Labour Court Database __________________________________________________________________________________ File Number: CD89358 Case Number: LCR12434 Section / Act: S67 Parties: CARTON BROS LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Temporary withdrawal of a sick pay scheme.
Recommendation:
5. Having considered the submissions made by the parties and
noting the financial position of the Company, the Court recommends
that immediate discussions should take place between the parties
on a restructured sick pay scheme. This scheme should then be
introduced on 1st September next.
Division: Mr Fitzgerald Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD89358 RECOMMENDATION NO. LCR12434
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CARTON BROS LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Temporary withdrawal of a sick pay scheme.
BACKGROUND:
2. The Company is involved in the processing of chickens at a
plant in County Cavan for distribution to supermarkets around the
country. The salmonella outbreak at the end of 1988 had an
adverse effect on the Company's business. A number of cost saving
measures were introduced including the introduction of a four day
week and the withdrawal of the sick pay scheme. The Company
stated that the main reason for the withdrawal of the scheme was
the financial difficulties experienced. It also contended
however, that there was a degree of abuse of the sick pay scheme
in the Company, and that this was costing a great deal of money.
The Company stated that it would be possible to restore the scheme
when the current financial problems were surmounted. At that
stage it would be possible to negotiate with the Union a more
satisfactory arrangement than the one currently existing. The
Union considered the withdrawal of the sick pay scheme to be
unacceptable. It contended that if there were any abuses of the
sick pay scheme the Company should deal with the individuals
concerned through established procedures but the whole workforce
should not be denied the benefits of the scheme. This the Union
contended, would give rise to enormous difficulties for genuine
cases. No agreement could be reached on the issue at local level,
and on 19th May, 1989 the matter was referred to the conciliation
service of the Labour Court. A conciliation conference took place
on 21st March, 1989. No agreement was reached and, following
further local discussions, the matter was referred to the Labour
Court for investigation and recommendation on 19th May, 1989. A
Court hearing took place in Dublin on 26th May, 1989.
UNION'S ARGUMENTS:
3. 1. The Union considers the attitude of the Company in
withdrawing the sick pay scheme to be totally unwarranted. It
imposes undue hardship on workers who become ill through no
fault of their own. The workers are dependent on their
employment for their income. If the sick pay scheme were not
available a situation could arise whereby they would be forced
to seek financial help elsewhere in order to meet medical
expenses.
2. There is no logical reason for the Company to totally
withdraw the sick pay scheme and impose hardship on the
workers. If it is true that there is abuse of the scheme,
there are adequate procedures available to the Management to
deal with this aspect of the situation.
COMPANY'S ARGUMENTS:
4. 1. Due to a changing commercial situation and increased
competition, profit levels in the poultry products industry
have been declining for a number of years. This fact coupled
with the outbreak of salmonella at the end of 1988, has had a
very serious impact on the financial situation in the Company
(details supplied to the Court). A number of cost cutting
measures have had to be introduced. A number of other
proposals which would have impinged on the workforce have been
withdrawn by the Company (details supplied to the Court).
2. The Company has retained its belief that the sickness
benefit scheme must be withdrawn on a temporary basis. The
Company has given a written undertaking that a sick pay scheme
will be re-introduced on 1st January, 1989. The scheme is an
area of high cost at a time when the Company's cash-flow is
under pressure. The benefits of the scheme are enjoyed by
only a minority. An examination of the scheme makes it
apparent that it is being abused both in terms of long and
short term benefit. Because of the level of debt arising from
investment, the Company is not in a position to finance the
current sick pay scheme. The Company's financial difficulties
are the obvious and most pressing reason for the withdrawal,
but a means of combating abuses will also have to be found
when it is feasible to re-introduce the scheme. At present
workers can be financially better off when on sick leave than
when they are working.
3. Management in the Company is making every effort to find
alternative markets for its product, and to spread any cost
cutting as evenly as possible among all categories of
employees. It is in the interests of all that the Company
survive the present downturn and maintains its employment at
existing levels. The Court is asked to support the Company in
its efforts to achieve this.
RECOMMENDATION:
5. Having considered the submissions made by the parties and
noting the financial position of the Company, the Court recommends
that immediate discussions should take place between the parties
on a restructured sick pay scheme. This scheme should then be
introduced on 1st September next.
~
Signed on behalf of the Labour Court
Kevin Heffernan
________________________
P.P. Nicholas Fitzgerald
15th June, 1989. Deputy Chairman
P.F./J.C.