Labour Court Database __________________________________________________________________________________ File Number: CD89404 Case Number: LCR12523 Section / Act: S67 Parties: WESTERN DIGITAL (IRELAND) LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim by the Union on behalf of 380 workers concerning a breach of the Company/Union Agreement.
Recommendation:
5. It appears to the Court, having regard to an apparent
misunderstanding as to the exact reason given for the lay-off, and
to the short period of notice given, that it was inevitable that
an atmosphere of frustration would arise. However, on the basis
of the submissions made, and having considered in particular the
wording of paragraph 4, page 1, and paragraph headed Temporary
Lay-off, of the Company Agreement, the Court has come to the
conclusion that the Company was not in breach of the Agreement.
The Court, therefore, does not recommend concession of the Union's
claim.
The above recommendation is within the context of the relevant
paragraphs of the Agreement. While it is noted that the paragraph
headed Temporary Lay-off deals with the issue of the Company's
ability to give notice, the Court further recommends that in
future a reasonable period of notice be given whenever a temporary
lay-off is proposed.
Division: Ms Owens Mr Shiel Mr Walsh
Text of Document__________________________________________________________________
CD89404 RECOMMENDATION NO. LCR12523
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: WESTERN DIGITAL (IRELAND) LIMITED
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim by the Union on behalf of 380 workers concerning a
breach of the Company/Union Agreement.
BACKGROUND:
2. The Company commenced operations in Cork in 1983 and its
primary purpose is to serve the European market. The Company,
which currently employs 550 workers (1st July, 1989), is involved
in the manufacture of printed circuit boards (P.C.B.'s) using two
assembly technologies. These are plated through hole technology
(P.T.H.) and surface mount technology (S.M.T.). The Company is a
high volume, low margin producer. On 27th April, 1989, the
Company informed the Union that staff would be laid-off for one
week during the period 1st-5th May, 1989, as a result of a drop in
demand for P.T.H. production. The demand decrease saw P.T.H.
manufacturing go from a 3 shift operation to a single shift
operation with a consequent drop in production, which limited
ability to absorb overhead costs and placed P.C.B. unit costs at
an uncompetitively high level. The Union argues that the lay-off
was in breach of the Company/Union Agreement in that there was no
particular set of circumstances which warranted the closure other
than the fact that the Company wished to enhance its profits for
the quarterly returns. This, the Union believes, is in complete
contravention of the clause concerning temporary lay-off, which
states:-
" While it is the Company's intention to provide
continuity of employment both parties recognise that
there may be circumstances outside the Company's
control (e.g. temporary lack of work, fuel shortages,
fire, storms, floods, market conditions, shortage of
materials, industrial action in another Company) which
necessitates short work weeks or lay-offs and the need
temporarily, to suspend the Contract of Employment.
The Company reserves the right to temporarily lay-off
employees until the circumstances change to the extent
that normal operations may be resumed. The Company's
ability to give notice of such lay-off will depend on
the notice it receives of the circumstances which make
the lay-off necessary. Employees will not be paid or
compensated by the Company during periods of
lay-off/short working."
The Union claims that the workers should be compensated for their
loss of earnings during the lay-off i.e. the difference between
wages and Social Welfare payments. As agreement could not be
reached locally the matter was referred on 28th April, 1989, to
the conciliation service of the Labour Court. No agreement could
be achieved at a conciliation conference held on 17th May, 1989,
and the dispute was referred on 1st June, 1989, to the Labour
Court for investigation and recommendation. The Court
investigated the dispute on 13th July, 1989, in Cork.
UNION'S ARGUMENTS:
3. 1. The Company were advised that this unprecedented action
was in clear breach of the existing Company/Union Agreement
and was causing deep resentment, and indeed frustration,
amongst the entire workforce, and would not go unchallenged.
It was a cynical exercise by the parent Company, who were
taking full advantage of the economic situation and the
unemployment levels in Cork, and was a very poor return for
the hard work and loyalty of a highly skilled workforce.
2. Nowhere in the Agreement, which covers most eventualities,
does the Company have the right to lay-off workers simply
because it is not making enough profit. The Company was not
in a loss making position.
3. Management have referred to their 'right to manage'. This
has never been challenged by the Union, who on a number of
occasions have co-operated with the Company when it was
necessary to lay-off workers for an indefinite period of time.
The Union has also accepted that when certain production lines
cease and no alternative work is available for the particular
workers, then permanent lay-offs are inevitable.
3. 4. The Company is a demanding one that totally accepts it's
responsibilities to its customers. This in turn puts
tremendous demands on its employees in relation to overtime
working, which has in the past seen the workers work 12 hour
shifts, 7 days a week for periods of weeks. The workers have
also been very flexible in relation to shift work, production
lines and holiday arrangements (details supplied to the
Court).
5. The Company's turnover in 1988 was $800m. compared to
$245m. in 1987. The contribution from the Irish workforce has
been nothing short of spectacular. This has been acknowledged
by both Irish management and the parent Company in America.
If a loss was being made, lay-offs might have been acceptable.
It is not acceptable to have them just because the parent
Company is not happy with profits for the January to March
quarter. The Company boasts of its loyalty and responsibility
to customers, but shirks its responsibility to staff.
6. There is no point in having an Agreement if either party
decides on a unilateral basis to ignore it. The Company are
in blatant breach of the Agreement. The fact that the
lay-offs occurred simply because the Company did not make
enough profits in one quarter is outrageous, unprecedented and
unacceptable.
COMPANY'S ARGUMENTS:
4. 1. Since July, 1988, the Company has been informing the Union
that P.T.H. technology was being phased out due to a drop in
demand and that this drop was resulting in an increase in per
unit costs. Further complicating the situation was the fact
that the Company's 'bread and butter' P.C.B.'s were having
their function absorbed by another type of circuit board. The
Company was having to look to new types of P.C.B. products for
future viability.
2. If one was to take a picture of the Company at the end of
April, 1989, the following picture would appear:-
- High volume producer with very low margins.
- Average selling price dropping in the market
therefore even lower margins and therefore even still
higher operating costs.
- P.T.H. and S.M.T. technology (and volumes) being
phased out.
- Customers who demand instant service/deliveries.