Labour Court Database
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File Number: CD88869
Case Number: LCR12259
Section / Act: S67
Parties: ANGLO IRISH BEEF PROCESSORS (SHANNON MEATS LIMITED) - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION
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Subject:
Compensation for loss of Christmas bonus and reduction in service pay.
Recommendation:
5. Having considered the submissions made by the parties the
Court recommends that compensation to the amount of #90 per person
be paid on foot of the claim.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD88869 RECOMMENDATION NO. LCR12259
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: ANGLO IRISH BEEF PROCESSORS (SHANNON MEATS LIMITED)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Compensation for loss of Christmas bonus and reduction in
service pay.
BACKGROUND:
2. Shannon Meats Limited was taken over by Anglo Irish Beef
Processors (AIBP) in 1987. Following the take over, AIBP
indicated in October, 1987 that it was eliminating the Christmas
bonus and reducing service pay with immediate effect i.e. from
December, 1987. However following discussions with the Union the
Company paid the Christmas bonus and service pay for the year
ending December, 1987. In January, 1988 a new agreement between
the Company and the Union was introduced, whereby the Company
discontinued the Christmas bonus, and service pay was reduced by
fifty per cent. The Union reluctantly agreed to accept the
elimination of the bonus and reduction in service pay, however
they claimed compensation for the loss incurred. The Company was
unwilling to make an offer on this issue and as local discussions
failed to resolve the matter the dispute was referred to the
Conciliation Service of the Labour Court on the 8th July, 1988. A
conciliation conference took place on the 3rd August, 1988 but no
agreement was reached. The dispute was referred to the Labour
Court for investigation and recommendation on the 9th November,
1988. A Court hearing took place in Limerick on the 18th January,
1989.
UNION'S ARGUMENTS:
3. 1. In the new agreement introduced in January, 1988 the
Company discarded the Christmas bonus and reduced service pay
by fifty per cent. The Union reluctantly accepted this but
insisted on its right to pursue a claim for compensation. The
Company stated that a new wage structure would be proposed and
it was anticipated that the new package would adequately
reflect the loss of these benefits. The Union decided to
await the outlining of these proposals before proceeding any
further. In June, 1988 the Company outlined details of a
package for the abattoir and boning hall. These proposals
involved the setting up of a separate company making the
employees shareholders and paying one third of their earnings
by way of dividend. While theoretically the employees would
have increased pay packets, the workers rejected the offer, as
the level of earnings could not be guaranteed, and was based
on the supply of cattle.
2. The Union has co-operated with the Company on many issues
and is completely against the elimination of the Christmas
bonus and reduction in service pay unless adequate
compensation is paid to its members. In December, 1987, the
last year in which the Christmas bonus was paid, the value of
the bonus amounted to #45 per person. This benefit has been
in operation for many years and the amount of #45 has been
paid since 1984. In relation to service pay the Court has
been provided with details of previous payments, current
payments, and the annual loss to the workers concerned. In
this instance also previous payments were negotiated many
years ago and had always been paid up to the time of takeover
by AIBP.
COMPANY'S ARGUMENTS:
4. 1. Both the service pay and Christmas bonus arrangements were
completely out of line with other companies within the Group.
When Shannon Meats was acquired by AIBP it was grossly
inefficient and the factory was closed at the time of
purchase. Changes were necessary in order to make the Company
efficient. It was inappropriate to maintain a Christmas bonus
where it did not apply in any other company in the Group and
especially where the Company's performance did not justify any
payment whatsoever. The service pay arrangement that applied
i.e. #1 for 5 years and up to #4 for 20 years' service, is
completely out of line both within the Group and in industry
generally. Where service pay does apply it normally applies
at the rate of 50p for 5 years and up to #2 for 20 years'
service. Numerous Labour Court recommendations have confirmed
this (details supplied).
2. Service pay and Christmas bonus schemes are not a feature
of the meat industry generally. In a random sample survey of
meat companies only fifty per cent of those surveyed applied a
service pay scheme. Those that did apply such a scheme paid
50 pence for 5 years and up to #2 for 20 years' service. None
of the companies surveyed operated a Christmas bonus. Since
Shannon Meats was acquired by AIBP average weekly earnings for
employees have increased significantly. (Details supplied to
the Court). Given the circumstances already outlined and the
fact that the Company does not have an established precedent
for paying compensation for loss of earnings, and that
amendments made by the Company merely brought the employees
into line, and in fact achieved an overall increase in
earnings, the Company feels that the claim is not warranted
and should be rejected.
RECOMMENDATION:
5. Having considered the submissions made by the parties the
Court recommends that compensation to the amount of #90 per person
be paid on foot of the claim.
~
Signed on behalf of the Labour Court
John O'Connell
_____________________
7th February, 1989 Deputy Chairman.
T.O'D./J.C.