INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
VITA CORTEX LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr McHenry
Worker Member: Mr O'Neill
1. Dispute concerning the rate of pay for new employees.
2. The Company manufactures and distributes foam products and employs 59 workers at its branches in Dublin, Navan and Cork. The workers are paid a basic weekly wage of £224 plus an average bonus of £12. Due to severe competition in the market place the Company introduced a restructuring plan in 1996 in order to ensure its continued viability. Included in the plan was a proposal to introduce a skill based pay structure for new employees which the Company maintained was essential to achieve a competitive labour cost base. Following local discussions and a conciliation conference held under the auspices of the Labour Relations Commission, the Industrial Relations Officer put forward a proposal which provided for "the development of a grading structure which would be the basis for payment of employees recruited in the future". The proposal was accepted by the Company but rejected by the Union following a ballot of the workforce. A further conciliation conference was held in October, 1997. Agreement was not possible. The dispute was referred to the Labour Court by the Labour Relations Commission on the 20th of January, 1998. A Court hearing was held in Cork on the 11th of March, 1998.
3. 1. The current rates of pay were achieved through difficult bargaining and negotiations over the years. The Union also agreed to redundancies in recent years. Workers give full co-operation and total flexibility in the achievement of production targets.
2. The Company formerly operated a non-contributory pension scheme as part of the workers' conditions of employment. The scheme is now a contributory one which was agreed to by the Union.
3. The Company's proposal relative to wage rates for new employees will result in a £60 per week reduction in the basic rate. This is not acceptable.
4. The workers concerned have accepted changes in work practices and in their pension schemes. They could not accept such a drastic reduction in wages with new workers working side by side with established workers for £60 per week less. This would cause serious industrial relations problems in the future.
5. The Company has operated an equal pay agreement since the mid 1970s and this would be another major change in the conditions of employment as agreed between the Company and Union. The Company should honour the agreed rates of pay and conditions of employment now and in the future.
4. 1. The current wage rates in the Company are the highest in the business, exceeding the wage rates of lower cost competitors by up to 80%. Many of the elements of the Company's viability plan are in place. A competitive wage structure is central to its success.
2. The proposed skill based wage structure poses no threat to the existing workers whose earnings will be red circled. Current workers' earnings could be enhanced through productivity.
3. The proposal on skill based pay is the fairest way to address the Company's wage problems and would afford the savings required. Rates of pay will still be considerably higher than many other operators but because of other actions taken by the Company it will be able to compete favourably for business.
4. The Company cannot accept that the current workforce has the right to prevent a plan being put in place now which will ensure that it will be in a position to provide worthwhile employment opportunities for new workers in the future.
The Court accepts that the Company's cost structure needs to be addressed so as to improve competitiveness and maintain employment.
However, having considered the written and oral submissions of the parties, the Court is not convinced that an adequate case has been made out for the introduction of the new pay structure proposed by the Company. As an alternative the parties should undertake an examination of the Company's labour costs, with expert assistance, with a view to improving productivity and efficiency. Consideration should also be given to a pay scale for new entrants, which could be service related.
This process should commence immediately and continue up to but not beyond the 30th of June, 1998. Any matters on which agreement has not been reached by that date may be referred back to the Court for further investigation and recommendation.
Signed on behalf of the Labour Court
31st March, 1998______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.