Labour Court Database __________________________________________________________________________________ File Number: CD88745 Case Number: LCR12198 Section / Act: S67 Parties: SUNBEAM LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS UNION |
Claim on behalf of general operatives for the application of the pay terms of the Programme for National Recovery.
Recommendation:
5. The Court has considered the submissions made by the parties.
From the information provided it is clear that the Company is at
an extremely critical stage in its development. For this reason
the Court recommends that the second phase of the Programme for
National Recovery be paid when it becomes due in 1989 and that
payment of the first phase be suspended pending the introduction
of the changes necessary to increase productivity in the knitting
section thus eliminating ongoing losses. The Court is assuming
that given the good will and co-operation of all concerned that
this can be achieved within the next six months, after which date
the first phase should be paid and retrospection due paid in three
instalments at intervals to be negotiated by the parties in the
light of the financial circumstances then prevailing.
Division: Mr O'Connell Mr Heffernan Mr Devine
Text of Document__________________________________________________________________
CD88745 RECOMMENDATION NO. LCR12198
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: SUNBEAM LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION
SUBJECT:
1. Claim on behalf of general operatives for the application of
the pay terms of the Programme for National Recovery.
BACKGROUND:
2. The terms of the previous wage agreement for the workers
expired in December, 1987 and the Union has claimed the
application of the terms of the Programme for National Recovery
with effect from 1st January, 1988. This was rejected by the
Company on the basis that it has recently been the subject of a
management buy-out and has been experiencing significant losses
and low productivity and cannot therefore afford to pay the terms
of the Programme. On 13th July, 1988 the matter was referred to
the conciliation service of the Labour Court. A conciliation
conference was held on 8th September, 1988 at which no agreement
could be reached and on 5th October, 1988 the matter was referred
to the Labour Court for investigation and recommendation. The
Court investigated the dispute on 30th November, 1988.
UNION'S ARGUMENTS:
3. 1. The Programme for National Recovery (PNR) provides for
modest increases in return for job creation, tax concessions,
etc. It also allows companies to gauge their costs over a
three year period. The workers are on low basic rates of pay
of #94.67 and #111.06 per week and would therefore qualify for
the minimum increase of #4.00 per week provided for in the
PNR. This would result in an increase of #12.00 per week
after three years, whereas workers in other companies would
achieve this in the first year and there are very few cases
where it would take three years to reach. Taking into account
tax and P.R.S.I. deductions the workers will be left with very
little spending power.
3. 2. All procedures have been gone through without reaching a
settlement, despite the fact that the Joint Labour Committee's
and Joint Industrial Council's have successfully concluded
agreements under the PNR. The high level of co-operation
given by the workers during the year has been acknowledged by
management and in many cases productivity has resulted without
any additional costs to the Company. The workers have given
full co-operation in dealing with absenteeism and are always
prepared to discuss improved productivity, but an increase in
basic pay is required. A number of companies have exceeded
the terms of the PNR and in all the circumstances it is
reasonable to have the terms of the PNR applied.
COMPANY'S ARGUMENTS:
4. 1. The Company has been and is experiencing significant
financial difficulties and the forecast for 1989 is that
losses are likely to continue. In view of the serious
situation long or even medium term losses cannot be borne and
the Company cannot add to the losses by a further #150,000
which would be the direct cost of implementing the terms of
year one of the PNR. The terms of the Programme are not
automatic. The text of the agreement provides for discussion
about some variation or no cost increases in recognition of
the fact that conditions and circumstances may exist which
require this. The Company has invoked this position as the
financial situation clearly confirms an inability to pay the
terms of the PNR.
2. The Company's strategy is to develop a survival plan to
achieve viability as soon as possible and to improve security
of employment. It is only by performance that the survival of
the Company can be achieved and the Union was advised that
future increases in earnings would have to be based on
productivity improvements. Major problems exist regarding the
levels of operator performance, particularly in the Knitwear
division which employs 48% of the direct factory personnel
(details supplied to the Court). In addition, absenteeism has
been at a serious level which resulted in both direct and
indirect costs to the Company. Considering that the survival
plan is the immediate objective, management has been both
responsible and realistic in identifying that any increase in
earnings will have to be strictly related to productivity.
This does not represent a new approach as the payment
structure in existence already has a strong incentive emphasis
(details supplied to the Court).
RECOMMENDATION:
5. The Court has considered the submissions made by the parties.
From the information provided it is clear that the Company is at
an extremely critical stage in its development. For this reason
the Court recommends that the second phase of the Programme for
National Recovery be paid when it becomes due in 1989 and that
payment of the first phase be suspended pending the introduction
of the changes necessary to increase productivity in the knitting
section thus eliminating ongoing losses. The Court is assuming
that given the good will and co-operation of all concerned that
this can be achieved within the next six months, after which date
the first phase should be paid and retrospection due paid in three
instalments at intervals to be negotiated by the parties in the
light of the financial circumstances then prevailing.
~
Signed on behalf of the Labour Court
John O'Connell
----------------
4th January, 1989
U.M./U.S. Deputy Chairman