Siptu has failed to secure the 15% pay increase it was seeking for employees of loss-making logistics firm, Flextronics.
However, in a dispute that went before the Labour Court, it was recommended that workers at the firm receive a 5% pay increase over two years.
The company has a total of 205 staff in its Irish operation and employs 92 workers in Limerick and 96 in Cork, with about 27% of staff members of the union.
Most recently filed accounts for Irish Express Cargo Ltd — trading as Flextronics — showed the firm recorded a pre-tax loss of €4.8m in the 12 months to the end of March 2015.
Revenues for the year amounted to €15.2m.
In the case before the Labour Court, Siptu was seeking a 15% pay increase for employees, 5% from April 2015, 5% from April 2016, and 5% from April 2017.
Siptu told the court the firm had granted only one pay increase in the last 10 years, a 2.5% increase in 2012.
The company told the court it also offered an increase of 2.5% for the period between July 1, 2015, to June 30, 2016, and this has been applied to all non-union employees and those employees in the union who accepted it.
Siptu also told the court that new employees have been on the minimum wage since they commenced employment in 2009 and 2010.
“Our members want to secure a multi-year agreement and believe that 5% per year for three years is a fair and reasonable claim given their continued co-operation, flexibility, commitment, and loyalty to the company,” the trade union said.
In its argument, Flextronics told the court that it is trading in a very difficult commercial environment and is currently in a loss-making situation, while the audited accounts will show substantial financial losses from 2013 to 2015 to date.
Flextronics also cited an Ibec survey showing that in 2014, 51% of employers in the pay survey paid an increase of 2% with 47% remaining on a pay freeze and 2% of companies looking for employees to take a pay cut.
The firm said the issue of a pay increase will be reviewable from the end of June this year.
The company told the Labour Court that it has lost significant business on the warehousing side of its operations in Limerick and Cork.
It stated that it is actively tendering for new contracts but hasn’t been successful to date.
In response to the losses, the firm has been forced to reduce headcount by three full-time staff and it has also laid off seven temporary workers.
Flextronics submitted that it does not have authorisation from its corporate parent company to agree a multi-year pay deal.
In its recommendation, the Labour Court stated that the company should enter into a two-year agreement, with workers provided a 2.5% pay increase from July 1 last to June 30 this year and a further 2.5% increase from July 1 next to June 2017.
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