Labour Court Database __________________________________________________________________________________ File Number: CD91229 Case Number: LCR13339 Section / Act: S67 Parties: CROWN BERGER IRELAND LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;MANUFACTURING SCIENCE AND FINANCE |
Dispute concerning a claim for compensation following the cessation of the manufacture of industrial paint.
Recommendation:
7. What is at issue in this case is the agreement clause on the
"importation of paint." It is agreed that consultation took place
between the Company and the Union and that workers did not lose
income or jobs through the change because of the Company's
successful marketing of decorative production. The Union argues
however that the cessation of manufacture of industrial paint was
a "fundamental change" warranting compensation.
Having considered the submissions and arguments made by the
parties, the Court is of the view that the "importation" clause
was included in the agreement as a safety precaution for workers
against loss of income or jobs.
As no such loss occurred, the Court is of the view that
compensation is not applicable in this case and recommends that
the Union accept this position.
Division: CHAIRMAN Mr Brennan Mr Devine
Text of Document__________________________________________________________________
CD91229 RECOMMENDATION NO. LCR13339
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 67, INDUSTRIAL RELATIONS ACT, 1946
PARTIES: CROWN BERGER IRELAND LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
MANUFACTURING SCIENCE AND FINANCE
SUBJECT:
1. Dispute concerning a claim for compensation following the
cessation of the manufacture of industrial paint.
BACKGROUND:
2. The Company which is based in Coolock, Dublin, has
manufactured and distributed decorative paint and industrial paint
for many years. The ownership of the Company has changed a number
of times in the last few years. It is now owned by Nobel
Industries Sweden A.B.. It employs 121 people permanently. This
claim involves five laboratory technicians who are members of
M.S.F. and 52 production and warehouse/transport employees who are
members of S.I.P.T.U.
3. Around mid-1990 the Company informed the Unions of its
intention to discontinue production of its industrial paint and to
import and distribute it from England. At a meeting held in
October, 1990 the Company stated that the main reason for it
ceasing its production was safety. To bring the process up to
requirements would be uneconomic. The product involved
represented 2% of its overall production, and the process
operation was outdated. The Company also stated that there would
be an increase in production in other products to offset the loss
of the industrial paint production.
4. The Unions objected to the Company's decision as they
considered it would adversely affect the workers earnings and that
it would be detrimental to the future of the plant in Dublin.
Further meetings at local level failed to resolve the issue and
the matter was referred to the conciliation service of the Labour
Court on 20th November, 1990. (The Company has since ceased
production of industrial paint). A conciliation conference was
held on 15th January, 1991. At the conciliation conference the
Unions modified their position to a claim for compensation. This
was rejected by the Company and the parties subsequently agreed to
refer the dispute to the Labour Court for investigation and
recommendation. A Court hearing was held on 14th June, 1991.
UNION'S ARGUMENTS:
5. 1. Whilst the Company's reasons for the discontinuation of
the product, i.e. safety/outdated process, may have some
validity, the Unions consider that the main reason is a Group
decision to move the process elsewhere rather than invest
money in Dublin. The cost of upgrading production would be
approximately #2/300,000 which is small compared to the #2
million which the Company has already invested on the
decorative paint production.
2. There is a clause in the Company/Union Comprehensive
Agreement which deals with the importation of paint. The
clause allows for the reasonable importation of paint without
the payment of compensation and for consultation with the
Unions in the event of any fundamental change in importation
policy. The Company's decision is a fundamental change of
policy and, therefore, the Unions' claim for compensation is
justified. All other products where imports are allowed are
manufactured by the Company. In this instance the product has
been discontinued.
3. In 1980 an occasion arose whereby a substantial amount of
paint was imported on the basis that it was "not worth
manufacturing here" and compensation was paid at the rate of
1p a litre. The Unions' claim is that a similar amount should
be paid now.
COMPANY'S ARGUMENTS:
6. 1. The Company has kept to its commitment that employment
levels would not suffer as a result of the Company's decision
to cease production and import industrial paint. This
decision was brought about because the cost of updating the
process to present safety legislation requirements is
uneconomical. It would involve converting 1/5th of the plant
for 2% of production. In addition the process is obselete and
newer products have come on the market.
2. The Company has shown its commitment to maintaining
employment levels by investing #2 million in decorative paint
production.
3. The Company does not consider that a fundamental change in
its importation policy has taken place. The loss of the
industrial paint production has been more than matched by
increased production in the decorative paint area. As a
consequence the workers have not suffered any loss of earnings
(details supplied to the Court). Therefore, the Unions' claim
for compensation is not justified and the Court is asked to
recommend accordingly.
RECOMMENDATION:
7. What is at issue in this case is the agreement clause on the
"importation of paint." It is agreed that consultation took place
between the Company and the Union and that workers did not lose
income or jobs through the change because of the Company's
successful marketing of decorative production. The Union argues
however that the cessation of manufacture of industrial paint was
a "fundamental change" warranting compensation.
Having considered the submissions and arguments made by the
parties, the Court is of the view that the "importation" clause
was included in the agreement as a safety precaution for workers
against loss of income or jobs.
As no such loss occurred, the Court is of the view that
compensation is not applicable in this case and recommends that
the Union accept this position.
~
Signed on behalf of the Labour Court
Kevin Heffernan
________________________
18th July, 1991. Chairman
M.D./J.C.