INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
WILLIAM MCKINNEY AND SONS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Owens
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. Pay increase.
2. The Company, which was established in 1927, is engaged in the manufacture of confectionery for both the Irish and overseas markets. It currently employs a workforce of 90 workers.
In 1996, following a dispute concerning pay rates and a Labour Court hearing, the Labour Court issued a recommendation, LCR15252, which was subsequently rejected by the employees. A strike then took place and the parties negotiated an agreement at local level on the 18th of October, 1996, to cover the period from the 1st of June, 1996, to the 1st of July, 1997. As part of the agreement the Union reserved its right to pursue its original claim for pay increases at a later date. In May, 1997, the Union sought to have the general operative rate increased from £3.70 per hour to £4.30 per hour (now £4.41 per hour) and for increases to be paid to all other grades. The Company rejected the Union's claim but offered to apply the terms of Partnership 2000 from the 1st of July, 1997.
The dispute could not be resolved at local level and the parties attended two conciliation conferences under the auspices of the Labour Relations Commission on the 4th of November, 1997, and the 17th of December, 1997. As agreement could not be reached, the Union requested referral of the dispute to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Company did not agree to the referral initially as it believed that the Union's claim was in breach of Partnership 2000. However, it then agreed to attend a hearing under protest, and the Labour Court investigated the dispute on the 8th of July, 1998, in Letterkenny.
3. 1. A pay rate of £3.70 per hour (£144.30 per week) is low by any standards and is badly out of line with rates applying in the industry, with those applying locally and with the average industrial wage. Pay rates in comparator companies in the confectionery industry range from £170.26 to £301.30 per week, while local companies pay rates of £179.92 to £248.80 per week.
2. The Minimum Wage Commission has recommended a minimum rate of £4.40 per hour which is based on two-thirds of median earning. This figure would rise to £4.70 per hour at the implementation date of April 1st, 2000.
3. The workers concerned have co-operated fully in helping to turn the Company around and to make it more competitive. Partnership 2000 should not be used to keep very low pay rates low. This approach will inevitably lead to low morale, with a consequent effect on production and turnover of staff. The Union has indicated at all times that it is willing to discuss the implementation of new rates on a phased basis.
4 1. The 1996 agreement recognises the Union's aspiration to pursue its claim at a future date, but it does not impose an obligation or commitment on the part of the Company to address the claim. Given the serious commercial and economical circumstances facing the Company for the foreseeable future, the Company is concerned and disappointed that the Union is pursuing a claim for a 19.2% increase in pay.
2. Although paid for a 39 hour week workers actually work for 34 hours. They receive a 30 minute paid lunch break daily and two 15 minute paid tea breaks. They also have a further 4 hours per week payable as overtime, which represents additional regular earnings of £22.20 per week, giving a gross of £170.65 including Year 1 of Partnership 2000. In addition seventeen workers benefit from early start premiums.
3. Despite commercial circumstances which do not support the payment of any increase in the current year, the Company recognises the contribution of the employees in terms of their continuing efforts to assist the Company out of its trading difficulties. Although the Union did not recommend the terms of Partnership 2000 to the workers, the Company has paid Year 1 of the agreement, backdated to the 1st of July, 1997.
The Court has given careful consideration to the submissions and arguments made by the parties. The Court has also taken into consideration the background to the dispute, including the terms of Labour Court Recommendation No. 15252, and subsequent agreement.
In all the circumstances outlined, including the terms of both P.C.W. and Partnership 2000, the Court recommends as follows:-
(a) The Union accept the Company's proposal to implement the terms of Partnership 2000.
(b) Notwithstanding (a) above, both parties enter into negotiations with a view to agreeing a basic pay increase, on the basis that there is flexibility on the Union side as to conditions at present pertaining as to unproductive hours paid for. This should include the concept of phasing in any increase between now and the expiry date of Partnership 2000.
Signed on behalf of the Labour Court
4th August, 1998______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.