for 1997 would have to be postponed for at least 6 months beyond the due date.
In March, 1994, the LRC had recommended that the following overtime rates should apply:-
Monday to Friday: first 3 hours at time plus one quarter, time plus one half thereafter.
Saturday: first 3 hours at time plus one quarter, time plus three quarters thereafter.
The LCR conciliation conference resumed on 19th February, 1997. The Company made a number of new proposals which were rejected by the Union. The Company's present proposal is as follows.
(a) All wage scales would remain at their current levels, through to the end of 1997.
(b) The Company would make an immediate gross payment of £100 to every employee, for the 1996 and 1997 phases.
The Company would require the following, in order to proceed with this proposal:-
(i) Knitting personnel to agree to work a full 24-hour Sunday rota, at a shift allowance of 33.33%.
(ii) A commitment by knitting personnel to a full review of the knitting bonus scheme, so as to achieve the increase in knitting output that is needed.
(iii) Overtime premium in the Company to be paid on the basis of the LRC recommendation, and to be based on hours in excess of 39 per week.
The Company had agreed to a revised bonus scheme in the knitting department in 1995.
The dispute was referred to the Labour Court on 13th March, 1997, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 14th May, 1997, in Castlebar.
3. 1. The workers have agreed to a number of major changes sought by the Company over the years. There have been redundancies in both plants, with the workforce being reduced from 70 to its present 49. Productivity has continued to increase despite the reduction in numbers. This has resulted in major savings for the Company. The workers are not looking for an excessive standard of living, they are only seeking payment which is due to them.
2. The Union is willing to discuss any proposals of the Company. The Company's attitude is that these proposals are not negotiable. At the last pay negotiations when the Company was in trouble, the workers agreed to the changes sought. Now the Company is proposing a new set of changes. If the workers have earned more recently, as the Company claims, it is because they have produced more.
4. 1. From 1991 to the present, the Company has had accumulated losses of £655,000. It made a profit of £5,810 in 1996 but this is not nearly enough to sustain the investment that is needed. The Company had to pay 4 years of increases under the PESP/PCW in just over 2 years. The business is labour intensive and wage costs represent over 35% of sales value.
2. In addition to wage increases, the Company has invested £450,000 in new equipment, particularly in the knitting department which has fallen far short of the level of output that is required. A revised knitting bonus scheme was agreed after protracted negotiations in 1995. The average earnings of the group of mechanics/knitters and knitters have increased by 15.4%. However, this new agreement has not resulted in any increase in productivity. One problem is that workers have refused to work a full 7 day operation, which would only be required for about one third of the year. Workers conceded a 10-hour working day on Sundays but the Company had to pay a 50% shift premium. Agreement to work a 24-hour Sunday when required remains a necessity.
3. Average earnings in the Company are considerably higher than in the industry in general. The Company is paying an excessive premium on overtime rates. It cannot pay any wage increases unless they can be funded.
The Court is concerned that output targets are not being achieved despite discussion and agreement on changes to bring this about. In the circumstances, the Court believes that it is in the interest of both parties to re-examine the situation, using the Union's work study expertise if necessary.
On the substantive issue before it, the Court, having considered the written and oral submissions of the parties and the accepted difficult financial position of the Company, believes that the Union should accept the proposals as set out in the Hawk Management Services letter of 20th December, 1996 as varied by this Recommendation:
1. The increase would apply to basic rates only and no other payments. (This is because of the present financial difficulties and is not to be taken as a precedent for any future increases.).
2. 3rd Phases of P.C.W. would apply from 1st January, 1997. The payment of arrears would be made not later than 31st December, 1997.
3&5 The Court would direct both parties to enter into discussion on these two issues and, when agreement is reached, management should implement phase 1 of the Programme 2000 from 1st January, 1998.
4. The overtime rules as per the LCR document of March 1994 would be implemented.
The Court so recommends.
Signed on behalf of the Labour Court
12th June, 1997______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.