Waterford Crystal union secures pay rise despite uncertain future

The trade union Unite has secured a 2% pay rise during the second phase of the current national pay deal under the Towards 2016 social partnership agreement. The pay rise will cover the union’s 1,000 members currently working at the troubled Waterford Crystal plant in Waterford City. The company lost its case to impose a pay freeze, based on the finding of a Labour Relations Commission assessor.

Waterford Crystal, a key component of the international Waterford Wedgwood glass manufacturing and ceramics group, recently announced its plan to make 492 workers redundant in 2008; the move is part of a major restructuring process at the company’s one remaining manufacturing plant in Waterford in southeast Ireland. However, it recently lost its case to impose a pay freeze put forward to an agreed assessor appointed by the Labour Relations Commission (LRC).

Company’s case to impose pay freeze

The company made its case for a pay freeze under the ‘inability to pay’ provisions of the Towards 2016 (2.86Mb PDF) social partnership agreement. However, the claim was turned down based on the finding of an LRC assessor. The confidential finding, which is binding in industrial relations terms, was made by the jointly agreed assessor, Brian Aylward, appointed by the LRC under section 1.9 (ii) of the Towards 2016 agreement.

In an exclusive report, the independent weekly journal Industrial Relations News (IRN) reported the content of Mr Aylward’s finding as follows:

While I have considerable sympathy with the position of the company and recognise that it is in a very difficult trading position, and that it has a need for continuous cost reductions and productivity increases, I have formed the conclusion that in relation to this particular phase of ‘Towards 2016’ I cannot uphold its claim under Section 1.9 (ii).

The phase of Towards 2016 to which Mr Aylward refers carries a 2% ‘price tag’ in wage terms. While the company can refer the case to the Labour Court, no precedent exists for the court altering private sector findings by the appointed assessors.

Assessor’s findings

In the case of Waterford Crystal, this finding looks to have settled wages until April 2008 when the question of the final two phases of Towards 2016 may well arise; however, these increases would be treated on their own merits in the context of circumstances then prevailing. This means that the company could win the argument the next time around. Commenting on this aspect of the case, IRN noted: ‘The message is the same for companies and unions in relation to the assessor system: the merits of each case will be judged on the criteria agreed in Towards 2016. In some respects, the outcome is similar to pendulum arbitration.’

As an experienced and respected assessor with a wealth of experience as a former senior personnel manager in the private sector, Mr Aylward explained to both the employer and trade union that his task as an assessor under Towards 2016 was to report back to the LRC after having examined the economic, commercial and employment circumstances of the company. Mr Aylward stated that he had received ‘the fullest cooperation from both parties’ during the process of the investigation.

Trade union reaction

The trade union Unite (formerly Amicus) argued that, in 2007, the company had made a profit for the first time in three years and rejected its plea of ‘inability to pay’. Unite had cooperated with the company to such an extent that some of its members at the plant were just above the minimum wage rate; the trade union believed that all of the employees had lost out relative to other industries.

Company position

The company argued that, since 11 September 2001, consumer behaviour in the company’s main market – the US – has changed significantly, with a shift from higher end department stores to lower cost discount stores. This, in conjunction with the decline in the US dollar, has led to a downturn in Waterford sales of €54.4 million over the last four years.

While showing a profit of €17.3 million in 2004, Waterford Crystal had recorded significant losses of €20.6 million in 2005 and €12.5 million in 2006. The company showed an operating profit for 2007 of €12.3 million, but once group interest costs and common costs are taken into account – related to turnover and based on the data provided – every year except 2005 would be showing a loss. According to the company, the operating profit for 2007 was mainly due to once-off benefits to the company.

Brian Sheehan, IRN Publishing

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Neuen Kommentar schreiben