INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
KIRCHHOFF IRELAND LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Carberry
Worker Member: Mr O'Neill
1. Method of calculation of pay round.
2. The Company is based in Letterkenny, Co. Donegal, and manufactures high quality pressed metal components for the automotive industry. The Company is a subsidiary of a German Company. Kirchhoff Ireland Limited employs 105 people with the majority of hourly paid staff being members of SIPTU.
The Company and the Union were unable to reach agreement on the issue of the minimum pay increases which applied in previous national wage agreements.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred
to the Labour Court on the 21st of September, 2001, in accordance with Section 26(1)
of the Industrial Relations Act, 1990. A Labour Court hearing took place in Donegal on the 29th of April, 2002, the earliest date suitable to both parties.
3. 1. Production operatives have suffered a loss of earnings from 1988 to date.
2. At a conciliation conference in July, 2000, the method of calculation agreed for the first phase of Programme for Prosperity and Fairness (PPF) was 100% of basic pay.
3. The Union claim that the same formula for implementing the first phase of the PPF should apply for previous national pay agreements.
4. 1. Regardless of output all workers are guaranteed 115% of basic weekly pay, with most workers earning in excess of the minimum and the average being 155%.
2. Employees are not lowly paid. Throughout the National Pay Agreements from 1988 to date, the Company has shown that employees gained more than the basic weekly minimum amounts as stated in successive agreements.
3. Three companies in the car components automotive sector have closed and another has reduced its workforce by over 50% in recent years.
4. Concession of this cost-increasing claim during the currency of the Programme for Prosperity and Fairness agreement would now have a serious effect on the viability of the Company.
The Labour Court gave careful consideration to the written and oral submissions of the parties. The Union has sought the implementation of the minimum flat rate increases as applied under the terms of various national wage agreements since 1981, to apply to basic pay instead of to the hourly rate. The Union specify that this should be applied to 100% of basic pay, as this was the method of calculation agreed at a conciliation conference in July, 2000, when the Company were involved in restructuring programme.
The Company pointed out to the Court that the minimum guaranteed basic was 115%, with most workers earning in excess of the minimum and the average being 155%. The Court is of the view that 100% basic is meaningless and while it may have been an agreed bargaining point in July, 2000, it has had no relevance in the past as a rate of
pay, nor is it likely to in the future. Normally the test used to ascertain "basic pay" where there is any confusion on the matter is "that which overtime is calculated upon."
The Court is of the view that the method of application of pay increases provided for under national wage agreements was applied in a fair and reasonable manner in the past. Similarly, the Court appreciates that going forward this issue needs to be clarified, therefore, the Court recommends that the parties should discuss how such increases might, if relevant, apply in the future.
Signed on behalf of the Labour Court
10th June, 2002______________________
Enquiries concerning this Recommendation should be addressed to Caroline Hayes, Court Secretary.